What is the best type of life insurance to buy?

Choosing an insurance policy can be difficult; you need to ask yourself what your financial, medical and family needs are. There are many factors that go into deciding which life insurance option is best for your needs, including your current income, debt amount, monthly expenses (including taxes), age, health issues (like high blood pressure or diabetes) and family history. The product with the most coverage at the lowest cost will be ideal for you. You can begin by comparing providers using the Better Penny Life Insurance Companies.

Term life insurance policies are generally for a period of 10, 20 or 30 years. For example, if you are 40 years old and buy a policy that lasts until age 50, it is considered a term life insurance policy designed to provide coverage until you reach middle age.

Permanent life insurance policies remain in force until the insured person dies, which is why they are often called "whole life" or "universal" as opposed to term insurance. Larger policies usually require a medical exam and may have a minimum age requirement of 30 years old for applicants.

Types of Permanent Policies

Whole Life Insurance
Also known as Universal Life, whole life provides lifetime coverage that remains in force if premiums are paid. Premiums can be paid through a monthly deduction from your checking account or other source, such as an employer payroll deduction. The premiums for this type of policy never go down because it does not have a built-in savings component. It can be a good option for people who want lifetime coverage and whose health may not be the best; it does not depend on good health to get approved (although your need may come into play).

Universal Life
This is like Whole Life in that it provides lifetime coverage, but premiums are flexible and can go up or down as needed. Universal life premiums do fluctuate based on the insured's age and the type of policy purchased. The goal with universal life is to accumulate cash value so you can take out loans against this balance to pay off debts, purchase real estate, finance college education, start a business, or fund retirement.

Cash Value Policy
A cash value policy accumulates a tax-free death benefit as the insured pays premiums, which can be borrowed against. When a death claim is made, the insurance company uses part of the cash value to cover the cost of death and invests the remaining funds. The policyholder can choose how much risk he or she wants to take with investing by selecting how conservatively his or her cash value account is invested. The more conservatively a policy's assets are invested, the lower its investment returns will be but also correspondingly lower expenses because there won't be as many transactions to process.

What is the average life insurance cost?

The average life insurance cost depends on many factors, including your age and health. Obviously, a 20-year-old who has no health issues will pay much less for a policy than a 70-year-old who has high blood pressure and arthritis. The younger you are, the more likely you will be able to secure coverage at an affordable rate. You can use the Best Life Insurance Quotes to find out how much it would cost for you.

How long does it take to apply for life insurance?

The time it takes to get coverage depends on the type of coverage you are looking to acquire. There are no medical exam term life insurance policies that become active right after the first payment is received. For permanent life insurance policies such as whole life and universal, the insured may need to complete a medical exam. For larger permanent life insurance policies, you can expect to always have to complete a medical exam.

Why Do I need Life Insurance?

Life insurance is not something lots of people like to think about--they would rather focus on more pleasant things like loved ones and dreams for the future. But if you have someone who depends on your income, life insurance makes sense. There are two main reasons to purchase life insurance:

To provide financial security for loved ones if you die before they do (this is called an "immediate need" or "term" policy). To save money now through tax-advantaged investing, which can be used to cover your family's future expenses (called a permanent, cash value policy).

Where Should I Buy a Term Life Insurance Policy?

There is an endless amount of life insurance companies out there, but navigating which one is best for you can be a cumbersome task. Luckily, regardless of your experience with life insurance, Better Penny provides can give you a personalized recommendation of which of our vetted term life insurance providers can work for you.

How Long Do I need Life Insurance Coverage?

Term policies are normally purchased for "term" or temporary coverage periods of between 10 and 30 years, after which they expire. However, most policies allow for automatic renewal so there is no need to shop around if your health has not changed.

A common misconception about life insurance is that term policies expire once you reach retirement age (the average retired couple lives another 19 years). If you want permanent protection that does not expire then consider buying Permanent Life Insurance.

How much life insurance do I need?

A good starting point would be to ask yourself how long your family could survive on your income alone. If the answer is less than two years, then you should consider purchasing some type of life insurance product. Remember that if both husband-and-wife work, they may want to consider buying twice as much total coverage as their joint income because they will now have twice as many debts and expenses. Once you determine how much financial protection you desire, consult an insurance provider

What Types of Life Insurance Are Available?

There are many types of life insurance. One of the most popular options is Term Life Insurance, which provides coverage only if you pay the premiums.

Conclusion

Life insurance provides financial security for loved ones if you die before they do. It is important to find a policy that fits your needs, budget, and ability to pay premiums on time every month. If this sounds overwhelming, don't worry! Better Penny can help recommend life insurance providers with affordable rates based on your situation.