words Al Woods
No one wants to think about the possibilities of dying or anything bad happening to them or their family. The unfortunate reality though is that at some point, we all must face it and deal with the repercussions.
Life insurance allows your family to get compensation if you pass away, you can gain even more if it is an untimely death or caused by some disaster. Do you want to leave your family with nothing when you go? Here are some of the things that you need to know about life insurance.
Some Policies Are Better For You Than Others
When looking at policies, you might think that you can just take the first policy you see and pay that for the rest of your life. This is something that you should avoid doing and you should definitely take the time to look into the policy and see what kind of coverage you are getting.
There is such a thing as too much protection based around the lifestyle you live and what you do for a living. These policies will pay out a lot, but there is a strong chance that you will not need the extent of that protection. Couple that with high insurance payments and you could be running out of money for a policy that you do not need at all.
With policies, be aware of the company that is offering them to you as well. Companies like AIG and Bestow all have different policies and different rates. You have to see which one is best for you and your needs. You can read this detailed Bestow life insurance review to get an idea of the services they provide. Find a policy that works for you and stick with it. While hopefully, you will never have to use it, it is better to be safe than sorry.
More People Have Life Insurance Than You Think
Millennials often think that they do not need life insurance as no one else their age really has a policy. This is another incorrect statement as recent research has shown that around 70% of all millennials own some type of life insurance policy. This can be provided through their work benefits, or something they have purchased themselves. The point is, is that this insurance is common and important enough that many people are buying it.
Just like with any insurance company, if you can entice the company with more customers, they are likely to give you a package deal and discount on what you are going to be buying. If you have a spouse or family members, you could speak with them about getting in on a package. Not only will it get you a better rate, but it can open up additional options within your coverage.
At a young age if you pass away, getting money that is equal to your current salary may be adequate for your partner. However, as you get older and make purchases like a home, that payout will likely not be enough for them to get by. By having someone else in your benefit package, you can get these extra payouts at a very cost-effective rate. Never underestimate the power of buying insurance with someone else.
Term Vs. Permanent
The next thing that you have to consider with life insurance is whether you want term insurance or permanent insurance. Permanent insurance will cover you until you die. While permanent seems like the best choice, it is often the most expensive and most of the time is reserved to only extremely wealthy people who can afford a policy like that.
In terms of permanent insurance, there are a few different options for you to choose from. There is whole life insurance which is a fully guaranteed policy throughout your whole lifetime. The premium is fixed when you purchase this policy so you don’t have to worry about any increases during your life, however, as mentioned above they are expensive.
Universal life permanent insurance gives you that full length, however, there is much more flexibility about the payments that you are going to make. You make ongoing deposits with some of it going towards your premium while the rest of it is invested into tax-free savings. This gives you the benefits of life insurance plus it lets you grow some money for whoever else is in your family. It is a cheaper option if you are looking at permanent insurance, but still can be quite expensive.
Term insurance on the other hand provides life insurance for a set amount of years. Once that term is up, it is up to you to renegotiate with an insurance provider and get another term. What are the downsides to term insurance? Your rates will definitely change and become more expensive and your payouts might decrease. Not only that, but there is a chance that the provider might decline you altogether.
The older you get, the higher risk you are for the company. If you have any health problems, they will be reluctant to take you on as there is a risk of you dying and collecting money. To combat this, these companies will give you higher rates or lower payouts. It is the most affordable insurance and the most common one that people get, but there is a reason for that. Understand what you are getting into with term insurance and ensure that you stay healthy when needing to renegotiate your term.
All of these things are important to know and understand when you are planning to get life insurance. Once you become an adult, it is strongly recommended that you get yourself a policy as you want to ensure that you can continue to look after those around you even after you pass away. Get the coverage that you need, but don’t get things that are going to be expensive and unnecessary. Just like with any insurance provider, some companies will try to upsell you on things that are not needed. Hopefully, you will never have to use a policy like this, but it is better to have one than to not.