Are you looking for the right life insurance plan for you?
When you start choosing life insurance plans, chances are you’re going to be bombarded with information from different providers. It can be hard to cut through all of the noise to find what’s actually relevant for your situation, so we’re going to try to help.
In this post, we’re going to talk about the 5 factors that you have to consider when choosing life insurance plans. It all starts with knowing what your options are, but let us help you understand how to narrow down the choices.
Table of Contents
1. What Policy You Want
When it comes to life insurance plan options, there are two types of policies to consider. Your particular situation should help you determine which is best for you.
Term life insurance insures you for a specific period of time (10, 15, 25 years). During the designated time period, you pay your premium and your beneficiaries receive a death benefit in the event that you pass away. If the period ends without you converting or renewing the policy, then you’re no longer covered.
The other policy type is whole life insurance, which covers you from the day you sign up until the day you die. Over the duration of the policy, you’ll build up cash value, which essentially functions as a savings account that you can defer taxes on. You can learn more about cash value and whole life insurance at Paradigm Life.
If you’re looking to have your kids covered in the event of your untimely death, term life insurance is probably the choice. It’s more affordable than whole life insurance, but if you can afford it, the whole life will pay out more in the end.
2. Affordability
One of the biggest factors that you should consider when choosing a policy is affordability. Yes, you want to be able to take care of your loved ones once you’re gone, but you shouldn’t let it affect your quality of life while you’re here.
Find something that fits comfortably in your budget. If unforeseen expenses arise and you’ve got a pricey life insurance policy, that’s often the first thing to go. Plan for emergency expenses and opt for a cheaper policy if necessary.
3. Options to Convert
Like we said earlier, your term life insurance policy will simply run out if you don’t renew or convert it. Looking specifically for a life insurance provider that gives you the option to convert is always a good idea.
If you decide down the line that you’d rather have a whole life insurance plan with no end, it’s going to be a lot easier on you to have the option to convert, rather than seek out a new policy.
4. Living Benefits
Again, you can’t let your life insurance policy compromise your quality of life. Comparing insurance companies’ living benefit options is a huge factor in making your policy decision. Some policies will allow you to take premiums back out to cover things like medical expenses and long-term care.
Of course, when you do this, it lessens the amount that your beneficiaries receive. That said, it’s a comfort to know that you can obtain this money if you absolutely need to.
Choosing Life Insurance Plans Takes Time
Choosing life insurance plans isn’t something you should rush. Take your time, consider the factors we’ve discussed here, and determine which policy is best for you and your family.
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