With the availability of so many kinds of insurance, it can be confusing trying to select the kind of insurance that is most appropriate for your personal and financial circumstances. Life insurance is valuable to have for the protection of your financial assets now and to ensure that the costs of your final expenses are taken care of. Life insurance is also worth considering for the unexpected turns that life often takes. Treating many of the diseases that strike older adults is becoming increasingly more expensive and has put a real strain on the retirement funds of many people. You can offset the unexpected and very expensive costs of prolonged medical treatments including extended care nursing, with partial or total withdrawals from your life insurance.
But how do you choose what kind of life insurance is the best fit for your personal circumstances? Should you invest in more than one kind of life insurance? There are many factors that you must consider that will help you in answering these questions. Does your employer offer a life insurance plan? How old are you? Are you nearing or in retirement? What is the state of your present health? What is your family history for major diseases? How much money could you afford to spend monthly, annually, or in one large payment for life insurance? Is your retirement fund big enough to cover retirement living, the expenses of an unexpected and lengthy illness, and also cover the costs of memorial and burial services when you die without having life insurance? These are questions to consider and to consult with a professional insurance agent about as well.
Term life and whole life insurance are the two kinds of life insurances that many of us hear about the most. But what do their names mean and what are the differences between the two? Is one kind of life insurance better overall than the other? The following information is intended to help you better understand term life insurance VS whole life insurance.
Term life insurance is so named because it signifies a kind of life insurance that stays in effect for a specified amount of time. Typically this means time terms of 10, 15, 20, or 30 years. Term life insurance often costs much less than whole life insurance because of these shorter amounts of time that a policy is in effect. That makes it appealing for those that cannot afford whole life insurance, for younger people not ready for whole life insurance yet, or for those not needing longer term life insurance. Your home and other financial assets are fully protected throughout the time term of your policy. This also offers financial security for your loved ones in the event you unexpectedly suffer dismemberment or are killed.
Whole life insurance is so named because this traditional kind of life insurance remains in effect for the life of the policy owner. Whole life premiums cost more than those paid for term life insurance, but whole life insurance carries a guaranteed death benefit and cash value amount. The cash value of whole life insurance grows much more than term life insurance due to the longer term and higher amounts paid in premiums with this kind of life insurance. Dividends are earned and can be used for unexpected costs such as treating a major disease. Whole life insurance offers the same financial protection for your family in the event you experience an accidental or expected death.
Owning both kinds of life insurance is not a bad idea if you can afford to. That way you can tap into whichever life insurance is most liquid and with the fewest penalties for funds for use in times of emergency.
1 comments:
This is the best information that I have read so far that clearly shows the difference between both these life insurance policy option. Earlier I was actually confused between both these types and is not able to decide which policy option should I buy, but after reading the details everything is crystal clear.
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