How Much Life Insurance Policy Should I Buy?
Life Insurance Policy is one of the most important insurance policies you can buy. Additionally, it is likely the most famous kind of insurance services as well. Majority of the people understand a few major benefits of buying this policy.
“When you die, your family gets the money.” This is the simplest summation of Life Insurance Policy for most people. You can rest easy, knowing your family has the resources to continue without you. However, this is not the only benefit of such an incredibly beneficial insurance policy. There are many other advantages, which are dependent upon the kind of policy and limits of coverage you buy.
The Countless Benefits of Life Insurance
A life policy can give you plenty of financial confidence for the continuation of your descendants. It’s the rule of the thumb, “the better policy you have, the more benefits for your family.”
Some people take part in the nominal policy offered through their workplace. Say, this policy is worth $25,000. In theory, this sum might seem nice. However, it is only enough to pay off your funeral expenses and some mortgage payments. You will receive far more benefits against a larger coverage amount. Such as, you will receive;
- A replacement for lost income
- Funds to pay-off mortgage payments
- Funds to pay-off various other debts
- Monetary resources for college education of your kids
- Retirement funds for your aging parents
These are the benefits associated with almost every traditional Life Insurance Plan. Specialized policies can provide further benefits. Such as;
- Greater tax benefits and fewer tax liabilities
- Some policies allow withdrawals for retirement
- ‘Riders’ and ‘contractual provisions’ can provide many additional benefits
Types of Life Insurance
There are two main types of life policies. They are called ‘Term’ and ‘Permanent’ Life Insurance Policy. A term life policy is meant to last a specific term. Such as 10 or 15 years. A death benefit is paid to your family, in case of your death during the specified term. This policy is limited to only the specified term. It expires when the time limit passes. In case of expiration; you must renew the policy, or buy a new one. On the other hand, a whole life policy lasts your whole lifetime.
1. Term Life Insurance
This policy has countless benefits of its own. It is not a permanent form of insurance policy. It is only temporary. This policy costs much lower than a permanent kind of policy, because it has less risks associated with it. It is simple to understand for a novice, as compared to more complex policies, with countless provisions and conditions.
Some term life providers allow the buyers to convert it into a more permanent whole life policy. You must inquire about this flexibility from the carrier before buying the policy. It is possible that, when your circumstances change, you no longer need this policy. Or perhaps, you can no longer afford it. In such cases, you can simply walk away. There will be no repercussions. You will only lose the premiums you have paid already.
2. Whole Life Insurance
This is the policy which generally comes to mind, whenever someone mentions ‘Life Insurance Policy’. It is the earliest and most easily recognized form of life policies & also a permanent form of insurance. It means, a whole life policy is for life.
There is a very important savings element attached to this policy. It is called a ‘cash value’. Once enough cash value is built, you can take it out, if your provider allows it. Moreover, you can also borrow a sum of money against it, if withdrawing is not an option, or motivation. Whole Life Insurance also provide countless tax advantages. These advantages are especially meaningful in estate planning endeavors.
How Much Life Insurance Do You Need?
There are a few unofficial rules that help determine how much Life Insurance Services you need. It is generally accepted that the least amount of coverage you must buy should have enough coverage for essential tasks. The funds should cover the lost salary. Moreover, it should also cover the key expenses. Such as, mortgage and various other debts, including credit card debts, or loans. When such basic requirements are fulfilled, you can exceed the policy as much as you want. After all, you only receive what you put in it.
Getting More Benefits and Advantages
The best way to receive maximum benefits out of a life Insurance policy is to buy it when you are young. The young and healthy subscribers always get the best rates because they are likely to have a long life-expectancy. Moreover, it is also less likely that they contract a serious disease any time soon. Lastly, they will continue to pay the premiums for a long time.
There are still ways for people over their twenties to receive maximum benefits. Almost every policy has some provisions which can offer additional benefits. You merely need to study them in detail. A few riders are especially beneficial, if they are offered by your insurance carrier. Such as;
- Accelerated Death Benefits.
- Disability Waiver of Premium.
Secure the Future of Your Family and Loved Ones Through the Best Life Insurance Services in Texas
SG Financial Inc. can provide you with the Best Life Insurance Services in Texas. Our extensive experience allows policyholders to receive maximum privileges. Ensure your children and beneficiaries receive a plentiful future through us.