Different Types Of Life Insurance

What Is Life Insurance?

Life insurance is difficult to understand and dissect by many people. The ultimate purpose of a life policy is to provide benefits to your loved ones when you pass. Most policies are written to protect your family’s lifestyle when you aren’t here to financially provide. Consider your mortgage, debts, and family’s future goals as you research different types of life insurance.

Monthly, quarterly, or annually premiums are paid for life insurance coverage, just like your home and auto insurance. The premium is unique to you, and based on your overall health and needs. During the life insurance application process, you may be asked a series of questions followed by a medical exam. The application and medical exam tells the life insurance company your overall health and risk. Once the results have been received, you will be approved or denied as insurable.

Once you have been determined insurable, you can start your research. Life insurance comes in all shapes, sizes, and colors. It will become clear that you have many options. 

Life Insurance For Everyone

Hundreds of life insurance policies are available to meet your individual needs. Everyone has a different combination of lifestyle, income, debt, and wants for the future. That’s why there is no “one size fits all” policy, so talk with your insurance agent or financial advisor about your options.

You and your neighbor probably have different expectations for how you would like your life insurance to perform. Align your needs and wants with what type of life policy you find valuable.

Do you want to leave your children and grandchildren with millions? Great, there’s a policy for that! Plenty of people want to leave enough money to cover after-life expenses, and maintain their family’s lifestyle short-term. The good news is that you have multiple types of life insurance to choose from!

Whole Life Insurance

The whole life policy is one of the most common types of life insurance written. These policies generally have a fixed premium that is paid on a regular basis until you pass.

Whole life is permanent life insurance with cash value. It also provides financial stability to the beneficiary with an after-life benefit. You will find that whole life carries a higher premium than other types of life policies. Traditionally, the higher rates are caused by guaranteed long-term insurability.

Due to its cash value, interest rates and taxes can be complex for whole life policies. Ask your insurance agent or financial advisor what you should expect in future years. If you want to see a return on premium while you’re living, then a whole life policy may be a great option. Overall, these policies are great for long-term financial planning needs.

Universal Life Insurance

Cash value and after-life benefits are also available with universal life insurance. If you are interested in flexible payment terms, then universal life may be your best bet. You have an option to choose how much of your premium is contributed to the cash value benefit.

As life changes, your financial needs and strategies will shift. The option to modify your premium can be useful and attractive when planning for change. However, the premium payment still has to stay within the policy’s minimum after-life benefit contribution.

At some point, you will start preparing to make the fixed income transition. Instead of modifying coverage, some policies may allow you to use the cash value benefit to pay your premium. This allows your after-life benefit to remain intact. This is one reason universal life policies are highly sought after for long-term planning. 

The associated market trend is one downfall of the flexible premium. Interest rates tied to the cash value benefit will follow the market. Remember to monitor your investment if you choose to make a universal life investment.

Term Life Insurance

Term is the most straight forward type of life insurance. Your premium is determined by your overall health, coverage amount, and policy term. Policy coverage options start at $100,000 and goes into the millions for up to thirty years.

This simple policy offers the after-life benefit, but carries no cash value. Your beneficiary will receive the fixed benefit when you pass.

Do you need life insurance?

As you can see, multiple options for life insurance are available. You could get a term policy as low as $30 per month. Or, you can build a comprehensive portfolio, if you are interested in a performance-based financial plan.

All this being said, we buy life insurance for the people we love. Life insurance is truly about your loved ones. If your income disappeared tomorrow, would your family be able to pay the mortgage? Personal debt? Everyday living expenses? College for your kids? Future financial responsibilities?

If you don’t make it home tonight, will your family have time to grieve? Or will they immediately panic to get the house sold? Find a second job? Cut the kids extracurricular activities?

You are your family’s most valuable asset. Life insurance protects your family’s lifestyle for years to come when you can’t.

Paine Insurance Group is dedicated to being the best insurance agency in McKinney.

THE RIGHT POLICY, THE RIGHT PRICE, THE RIGHT TIME

There is no “one size fits all” when it comes to protecting your family, and we spend the extra time to tailor plans specific for your needs. Our agents focus on follow-up and follow-through to protect the things and people that matter most to you. We would love to answer any questions you have about insurance coverage and options in McKinney. Call Paine Insurance Group today at 972-316-9517 or visit us Monday through Friday. We are located at 3400 Eldorado Parkway, Suite 4, McKinney, TX 75070.

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3400 Eldorado Parkway, Suite 4
McKinney, TX 75070

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