There are a variety of insurance policies you’ll have to choose throughout your life. Car insurance and home insurance are certainly important, and it’s good to compare plans, but perhaps the most important policy decision you’ll make is when you choose your life insurance. Today in the Davidson Law Group blog, our estate attorneys will explain how to choose a life insurance policy that works for you.
What is Life Insurance?
Life insurance is fairly simple in concept. You make monthly payments or premiums and after you pass away, your beneficiaries receive death benefits. Life insurance policies will vary based on who’s applying for them. For instance, if you’re higher up in age and have various medical issues, you’d be paying considerably more than a younger person with no health issues. Of course, that’s why our estate attorneys recommend buying life insurance earlier in your life before these health issues present themselves.
Common factors that will affect your life insurance premium are:
- Family Medical History
Make sure you compare quotes before making a final decision. You may want to consult with your estate attorney too, as they could provide some useful advice to help you make a choice.
Types of Life Insurance
As far as the actual policy itself, there are two basic types of life insurance to choose from: term life and whole life. Each has its own set of benefits and drawbacks. Let’s discuss these two policies a little further.
Term Life Insurance
Term life insurance is a policy where you set a certain amount of time, like 5, 10, or 20 years. During this span of time, your premiums are guaranteed and will not fluctuate. However, keep in mind that if your term ends and you need to extend your policy, your premiums will definitely go up.
Whole Life Insurance
Whole life insurance does exactly as the name suggests. It covers you for your entire life. The premiums are fixed and can be invested, basically working as a tax-deferred savings account. The biggest drawback to whole life insurance is the fact that it tends to be more expensive than term life.
Consult with Your Estate Attorney
If you’re having trouble choosing what life insurance is right for you, you could always run your options by your estate attorney. They’ll be able to provide valuable insight into what might be best for you and your loved ones. For more information about our various services or to speak with an estate attorney, contact Davidson Law Group in Fort Worth, Allen, or Tyler today.