Understanding the Two Primary Types of Life Insurance
Many people may think life insurance is just another unnecessary expense without realizing its purpose and benefits. The question to ask yourself is would someone in your life suffer financial hardships if you were to pass away? If the answer is yes, then life insurance is worth considering. The most fundamental step towards understanding life insurance is knowing the differences between the two primary types of life insurance:
Term life insurance is the simplest and a relatively inexpensive way to temporarily protect your family over a “term”, or certain time period. It provides coverage commonly for 10, 20, or 30 years. And if your death occurs within the specified term, your beneficiaries receive the payout.
Permanent life insurance, as the name suggests, provides a death benefit for life as long as premium payments are made on time. Whole life, universal life, and variable life are types of permanent life insurance. Unlike term, permanent life policies are more complex because they offer a savings component primarily called “cash value” that grows with interest over time on a tax-favored basis.
Life insurance can help reduce the financial impact on your loved ones in the event of your death. Call us at 910-623-0858. We can help you sort through the many options and design a plan to best meet your needs and expectations.