When it comes to something as important as your loved ones’ financial security if you die, make sure that you take these tips into consideration to ensure you pick the right life insurance policy.
Life insurance is a policy that provides your loved ones with a lump sum of money called a death benefit in the event of your death. But for many people, choosing a life insurance policy can be quite the hectic adventure. There is a lot that rides on your decision, and if you choose incorrectly, it will be your loved ones that face the consequences. Make sure that you choose the right life insurance policy with these tips.
- Know the Two Types of Life Insurance
∆ Term Life Insurance – Term life insurance, as the name suggests, only lasts for a limited term. The terms usually go from 5-30 years and this policy is typically the least expensive life insurance option. Term life, however, does not hold any value outside of the death benefit.
∆ Whole Life Insurance – Again, much can be learned from the name of the policy. Whole life insurance will cover you for your entire life, as long as you pay all your premiums on time. While a bit pricier than term life, whole life accrues cash value that can be used, should you reach retirement and decide that paying the premiums is not something you want to continue doing.
- Know How Much Life Insurance You Need
In order for your family to be fully financially protected, you have to consider your monetary value to them at the moment. You have to consider the mortgage, car payments, credit card debt, student loans, future children tuition, and other child-related costs and things for which you pay.
Life insurance is an incredibly important policy; a policy that requires much thought and consideration in order to protect your loved ones. For all of your insurance questions and needs, contact CAV Insurance today.