What is the Best Life Insurance Policy?

by Jeff Rose on July 18, 2012 · 0 comments

best life insurance policySo, it is time for you to search for life insurance, and you are wondering which one you should choose.

The process can be a bit daunting.

If you have not shopped for life insurance before, you should first learn a bit about the different types that are available.

Understanding the difference between them first will help you to decide the best life insurance policy for you.

The Different Types of Life Insurance

There are several types of life insurance, but for the nature of this post, we’ll just focus on these three.

  • Term Life Insurance – This is the most affordable of all of the types which allows people to purchase policies with a bigger value than they’d normally be able to. If you outlive the term, you do not receive anything back after it’s over.
  • Whole Life Insurance – This type is more expensive, but that is because it never expires and it acts like a savings account which grows tax deferred.
  • Return of Premium – A death benefit will be paid should you die during the term, and if you outlive the term you will receive the money back that you put in, not any interest.

Which is the Best Type of Life Insurance?

To decide the best type of life insurance, looking at all of them in detail is necessary so that you can see all the benefits and cons of each. At first glance, it can be a bit confusing since they all have different costs and different results at the end.

Return of Premium is the middle of the road when it comes to cost, and no matter what happens, whether you outlive the term or die during it, money will be awarded. If you do outlive it, the money you get back will only be the money that you put in. Any interest that accrued during the term will actually go to the insurer, so you are basically giving them a free loan when you sign up for this type of life insurance.

Whole Life Insurance is most certainly the most expensive of your options, and can be daunting because of this. Lots of times people scrape together whatever they can to pay their whole life policy the first few years, then realize they can’t afford it, which means they probably won’t even come up even on what they invested into it on their return. Because of the high costs of this insurance, you are probably better off saving for retirement on your own in the end.

Term Life Insurance, the most affordable of all three, is popular especially among people who are just starting out with a young family. Many times the term can last until their children are grown and out of college. If you outlive the term, you do not receive anything back, much like car insurance, and many people consider this frustrating and feel like it is a waste of money.

But, consider the fact that it is much cheaper than the other types of life insurance, especially Whole Life. The money that you save from having Term Life instead you could use to save for your retirement, and come out much more ahead than you would if you invested in Whole Life insurance, making Term Insurance the best of your options out of all three.

Plus, you can most likely afford a policy with a larger value than you normally could, so that if you do die during the term, your family will be all that much more taken care of.

Choosing the Right One

Choosing the best life insurance policy for you has a lot to do with your situation.

  • How much insurance do you need?
  • How much can you afford?
  • How long do you need it for?
  • Do you have any pre-existing medical conditions?

All these factors will help you guide which of the above policies is for you.

Still not sure?  Don’t worry, we’re here to help.   Just call our office 855.457-6525 and will help identify what insurance policy is best for your situation.

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