Why do so many people have life insurance? What’s so good about it? And when do people generally get it? As well as this, what are the benefits of universal life insurance over the benefits of group life insurance and the benefits of whole life insurance policy? Well, the benefits of life insurance are exactly the topic that we’re going to be exploring in this article. So, if you want to learn more about life insurance benefits, read on.
So, why should I think about life insurance?
The main benefit of life insurance, as you’re probably already aware, is that a life insurance policy can help to provide for your family if you pass away. But did you know that different types of life insurance can give you different types of coverage with different benefits?
For example, some kinds of life insurance have the benefit of providing funds for college education, whereas other life insurance policies will help with providing care for aging parents. Still, other types of life insurance will help you out by paying off debts like your credit cards, student loans, and car loans, while some may help to pay off your house mortgage.
What are the benefits of term life insurance?
Each type of life insurance has its own unique set of benefits that make it particularly suited to different types of people. When it comes to term life insurance, though, what are the benefits of this type of life insurance policy?
Well, first of all, one of the major benefits of a term life insurance policy is that the policy is low cost. In fact, a term life insurance policy is one of the cheapest types of insurance policy you can get.
But as well as this, term life insurance is one of the easiest styles of insurance policy to understand. It’s not that complicated, and there is no investment or savings element to it.
Some term life insurance policies are also modular – when your term length is nearing expiry, you may be able to convert it to a whole life insurance policy. If this is your aim, though, make sure you check this before purchasing any term life insurance policy.
What’s more, is, you can quit your term life insurance policy without losing any more money than the premiums you have already paid if you can no longer afford or do not need your term life insurance policy anymore.
What is beneficial about permanent or whole life insurance?
The even more pricey form of life insurance, whole life insurance, comes with its own set of benefits as well. So, what are some of the benefits of permanent life insurance? Let’s take a look:
First of all, there’s the obvious benefit of permanent life insurance being permanent! With permanent life insurance, you have the security of complete, guaranteed, lifelong insurance coverage that is never going to stop.
But as well as this, whole life insurance can also provide you with estate planning benefits, which are tax-advantaged.
The main, unique benefit to whole life insurance, though, is its cash value – an important savings element the policy has. You get the ability to take out your whole life insurance cash value, or else you can also borrow against it.
How can I get better value life insurance?
Did you know that it is most cost-effective for you to buy a life insurance policy as young as possible? Insurance companies are more likely to give a low rate to younger people. This is chiefly because people who are young have a longer life expectancy, and so, are seen as being able to pay more premiums to the insurance provider over a longer period of time. Younger people are also substantially less likely to have been diagnosed with a serious disease.
That being said, there are still plenty of ways to get great value life insurance, even if you aren’t so young.
One such method is riders. Riders generally must be put into place before you open the policy.
One rider is the accelerated death benefit. The accelerated death benefit helps to pay for the necessary care of a terminal or chronic illness. A very useful rider, but do be aware that it usually lowers your death benefit.
Then there’s the disability waiver of premium, a rider that lets you retain your insurance coverage while you stop paying premiums if you have a disability.
Of course, these aren’t the only riders there are. Talk to a professional to find out more about riders.
Other ways to control or reduce your policy’s cost include taking advantage of a whole life policy’s cash value to reduce your premium later, getting group rate insurance through your employer, or going for a joint policy for you and your spouse.
Does term life insurance or whole life insurance have more benefits?
Well, this really depends on you and what you want. Both policies offer a death benefit, of course, but here the similarities end.
To summarize, a whole life policy gives you the benefit of greater flexibility, as well as having consistent, unfluctuating premiums throughout the policy span, though this policy is one of the more pricey ones.
Whereas a term life policy offers you a similar amount of cover, but only for a decade or two, and without any investment or savings elements built into the policy.
So, both policy types have their own unique set of benefits that are likely to suit you best at a certain point in your life.
Ever heard of corporate-owned life insurance?
What about ultra-high net worth Canadians? Surely such people have no use for traditional insurance?
It’s true that most such Canadians are self-insured because of their assets. So, what type of insurance suits such wealthy people?
Well, corporate-owned life insurance can be a good solution. Corporate-owned life insurance is a tax-effective way for a wealthy individual to accumulate passive wealth within a company, access the wealth tax-free, and move the wealth tax-free to their surviving beneficiaries. Check out wealthinsurance.com for more on this.
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