What Life Insurance Policy Is Right For Me?
There is no one-size-fits-all when it comes to protecting the ones you love most. Life can take us in different directions and you need a good road map showing you how to get to your destination, even if you're faced with roadblocks, or obstacles and have to go different routes to get there. American Policy Insurers love analogies, and are happy to stick with them throughout the article if it helps shed more light on this subject. Let's cruise!
Life Insurance is the "vehicle", ensuring the safety and well-being of yourself and the ones you love and there are many different "Insurance Vehicle" types to choose from. Some Insurance Policy options are guaranteed to be reliable, while some Life Insurance products come with a bit more risk. Let's cover the differences between these different life Insurance Policies types so you can make the best decision for you and your family, to prepare for the open road ahead!
Safe Bet Life Insurance Policies
Permanent Insurance
If you are more fond of the "safe way home" option you're going to want to stay within this section of insurance products, as these are designed to last you a lifetime and ensure your family is able to venture on, even at the thought of you passing away. At the end of the day, that is what life insurance does for families, is a guarantee that if something were to happen to you, like a car wreck for example (wink wink), and you were to not make it back to them, that your Final Expenses are conditionally paid for. Get it? It's about making sure we have our personal affairs in order for our families, for any unforeseeable catastrophe in the future.
Permanent Whole Life Insurance
Universal Life Insurance Policy
This type of Insurance Policy is semi-permanent to permanent depending on how long you are wanting the coverage to last. You heard that right, this Life Policy is flexible in nature, allowing you to swerve and navigate your monthly, quarterly, or annual premium payments, by paying a minimum, up to a maximum amount at any given point to adjust the Policy Benefit values, which you cannot do with Whole Life Policies.
Universal Life Policies offer a guaranteed death benefit and offer cash value incentives, very similar to that of a Whole Life Insurance Policy. So what's the difference between Universal and Whole Life Insurance? Universal Life is flexible in nature and comes with better rates than Whole Life, however comes with certain age and health criteria to qualify for this type of coverage. More benefit amounts for your dollar with guaranteed premiums up to age 121, grants a solid frame foundation for any individual.
You'll also want to note that this Policy will require some servicing on the Policy Owner's side as you cruise, to keep track and adjust where your cash value sits over time and ensure the benefit will last up until the age you are wanting. One huge benefit of doing this allows a client to contribute more or less to their premiums at any point to increase their death benefit and/or cash values in the policy.
Whole Life Insurance Policy
If you're willing to invest just a little extra to ensure you'll never have to service your "vehicle" again, then you'll be a fan of Whole Life Insurance Policies, as they allow you to hit the cruise control button. Once you've signed up with this type of policy you'll have a set lifetime premium and your family is guaranteed to receive the death benefit upon your passing. Simple and easy.
Whole Life requires nothing from the policy owner except paying your premiums on time. It's suggested to at least have your basic expenses in place with a Whole Life Policy, such as your burial and ceremony costs, and to cover any debts, such as a car loan, or Healthcare Expenses, so that cost is not passed down to your loved ones. You can find more information on expenses that can be passed down from the Federal Trade Commission here.
Most companies offer different kinds of benefit riders that you can include for low rates on your policy that can help for a variety of other "road conditions" ahead. Some of these help with your children's education, or living benefits that help if you were to become terminally ill, or needing long-term care (LTC), ones for disability, and even riders that help you pay your premiums in the case of COVID or unemployment.
Life Insurance Policies With Some Risk
Term Insurance
If you are an off-road adventure seeker or like to find a good value for your dollar then you'll want to look into Life Insurance Policies that have certain terms, conditions, or last for certain periods of time, classically known as Term Insurance Policies. You can choose the number of years you'd like the coverage to last and the terms for which those benefits are paid to your family. Eligibility of benefit amount, coverage length, and renewability depend upon certain conditions like age and health.
Level Term Life Insurance Policy
Term Products offer you much higher coverage amounts at much more affordable rates than Permanent Life Insurance products. Why doesn't everyone just get a Term? We suggest every family have both. Everyone has different needs and different wants, and what's right for you isn't necessarily right for another family. Not everyone qualifies for these exclusive benefits, however, we suggest starting out with a Whole Life or Universal Insurance Policy in your younger years, especially one for your kids if you are a parent to cover your potential costs of death, and then add a Term Insurance Policy in addition when you start to accrue more expenses and debts like accidents, car notes, education, mortgages, family, credit cards, business loans, etc.
What's great about Level Term Policies is that it allows you more legroom to cover those bigger assets securely, for an affordable, fixed premium. These policies allow you to create more cash flow in the short term and give you the ability to make other investments, or to save some money. Based upon age, you could also qualify to get a Return Of Premium to recoup all money paid into your "vehicle" if you outlive that Term Period. Win-Win!
Upon applying for Term Products, certain companies and Insurance products will require a Medical Exam for the driver of the "vehicle", and others will only require a health questionnaire screening, known as underwriting questions with a prescription history check to ensure your insurability. Smart people that get behind the wheel with their families in the backseat want "full insurability" and have both Permanent and Term Policies, which we always suggest if plausible for your budget.
Increasing Term Life Insurance Policy
We've all had that kind of vehicle before... Might as well call it a "B.O.A.T." as you'll have to "Bust Out Another Thousand" year over year. Increasing Terms work exactly as described, as they increase in price and renew yearly based on your risk factor eligibility to the company. Why would I want a Policy that increases year over year? You can get them at unbeatable rates when young and healthy.
These policies can be effective when you are... Young and naive. American Policy Insurers never suggest these as the best Insurance Vehicle to get your family safely home, unless it is a supplement in addition to other coverages in place. Although enticing to most at first based solely on price, will soon come to find out that age and health factors will raise that premium from a Kia payment up to a Range Rover payment in no time.
Decreasing Term Life Insurance Policy
Sometimes referred to as Mortgage Term Insurance, these Decreasing Insurance Policies are made for higher amounts of coverage, made to cover large debt balances such as a home, mobile home if your a roadie, or any large loan you intend to pay off over time. What do you mean it goes down? The benefit amount decreases year over year, but decreasing term premiums stay the same. Yes, you read that right, please try and stay on the road, we'll explain.
For some, this may sound like a fender bender waiting to happen but in essence, if you were paying off big debts like a mortgage, for example, as the balance gets paid off over time, your family would also need less benefit if you were to god forbid, pass away unexpectedly. Make sense? For those that want a more inexpensive Term option than a Level Term Policy it definitely does make sense.
Learn Something?
If you feel it was tough to keep up with the analogies, I'm sure you can imagine how hard it was to keep this vehicle moving in the right direction, and we hope you gained some valuable feedback about the different types of Insurance Policies that are available for you to qualify for within this article.
If there are any Questions About How Permanent or Term Insurance Coverage Works, or Quotes On Insurance Policies we can help you find, go ahead and proceed to click one of the BIG BLUE BUTTONS for the type of policy you're interested in, and a licensed, American Policy Insurer will ensure you get the help you deserve.
Semper Fidelis.
