Life insurance is important, especially if you have a family or other financial obligations. There are two major types of life insurance, term life and permanent life. Both offer different benefits. Here’s how you can decide which is right for you.
What Is Term Life Insurance?
Term life insurance covers the insured for a set period of time. The amount of time you are covered is stated in your life insurance contract, meaning there shouldn’t be any confusion related to how long you are covered. If you die during the insured period, your beneficiaries will be paid a death benefit that is also stated in the insurance contract. If you die outside of the stated period, there will be no payment.
What Is Permanent Life Insurance?
Permanent life insurance covers the insured for their entire lifetime, as long as you make your premium payments. Permanent life insurance policies also include a cash savings component that builds equity over time. You can take loans from the cash savings component or withdraw the money entirely. If you take a loan from the cash amount, the unpaid amount may be deducted from your death benefit when you die.
Which Is Best?
If you are younger, there are benefits to buying whole life insurance. Primarily, a permanent life insurance plan will be far less expensive if you are young and in good health. This can allow you to set up insurance that keeps you protected for a lifetime.
On the other hand, term life insurance is pretty cheap when you’re young too. You can also purchase plans with much higher death benefits when you’re young and healthy. The downside to this is that you are less likely to die during your youth, meaning some money could be wasted.
Beyond age, you should also consider what your needs are. If you are on a trajectory that should lead you to have complete financial security in your later years, whole life insurance may not be necessary to replace your income. Instead, a term life plan can provide you with the coverage you need while building your assets and wealth.
Find Life Insurance Coverage Today!
If you aren’t yet sure which form of life insurance is best for your situation, get help making the decision. Carolina Senior Benefits is prepared to help you choose, just give us a call at 704-765-4689 to get started.