(BPT) - While you can't predict everything life may throw at you, you can still set yourself up for some of life's uncertainties. One way you can prepare for any situation and provide for your loved ones in the future is through life insurance.
The ins and outs of life insurance can seem complicated and overwhelming, but don't get discouraged. Boston Mutual Life Insurance Company offers tips and insights to help you identify the best life insurance options that make sense for you and your family. Check out the company's answers to some of the most common life insurance questions.
What is life insurance?
The basic concept of life insurance is pretty simple. You pay premiums to an insurance company for the length of your policy. When you pass away, the company pays a death benefit to your beneficiaries that can be used for funeral and final expenses, medical bills, credit card bills, mortgage payments, living expenses, and more.
Why do I need life insurance?
A life insurance policy can help you secure your and your family's future. At its core, life insurance is a key component of a good financial plan and provides peace of mind for you and your loved ones. Many people assume life insurance only covers funeral costs but claims payments can be used for an array of other expenses to relieve family members of having to cover certain outstanding bills after the policyholder is gone.
When should I get life insurance?
A common myth about life insurance is that it's only for older adults, not for healthy young adults. However, purchasing life insurance while you're young establishes protection right away before you may even need it. It can also be a smart financial decision because you typically can secure lower premiums when you're at a younger age.
If you're a parent or grandparent, consider setting your children or grandchildren up for success by purchasing a whole life insurance policy for them. One idea could be to gift a whole life insurance policy to your child or children (or grandchild or grandchildren) for high school or college graduation. This is a sensible present that builds cash value that can help them plan for their own future.
What are the different types of life insurance?
There are two main types of life insurance policies. Which one you choose will most likely depend on your present and future needs.
- Whole life insurance is permanent life insurance that provides protection for your entire life and offers financial support through a claims payout to your beneficiary or beneficiaries at the time of your passing. Whole life accumulates a cash value that you can access during your life if needed for certain expenses, such as to buy a home, settle debts, or pay for college.
- Term life insurance offers financial support for a loss only during a specified period. The premiums may be lower than whole life insurance premiums, but it won't offer coverage for your entire life. Term also doesn't accumulate value.
How much life insurance do I need?
Life insurance is not a one-size-fits-all product. How much life insurance you would consider purchasing depends on your age, family situation, and future plans. Luckily, there are a number of options, including riders (or add-on benefits to a policy) that offer you flexibility. The best way to figure out what type and how much life insurance you may need is to talk with a local insurance professional.
Curious about learning more about life insurance options that would fit your needs? Visit Boston Mutual.com for more details.
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