Life insurance falls into two main categories: term life insurance and whole life insurance. Both have their value, but they are separated for a reason. This primer from us at Elliott & Associates Insurance serving Opelika, AL will help you narrow down your coverage needs.
When Should You Consider Life Insurance?
Generally, life insurance is a vital part of a financial plan once you have a family. Without one, you only tend to leave behind expenses like funeral costs. If you’re supporting other people, there is suddenly a deficit that can take time to fill, especially when factoring in the emotional costs.
When Should You Select Term Life Insurance?
Term life insurance has a set duration and few benefits, but that makes it easier to get and lowers the premiums. If you’re worried about qualifying for the insurance, don’t want to spend much, or are going to experience a higher risk for a shorter period of time, term life insurance allows you to get coverage in case of the worst.
When Should You Select Whole Life Insurance?
Whole life insurance is usually more expensive, but it can be used in a variety of ways that aren’t available with a term life policy. First, you can lock in your premiums while you’re healthy and younger, and the whole life policy will stay in effect at your agreed rate increases until you cancel it or stop paying your premiums. Most will have a feature called actual cash value which collects a portion of every premium you pay. Some providers will provide you with interest for that cash value, invest it to increase that return, and take out loans against its value.
Every Situation Is Different
This general advice will hold true in most cases, but everybody’s life and insurance needs will vary. Contact us at Elliott & Associates Insurance to go over the details and figure out which plans work for you.