When it comes down to it, getting life insurance fast and easy seems like an uncomplicated process. However, this is only until you see the paperwork and the broad scope of different polices that you can purchase. There are really two main types of life insurance: term and permanent. Sure, it may be simple to say that term life insurance is temporary and permanent is not, but it is a lot more complex than that. Plus, how do you actually know which one is right for you? Before you can answer this question, you need to take a look at a number of different factors.
Term life insurance is pretty basic. If you don’t want to pay that much for your monthly premiums but still want some kind of monetary benefit to be left to your survivors after you are gone, you may want to sign up for a term policy. These policies often last for about ten to thirty years. You can also renew your term policy if you want to extend your coverage.
A permanent insurance policy is different in that there is more of a fiscal responsibility. Plus, there is a bigger investment, which can often yield a larger return – if you play your cards right. In most cases, the money you put into your permanent policy is counted as an investment and accrues interest over a certain amount of years. Yes, your monthly premium may be higher, but when the cash benefit is paid out, it is usually protected from taxes. In some cases, a perm policy is a little bit like a mutual fund – you aren’t just paying for a policy, you are making every dollar work for you.
When it comes to the benefits and disadvantages of both term and perm policies – there are some important factors to look at. One of the biggest is lifestyle. If you are young and want some kind of temporary coverage, you may want to go with a term policy. If you are middle aged and are thinking seriously about the future and the well being of your descendants, you probably want to go with a perm policy. This is especially the case if you have a lot of assets to protect, which is common with a lot of people that are older and have property and investments to safeguard.
In the end, term and perm life insurance is one of those things that you have to break down and evaluate before you can purchase a policy. Not only do you want to break down the pros and cons, and create a list of what both policies entail in terms of coverage, but you also want to break down the numbers. It all comes down to the numbers. Moreover, you want to think of the people you are leaving behind. In the end, there are not a lot of ways to make sure your survivors are safe after you pass on, but at least you don’t have to worry about them being financially insecure.