A solid financial plan usually includes some type of life insurance. Life insurance is ideal for most people to have. You never know when something unexpected can happen, and you will want your loved ones who depend on you to be covered. There are different types of life insurance that protect your family in different ways. Which type is best for you depends on your particular situation, so you should keep you personal goals in mind as you evaluate the different types of policies.
Term Life Insurance
Term life insurance covers you for a fixed period of time; for example, it could cover you for a 10-year term or 20-year term. This type of insurance will need to be renewed at the end of that term if you wish to continue your coverage. Your premium will stay the same for the length of the term, but if you go to renew it, keep in mind the premium can change. Premiums are based on your age at the time you take the policy out, as well as what your health condition is.
Whole and Universal Life Insurance
The other type of life insurance would be whole or universal life insurance. Those policies are typically referred to as permanent insurance because you don’t have to renew them. The coverage continues for as long as you pay the premium. The amount of the premium is also not impacted by your age or your health condition. Whole and universal life insurance policies, in addition to the insurance coverage they provide, also build up in cash or loan value that can be borrowed against in case of an emergency.
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