Life insurance is an important type of insurance, especially for those who are getting older and have families to take care of.
There are many reasons to purchase life insurance; from providing for your children should you pass away to covering the costs of funeral expenses so you’re family isn’t scrambling should anything happen.
The most inexpensive form of life insurance is term life insurance—a type of insurance that lasts for anywhere from 10 to 30 years. Should you pass away during the policy’s term, your beneficiary would receive the amount that the policy is good for. If it expires before you pass, you’d need to purchase a new policy or your family wouldn’t receive anything. Often, the policy doesn’t need to be for as much the second time around. If you had children at the time of the first policy, they’re likely grown now and won’t need as much monetary support as they would have originally.
Universal life insurance, on the other hand, is a type of permanent life insurance, meaning it does not have a specific term or expiration date. These are sometimes known as single premium, fixed premium or flexible premium plans. Buyers choose the amount of insurance as well as their monthly premiums. When you pay premiums that go beyond the cost of the insurance, you can earn interest and the cash value can be applied to other things like your children’s’ college tuition.
These two types of life insurance differ in a couple of ways.
Term life insurance is just a basic policy while universal life insurance has additional death benefits and a savings component that creates a cash value for the policy. The cash value aspect of universal coverage gives individuals tax advantages as well. On top of that, universal life insurance is highly flexible, giving buyers the chance to change their premiums or death benefits after the policy is already in effect. This may make it more desirable for those with families to provide for.
The best way to find out more about life insurance, and whether term or universal best suits you, is to consult an insurance agent who can further detail the options available to you. Learn more about life insurance by scheduling a consultation with Peter Green—call (714) 258-2800 or get a free quote online today.