Life Insurance Basics

Many people who think about buying life insurance for the first time wonder if buying a policy is worthwhile. They have enough bills to pay already. Why add anything else, especially if it is for something they may never use?

It is tempting to skip paying for a life insurance policy altogether. Without a life insurance policy, however, an individual stands to put his or her family in more financial difficulty. In the event they die, they leave their family without a stream of income they were not only used to, but that was crucial to keeping up with their rent, car payments, groceries and other living expenses.

In addition, the family would have to pay several thousand dollars to plan an unexpected funeral. This could cause the family without life insurance to endure extreme financial difficulties and face foreclosure or bankruptcy as a result. The tragedy is that a nominal life insurance premium payment would have been all it would have taken to avoid this.

You want to make life insurance as affordable for you as possible. There are two types of policies to choose from – term life insurance and whole life insurance. You can choose how much coverage you would like depending on your family’s financial needs.  The more coverage you purchase, the more the policy is likely to cost. Term policies are generally less expensive than whole life policies and are great for young families, smokers looking to get life insurance coverage, or anyone in a high risk life insurance situation. Whole life policies build cash value a policyholder can use, while term policies do not.

Other factors that go into the price paid for life insurance is a person’s health and age at the time of applying for coverage. Talk to a life insurance agent to find out which types of policies and coverage limits are best for your budget, age and plans for the future.