Life insurance is a great way to prevent loved ones from figuring out how to cover final expenses. The cost of a funeral has increased significantly in the last few decades. Life insurance can help cover those expenses, so that loved ones can spend more time focusing on grieving than worrying about money. Not all life insurance policies are the same. Here are the most common ones to choose from.
Guaranteed acceptance term life insurance helps cover those final expenses without the hassles of other life insurance applications. Many of these policies allow you to obtain coverage fast and yet retain affordable rates. This type of insurance helps cover and medical bills. Retirees who have not had prior estate planning can greatly benefit from this type of coverage. Many of these plans do not require a health screening, but some do.
There are other term life insurance policies available. Beyond those offered as guaranteed acceptance, term life policies are generally more affordable than other options. This type of insurance often has an expiration date that may come before a person passes. Most policies last 10 or 20 years. Some companies allow individuals to transfer a term life policy to a more permanent one. These policies are often perfect for those on limited budgets. Many of these policies require a health screening to determine the amount of coverage and premium costs.
One of the more permanent life insurance policies is universal life. Some offer guaranteed death benefits. Others offer varying premiums in certain situations. This is a more flexible, permanent life insurance option that can help when times are difficult. These policies are a subset of whole life insurance plans.
While more expensive than a term life plan, whole life insurance offers a more permanent solution for end-of-life expenses. The premiums generally stay constant throughout a person’s life allowing for easy budgeting. Over time, these policies build a cash value that is accessible to help you meet other financial goals. These policies do not have a term date and offer greater flexibility than term life insurance plans. In some cases, policy holders can earn dividends for their policies allowing them to use that money for other financial goals. Plan for retirement, pay for a kid’s college or buy a vacation home. The policy does not dictate what you can use the cash value for. Talk with a financial planner or insurance expert for help choosing the best one for your life and financial situation.