Understanding the different types of life insurance and choosing the one that’s the best fit for your family can seem difficult and overwhelming. What is life insurance? How much will a life insurance policy cost? What kind of life insurance policies are out there for you and your family? We’re glad you asked! In this quick article, we’ll help breakdown some life insurance basics.
What is Life Insurance?
Life Insurance is a policy that gives your loved ones a tax-free lump sum of money upon your death. The amount of life insurance coverage you need will depend on a few factors like your family’s sources of income, your lifestyle, your debts and the number of dependents you have. For a more precise number, ask the experts here but as a rule of thumb, you should consider at least 10-12 times your annual income.
Life Insurance Costs & Types
The cost of life insurance depends primarily on your projected life expectancy and of course coverage amount, coverage type and length of term. When determining life expectancy, factors like gender, age, health, medical history, occupation etc. will be considered. For example, a healthy 30 year old male can expect to pay around $300 a year for $300,000 worth of term life insurance.
There are a few different kinds of life insurance available, but here is a quick breakdown of some of your options:
Why Life Insurance?
Life insurance is an essential part of financial planning. It will help cover end of life expenses (which average around $10,000), it will protect future plans like college and retirement for your loved ones and can pay off debt like student loans or mortgages for the family you leave behind. Avoid the what-ifs and worst-case scenarios for your loved ones by talking to an agent about life insurance today.