There are a number of advantages of having life insurance, yet only half of Americans have life insurance. Of the 50% that have coverage nearly 80% wish they had purchased life insurance earlier in life. Many individuals discover too late that life insurance can help them reach their financial goals, and the younger a person is the better in this regard. Life insurance symbolizes our dedication to loved ones, protecting their financial future while also potentially benefiting our own.
What is life insurance?
Paying monthly premiums to the insurance company, a contract is formed between you and the insurer. In exchange for premium dollars the insurer guarantees a payment to your beneficiaries when you die. Two primary types of life insurance help with an individual’s financial and life goals and are part of any responsible financial strategy:
Arizona term life insurance can help protect loved ones for a certain time period in your life, as an example, when children are financially dependent. Coverage typically last 10-30 years. Term life insurance is much less expensive than whole life and the savings can be invested elsewhere. Invested properly, the savings between term life and whole life may result in not needing life insurance over time. In a nutshell, term life insurance does the job, it replaces your income if you die.
Permanent Life Insurance
Permanent life insurance is just that, coverage up to the day of death, at which time the beneficiaries listed on the policy are paid a death benefit (assuming premiums have been paid.) There are different varieties of permanent life such as whole life (the most common) universal life, and variable universal life insurance. Each will have a cash value component. Variable universal life allows more control as to how premiums are invested.
Opinion
For the vast majority of individuals, it is best to purchase an Arizona term life insurance policy and invest the savings elsewhere. As an example, if a whole life policy will cost you $300 a month and a term life policy $50, invest the $250 savings per month in the market or save for an investment property. The trick of course is to start as young as possible, as the proverbial clock just keeps on ticking for all of us.