Life insurance exists to protect loved ones in the event of the policy holder's death. It ensures that the beneficiaries will get the financial resources necessary to continue the same lifestyle as before the policy holder's death. Consumers should be aware that there are several types of life insurance and determine how much coverage is needed when reviewing life insurance policy options. An agent from Heffers Insurance Agency can guide you through this process. Or if you prefer an online quote, compare other agency quotes with Heffers Insurance Agency in minutes.
Understanding Basic Types of Life Insurance
Term Life insurance provides coverage for a set term of one or more years, paying benefits only if death occurs during that time. This insurance typically delivers the greatest immediate return for your premium dollar. The majority of term insurance policies can be renewed for one or more terms, regardless of your health status; however, premiums increase each time.
Whole Life insurance provides protection as long as the policy holder lives. The policy holder pays the same premium as long as he lives. The premium may be greater than the same amount of term insurance initially. Whole life premiums, however, are smaller than term life premiums that you continue renewing until later years.
Deciding How Much Life Insurance to Buy
To determine the amount of life insurance needed, the policy holder must consider what financial resources the dependents would be left with if the policy holder died right away. Next the policy holder must think about what the dependents actually need to maintain the current standard of living. The life insurance policy should come as close to making up the difference as possible.
Other Important Considerations
- After receiving a new policy, carefully review it with an insurance agent to verify the terms. Ask questions regarding any unclear terms.
- A life insurance policy should be reviewed with an agent every few years, as income and needs change.