1. Final Expenses. A small, affordable life insurance policy can be a good idea if you want to give your family an easy way to pay for your final expenses.
2. Debt. If you’re still paying off any debts, a life insurance policy is one way to protect your family from carrying that burden.
3. Peace of Mind. If the premium for a small life insurance policy fits into your budget, you may want it just to know your loved ones will be provided for.
Term Life Insurance
This insurance policy is considered to be one of the simplest and affordable types of life insurance as it typically ranges between $30-$40 a month for a 30-year, $500,000 policy for young people in the age range of 20-30.
Whole Life Insurance
Whole life insurance is a permanent policy that does not expire. It is usually more costly than term life insurance because of added fees, taxes and the extra feature. This policy might be worth the extra payment if you need the cash value to cover endowments or estate plans.
Universal Life Insurance
This is one of the more complex life insurance plans as it can be more flexible with changes in the cash value and the death benefit which can be attractive to some but too complicated for others.
Variable Life Insurance
This insurance policy is similar to whole life insurance in that they both have cash value, but the cash value functions are very different. In a whole life insurance policy, the cash value is a savings account while the cash value in the variable life insurance account is placed into a mutual fund to be invested into the stock market for the chance of higher growth. While this option does provide a higher return, the return is adjusted for a much higher level of risk as the cash value is dependent on the stock market.
Simplified Issue Life Insurance
This insurance policy does not require those that are fairly healthy to take a medical exam, saving them time from the entire underwriting process. This policy can be more expensive when compared to other policies because there is no examination requirement.
Guaranteed Issue Life Insurance
Similar to the simplified life insurance, the guaranteed issue policy does not require you to fill out any health questionnaires if you pay a premium. This is especially beneficial for people in poor health or the elderly whose health makes it harder for them to get insured.
1. When your finances change
If you buy or refinance a home, receive an inheritance, or become responsible for a loved one’s finances, you should talk to your broker about updating your policy.
2. When your family grows or changes
When your family changes, it may affect what your children would need if you were no longer there to support them. You may want to increase your coverage when you add another family member, for example.
3. When your income changes
If your income changes, your family’s lifestyle may change along with it. You might want to consider updating your life insurance coverage to keep up with your current income, as this could help your loved ones maintain their current lifestyle.