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3 Things to Consider When Purchasing Life Insurance
Feb 04, 2021
Life Insurance is Important, Knowing What to Ask About it is Also
The past year has shown us all how unpredictable life can be – especially the factors that are out of your control. The best thing that you can do is be prepared. Life insurance coverage helps to keep you and your loved ones prepared for anything, but making the right decision in your coverage options can feel overwhelming. While you’re exploring all the proper options for your life insurance coverage, consider these 3 things important to the process:
- Understand the difference between Term and Whole Life – The two paths which you can take with life insurance fall into Term and Whole or Universal. Both have a specific application when it comes to providing coverage for your assets. Term life is a policy which you take out for a specific period of time – oftentimes these periods are for the span of time which your children are in school or for the lifetime of your home’s mortgage. Whole or Universal policies last from the moment you take out said policy until the end of your life. Whole life insurance is typically taken out with the intent to help cover the cost of a funeral or replace lost income for a dependant. Typically, term policies are more attractive to younger policyholders in good health.
- Know if you have other goals for your policy – Life insurance policies can provide further benefits to your financial portfolio beyond potential payouts. In some situations life insurance policies can be qualified for use as collateral for loans – this is typically only the case for a policyholder who has a positive credit history, but adding a life insurance policy can help secure personal loans. Similarly, whole policies can provide benefits similar to that of a savings account. These policies have a cash value which grows over time, not unlike other long-term investments with tax-exemption. If you’re interested in diversifying your options when it comes to financial reinforcements, consider building the utility into your life insurance coverage.
- Know your beneficiary and their needs – While considering your beneficiary for your life insurance policy, consider what they need. If your beneficiary is listed as a business which you own, provide a written plan for how the awarded assets are to be distributed throughout the business. If your beneficiary is a child, assure that they are not a minor – oftentimes, minors are wholly unable to claim their intended awards. Contrary to popular belief, naming your estate a beneficiary for your life insurance policy can carry with it heavy tax implications. After determining which entity is best fit to receive the benefits of your policy, know how to structure your policy so that the payouts to that beneficiary will be most helpful.
The basics of building a life insurance policy may be straightforward enough, but don’t take the workload upon yourself – we’re here to help! Our dedicated team at Wallin Insurance has the experience and care needed to assure that not only is your insurance package affordable, but complete. If you have any questions or need some guidance in taking out your life insurance policy, please contact us. Our goal is to give you the coverage you need.
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