You’re never too young, or too old, to protect your family against a financial crisis upon your death.
There are numerous types of life insurance. The forms that provide the appropriate protection for you depend on your specific needs. Our experienced insurance professionals will work with you to understand those needs and provide you with the policy that’s right for you and your loved ones. To get you started as you consider your needs, the following is a brief overview of the two most common forms.
“Term” versus “Whole Life” Insurance
What’s the difference? In the years when families are growing, paying mortgage payments, saving for college expenses, etc., Term Life Insurance is intended to help cover your family’s financial needs in the event of your death. The policy is established for a preset period of time, i.e. “term” (usually 10-, 20- or 30-years) during which time the loss of your income would likely have a crippling impact on your family’s livelihood and future plans.
In contrast, Whole Life Insurance provides death benefits for your entire life. It is frequently purchased to cover final expenses—funeral home expenses, remaining debts, estate expenses—or as part of an estate plan. Premiums are usually paid throughout your life (or ending at age 100 if you are fortunate enough to reach that age); this type of policy builds cash value and provides a guaranteed death benefit at the face value of the policy. You usually can borrow against the cash value of the policy but must pay it back with interest.
How do they compare in cost? Term life insurance generally offers the highest death benefit for the lowest cost. And rates are currently are at a 50-year low. Whole life insurance has much higher premiums than those you would pay for the same amount of term life protection, but it would ultimately be less than you would pay if you keep renewing a term life policy until your later years.
How do I decide which to choose and how much coverage for what period of time? It all depends on your situation and your needs. If you have dependents–how many, what are their ages, can your spouse work, what is your mortgage balance, do you have savings…the list goes on. We can help you evaluate your obligations and their timeframe to arrange the best term life policy for you and your family. On the other hand, if you only are concerned with assuring that your estate is not saddled with debt, we can help you determine the best whole life policy for you as well.
A few general considerations to keep in mind
The younger you are when you purchase life insurance, the less expensive it can be.
Your health is a key factor in establishing the cost of your premiums. For example, smoking can cause your rate to quadruple, but if you stop for one year, you may get a standard non-smoker rate; stopping for three years may make you eligible for a preferred rate that can be almost half the cost of a standard rate.
The premium costs promoted by some companies are come-ons. Initially, they may quote you a very low rate, but after the insurance physical is completed and medical background verified–the rate could dramatically increase.
At every Cushman Insurance Group agency, we’ll ask the right questions up front. And then find you the best policy to meet your needs at the best price we can. No phony intro rates. Just fair, honest, quality protection.