What Are The Different Types of Life Insurance #lifeinsurance #termlifeinsurance #wholelifeinsurance

What Are The Different Types of Life Insurance

#lifeinsurance #termlifeinsurance #wholelifeinsurance

As you get older, you may begin to worry about how your family would carry on financially if something were to happen to you. They will have to pay for everyday expenses without your income and all of the costs associated with your passing, which can be expensive. According to the National Funeral Directors Association, the average cost of a funeral in 2012 was $7,045.

Furthermore, the Federal Trade Commission (FTC) says family members may be responsible for your debt under certain circumstances, such as if they co-signed for an obligation or if you live in a community property state such as California. Other situations include when state laws require a spouse to pay certain kinds of debts such as health care, and if a person is responsible for resolving your estate and doesn’t comply with the state probate laws.

This is where life insurance comes in, as it can protect your loved ones if something does happen to you. However, there are as many types of life insurance nowadays as there are brands of bread at the grocery store. It’s easy to get confused with all of the different offerings, so here is a quick guide to the main types you should know.

Term life insurance
Term life insurance is a policy that lasts for a specific period. Generally, the terms range from five to 30 years, in increments of five. With this type of insurance, you pay premiums for each year of the term. If you die at any time during the term, your beneficiary will receive the death benefit. When the term ends, the coverage also ends. Insurance provider MetLife says this is usually the most affordable life insurance option.
Pros
● Good value for the cost
● Simple structure makes it easy to understand
● Only buy as much as you need (for example, if you only want coverage while paying off your mortgage)
Cons
● No savings component
● No interest earned
● You could live past your policy end date
● Extending coverage can be problematic (i.e. expensive, difficulty in proving insurability)