This is a sponsored post partnering with Mason Finance. All opinions are honest and are my own.
When you become an adult, there are a lot of things it feels like you have to learn – how to budget, how to balance your checkbook, how to sign up for all your utilities – but one thing you might not think about right away is life insurance. I’ll admit that it’s not something we thought too heavily about until we had children, but it’s good to be informed early on so you can equip yourself to protect your family.
You might just think all life insurance is kind of the same. You buy a policy, and you’re set, right? While life insurance truly isn’t that complicated, there are different types of life insurance, and it’s good to know what your options are before you make a decision. The two main types are:
- Term life – a policy that covers you for a certain period of time, usually 10, 15, 20 or 30 years. Once the policy time frame ends, so does the coverage.
- Whole life – policies that provide permanent coverage; these last a lifetime, have guaranteed premiums, and have a guaranteed cash value.
Term life insurance can seem like an appealing option because it is cheaper than whole life insurance. However, it does become more expensive as the covered party ages, especially after he/she hits age 50. The term must be renewed if you want to extend your coverage beyond the initial term length. This type of insurance provides death benefits only, and the benefits are only paid if the insured passes away while the term of the policy is still in effect.
Whole life insurance covers the insured party for life. You either have to qualify with a health examination or pay a higher rate without a medical exam. It provides death benefits as well as a cash value that accumulates during the life of the policy. Those interested in cashing out whole life insurance policy should know that the cash value is based on how much the return on investment is worth.
Be sure and research which option is best for you – the main thing is to become informed so you can protect your family in the best way possible!