courtesy of www.healthysciencebuilding.com
Life insurance can be an important tool to pay for any expenses after your death and some expenses while living depending on your policy. Once you have the
magic number for amount of coverage you want, seek out comparisons for monthly premium rates
and plan benefits. Be sure to check the company’s reviews. Also, get to know the financial strength ratings from
S&P, Moody’s, Fitch, or A.M. Best, this will show how stable the company
is.
There are many rewards for buying life insurance
-Paying off debt and hospital expenses-Leave less financial responsibility on your grieving family
-Covering funeral costs
-Providing a cushion for your spouse and/or kids
-Creating wealth for your heirs
-Protect a small business`
-Some policies offer cash reserve--additional source of supplemental income
courtesy of www.sentinelgroup.com
But there are also many risks to buying life insurance:
-The purchase price for your coverage changes as
you age
-Health conditions diagnosed prior to buying life insurance can limit the amount of coverage you can purchase
-The financial institution or the company holding your benefit can go under, making it impossible to pay your benefit
-Purchasing too little insurance can leave a burden on your family and purchasing too much coverage can be a waste
-Purchasing life insurance with your employer is more cost effective but if you leave your employer the plan may not transfer to
an individual policy
The most common types of life
insurance is term, whole, and variable. Term life is the purchase of a death
benefit based on a group of years usually in 5 or 10 year increments. It is
usually a cheaper alternative with high coverage but if you do not pass away
within that time then you have to purchase another term. Whole life is the
purchase of death benefit for the remainder of your life, stays in effect from
purchase date until death. This type of policy offers a cash reserve and it is
invested by the insurance company until the benefit is paid. Variable life is
not as commonly selected but operates like whole life insurance with changes
throughout a term of years for investment on cash reserve. For example, you would
personally choose where your cash reserve is invested every ten years.
Last words of advice—keep your
contact information up to date and your policy information accessible for
people to find upon your passing. Hopefully, we will all live a long, beautiful
life. In meanwhile, this gives you a head start to a make a decision on what
will be best for you. Feel free to comment or share below or on social media at Instagram @practicalwallet,
Twitter @practicalwallet, and
Pinterest @practicalwallet.
