If you have recognized the need for life insurance to protect your beneficiaries if something happens to you, this is a crucial first step towards obtaining a policy that can benefit you and your loved ones for years to come. There are several different types of life insurance and each is explained below. Depending on your needs and health condition, one may be more appropriate for you than another. Doing your research ahead of time and speaking with an experienced insurance agent is strongly recommended before you sign your life insurance application.
Term Life Insurance
Term life insurance is the most popular type of coverage as it is also the most inexpensive. A term life insurance policy can be obtained for typically between 10 and 30 years and usually has cheaper premiums because you are essentially renting a life insurance policy from the company. Your premiums will also depend on other factors such as your health and the amount of coverage you would like your beneficiaries to receive if you pass away. That being said, term life insurance is still likely to be your cheapest option for financial protection.
Permanent Life Insurance
Unlike term life insurance, permanent life insurance protects you over the long run. This means that regardless of when you pass away, your beneficiaries would be entitled to receive the benefits associated with the policy.
Permanent life insurance companies are usually more expensive than term life and they also come with more riders or add-on bells and whistles that can be customized based on your needs. For example, some permanent policies allow you to build cash value as you pay premiums on the policy which you may be able to access as a loan down the road.
Permanent life insurance policies may be appropriate for you if you do not want to run the risk of having to get another life insurance policy 10, 20 or 30 years down the line. Locking in a premium now can help you save significantly as you are more likely to be young and healthy.
No Exam Life Insurance
No exam life insurance can be obtained much more quickly than traditional policies. Insurance companies assess mortality risk by evaluating your medical conditions prior to giving you a policy. If you choose to go the route of not getting a medical exam with your life insurance policy, the company assumes more of the risk and therefore, your premiums are likely to be higher. That being said, processing life insurance applications without an exam is much faster on the insurance company’s part so it is more likely that you will have a policy in hand quickly. This is also beneficial if you do not want to go through the process of getting a medical exam or if you are concerned about deteriorating health conditions.
Consult with an experienced individual in the insurance industry to determine whether term life insurance, permanent life insurance or no exam life insurance could benefit you.