Obtaining life insurance is one of the smartest decisions you can ever make for you and your family. Life insurance will allow your family to continue living the way they are now should something happen to you, providing them with a stream of income to take care of final expenses and other costs that may be left uncovered in your unexpected absence. The proceeds from a life insurance plan can be used to cover everything from mortgage payments to college tuition, and simply having life insurance will give you the peace of mind that comes along with knowing your family will be OK in case of the unexpected occurring.
When you decide to get life insurance, you will typically need to decide between three types of programs – whole, term and universal life insurance. Each of them operates very differently, so it’s important to select the one that will ultimately work best for you and your family. Let’s take a closer look at the advantages that each offers to consumers.
Whole Life Insurance
Whole life insurance is designed to provide you with lifelong insurance in exchange for fixed premium payments. These rates will generally not increase, and the accrued cash value of the insurance can be used throughout your life as equity that you can borrow against to pay for other expenses or to receive a loan. These policies also have a guaranteed rate of investment, ensuring that your invested payments accrue additional value.
Term Life Insurance
Term life insurance – as its name suggests – provides a consumer with coverage for a specific period of time. Most term life insurance policies can run anywhere from one year to 30 years, and your dependents will only receive a payout if you pass away within that time period. Unlike whole life insurance policies, term policies offer no cash value, but instead cover you for the designated period at a reduced premium for the duration of the plan.
Universal Life Insurance
Last, universal life insurance programs are similar to whole life insurance in that it covers you for life, but it offers a more flexible premium payment schedule. Payouts from a universal life insurance program are made tax-free, meaning that any beneficiary who is named in your estate can use the income without needing to worry about being subjected to probate or public record, allowing them to pay for expenses discretely. This coverage is also unique in that it can be used as a tax-free income stream in retirement in addition to accruing equity you can borrow against for various expenses throughout your life, like college tuition, home ownership or unexpected emergencies.
All three types of life insurance have their benefits, so you should choose the one that works best for you to protect your family both now and in the future. The experts at The Lewis Financial Group can help you select the right life insurance and discuss your options with you to determine what works best for you and your situation. Contact us today in West Virginia at 304-242-3355 or in Ohio at 740-699-2636 to schedule an appointment to learn more.
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