Although nobody likes to think about death, it’s an inevitable event. Because each day is a blessing, and we never know when our time will arrive, and being prepared is always the best practice. With NH life insurance, you can have peace of mind that your loved ones are protected after you can no longer care for them. And, with National Life Insurance Day around the corner, what better time than now to consider the protection!
However, obtaining life insurance is often avoided because of intimidation and fear of the unknown. With that in mind, choosing the best coverage is easier than you may think. Here at Brownell Insurance Center, we understand that multiple policies and options can be overwhelming. That’s why our team of experts is here to help.
In this article, we’re looking at the three major types of life insurance policies to help you gain knowledge and provide you with the pros and cons of each.
One of the most commonly selected policies is term insurance. This type of insurance offers the most significant death protection of all life insurance policies with the smallest premium payments. Premiums for this policy are based on an insured’s age, health, and life expectancy. Policies allow individuals to select a specified range of time they’d like coverage. Often, these policies provide coverage for 20 years. Term life insurance is only paid out if the covered individual becomes deceased during that specified period. Although this may sound like a gamble, term life provides peace of mind during the coverage period and guarantees payment of the face amount of the policy if the named insured passes away. This life insurance has no value other than a death benefit but is helpful to cover debts such as mortgages or business expenses if the insured dies. Furthermore, many of these policies allow for renewable or conversion depending on the insurance company. By taking advantage of this feature, you can establish a new term or switch from a term to a different type of policy when your insurance needs to change.
When thinking of coverage for a specific “term of time,” think of term life insurance.
Whole Life Insurance
The second most common option is whole life insurance, also known as traditional life insurance. As the name implies, this type of policy covers you with a permanent death benefit throughout your life. In addition to the payout upon the death of the insured, whole life insurance has a savings element, in which the policy’s cash value may increase. These cash values can be borrowed or cashed in. The outstanding loan principal and interest reduce your death benefit to pay back the loan. The policy’s cash values increase as interest increases at a fixed rate and on a tax-deferred basis. However, the premium doesn’t increase as you get older, and many policies provide a cash-out option. Whole life insurance can come in many different forms like Modified Whole Life, Variable Whole Life, Universal Life, 20 Year Life, etc. Your broker at Brownell Insurance is happy to explain all of your available options.
When you think of having coverage for your entire lifetime, think of whole life insurance.
The third kind of life insurance is endowment insurance. This type of protection has one of the highest premiums while offering the same coverage as a whole life policy due to the extra premium you pay to go into the savings portion of the life policy. The one primary difference is that endowment insurance can be considered a way of saving. If the insured is to outlive the policy term, they can receive a lump sum at maturity. This form of life insurance will have a 10, 15, or 20-year term. At the end of the term, the policy proceeds will be paid to the insured. These policies are usually used to “save” money to pay off loans or provide funds for education.
Every lifestyle has different needs, especially regarding NH life insurance. While term insurance, whole life, and endowment insurance are the three most common policy types, they aren’t the only kinds. When venturing into the world of life insurance, contact our team for trusted, expert advice. It’s best to contact professionals to thoroughly examine, which is best for you.
May 2nd is National Life Insurance Day! Contact Brownell Insurance Center today at (603) 437-1992 and be sure your loved ones are protected, even after you are gone.