Life Insurance 101
While most people don’t fancy the thought of their own death, the fact of the matter remains that death is part of life and in order to protect our loved ones, we need to give some thought to the subject of Life Insurance. Becoming more educated in what life insurance is and what your choices are, the easier it will be to prepare for your final expenses and protect the ones you care about most.
First, you need to understand that there are a few different choices and variations of your life insurance options. Figuring out which life insurance option is best for you will depend on a few different factors, including your current age and health condition. The two major classes of life insurance policies that you need to concern yourself with are Term Life Insurance and Permanent Life Insurance.
Term Life Insurance supplies you with life insurance coverage for a pre-determined period of time. This type of life insurance coverage will usually cost less than permanent life insurance. Policy durations are normally divided up into clear and simple periods of time such as 1, 10, or 10 years. If you are to die within that time period, the death benefit you qualified for will be paid to the beneficiaries you have chosen. On the other hand, if you are still living when the time period expires, your protection will end unless you elect to renew the policy. Term Life Insurance is a perfect fit for those individuals who are only in need of temporary life insurance coverage or those who need large amounts of coverage but are unable to spend very much money.
Permanent Life Insurance provides coverage that is devised to accommodate an individual’s entire life, although in some cases, the policy you choose may be limited up until a specific age. Permanent life insurance policies acquire a “cash value” over time; once you have reached your policy age limit you will be paid the total “cash value” of your permanent life insurance policy. This is one of the major advantages of deciding on permanent life over term life, because it allows you to build up a “cash value” policy. However, there are 2 different divisions of permanent life insurance; Whole Life and Universal Life.
With a Whole Life Insurance policy, under certain circumstances, an individual will be paid dividends and they will also have the advantage of premiums that will not fluctuate over time. With Universal Life Insurance, the owner of the policy is granted the ability to change the policy premiums. Having this type of flexibility can be very beneficial if the owner of a Universal Life Insurance policy experiences a future life changing event.
Note: Any form of permanent life insurance is especially good for younger individuals, who are interested in long term life insurance and who like the idea of building up a “cash value” with their policy.
Knowing you have choices when it comes to life insurance is important…but making a sound decision on the right policy for your personal situation is even more important. Hicks Insurance will help you analyze and discover the perfect policy for your personal and financial situation.
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Hicks Insurance – Humble, Texas – Life – Term Life – Whole Life – Universal Life
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