If you're looking for life insurance coverage, you may be asking yourself: “What type of life insurance coverage do I need?” Term life? Permanent life? Variable life? Variable universal life? What do many of these terms mean, anyway – and which will provide your loved ones with the best coverage at the best price?
There's a great deal to consider when you're thinking about life insurance. Just how much are you able to afford to pay in monthly premium payments? Just how long would you like your coverage to last? What kind of death benefit would you like to leave for your loved ones? Are you taking out life insurance coverage to pay for your final expenses, or are you currently hoping to make use of your life insurance coverage to make sure your family could cover their day-to-day expenses (the mortgage, the groceries, etc.) after you are gone?
Taking out life insurance simply to cover the price of your own funeral is a very different thing from taking out a life insurance policy that can help replace the income you provide your loved ones. Life insurance coverage comes with numerous options and opportunities, and it is your decision to decide that is best for you and your family.
Choosing the right life insurance coverage is a vital step towards protecting all your family members and ensuring your personal peace of mind. We can't let you know what kind of life insurance coverage is right for you – but we are able to break up the different different types of life insurance so you know exactly what you're signing up for.
So if you're wondering, “What kinds of life insurance should I get?”, we are here to assist.
Term life insurance
Term life insurance is an easy and affordable way to protect your loved ones against a worst-case scenario. Term life insurance is also one of the most popular types of life insurance available – meaning if you're wondering what kind of life insurance you'll need, you might want to begin by considering a term life insurance policy for the financial needs.
As it would seem, term insurance provides insurance coverage for a specific length of time for the insured person. Most term life insurance policies offer 10, 15, 20 and 30-year terms, and you can decide what term length is best for you. Lots of people choose a term length that covers their loved ones via a major life milestone. If you have a 30-year mortgage, for example, you might like to take out a 30-year life insurance policy. If you are 15 years out from retirement, a 15-year policy might be best for the financial needs. Some parents remove 20-year policies to pay for their own families until their children graduate from college.
This (and all sorts of kinds of) life insurance come with a death benefit, the amount of cash paid for your beneficiaries when you die. This death benefit is usually referred to as the policy amount, and typical insurance coverage amounts vary from $100,000 to as much as $3,000,000. (It's understandable, however the more coverage you get, the higher your monthly premium payment is going to be.) Generally, the death benefit could be issued inside a lump sum payment, and it can be used to cover funeral expenses as well as serve as a salary replacement to assist your dependents or beneficiary. If you want to ensure your family members can both survive and thrive after your death, a phrase life policy could provide the protection you need.
Term life policies are also extremely affordable. You will not get the cash value that accompany permanent life insurance plans, but you'll pay a much lower life insurance rate when choosing this type of insurance. A healthy, non-smoking 35-year-old man can buy a 20-year, $500,000 Haven Life term policy for about $24 monthly, which monthly premium rate is locked in for that entirety of his 20-year term. Plus, you'll simply be paying for the amount of life insurance your loved ones really needs – and you can use our online life insurance coverage calculator to calculate exactly how much coverage you should get with this particular life insurance coverage option. If life insurance is going to be part of your long-term financial plan, obtaining a few good term life quotes should be in your immediate to-do list.
Medically underwritten term life insurance
Most term life insurance policies are medically underwritten, meaning you'll need to have a life insurance medical exam as part of your application. Don't worry – the exam could be completed in your house at a time that you pick, and should not take more than Half an hour.
Life insurance providers make use of the medical underwriting process in an effort to assess your health and identify any potential risks. (Smokers, for instance, are thought riskier than non-smokers – which is one reason to think about kicking the cigarette habit.) Test, along with questions regarding your current hobbies, family medical history along with other relevant factors, helps determine both eligibility for term life insurance and also the amount you'll pay in monthly premiums.
If you are in good health, a medically underwritten term life insurance policy might be one of the most affordable life insurance coverage options out there. Here is a real-life Haven Life customer example: a 30-year old non-smoking woman in excellent health happens to be paying $19.46 monthly for any 20-year policy with $500,000 in coverage. That's the value that medically underwritten term life insurance can provide.
Quotes for term life insurance
No health check life insurance
If you do not feel at ease going for a health check, you may also apply for no-medical-exam life insurance coverage, otherwise known as simplified issue life insurance. This kind of term life policy is not fully medically underwritten, so it's apt to be more expensive than a standard term life policy. Because the life insurance coverage company doesn't termed as much about your health background or risks, they'll both limit the quantity of coverage you will get and raise the cost of your premiums.
If you have in mind being familiar with no-medical exam life insurance coverage, check out Haven Simple. The application can be completed online within a few minutes, and a 30-year-old non-smoking woman can expect to pay for around $17.81 per month for a 15-year policy with $500,000 in coverage.
It's vital that you be honest in the application. The issuance of the policy or payment of benefits may depend upon the truthfulness of answers you give within the application.
Quotes for Haven Simple
Permanent life insurance
Permanent life insurance coverage may be the other major group of life insurance coverage. Unlike a phrase life insurance policy, a permanent life insurance policy offers lifetime coverage. (In ways that a permanent life policy covers you permanently.) This type of permanent coverage comes with a higher life insurance rate. A $100,000 whole life policy from Allstate, for example, starts at $136.68 monthly.
Like term life insurance policies, a permanent life insurance policy provides a death benefit that is generally paid out inside a lump sum. However, permanent policies also come with a cash value. The policy's cash value accumulates each and every premium payment, and often the policyholder can withdraw some or all the cash value and employ it to pay for everything from college costs to retirement expenses.
Permanent life policies are attractive because they permit you to both provide for your beneficiaries after your death and accumulate money while you are still alive. The cash value can serve as a kind of savings, plus some kinds of permanent life plans even allow you to invest the money worth of your policy.
Variable life insurance
Variable life insurance is a type of permanent life that allows you to invest the cash value of your policy. While these investments could boost the value of your money value, and eventually the policy your policy provides, they could also decrease the policy's cash value, where the cost a coverage gets to be more expensive.
Universal life insurance
A universal life insurance coverage is yet another type of permanent life insurance coverage – but it comes with the choice to pay flexible premiums. Most life insurance policies have fixed premiums, in which you spend the money for equivalent money every month. Universal life insurance coverage gives you the opportunity to use the cash worth of your policy to cover your monthly premium payments. Universal life also provides you with the opportunity to pay a lot more than your monthly premium amount in order to increase the cash value of your policy.
You may also choose a variable universal life insurance coverage, which lets you put the cash worth of your policy into various investment options. Variable universal life provides you with the investing power a variable policy combined with flexibility of a universal life policy – but you'll pay higher premiums than you might pay having a term life policy.
Guaranteed issue life insurance
Guaranteed issue life insurance is a kind of permanent life insurance coverage known as final expense insurance (that's, insurance that pays just enough money to pay for your final expenses). As the name implies, everyone who applies for guaranteed issue life insurance is issued an insurance policy – but premiums are relatively expensive and you're typically restricted to a death advantage of $50,000 or less.
Employer-provided life insurance
Many people subscribe to group life insurance plans through their employer. Efforts in many cases are offered during open enrollment, along with medical health insurance, disability insurance and other kinds of insurance policy.
In most cases, group life insurance policies are guaranteed-issue (everyone who applies gets accepted) and do not require a health check. Your employer might pay a portion of the monthly premiums – or perhaps cover the entire price of the insurance policy.
What's the drawback? You aren't likely to get just as much life insurance coverage with a group life insurance coverage plan as you would having a term life policy or perhaps a permanent life policy. Actually, some people choose to supplement their employer-provided life insurance coverage by having an affordable term policy, just to ensure that themselves may have the security they require. Being underinsured isn't a lot better than being uninsured, in the end.
Life insurance riders
Life insurance riders are typical with life insurance coverage, and can be put into both term life insurance and permanent life plans. Most riders will increase your monthly premium costs, so speak to your life insurance company about your options and only subscribe to the riders that are most likely to profit you and your family.
There's a lot to think about, when considering life policies. Would you like the affordability of the term life plan? Should you obtain a permanent life insurance coverage plan for the cash value, or would you be better off saving or investing your personal money? What are the life insurance riders you should think about?
Ultimately, the question of “What kind of life insurance coverage will i need?” comes down to determining what kind of coverage is the best for your loved ones – and how you will get that coverage in the best, most affordable price. For several people, that means term life insurance. We can not say which kind of life insurance coverage is the best for you – but we can do our best to explain the various kinds of life insurance coverage, so you've the tools you need to make an educated choice.