What Type Of Life Insurance Should You Buy? Life Insurance Explained!

Purchasing life insurance is one of the wisest financial decisions you can make, especially if you have loved ones to care for! However, every individual and family has different needs. Thus, the choice of insurance coverage will depend on a host of variables, and little research into what life insurance policy options are available in the market!
Before you go about your life insurance buying decision, here are some common types of life insurance policies you must know about!

Term Life Insurance

The most popular and simple to understand policy is term life insurance that, for an affordable monthly premium, provides dependable coverage that lasts for a specific number of years. In the event of the insured’s death during the term period, the beneficiaries are entitled to receive the value of the policy. This payout can be done in a lump sum amount, a monthly payment, or an annuity, depending on what the beneficiaries choose. However, if the insured lives through the term, which typically lasts up to 30 years, there is no payout as the benefits expire.

Permanent Life Insurance

The beauty of permanent life insurance is that it comes with a lifelong coverage assurance, given that you keep up with your premium-payment obligations! Aside from a virtually permanent coverage that you can’t outlive, there is a tax-deferred death benefit along with the policy’s potential to build significant cash value, extra financial protection that can be used by the beneficiaries as they see fit! A permanent life coverage plan also covers expenses such as the insured’s funeral costs, family income, and estate liquidity.

A permanent life insurance policy can prove to be the perfect choice for you if:

● You have loved ones who are financially dependent on you.
● You have the heart to stay through the course of your policy to potentially generate a significant cash value.
● You own an active term policy and are looking to convert it into something more substantial and permanent.
● You’ve retired or nearing your retirement and need to secure your family’s future financially.

Most permanent policies require paying a significant amount of initial premium compared to term policies, which are more affordable and come in all shapes and sizes! The reason behind high premiums is that a portion is contributed to developing the policy’s cash value. In the long run, this two-fold benefit (death benefit plus cash value) can offset the seemingly huge cost investments.

There are several types of permanent life insurance policies that come with flexible terms, making it a viable option for most people, for every budget and risk tolerance level! The four primary permanent life insurance are discussed here!

● Universal Life Insurance
⮚ It provides flexible death benefits as well as flexible premium plans.
⮚ Cash value is accumulated over time at a floating interest rate. There is a minimum rate guarantee to lower the risk factor!
⮚ Many policies come with secondary guarantees which provide the policyholder with greater security!

● Indexed Universal Life Insurance
⮚ It offers both death benefit protection and strong cash value generation potential at a protected interest rate.
⮚ Interest rates vary partially based on the movement of a specified stock market index that may be linked to it.
⮚ It also provides you a choice to get tax-free cash value, that too, without any penalty whatsoever.

● Variable Universal Life Insurance
⮚ It offers greater flexibility in policy conditions along with a more significant cash value generation strategy.
⮚ It also provides you a choice to get tax-free cash value, that too, without any penalty whatsoever.
⮚ It comes with the option to convert cash values accumulated over time into annuities, a form of extra income, spread across years that you won’t outlive.

● Whole Life Or Ordinary Life Insurance
⮚ It involves guaranteed death benefit value and a guaranteed rate of increase on your cash values at a premium level that is guaranteed to stay constant for life!
⮚ It also offers you an opportunity to earn extra income on top of the guaranteed death benefit and cash value growth in the form of dividends.

HIS Insurance and Service is your go-to insurance service provider to choose the right life insurance policy in Northern Virginia. Our insurance agents listen to your concerns and provide you with important information and support at every step of your decision! Call us today to learn how we can help you in your search for the right insurance plan!