Term Life Insurance Vs. Permanent Life Insurance: Which Is Best for You?

Choosing between life insurance types can often be a tedious and long process. There are many options available for the policies,Guest Posting as well as terms within those options. Companies offer so many types because everyone seems to need something unique to their situation, lifestyle, etc Benefits of Using.

Two of the most common types are term life insurance and universal life insurance. Though there are several other kinds of coverage, these are the two that are most often used for families or businesses.

Term Life Insurance Explained

This is a policy set up to cover a person for a specific amount of time. During this time as long as premiums are paid, the same death benefit will always be held. Premiums and coverage never change, and after the term is up, there may be an option for renewal.

This kind of coverage is most often used by parents with families that only need coverage for a specific time period. For instance, a family with a mortgage might be best off to have both spouses covered. In case of death, during the length of the mortgage, the coverage amount for whoever passes will be paid to the other spouse, allowing them to pay off the mortgage.

Another case for using term life insurance is when there are still children at home. Being covered until the youngest child is old enough to support themselves gives both spouses comfort in knowing that the children would be taken care of if anything were to happen.

Often times this kind of policy will remain in effect until the last child leaves home at age 21. One last example where people often use this type of policy is with a stay at home parent. A death benefit can keep the rest of the family financially afloat in regards to daycare for younger children, and other spousal duties.

It’s very important to consider what would happen to a family if a stay at home spouse were to pass away. Often times they are over looked because they have no income. The money they are saving the family though, in cleaning and daycare bills, adds up and should be considered for their own term life insurance policies.

Permanent Policies Explained

Permanent policies are characterized by their cash values and death benefits. One of these common policies is universal life insurance. This kind of policy is used for people who want to have a more hands on approach with their coverage and cash value.

The popular idea behind universal life insurance is that the premiums, pay out, and cash value are all decided by the owner. An amount of money is left in their account and monthly premiums can be taken from this amount to cover the death benefit desired.

If their wishes change, the universal life insurance policy is easy to alter by additional deposits. The cash value can also be used for certain investments, which allows the owner to have more control over their money.

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