Insurance Facts

You know you need it, but you don't understand what the differences are in life insurance policies. It’s pretty simple once it is broken down into the basic terms.

Term Life Insurance

Term life is a policy that's set up for a quantity of time that you can select, sometimes 10-30 years. You pay your premiums and your policy will stay in effect for so long as you selected the policy for. If you die during the term, your beneficiary will get the greatest benefit to help with your last costs and funeral costs. If you do not die during your term, then you just have to get a new policy, which is subject to underwriting rules, and you will need to re-qualify for it. This is the easiest type of life insurance to get online quotes for, as well as the most often policy written.

Whole Life Insurance

Whole life insurance is meant to last your entire life. You can raise equity in your policy, even borrow against it after you have paid on it for some time. This used to be the most preferred way to buy life insurance when the IRs were way higher. Now that the interest rates are extremely low, this type of policy does not make as much sense. There are more investment models that would give you an improved rate of return.

Indexed Life Insurance

Indexed life insurance provides the best of both worlds. It'll gain interest up to the cap % outlined in your policy when there's a gain in the S&P 500 or Naz, but if there's a loss, your policy remains the same. This would be preferable to just a whole life policy. These are reasonably new in the life insurance world, but are becoming more and more popular for their safety and for their potential for rising in value.

Whichever one you get, you'll need to make certain is what you want for your current position. Whatever you do, do not skip having life insurance. Your family will thank you for it.

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