By Emily Raunig
September is Life Insurance Awareness Month. Life insurance may not be something on your mind or something you may be looking into purchasing. Regardless of what stage you are at in life, every adult should become educated on life insurance. It’s important to understand what plans most insurance companies can provide and why you need life insurance.
Why do you need it? Security for you and your family, because bad things happen. Life insurance protects your family from the possibility of devastating financial losses if something happens to you or your spouse. It gives financial security, helps to pay off debts, helps maintain living expenses, and pay medical and funeral expenses.
There are two major types of life insurance- term and whole. According to the American Council of Life Insurers, in 2018, four million life insurance policies purchased were term, and 5.9 million were whole. It’s essential to understand the differences between the two and which one is right for you.
Term Insurance is a straightforward type of life insurance. There are different types of term insurance available to you. In general, term life insurance protects you for a specific price over a specified period. Usually, the periods vary from 10, 15, 20 or 30 years. This insurance only pays if death occurs during this time. After this, it’s left to the individual to buy whole life insurance or renew or purchase a different term plan.
There are three different types of term insurance:
- Annual Renewable Term
- Level Term
- Decreasing Term
For information on different term insurance plans, visit Trust Point Insurance & Real Estate.
Whole/Permanent Life Insurance
Whole or permanent life insurance protects you if you pay your premiums in full. Permanent life insurance builds cash value for you to use for expenses later in life. With traditional whole life insurance, your insurance charges you a higher premium than what’s needed to pay the claims. Instead of a yearly premium, it invests the extra money and uses it to pay the premium when you are older.
There are three types of whole life insurance:
- Traditional whole life
- Universal life
- Variable life
For more information on different types of permanent life insurance plans, visit Trust Point Insurance & Real Estate.