Wednesday, October 09, 2019

By Barbara Pronin Most people with families and dependent children know they need life insurance. But what kind of policy is best for you, based on your needs and your budget?

Start by understanding the differences:

Term life insurance. These policies, typically the least expensive, offer protection for a limited time. Term coverage can range from $100,000 to more than $3 million and can be in place for between 10 and 30 years. It’s designed to cover expenses that will eventually end, such as a mortgage. It’s protection that can help a family maintain its standard of living if the insured should die before the end of the set term. But once the term of the policy ends, there is no death benefit in place. 

Whole life insurance. These are permanent policies that cover the insured for his or her entire life. With whole life insurance, you will pay a fixed premium in return for a fixed death benefit, so that the surviving spouse and/or children receive the death benefit no matter when the insured dies. Whole life policies also allow you to borrow from the cash value during your lifetime, if you need to, although the death benefit is lowered by the amount you borrow. 

Universal life insurance. Like whole life policies, these policies are permanent and cover the insured for a lifetime. In addition, a portion of the premium you pay funds an interest-earning account that accumulates a cash value that you can access if you want to pay off a mortgage or use it for college expenses or an emergency - which lowers the death benefit - and/or you can increase your payments to add to the interest-earning account. 

While term policies can be purchased from companies that sell to consumers online, a qualified life insurance agent can help you decide which type of policy - or combination of policies - will work best for your needs and your budget. But the cost of any policy depends on your age at the time you buy it, which is one good reason not to put it off . 

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