Do you need Personal Life insurance?
Guidelines on what to buy and why.
Purchasing a life insurance policy is traditionally done with one key goal in mind: Financial protection for family or other beneficiaries who remain living. And although life insurance is potentially a complex topic,
there are only two basic forms: Term or Whole Life. Which is the best life insurance for you? Before you get a life insurance quote, let’s examine some of the differences.
Term Life Insurance
As the name implies, Term life insurance covers the insured for a set span of time. At this stage, 30 year is the longest term available and that is subject to several factors. Among them are age and health of the person being insured. In the event that the insured individual passes away during this “term”, the financial benefits are then paid out to the beneficiaries. Term insurance is often selected by younger buyers due to its lower premium payments. Keep in mind that as the policy “ages” premiums will also increase. As you’d expect, once the “term” is complete, both payments and benefits come to an end.
Whole Life Insurance
As stated, these life insurance policies can be maintained for all the remaining years of a person’s life. Some of the advantages of a Whole Life coverage is that once approved, you cannot be revoked for as long as the premiums are paid according to the policy. As we age the benefit of this become astoundingly clear. Whole life policies are normally structure to produce a cash-value. This can allow both the insured person to enact a “policy loan” in order to cover expenses. Often this type of loan is used for big-ticket items such as family college or graduate study expenses, unexpected needs and nursing care for elderly or those in need of specialized and intense care. Premium costs for these policies is typically higher than Term, but do not often increase.
Typically, a physical exam is performed prior to completion of the policy. While pre-existing conditions often don’t exclude a person from being accepted for either Term or Whole Life insurance, they may have an impact on the premiums. These situations along with personal choices such as type of employment, risk-related hobbies and personal habits such as smoking can also affect the cost of premiums for either type of life insurance.
Basic payout differences between Term and Whole Life Benefits can be seen here
|Death benefits paid during the limited term of coverage||Death benefits paid as long as the policy is maintained|
|Death benefits are not subject to federal taxation*||Death benefits are not subject to federal taxation*|
|Policy-loans are available and value of the policy will tend to increase along with Market§ activities.|
*Some restrictions apply. Consult with your representative for details.
Consult with your representative for details.
If you’re ready to receive a life insurance quote we’d be happy to help connect you with an insurance professional who fits both your needs and your budget. Contact us here. NJINSURE.com looks forward to serving you.