The start of a new year is the perfect time to review your life insurance needs. The following information will help ensure that you get off to a sound and secure financial start.
Why You Need Life Insurance
Plain and simple, life insurance is the ultimate form of protection for your family’s financial future. Whether you’re the primary breadwinner or the person who holds it all together at home, life insurance ensures that your family is able to sustain its standard of living should you pass away.
Why Purchase Your Own Policy
Purchasing your own policy, rather than depending solely upon an employer-sponsored policy, makes perfect sense. There are important tax advantages to consider, and your own policy provides stability in the event of a job loss. Be sure to speak to your insurance agent about your individual situation.
Types of Life Insurance Policies
There are several types of life insurance policies designed to fit nearly any budget, age or need.
A few of the more common forms include:
Term Life Insurance: Such insurance is considered one of the most affordable options. Term life insurance provides important protection for young adults and others seeking cost-effective options. It does not include an investment option. Policies range from one to 40 years duration.
Whole Life Insurance: Premiums typically include a face value portion and an investment portion, which is paid in the form of dividends. Although initial premiums are higher than they are for term life, whole life often is more affordable for long-term coverage.
Variable Life Insurance: With variable life insurance, a portion of the premium is used to pay for the cost of the insurance and fees, and any excess can be invested in such things as stocks and bonds, mutual funds, equity funds, and money market funds. It is advisable to work closely with your agent in order to determine the right level of coverage and investment diversification to meet your individual portfolio needs.