Life insurance is an important step in planning for your family’s future. In the event of your death, a life insurance policy provides income-tax free money to your beneficiary or beneficiaries. This money can be used to pay funeral expenses, debt, tuition, estate taxes, or any other long term expenses.
The type of life insurance you choose depends on your personal and financial needs.
Generally, you should consider life insurance if:
There are several different types of life insurance available. The most common types include:
Term life insurance is the least expensive life insurance because it provides insurance for a specified period. It is available in varying term periods with fixed premiums of 1, 5, 10, 20, and 30 year terms, or sometimes to a specific age, such as 75.
Whole life insurance is a form of permanent life insurance. It provides death benefit protection until age 100. Over time, whole life insurance can build cash value. With each premium payment, it can provide a living benefit that the insured may tap into at any time while alive.
Universal life insurance is the most flexible life insurance policy to date. It is characterized by flexible premiums, flexible face amounts, and unbundled pricing structures. Like whole life insurance, universal life insurance can build cash value which earns an interest rate that may adjust periodically although it is usually guaranteed not to fall below a certain percentage.
The flexibility provided by universal life insurance policies is attractive. Also, while the interest paid on universal life insurance is often adjusted monthly, interest on a whole life insurance policy is adjusted annually. This means that during periods of rising interest rates, universal life insurance policy holders see their cash values increase much more rapidly than those in whole life insurance policies.
At MIA, we can help you determine what type and amount of life insurance is best suited for you. Contact us today at firstname.lastname@example.org, or give us a call at 832-604-9500.