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We’ve Got the Answers That Will Clear Up Your Confusion
There are lots of reasons why it is a good idea to have life insurance, but whatever your circumstances, realizing you need life insurance is the easiest part. The hard part, of course, is figuring out the process, the types of life insurance, and what it all means for you. It is normal to have lots of questions about life insurance. The good news is that we have the answers so you can make the best decision for yourself and your family.
What is involved in applying for life insurance?
One of the first questions many people ask is whether they will need a medical exam. While there are some types of life insurance you can get without a medical exam, these policies typically cost more and provide less coverage.
There is a common misconception that these medical exams are invasive and inconvenient. However, any reputable company will work with your schedule to make this process as easy as possible. And what many people do not realize is that the blood test actually helps you in many ways because it is how the insurance company calculates the best rate for your policy. These tests give the company a picture of your general health, including risk factors like high blood pressure, high cholesterol, or glucose, an unhealthy BMI, and signs of nicotine, tobacco, or drug use. What this means for consumers is that healthier applicants are eligible for lower premiums.
How do I know what type of life insurance policy I need?
Most people have heard of comprehensive life insurance policies like term and permanent life insurance, but you may be less familiar with policies that are designed to cover specific needs, like final expense insurance. Sometimes called burial insurance, these policies help your loved ones pay for funeral costs, plus any debts like medical bills. Final expense insurance is especially helpful for seniors who don’t have a term life policy but who want to ensure their loved ones are not left with the responsibility of handling their final expenses.
Term Life Insurance
The two main types of life insurance are term and permanent. Term life is the simplest and most straightforward option, and as long as you choose the right amount of coverage and the best term for your situation, most people find that a term policy provides exactly what they need. Choosing the right term and value of the policy is essential because you want to be sure that your loved ones can maintain their current standard of living if you pass away unexpectedly. If you were to pass away during the term of the policy, your beneficiary would receive a payout. Otherwise, the policy would expire at the end of the term.
Permanent Life Insurance (Whole and Universal)
Unlike term, permanent life insurance policies never expire as long as you continue paying the premium, which means your beneficiary is guaranteed to receive the value of your policy after your death. Market Watch explains how these policies also include an investment so the cash value grows over time. There are two types of policies that are both considered permanent: whole and universal. The main difference is that universal life insurance allows you to increase or decrease the benefit if you feel like your insurance needs a change later in life.
For some families, the drawback of permanent life insurance is that rates are higher than with term life. However, Kiplinger explains how some people like having whole life as a way to build a fund for their children to inherit. You can also draw from this fund while you are living as a way to pay for needs like long-term care.
Life Insurance and Your Budget
Of course, you will need to make sure you have room in your budget for the monthly premium. This added expense is also something you will need to take into account when you are doing other things, including buying a house. For example, when you are trying to determine how much you can afford to spend on a house, it is definitely something that you should keep in the back of your mind. However, when applying for a loan, lenders do not take “living expenses” into account, so you can exclude insurance payments (as well as groceries and transportation costs).
Regardless of what you choose, the bottom line is that life insurance is there to protect your family. No one wants to need life insurance, but putting it off means putting your family at risk. We can help you take the guesswork out of insurance so that confusion does not keep you from getting the coverage your family needs.
For more information, please give your trusted, neighborhood independent insurance agency a call at 845-986-1177 or submit a quote for life insurance here.
At Seely & Durland, we are your business, home, auto, and life insurance solutions provider, partner, and adviser, serving Warwick, Greenwood Lake, Florida, Goshen, Pine Island, Middletown, Chester, Monroe, Newburgh, Orange County, and the Hudson Valley and Tri-State Area.