Life insurance isn't most people's favorite topic of conversation, largely because it inherently forces people to confront their own mortality. There's also the fact that deciding on the right life insurance policy for your needs can seem like a daunting task, especially if you're unfamiliar with policy types. Still, just as you strive to maintain a good health insurance policy to protect yourself in case of injury or illness, you'll need life insurance to protect your spouse or other dependents if the worst should transpire.
If you were ever diagnosed with lung cancer, breast cancer, colon cancer, leukemia, or any other type of cancer, you'd undoubtedly search for the "best oncologist near me" and take advantage of any help that your individual policy for health insurance provided. You'd likely want to participate in any clinical trials you could if other methods weren't yielding positive results as well. This is just one situation where you'd likely be grateful to have life insurance so that if the worst did come to pass, you'd know that your beneficiaries would be covered by your death benefit, and they could handle final expenses and other arrangements.
While you might think of a life insurance policy as something that you're only likely to need later in life, the earlier you can obtain one, the better. This is because premiums tend to be cheaper when you're young and still in good health, and you may find it easier to get a higher amount of coverage as well. You'll need to look at a variety of companies, such as MetLife life insurance, to compare online reviews and quotes. Here are the three types of life insurance plans you're most likely to find and the advantages and disadvantages of each.
1. Term Life Insurance
As the name suggests, a term life policy is only good for an agreed-upon amount of time. Terms are usually negotiated in increments of ten years, but you may be able to find term policies that can be renewed on a yearly basis in exchange for higher premiums. The biggest advantage of these policies is that they end to have the lowest premiums of any plans around, but they only include a guaranteed death benefit, whereas permanent policies tend to offer additional advantages.
Also, you'll have to decide at the end of the term whether you want to renew the policy, convert it into a form of permanent life insurance, or let the policy lapse. If you pass while the policy has lapsed, your beneficiaries will receive nothing. This type of policy can be good for those just starting out or for people who only need life insurance for long enough to reach specific financial goals.
2. Whole Life Insurance
Whole life is a type of permanent policy that can accrue cash value in addition to providing a death benefit. The savings component of a whole life policy builds cash value through dividends, but the process can be sped up if you pay monthly premiums in advance.
There are a few ways you can use the cash value. It may be added to the death benefit if it remains untouched. Otherwise, you can borrow against it or even make withdrawals. Just be careful not to take out too much, as it can eat into the death benefit, thus reducing the value of the policy.
3. Universal Life Insurance
This policy type tries to combine the best of both worlds by offering lower premiums, similar to a term policy, along with an investment savings element. You'll have to pay a minimum cost of insurance to keep the policy active, and any additional payments grow the policy's cash value.
Premiums for this type of policy are typically variable, meaning that they can change over time. Typically, the price of insurance will go up as you age, but it may be possible for the policy's cash value to pay for itself.
You may wish to speak with a financial advisor about which type of policy would be best for you and your family before you commit. It's also worth noting that most traditional companies will want you to take a medical exam before they offer coverage.