Less than 60% of Americans hold life insurance, which leaves millions of loved ones unprotected when a provider passes on.
Fortunately, life insurance policies are incredibly affordable – some plans are available for as low as $5 a month. But to get the best life insurance for your family, there are some things you need to understand.
When you select life insurance, consider these factors to make sure your insurance fits your needs.
Understand Term vs Universal vs Whole Life Insurance
The first thing you should do is understand the differences between term, universal, and whole life insurance.
Term life insurance usually has low premiums and lasts for a specific length of time, usually 10 to 20 years. This is a great option if there’s not a lot of wiggle room in your budget, but you want to make sure your family and children are provided for.
While many term life insurance policies can be upgraded, if your policy reaches the end of its term and you don’t die, the money you put into it is lost. Still, for your family’s security, it’s a worthwhile investment.
Universal life insurance is also known as adjustable life insurance. It’s a lot more flexible than whole life insurance, but it offers similar coverage.
You can adjust your premiums and the face value of your coverage throughout your life. This makes it a useful tool when your financial security is a bit rocky at times.
Whole life insurance covers you until you die, no matter how long that may take, but you pay into it the entire time. It’s a great savings vehicle, and it can ease the financial burden of afterlife services.
But since it’s such a useful tool, premiums are much higher than term life insurance.
WRS Insurance Solutions breaks these policies down in more detail to give you a better idea of their pros and cons.
Make Sure You Have Enough Coverage
To understand how much coverage you need, you need to consider why you’re choosing life insurance in the first place.
Are you trying to completely cover the household expenses until the kids are grown so your spouse never has to work? Are you just looking for a small cushion to provide a few years of relief?
Factor how much you’ll need to cover those expenses. Consider any debts, inflation, education expenses, death costs, or other costs that may need to be covered too. How much money can your spouse bring in, and what other assets and savings do you have that could ease the premium you need on your insurance?
This will take some math, but all these factors are important to consider to make sure your family is properly covered.
Use These Tips to Select Life Insurance That Fits Your Needs
When you select life insurance, you need to make sure it fits in your budget, it covers your needs, and it lasts as long as you need it to. Different policies have different pros and cons.
We’re here to answer all your financial needs. Keep reading for the best information to preserve and grow your financial wealth.