You may not want to think about buying a life insurance policy, but the right one will protect your family from financial hardship in the event of your death. Not all life insurance plans are the same, so it pays to do some homework before you settle on one. Here are a couple of things to consider before making a purchase.
The Different Kinds of Life Insurance
The right life insurance policy for you will depend on your financial position and goals. These are the two main types:
- Term policies: These are generally the least expensive coverage option. They will remain in effect for the duration of the term as long as you pay your premiums. They pay a benefit upon death.
- Permanent insurance: These policies will remain in effect for the rest of your life as long as you pay the premiums. They also build equity and can be used as an investment account.
The Expenses You Want To Cover
Life insurance can cover so much more than final expenses. That is why you need to carefully weigh what you want a policy to do. It can be used to pay off major debt, such as a mortgage, vehicle loan, or student loan. It can also be used to fund future purchases, such as your children’s college tuition.
Before you purchase life insurance, be sure to invest your time in researching how you want to use the policy and which type will best help you reach those goals.