Posted on: 18 March 2019
When you are planning on things that you can do to make sure that your family is safe after you have died, one of the things that you plan on should be life insurance. With life insurance, your family will be able to have some money, which can let them cover the funeral expenses, as well as other expenses that may come up. When you are looking at life insurance, there are different kinds of insurance that you can choose from. Knowing the differences can help you figure out which one is best for you and your situation.
When you choose to use term life insurance, you are setting it up for a particular time period. For example, your term may be for 30 years from the time you sign up for the policy. If you were to die within that term, then your family or beneficiaries will get the payout from insurance. However, if your term expires on 01/01/2020 and you die on 01/02/2020, then your beneficiaries won't get any payment, unless you have started a new policy that would cover that time period.
Term life is generally less expensive than other kinds of life insurance. You also generally don't have to get a medical exam before you start the policy. If you are young and healthy, this can be a good way to get some life insurance and give you some breathing space before you get better insurance.
Whole life insurance is different to term life. With whole life, as long as you keep up the payments on your policy, when you die, your family will get payout. It doesn't have an expiration date on the policy. Generally, you will have to have a medical exam before you start this kind of policy, especially if you are going to get significant coverage.
However, with whole life insurance, you can borrow against your policy. If you do that, part of your premium will go back to paying the loan and part for the policy. If you do borrow against your insurance and you die before you have paid it all back, the payout to your beneficiaries will be minus the amount that you owe.
Having life insurance is a good thing for you and your family. It makes sure that your family is well protected financially if something happens to you, which can give you a lot of peace of mind.Share