When you first start your family, you may want to consider a life insurance policy. A life insurance policy can provide coverage for your family in case an unexpected accident makes it so that you can no longer care for them. If you suddenly pass away, life insurance can provide your family with benefits for funeral expenses, income and help with the unexpected burden of debt.
But not all life insurance policies are created equal. There are three main types of life insurance policies:
Term Life Insurance
A term life insurance policy lasts for a specific length of time. If the policyholder passes away while the policy is active, benefits will be paid to those listed as beneficiaries. If the policyholder does not pass away while the policy is active, the policy will simply end.
Whole Life Insurance
A whole life insurance policy provides coverage for as long as the policyholder lives. This policy lasts until the policyholder passes away and pays out benefits to the surviving beneficiaries. There is no need to renew this type of policy.
Universal Life Insurance
A universal life insurance policy is a type of whole life insurance policy that adds a cash value option. This means that as your account accumulates interest you can withdraw a certain cash amount while the policy is still active.
The best life insurance policy may differ from policy to policy depending on your specific needs. For example, if you or your spouse are still paying off student loan debts, you may want a term life insurance policy that only lasts until you pay off your debt. This way, if you pass away before paying off your student loans, your loved ones will have the cushion of your life insurance policy to help take care of the unexpected expense.
On the other hand, a whole life insurance policy is useful if you simply want a single policy to last as long as you live and one that you don’t have to renew. Cash value policies such as universal life insurance policies can also be extremely useful for receiving extra cash when you need it.
As a new family, there is a lot on your mind from a new home to possibly having children and more. Take life insurance as one of those considerations as you are setting up the finances to take care of your family.
The best part about getting life insurance young is that it typically costs less than if you purchase it later. Speak with an insurance agent about protecting your family with life insurance today.