Examine Your Life Insurance Options

Category: Personal Insurance

Whether you have recently taken a relationship to the next level, married, had children or bought a house, chances are that you have experienced a major life event. Why else would you consider life insurance, right? Your circumstances and the goals you have in a life insurance policy should help determine the right coverage options for you and your loved ones.

The most popular and least expensive type of life insurance is called a term policy. Term life insurance lasts for a set period of time (term) as long as you pay the monthly premium. An annual-renewable term policy can be purchased one year at a time, and unlike the permanent types of life insurance you don’t usually have to qualify at each renewal with a medical exam. Premiums for term insurance increase as you age, so it’s best to purchase this type of life insurance sooner rather than later.

Another option is a whole life insurance policy, which is a type of permanent insurance. Whole policies combine lifetime coverage with an investment fund. This form of policy pays a fixed amount to your loved ones upon your death. A portion of your premium goes toward building cash value from investments made by the insurance company. Cash value builds tax-deferred each year that you keep the policy, and you can borrow tax-free against the cash accumulation fund. Premiums for this life insurance option are generally fixed.

Your third option is a mix of the previous two. Universal life is a type of permanent insurance policy that combines term insurance with a money market-type investment that pays a market rate of return. To get a higher return, these policies generally don’t guarantee a certain rate. Variable life and variable universal life are permanent policies with an investment fund tied to a stock or bond mutual-fund investment, however, and returns are also not guaranteed.

Knowledgeable, independent agents at Sutton Insurance can help identify your life insurance goals and suggest coverage options best suited for your circumstances and your family. Our experienced agents are able to find you a variety of quotes from a number of providers, ensuring the life insurance policy you choose offers the best coverage at the most affordable rates. Contact us to find out how you can be there for your loved ones long after you’re gone.


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