What do you care about most in this world?
Is it your car? Your cellphone or home?
How about your life?
If you’ve never before considered purchasing a life insurance policy, now is the time. You wouldn’t wait until after you’ve been in an accident to look into car insurance, why should you do that with your life?
We know, easier said than done. Finding the right insurance policy can be confusing and downright tricky. That’s why we’re here to clear things up.
Read on to learn why investing in life insurance could be right for you and your family.
What Is Life Insurance and How Does It Work?
Let’s dive in straight off the bat: what the heck is life insurance anyway?
You should note that life insurance is not meant for you, it’s meant for your loved ones. In short, insurance is a contract between you and a company where in exchange for regular payments (likely monthly), the company will pay out an agreed upon sum of money to your selected beneficiary.
It is a fact that you are going to die one day. Until someone invents a way to live forever, we all just have to face that fact. Life insurance is a way to “ensure” that your loved ones are taken care of when you pass away.
Life insurance is especially important for those who are the breadwinners of the family.
Here’s a quick breakdown of some life insurance lingo:
Beneficiary: A person of your choosing that receives your death benefit
Death Benefit: The payout upon your death previously agreed between you and the insurance company
Premiums: The regular payments, whether weekly, monthly, or yearly, that you pay in order to purchase the insurance policy
The Difference Between Permanent and Term Life Insurance
You may have heard the phrases term life insurance and permanent life insurance thrown around before, but what exactly are they?
Let’s take a look.
Term Life Insurance
Term life insurance is a policy that is only good if you pass away during a predetermined time period. You might consider term life insurance if you find yourself working a dangerous job, such as an electrician or oil driller.
Term life insurance is typically cheaper than a permanent policy, of course, this is because you might not pass away during the length of the term insurance.
Permanent Life Insurance
Permanent life insurance, on the other hand, guarantees a payout, no matter when you die. You may also hear the terms “whole life insurance” or “universal” insurance. These are essentially the same as permanent, but may have variation based on the offering company. Check out this quick company comparison with Top Quote life insurance.
Since permanent life insurance is more expensive, we recommend you practice as many money saving principles as possible, so that you won’t need a permanent policy.
Is Investing in Life Insurance Worth It?
Now that you’re more educated on the subject, it’s time for you to decide if investing in life insurance is worth it.
That long and the short of it is, no one can tell you what’s right for you. You have to decide for yourself which, if any, policy best suits you and your family.
For now, we can only suggest that you continue to educate yourself as much as possible on the matter.
If you’re a small business owner, on the other hand, you won’t want to risk not having a strong policy. Check out these 8 types of business insurance any small business won’t last without.