Choosing the type of life insurance policy you want is no walk-in-the-park. Though one may feel inclined to not get life insurance, there are many benefits that come along with securing a policy to protect you and your loved ones. To help, we’ve outlined important things to remember when choosing a life insurance policy below.
Determine if you want to build cash value
Unlike other types of life insurance policies, whole life insurance never expires and has the advantage of building up cash value, especially if you are wealthy. The money accrued has a guaranteed interest rate that works as a savings plan for a permanent policy. A portion of your premium allows you to use the cash value towards a retirement plan, investments and even expenses. This may be the perfect plan for you if you want a head start on estate planning at an early age. As always, choosing your beneficiary is always included in this process.
Note how much life insurance you can buy
Choosing to buy any type of life insurance policy requires money. Of course, working within means of your budget will also help towards supporting your financial plan. Term life insurance, for example, is more affordable as coverage is only set for a certain timeframe. While some individuals can buy multiple policies at once, such as when an employer is limited to an allocated policy timeframe, one must note how much life insurance can actually be bought as there are limits. Insurance agents can typically note your limit by calculating your net worth and current income.
Consider your age and overall health
Your age and overall health play a huge factor when determining which type of policy to choose. For example, if you are young, but you have a serious chronic illness that will affect your older years, your whole life would be more suitable. If you are a senior and are thinking about getting life insurance for the first time, then your whole life insurance may not work in your favor as it is a permanent policy and the premiums are much higher. Ultimately, the expiration date on a policy, such as a term life insurance, may or not work for you, with the exception of the scarcity of your risk class, such as temporary needs, any medical history and health changes.
Should you want to borrow
Borrowing from a policy is possible, such as taking out a loan, but doing this can come with downfalls. You not only risk losing benefits or having a reduced death benefit, but you can potentially pay taxes if the policy runs out of cash. Paying additional premiums may help but making sure how to approach borrowing in the first place is highly recommended.
Your family depends on you for financial stability. Do not let the burden lay on their shoulders in times of hardship. Instead, let us help you choose a life insurance policy that fits your needs.
Care Financial is a privately owned and operated business providing families, individuals and businesses with comprehensive wealth management strategies. Contact us online at www.carefinancial.com or call us at 251-633-7122.