USMC LinksProtecting and serving yourself and the ones you love means being prepared for all situations. Investing correctly is a smart choice to help keep your family prepared for any financial situations. Of course, there are riskier options for investing, but one that is guaranteed to help you save your money for a time when you most need it, is life insurance. This is money saved for the people who depend on you financially. Whether it be to used for final expenses, replace lost income, cover debts, or fund a child’s education, life insurance is a smart way to helping keep your family safe.
Life insurance is meant to help your family in times of need, however that time depends on what type of insurance you choose. There are two main types of life insurance: term and permanent life insurance. Term life insurance covers you for a certain block of time. Permanent life insurance combines the coverage of a term policy with investment components to help build the cash value of your policy over time. Often, a permanent policy also allows the policyholder to access money in case of emergency.
Term Life Insurance is best used for families on tight budgets that could be drastically hurt if a policyholder should pass. Often this is when children are attending school or college, or there is a large debt to pay off. Term life insurance can provide coverage anywhere from one year to thirty years or even longer. The most common policies provide coverage for twenty years. The most important thing to remember with term life insurance is that it is temporary, however offers a great amount of coverage for a very low initial premium.
Be aware, term life insurance should not be confused with Long Term Care Insurance, this is a separate kind of insurance that guarantees additional support if the policyholder becomes ill and needs assistance (such as bathing, dressing, and eating) by professional nurses or therapists. This is an option under Armed Forces Insurance life insurance umbrella of products, if needed.
The second type of life insurance is known as Permanent Life Insurance. These policies remain in place as long as the premiums are paid. Often a cash value component is available with these policies which will help the policies value increase over time. As well, the owner of the policy can borrow against that cash value in times of need. There are several types of permanent life insurance:
Whole Life Insurance is a very simple and straight-forward policy which guarantees a fixed premium for the duration of the policy with an annual cash value growth. However, it does not offer investment flexibility and, once initiated, you cannot change the options of the policy.
Universal Life Insurance gives more flexibility to the policyholder by allowing them timing and the amount to their premium payments as well as being able to adjust their coverage levels as needed. You a guaranteed an annual cash value, however, like whole life insurance, you do not have the option of investment flexibility.
Variable Life Insurance allows investment flexibility across stocks, bonds, and money market accounts which can potentially give greater long term returns. However, there is no minimum cash value because a market can fluctuate and coverage amounts may change.
Variable Universal Life Insurance offers the best of both variable and universal life insurance. It offers great flexibility in investments as well as varying the premium payments and coverage amounts. You are able to choose investments in a wide range of markets along with tax-free transfers between the investment. Though it can be the most rewarding of the life insurance policies, it also exposes the policyholder to great risk as well.
Whichever life insurance policy you choose, know that you are making a wise step in helping protect your family in times of need. If you have more questions about what type of life insurance policy is right for you, don’t hesitate to talk to Armed Forces Insurance, we are happy to help.
