Choosing Life Insurance

There was once a father, he loved his children dearly. He vowed that he would do anything for them, and protect them. As a father, he believed it was responsibility to make sure that he would provide everything they needed and would always make sure he gave them the world. And he did love them, care for them and protect them – up until his passing. He was always certain that he would be there to care for his children that he failed to plan for what would become of his children in the event of a tragedy. Death is something that happens to everyone – it is inevitable. Protecting our family is a responsibility we owe to our family. Dealing with the loss of a family member is difficult enough, if one had to also deal with the financial hardship, it can become difficult to cope.

One of the main reasons people cite as to why they do not choose a policy is because they believe choosing a policy can be overwhelming. Insurance really is not that tricky – choosing a life insurance plan may be easier than you think.

Generally speaking, there are 3 types of plans to choose from. All plans will be some form of these types:

Term: Think of this as your phone plan, it is a pay-as-you go plan. Your insurance term can be a 5, 10 or 20 year term and you pay monthly for it for the term. You are able to renew the plan upon the completion of a term (or up to age 65). The younger you are, the cheaper the premiums you can get – the older you are, the more expensive premiums are. If you choose to end the policy while you are still alive, this type of policy will not give you your money back.

Term to 100: A term to 100 is a similar to the term plan, but it covers you until age 100. As the term is longer, your premium will be less, and you will have coverage after 65 years. Again, there is no cash surrender value for this plan, so if you end the policy or past the policy coverage term, there is no money back guarantee.

Permanent: You may have heard of this as universal or whole life insurance. Your monthly payments depend on a variety of factors – age, job, health, wealth, etc, regardless, the premiums will much higher than term or term 100 policies. Your premiums will not change, and coverage is for your entire life regardless of age. With this policy, if you give up the liability for death benefit, you can cash the money that has built up in the plan (although it may take anywhere from at least 10 years to have a decent amount).

The coverage you need really depends on you – some financial planners say that anywhere from 5 to 7 times your current income is enough, while others suggest that the amount can be lower if you have mortgage insurance in place. Really look at the options available and choose a plan that suits you. An insurance agent will be happy to discuss options with you. Everyone has different needs and need to choose a plan that suits them. But remember – be honest with your insurance agents. Hiding an illness can be a cause for the term to be voided, so be honest and help choose a plan that will protect your loved ones. Insurance does not have to be that tricky, with the right tools and guidance, you can make sure your family will always be cared for.