Life insurance is a phrase that is tossed around and a product that is often purchased without a clear understanding of what it means. For many people, the Michigan life insurance policies they hold are not going to last them long enough to pay off. For this reason, it is important to understand the different policies, what they mean and why it is so important to shop now instead of later.
Term life insurance policies only last for a specified period of time. The benefits expire when that period ends, and any money placed into them is wasted. These policies tend to be bought more often because they are less expensive, but consumers are saving money on a less effective policy. In essence, they’re saying they must die before the policy ends. No one wants to feel that way.
Whole life insurance policies last from the moment of purchase until the death of the insured, no matter what. These are more expensive because their coverage might last many years or even decades. This type of policy is less common than term life due to its expense, but is beneficial in many ways. Once owned, whole life policies are less stressful, as the insured knows that their plan will cover them in the event of their death. Also, whole life insurance policies can be borrowed against (albeit at high interest rates) in case of an emergency.
Many policies are woefully underfunded. Ask yourself: what is your plan? $100,000? $150,000? The average consumer holds around $50,000 in debt, and the average funeral cost is between $10,000 and $15,000. When you consider that it takes around two to three years of financial readjustment for the surviving spouse with an average household income of $32,000, then you are looking at $161,000 already, and that doesn’t include additional expenses. Keep in mind that you want to leave enough for your spouse to live on until they adjust. Would you like to leave enough behind to help put your kids through college? To pay for your daughter’s wedding? These questions are important to ask yourself.
Life insurance costs are based on age and health at the moment of purchase, so your health in the past or the future is irrelevant. Buy now, before costs rise. A healthy 40-year-old man might pay between $300 and $500 a year for life insurance for a $500,000 policy. However, those costs double and quadruple over the next 20 years for the same cost. If purchased at an even younger age, like the 20s, a plan could pay out well over $1,000,000 at a low cost per year over a lifetime.
Call Insurance Planning Service at 800-220-5582 today for more information about purchasing a life insurance policy.