Choose A Suitable Life Insurance
What is life insurance?
Life insurance is a tool that provides financial refuge to your family/dependents after your passing. This is a non-taxable amount that can be used to pay for any mortgages, loans, and other expenses across the board as it replaces the income of the bread-winner in the unfortunate event of their death.
As per the Orange county health improvement plan 2017-2019, by 2040 one in four residents of Orange County will be of 65 years of age or older, which is why it is essential for one to not just have health insurance in Fullerton, but also consider investing in a life insurance policy. Being a critical purchase for any individual, knowing the numerous reasons for an investment such as this is absolutely important too.
Reasons why must one get life insurance
● Monetary assistance for beneficiaries after your death
● Child support financially, in case one or both parents pass away
● Mortgage or debts can be paid for through the money accumulated in life insurance
● Young age + less premium is most likely the case
How to choose the ideal plan?
While accessing the right life insurance policy, any individual must factor in the size of their household, their earnings, the state they live in, their health, age, and offers. A few factors that determine the cost of premiums are as follows;
● Age – An older individual will have to pay more towards premium as compared to a younger person. One must consider investing in a life insurance policy early on in their adult life
● Nicotine usage – It is commonly known that nicotine users pay more for health insurance and that applies to life insurance as well. If you consume nicotine, you are at a higher risk to die over a non-smoker which makes premiums higher for you
● Gender – It is statistically proven that women outlive men and that directly affects premiums. Women pay less towards premium over men
● Employment – Your work determines how much you pay towards the premium for life insurance. If you are engaged in a job that puts your life at risk, you are more likely to pay higher than say a banker.
● Health – It is a standard procedure to look at one’s medical history before issuing a life insurance policy to them. If you have any pre-existing medical conditions, you might have to pay more premium
● Coverage – Premiums depend on the kind of policy you pick. If you choose a term insurance policy you will pay considerably less than if you picked a whole life insurance policy.
To purchase an ideal plan for you, you must ascertain the kind of coverage you’re looking for and whether or not you’re the primary or only earning member of your household. You will also have to calculate and compare if the policy you choose and the amount you pay will sum up to a total that will cover the expenses of your family/beneficiaries after your demise. A pragmatic way to access the right policy for you is to set aside a budget that you as the breadwinner can afford to pay for as premium towards life insurance.
Ref – FAQ Benzinga.com
The difference between Term and Whole life insurance
Term insurance is relatively cheaper than a whole life insurance policy. A term life insurance as the name rightfully suggests only covers you for a set time period, which when expires before your demise, doesn’t offer a payout to your beneficiaries. On the other hand, whole life insurance policy lasts your whole life and offers the entire accumulated amount minus the cash value element to your beneficiary. One can opt for a policy that fits their household based on the above factors.
Ref – AmFam.com