If you own term life insurance or universal life insurance congratulations! At least you own a policy that pays a death benefit to loved ones when you die.
Far too many husbands, wives, fathers and mothers do not own life insurance. If you die there are almost always family members who will be hurt financially.
Often we have a husband who makes 70% of the household income. If he passes away the majority of the income that home was earning is instantly gone. That leaves a wife and children scrambling. They will be forced to survive on savings, family, and government assistance. It is not the best solution to a problem that is easily solved by buying life insurance.
Even in homes where a household is 50-50 in earning power you still have a dramatic drop in household income when one of them dies. How many households could lose half of their income and survive?
- • The premium is cheap when you are young but very expensive when you get older. Dont expect to see many senior citizens with term insurance.
- • At older ages the policy either A) terminates or B) becomes unaffordable due to rising premiums.
- • Gives you a level premium today and the rest of your life, usually up to age 100 or 110. You pay more for this policy with the guarantee that the rate will always stay the same.
- • Monies can often accumulate inside the policy. Be careful though, this money is usually best left inside the policy.
Which policy is better term or universal life? It is a hard and easy answer. The real answer depends on your personal situation.
If you are young (18 35) you can likely get away with term life insurance. Most term life insurance policies allow you to "convert" your policy to a permanent plan, such as a universal life.
But do not buy term life insurance and believe that you will never have to buy life insurance ever again. At some point (in your 40's usually) you will need to face the reality that you need to buy a universal life insurance plan to ensure you lock a rate in at an affordable premium for the rest of your life.
If you buy term insurance and wait to change to a universal life policy when you are in your fifties or sixties you will find the universal life rates very high. Buy term when young but change over before you get too old.
Keep in mind that health plays a big role in life insurance. If healthy today, you may want to consider skipping term insurance and jumping directly to a universal life policy that locks a preferred, low rate in today for the rest of your life.
To obtain a quote on life insurance, click this link button. The quote is free and there is no obligation.