If you’re reading this, chances are you’re looking to buy life insurance to protect your family and your retirement. But where to start? Do you know the differences between term, whole life, and universal life insurance? Do you understand how much coverage you need?
You may have heard that term life insurance is cheap and cheaper versions of the same thing. But is that true? Does that mean one is better than the other? And which is better for your financial future – pre-existing conditions or high medical bills? Let’s take a look at these questions and more with help from an expert at Allstate Life Insurance.
What is life insurance?
Life insurance is a form of insurance that protects you and your family in the event of your death. The coverage varies depending on the type of insurance you purchase. A term life insurance policy will cover you and your family until you pass away, while a whole life insurance policy will pay out after you’re gone.
You can purchase term life insurance online, in insurance offices, or over the phone. And there are many different types of life insurance to choose from. Terms are generally cheaper than whole life, but that doesn’t mean one is better than the other.
The only way to know for certain which type of life insurance is right for you is to speak with a live insurance sales representative and let them go over the various policies and premiums available to determine what’s best for your situation.
What is the difference between term life insurance and whole life insurance?
There are many differences between term life insurance and whole life insurance, but the most emphasized one is price. Term life insurance is cheaper than whole life because it doesn’t guarantee you coverage until you’re dead.
What this means is that, if you die before you’ve paid off your policy, the insurance company has to pay out your beneficiaries. But whole life insurance is guaranteed coverage for its entire policy term, while term life only pays out if you die during the term. Another difference between term life insurance and whole life insurance is coverage.
Term life insurance only covers you if you die during the term, while whole life insurance covers you and your beneficiaries, including current and future insurance policies. Another major difference is that whole life insurance pays out the death benefit after you’re gone, while term life insurance pays out only if you die before the policy settles.
This means that if you have a pre-existing condition, like a heart condition, term life insurance may not be right for you. But if you don’t need the money now, or you’ll be able to pay your bills and have funds left over for your kids’ college education, then whole life insurance might be best. But if you have high medical bills or long-term care expenses, especially if you have a history of health problems, then term life insurance could be more suitable.
How much does life insurance cost?
The price of life insurance will vary depending on the type of policy you choose, as well as your coverage needs. A basic life insurance policy available on almost every insurance policy form will cost you around $100 per month. Some life insurance policies are more comprehensive, covering your retirement, as well as your family and your estate.
You may also want to consider adding additional coverage to protect your loved ones in an expensive accident. For example, if your loved ones are prone to car crashes, then coverage for that reason could be a better choice than just regular car insurance.
Is one type of life insurance better than the other?
There is no one type of life insurance that’s best for everyone. Instead, the perfect solution would be to get a variety of different types of life insurance to see what works best for your situation. However, if you’re buying term life insurance, you may want to consider buying different coverage types as opposed to different types of life insurance.
This way, if one type of cover doesn’t cover you appropriately, you have other types to fall back on. If you’re buying whole life insurance, you may want to consider adding an umbrella policy to protect your assets in an expensive situation where one of your other types of life insurance doesn’t help you out as much.
Should you buy life insurance for your kids?
If you have kids, you might be wondering if you should get life insurance for them, too. The answer is yes, of course you should. But you’d do better to get term life insurance for yourself first, while your kids are still young and healthy.
This way, if one of them gets in an accident, you have enough coverage to pay for the medical bills and help them out financially. But if you have to pay for your kids’ life insurance, at least you’ll have the money left over for your retirement.
The bottom line
If you’re looking for ways to protect your family and your retirement, then term life insurance is the way to go. But if you’re looking for ways to protect your financial future, regardless of the cause of your death, then whole life insurance is the way to go.