Most people that have heard of life insurance are aware of the primary benefit that it offers – namely, that if you were to die that your family would get money and be able to be taken care of financially. What people don’t always know is that there are actually many different types of life insurance that offer multiple benefits on top of that. Whether you’re looking for basic life insurance coverage or are wanting a customized life insurance policy that comes with the best life insurance award, here are some of the many benefits of life insurance.
Life Insurance Benefits
While all life insurance gives you the benefit of knowing that your family would receive some money should you die, the truth is that the more life insurance you have, the more benefits it offers. For example, if you have a bare minimum policy that offers $25,000, while that seems like a lot of money it won’t go very far after your death. In some cases, that might only be enough to cover the funeral costs and a handful of other bills/expenses. When you have a larger coverage amount, your family has access to many more options. Some of the options afforded by having more life insurance for families include:
- College savings
- Paying off the mortgage
- Replacing lost income
- Paying off credit card debt
- Paying off student loans
- Paying off automobile loans
Benefits of Different Life Insurance Policies
There is also something to be said about how different kinds of life insurance policies offer different benefits. Depending on the policy you have, you may have extra tax benefits where you aren’t taxed on the money received or it can be transferred with fewer liabilities. There are also some life insurance policies that accumulate cash value. In these policies, you’ll accumulate cash over time and can pay offer premiums at a later date or be pulled out and used to help with retirement or other expenses later on in life. Some life insurance policies also help to protect against disability. If your policy is bundled with disability insurance, it can help to replace your income if you were to be put in a position where you weren’t able to go back to work. Lastly, some policies have what they call “riders” which are provisions that are contracted upon that allow benefits to happen even before death.
Whether you go with term life insurance, whole life insurance, or any other type, it’s important to know the benefits upfront in order to make the most informed decision for you and your family.
Types Of Life Insurance
The main types of life insurance include whole life (permanent life), universal life (term insurance with savings component), and term life insurance. If you’re searching for absolute guarantees, choose a whole life insurance policy, which offers the death benefit as well as a safe and stable savings plan.
Universal life insurance policies are flexible, wherein you only have to cover the insurance cost and a few other expenses to maintain the death benefit. The cash value has annual credit interests, depending on the plan. On the other hand, term life insurance is purchased to cover a specified period. At the end of the term, the fixed premium expires with the coverage.
Tips Before Getting Started
Before you get started on choosing a life insurance policy, it’s crucial to do the following:
- Determine How Much Insurance Coverage You Need: Figure out how much of your income you can invest in insurance, especially if you’re the breadwinner. It’s important to get enough coverage for your beneficiaries while still being able to afford the policy. For instance, this key man insurance calculator can help you determine the coverage that’s right for you when looking for key person life insurance for your business.
- Choose The Best Type Of Insurance: Do you want permanent coverage or coverage just for a certain period? You can check insurance provider reviews like Progressive Insurance review to know which companies offer the best insurance plans.
- Understand Your Renewals: You can renew your policy for one or more terms, but premiums will be higher. Make it a point to review your insurance policy every year.
Takeaways
You’ve learned the different benefits of life insurance. Protect your estate and your family in case of unexpected events. Follow the tips shared in this post to keep you guided in making the right decision.
