Learn how to understand whole and term life insurance quotes before you decide on a life insurance plan.
Even though most people will get life insurance at some point, too many people aren’t sure where to begin. If you think you will need to get a whole or term life insurance quote in the near future, you should start thinking about what you want out of a life insurance plan.
For those that are still unsure of how life insurance works, we’ve compiled a list of questions that you need to ask before deciding on a life insurance plan. By asking these questions of yourself and of your insurance company, you can feel confident when you sign your life insurance contract.
How Do I Know If I Need Life Insurance?
Before you seek out a whole or term life insurance quote, ask yourself a few questions to determine whether or not you need life insurance.
If you feel like getting a life insurance plan is complicated — you are not alone. There are lots of options and you’ll likely get different whole life or term life insurance quotes from each company you consult. But, before we get ahead of ourselves, let’s start at the beginning by answering the question: “How do I know if I need life insurance?”
To find out, answer the following questions. If you answer yes to any of the following questions, you should purchase life insurance:
- Do you have any dependents that rely on your income?
- Do you have any outstanding debts, like a personal loan or a mortgage, that others would be responsible for after you die?
- Are you worried your savings isn’t enough to cover your end of life expenses?
If you answered yes to any of these questions, you should consider purchasing life insurance. Now that we’ve determined if you need life insurance, it is time to go over how much it costs.
How Much Does Life Insurance Cost?
Term life insurance quotes generally depend on the age, location and health status of the person applying.
There are a lot of factors that determine the cost of a whole or term life insurance quote. The first factor that is taken into account is age. When it comes to term life insurance quotes, very often young people will end up paying lower rates. People between the ages of 20-30 will generally pay around a $20 premium for a 250,000 plan. This is of course, for a term life insurance plan that will eventually expire.
For young people interested in signing up for whole life insurance, the cost could be up to 10x more than you would pay with term life insurance. In many cases, young people end up paying more than they will as they get older — essentially saving the insurance for when you will need it most. If you’re beginning to get confused by the different types of life insurance, we’ve got you covered. Let’s find out about the different types of life insurance you can choose from and their individual benefits.
What are the Different Types of Life Insurance?
Find out if term life insurance, whole life insurance or universal life insurance is right for you.
There are 3 major types of insurance that most people encounter. Each has its advantages and disadvantages depending on your life situation. Read through each section to get a better idea of which type of life insurance will work best for you.
Term Life Insurance
The first type of insurance is term life insurance. As we have previously mentioned, term life insurance is unique because your coverage will eventually end. Most term insurance policies can last anywhere from 10 to 30 years. If you don’t use your insurance at that time, you are essentially paying for peace of mind. However, since no one knows what will happen in the future, many young people seek out term life insurance quotes because the monthly cost is drastically cheaper than the other two options.
Whole Life Insurance
Should you opt for whole life insurance over term life insurance, you’ll sign the contract and receive permanent insurance. Not only is whole life insurance permanent, but it can also grow in value over time. This money provides a lot of flexibility for older people as they can use cash from their whole life insurance policy for emergencies or as supplemental retirement income.
The catch is, only as long as you pay your premium will you receive these benefits. If you find yourself unable to pay the premium or want to exit your whole life insurance plan, walking away from your plan can be complicated and expensive
Universal Life Insurance
The third and final type of insurance you might encounter when deciding on a plan is called universal life insurance. Benefits-wise, universal plans operate similarly to whole life insurance plans. Universal plans also guarantee permanent protection and can accrue cash value over time. The major difference between universal life insurance and whole life insurance is that universal plans allow adjustments to your monthly rates. Adjustments to your rate are made so you can continue to afford life insurance should there be changes in your income. When you choose a universal policy, the rate flexibility is closely monitored so that your policy does not lapse.
There are lots of other factors that will help you determine which type of policy is best for you and your family, so it’s important to do your research. We recommend working with an insurance company to determine which policy is the best for you at this stage in your life. Remember, your life insurance plan is specific to you so make sure you feel comfortable with your coverage.