Part of preparing for your future is planning how your family will survive once you’ve passed. While the younger you are, it may not even be a thought in your mind, it’s important to understand that the sooner you meet with an insurance agent, and establish your coverage, the better off your family will be in the long-run. It’s a back-up plan to keep your family financially secure should the unthinkable happen. How can life insurance prepare you for the future? Learn more below!
What Life Insurance Should I Get?
There are two primary policies, to consider, when getting life insurance. These primary options then break-down to suit whatever specific needs you have. Those are:
● Term Life Insurance will cover you for a specific amount of time. Generally, you could have coverage for 10, 20, or 30 years. If you pass away during this coverage the money can be distributed with no problem. After the term expires, your family or whoever is on the policy will not be able to collect. Some term life insurance policies can be renewed, but you will have to discuss what your policy allows with your insurance agent.
● Permanent Life Insurance will cover you for the rest of your life, whether that be 20 years or 100 years. This life insurance will create more of a savings account. While you have is a minimum guaranteed interest, or a dividend will accumulate throughout the years. If need be, you can borrow against it or possibly use it to cover whatever premiums you may have.
◦ The cost of a permanent life insurance policy will be more expensive and possibly increase over time, while the term life insurance is less costly. It comes down to personal preference and what may need to be taken care of after you pass away.
How Much Life Insurance Should I Take Out?
The standard range is from $250,000 to $1 million. It comes down to handling any funeral costs, a mortgage, student loans, or any other debt you may have. If you are the primary source of income for the family, it helps pay for any day-to-day expenses the family is used to paying for until they can find another means for an income.