No one likes to think about death, but preparing for the inevitable can make things easier for your family members. The best way to ensure your family’s financial future after you pass is to purchase a life insurance policy with enough coverage for your specific situation. Life insurance provides financial peace of mind when facing funeral and burial costs, paying off outstanding debts, and managing daily living expenses. This is especially important if you shoulder the sole financial responsibility for dependents.
What is life insurance?
A life insurance policy is an agreement between a policyholder and an insurer. In exchange for monthly premium payments, your beneficiaries receive a lump sum payout, or death benefit, upon your death. Your beneficiaries can use the death benefit to cover expenses such as living expenses, mortgage payments, or college tuition. Life insurance coverage provides financial protection to ensure your family can survive and pay for planned expenses.
There are two main types of life insurance policies.
There are two main types of life insurance policies you can purchase, long-term coverage or coverage for a set period of time. The most affordable and popular type of life insurance is term life insurance. It provides coverage for a set period of time (10-30 years) and you pay a fixed premium for the life of the policy. Beneficiaries can claim the death benefit payout tax-free in the event you pass during the policy term. You can renew a term life insurance policy once it expires on an annual basis for a higher premium rate.
Permanent life insurance is a more expensive type of coverage that provides lifelong coverage. This type of policy accumulates cash value on a tax-deferred basis throughout the life of the policy. The cash value is like a savings pocket that allows you to make a withdrawal or borrow against.
Whole life insurance has a fixed death benefit and cash value that grows at a guaranteed rate of return. Universal life insurance offers the flexibility of premium payments and death benefits. The cash value of a universal life policy builds depending on the policy type and is tied to an index. Burial insurance is a minimal whole life policy with a small death benefit designed to cover funeral costs and final expenses.
With so many types of insurance products available, determining how much coverage you need and what additional costs are necessary is tricky. The best way to find the right amount of life insurance for your family’s financial future is to compare life insurance policy quotes. At SelectQuote, you can compare different types of policies from a range of life insurance companies. Whether you need lower life insurance costs or need to determine if you have enough coverage, comparing life insurance quotes is the smart way to meet your life insurance needs.
Life insurance premiums are determined by several factors.
Several factors determine your life insurance costs such as the type of life insurance policy and the amount of coverage you buy. Age plays a big role when determining premium rates. The younger you are when you purchase your insurance policy, the lower your premium will be. Insurance companies consider gender when determining premiums.
Women have a longer life expectancy than men and usually pay less. An insurer will consider your medical history and health to calculate your life expectancy and insurance rate. Your lifestyle habits such as driving history, criminal record, and dangerous hobbies and professions also determine your life insurance rates.
One of the best ways to ensure you live a long and healthy life is to prioritize your health. Carrying excess weight and body fat is bad for your overall health. Obesity is known to cause diabetes, heart disease, stroke, and some cancers. Practicing the right type of physical activity and making the right lifestyle changes are key to healthy weight loss. StepFitnessOnline explains how to lose weight with the right types of physical activity.
The key to completing an effective weight loss program is to set weight loss goals. Physical activity is defined as a planned and repetitive movement. Most people plan their workouts for the week to keep track of their movements. Effective exercise must be repetitive and intentional, whether you are training for a marathon or working toward weight loss. The best physical activities that support weight loss include cardio, strength training, dynamic and static stretching, and meditation.
It’s a good idea to have life insurance so that your family’s financial future will be secure in the event of your passing.