Life Insurance

If you think that the cost of living has become ridiculously expensive, just wait until you see how much it costs when there is a death in the family. It’s never a pleasant thought to think about our final days, but it’s something that really has to be done. This is especially true of you have a family where you are the major bread winner. What will they do in the event that something happens to you? What you have to ask yourself is if you have adequately prepared for your family to be looked after in just such a situation. If you haven’t it really is time you considered taking out a life insurance policy.

Making the decision to take out a life insurance policy is a good one, but it may not be as straightforward as you imagine. Not only do you have to choose between the numerous insurance companies that are constantly vying for your attention on TV, you also need to decide which type of policy best suits your personal situation. Let’s take a quick look at your options so that you can get a better idea of which type of life insurance is best for you and your family.

Perhaps the most common form of life insurance is the whole-life policy. Simply put, you decide on a specific amount of money that you would like your family to receive in the event of your passing. The amount you choose will decide the monthly premium you pay, as will your age when you take it out. The earlier you decide to buy this type of policy, the less you will have to pay each month. Those payments will never change for as long as you are alive, with the insurance company investing that money to make it grow over the years.

If you can’t really decide on a set amount that you would like to insure your life for, you could always choose a term insurance policy. As the name suggests, this is a policy that is taken out for a set period of time. The insurance company doesn’t do any kind of investing with your money here, choosing instead to automatically renew your policy for every year that your remain healthy. The monthly premiums start off very low, especially if your buy when you are young, but they increase over time. One way around that is to purchase a policy at a fixed rate for a set period of time.

Universal insurance is somewhat similar to term, but there is also an investment aspect to this one that is similar to a money market account. You can choose a guaranteed rate of return or roll the dice and get a bigger chunk by not settling for a guaranteed rate. If the latter of those two options is a little more appealing, you could go with a variable life insurance policy, where there are no guarantees, but the returns can be that much higher.

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