Most people will agree that they need some type of life insurance. However, they may be confused about what they should buy. When you get married and start a family, you should have a life insurance policy that will protect your loved ones if something unexpected happens. Most people do not like to think about this, but nothing is certain and if you die, you will want to make sure your family is secure.
Term Life Insurance
One type of insurance most often chosen by people starting out is term life insurance. You can choose the amount of time you want the coverage. Generally, this is ten, twenty, or thirty years. Most people choose a policy that covers the number of years they will be working and paying bills. An example of a company that offers affordable term life insurance is Fortix Lux.
Term life insurance is designed to pay your beneficiaries a certain amount if you should die. It should be enough to take care of the expenses that your income covers until children are grown. The amount that you pay on the premium is usually the same. When a term life insurance policy expires, your children should be old enough to take care of themselves, and your major expenses, such as a mortgage should be paid.
Whole Life Insurance
Unlike term, whole life insurance has a cash value. As you pay the premiums, the value grows. The premiums you pay will stay the same, and upon your death, your beneficiary will receive the benefit. Since the cash value grows, you can borrow against it or even cash in the policy. Depending on the type you choose, your policy may earn dividends annually.
If you have a policy that earns dividends, you can use this money for a variety of things. You can take the cash, repay amounts you have borrowed against the policy, leave them to earn interest, or use them to reduce the premiums you are paying. Anytime you are considering purchasing a life insurance policy, you should talk to a financial advisor, allow them to explain the different types, and help you decide what type you need.