Who Needs Life Insurance?
You need a life insurance policy if anyone depends on your income or stands to inherit a financial burden in the event of your death. The money your dependents will receive, “the death benefit,” can help pay essential day-to-day expenses, such as mortgage and medical bills, and help your family reach longer-term goals such as your children’s college education. Plus, life insurance can help ensure that your loved ones are not burdened with debt or forced to sell assets to pay outstanding bills or taxes. Contact us today to receive your Upper Marlboro life insurance quotes.
How Much Insurance Do You Need?
This depends on a few factors. Generally, the rule of thumb is 7 times your salary; however, as life changes, your insurance needs might, too. It’s a good idea to reassess your needs annually to make sure you have enough to properly protect your family. Beyond protection, life insurance can be the cornerstone of your family’s financial security by providing savings and wealth transfer opportunities. In fact, the very first step in selecting life insurance is to decide how you want the insurance to work for your family. When you’re ready, we can help you determine the amount of protection you may need and the type of insurance that’s right for you.
You want to select the right coverage to protect your family. Learn more about the options available:
What Do You Want from Your Life Policy?
There are two types of life insurance available today: term and permanent. One is straightforward life insurance with a basic cash payout. The other works a little harder for you. The type you choose will depend on your financial situation and what you’re looking for in an insurance policy.
Term Is for a Time
Term insurance is the most basic type of insurance. You can buy protection for a certain amount of time (or term) such as 5, 10, 15, 20 or 30 years.* If you die before the term is over, your beneficiary gets the death benefit stated in your policy. If you live beyond the term, your beneficiaries get no payment. This type of insurance is usually the least expensive to buy.
Renew or Convert
Term policies often allow you to extend your coverage for another term without having to get a medical check up. In some cases, you may be allowed to convert your policy to a permanent policy. This flexibility allows you to decide how you want your insurance policy to work for you. One approach is to use the term as your “starter” policy and upgrade to a permanent policy once you become more financially established.
Is Term Insurance Right For You?
Consider term insurance if:
- You are currently unable to pay the premium of a permanent policy
- You are looking for home mortgage or other loan protection
- You have young children
- You’re looking for additional protection to supplement another life insurance policy
- Term life insurance is generally less expensive than permanent life insurance
- You can select a policy with decreasing coverage to match your decreasing mortgage or loan balances
- You can buy protection for the length of time it will take for them to be financially independent
- Term life insurance offers affordable increments of coverage for the length of time you choose
Permanent Is For Life
One main difference between term and permanent life insurance is that permanent doesn’t expire. As long as premiums are being paid, it stays with you permanently.
The other big difference is that with permanent life insurance, your premiums are invested to produce returns. This gives your policy a cash value, which usually accumulates at a guaranteed minimum interest and is available to help fund retirement, emergencies and more.
The law currently allows your cash value to grow tax deferred. Because of this benefit, a permanent life insurance policy has become more than a protection tool for some people—it’s also a financial tool.
Is Permanent Insurance Right For You?
Consider Permanent Insurance If:
- You are looking for tax advantages
- You may need access to your money
- You are looking for a hedge against inflation
Earnings grow tax deferred. You can take out a loan, withdraw or surrender the policy. Universal policies allow you to adjust the death benefit to keep pace with the erosion of purchasing power.
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