Life Insurance is an important thing to consider, but it can be pretty confusing too. With the abundance of information out there, you might struggle to figure out if you should get life insurance and, if so, which one? These questions might seem like they would be too complicated to answer, but they’re not!
In this post, we will be going over the two main types of life insurance and the 5 reasons you should get one too!
2 Main Types of Life Insurance
When you’re shopping for life insurance policies, you’ll usually find two main types. Term Insurance and Whole life insurance. Here’s how they differ:
Term Insurance
Term insurance is exactly as the name suggests, an insurance plan that’s for a term in time. This can be 10 years, 20 years, 30 years, or whatever you and the insurers agreed upon. The premiums here are cheaper, but you have to make sure it’s always renewed so your heirs would actually benefit from it once you’re gone.
Whole Life
Whole life insurance is on the more expensive side, but it’s truly something that stays with you throughout your entire life. No matter when you pass away, it’ll be right there as the safety blanket your family might need. Not only that, but as time goes on and you’ve paid a certain amount of money (depending on your contract), you can even borrow against it and take out loans!
If you’re looking to get a plan that’s affordable and the terms are flexible, term insurance would be the one for you. If you want to secure your family’s future forever and not have to worry about constantly having to renew the plan, you should pick whole life insurance if the premiums fall within your budget.
5 Reasons to Purchase Life Insurance
Now that you’re familiar with the main types of life insurance plans let’s go over the 5 reasons you should consider getting either of the plans for yourself!
Protect your family
Whether we like to talk about it or not, all of us die someday, and when we do, we leave our families behind to have to go on without us. This isn’t just an emotional burden but can be a financial one, too, especially if you are the sole provider of the family. With a good life insurance plan in place, you don’t have to worry about your family’s financial well-being after your passing.
Create an Inheritance For Your Heirs
Even though it might seem like inheritance is a matter that’s going to be easy to sort through. But even if you only have one heir, it will take a while for them to inherit your properties legally for them to be able to do something about it. Life insurance inheritance kicks in immediately so fast that they can even pay for your funeral with the insurance payout! That takes off the stress of the financial planning away from the family, so they can grieve in peace and receive all of the money intended for them. That’s because life insurance payouts are totally tax-free.
Protect a business
Setting up a family business takes decades, but with the inconsistencies of the way businesses work, there is far too much that is on the line all the time. You could have debt, payments that need to be made, or simply be the real value behind the business. If you’re gone, the business might be at risk too. Life insurance policies linked to businesses can step in to either sell the business in a fair way for the family or pay off any debts on your behalf to keep it running!
Create A Source of Savings
Not only is life insurance itself like giving your heirs a savings account, but many life insurance plans even come with a savings component that you can use in your life! Making saving a lot easier!
Make a large charitable contribution.
If there’s a cause you really believe in but don’t think you’ll be able to put money towards it in your life, you can link your life insurance policy to a charity too. That way, after you pass, the charity will receive the payout and the benefits and be able to put it to good use.
Final Thoughts
Thinking about your own death isn’t fun, but the reality is that it’s going to happen someday, and when it does, we’re not going to be here to deal with the consequences. Life insurance is the perfect way of making sure that after we’re gone, our families have nothing to worry about, whether we were able to save up a significant amount of money or not! At Millennium Brokers, we could love to help you navigating the Life Insurance Purchase. You can get your quote in minutes.