Although insurance isn’t a form of investment, it is an essential component of prudent personal financial management. Security is what insurance is all about. It safeguards everything that you’ve worked so hard for. It safeguards your spouse in the event of your untimely death. It is responsible for sending the children to college. It keeps a family together at a time when money shouldn’t be an issue.Learn more by visiting Miller-Hanover New Oxford Office – Gettysburg life insurance
You need protection, but choosing the right policy to safeguard your family and properties is like learning a foreign language. It’s a maze of insurance products out there, and finding the right coverage for your needs can take a little research. Term life, entire life, universal life, real cash value, dividends, and loans against policy – it’s a maze of insurance products out there, and finding the right coverage for your needs can take a little research.
Here’s a crash course in providing the most life insurance for the least money while also having the cover you and your family need.
There are two basic forms of life insurance, each of which has many variations.
Term life insurance is the most easy to grasp. It’s also the most cost-effective security available.
Term life insurance pays only if the insured (you) dies within the policy’s term, which is the amount of time your life insurance plan is active. Term life insurance is offered in a number of time periods, including five-, ten-, and thirty-year terms.
The lower the monthly premium – the dollar sum you pay for insurance per month – the younger you are. Premiums are determined by two factors: your age (and general health) and the amount of coverage you need.
You keep it easy with term life. If the insured person dies, the insurance provider owes X sum of money to the beneficiaries as long as the policy remains in place, that is, as long as the death happens within the policy’s duration, thus the name term life insurance.
Term life insurance doesn’t build up value, you can’t invest against it, and if you want a short term and your health improves, you might end up paying more for your term life insurance than you would if you bought a long-term policy.
Whole life insurance, also known as lifelong insurance, universal insurance, variable universal insurance, and other product names, falls under the broad category of coverage known as whole life insurance.
The first distinction between term and whole life insurance is that whole life insurance protects you from the time you purchase it until you die. This, of course, means that you pay your monthly whole life insurance premium. Whole life insurance does not have a definition (duration of coverage). When you buy it when you’re young, your premiums will be modest, and you’ll begin to accumulate cash value.
The other major distinction between term and entire life insurance is this. It pays to live a full life. Not much, but dividends that can be used to reduce monthly premiums or left to accumulate and gain interest.