Life insurance can be confusing and complicated, especially if you’ve never dealt with it before. This article will help you understand the main points of life insurance and its benefits, so you can make the most informed decision possible when choosing an insurance plan that works best for your life situation. Topics covered in this article include how to choose the right life insurance policy, what kinds of life insurance policies are available and how each of these plans work, as well as some basics on how to find an affordable plan that meets your unique needs and goals.
1) Life insurance isn’t just for breadwinners
Many believe that life insurance is just for the breadwinner in a family, but it’s actually important for everyone to have some coverage. If you’re a single parent, or even if you’re not the primary breadwinner in your home, life insurance is still something that you might want to consider.
2) You don’t need as much coverage as you think
Everyone knows that life insurance is a necessity. It’s also often the first thing people want to get out of the way when they start planning for their future. However, you don’t need as much coverage as you think. In fact, most people only need about 5x the amount of income needed to support their family in the event of a death.
3) Your health affects your premiums
The price of life insurance can vary depending on the individual. Some factors that affect the price include your age, gender, occupation, and health. For example, if you are a smoker, you will likely pay more for your coverage than someone who doesn’t smoke. Plus, if you have a pre-existing condition like diabetes or heart disease then you may have trouble obtaining coverage at all.
4) Life insurance can be used for more than death benefits
Life insurance can provide peace of mind for a variety of reasons. For example, it can be used to protect your family in the event of a disability or to help pay off your mortgage if you become unemployed. However, there are many misconceptions about life insurance that may keep some people from purchasing coverage. To help you understand what life insurance is and how it works, we’ve compiled 10 surprising things you didn’t know about life insurance.
5) You can get life insurance without a medical exam
You might be surprised to learn that you can get life insurance without a medical exam. In fact, many companies offer policies that are guaranteed issue, which means they won’t ask any health-related questions at all.
6) The younger you are, the cheaper life insurance is
- The younger you are, the cheaper life insurance is. Premiums are based on the risk that you will die before the policy expires. Those who are in their 20’s and 30’s pay much less than those in their 50’s and 60’s because they’re less likely to die prematurely.
- Some policies have a guaranteed rate, which means your premiums will never change no matter how old you get or how long you’ve had the policy.
7) Term life insurance is the most popular type of life insurance
Term life insurance is the most popular type of life insurance. It is a contract between an insurer and the insured, where the insurer agrees to pay a benefit to the insured if he or she dies during the term of coverage. Term life insurance can be in effect for as little as six months or as long as thirty years.
The most common type of term life insurance is whole life insurance, which includes both death benefits and cash values.
8) Whole life insurance has benefits other than a death benefit
Whole life insurance may have a death benefit, but it has other benefits as well. It can provide a steady income for your family, pay off your mortgage and even pay for your children’s college tuition. This is what you need to know about whole life insurance.
9) There are different types of whole life insurance
Different Types of Whole Life Insurance
Whole life insurance is the most common type of life insurance in the United States. It’s a permanent policy which lasts for your entire life and it provides coverage for death, disability, and retirement. This type of life insurance has two components: an investment component and a death benefit component. The investment component grows tax-deferred, meaning that you don’t pay income taxes on any gains made in the account.
10) Universal life insurance is the most flexible type of life insurance
Universal life insurance is the most flexible type of life insurance, because you can switch from whole-life to term or back without having to go through the application process again. This flexibility is crucial if your needs change in the future. Some other benefits of universal life are that it does not have a set premium, which means that you can pay as little or as much each month as you want, and it also allows for tax-free growth on certain funds.
