Preparing for the future can seem like a daunting task. The reality is that the sooner you begin to plan, the more benefits you and your loved ones can expect to see down the line. Family life insurance plans don’t need to be scary or complex. In fact, one of the best things you can do for yourself and for your family is to weigh your options ahead of time. From lower premiums to financial stability in retirement, there are plenty of reasons to begin your research into life insurance products now.
When To Begin Researching Life Insurance Products
To reap the most significant benefits, it’s best to start thinking about your life insurance plan early. It’s quite common to be hesitant about purchasing a life insurance policy since it can be difficult to afford monthly premiums. However, planning early and evaluating your options might mean a lower insurance rate and avoiding higher premiums later. Even if you’re healthy, it’s important to have coverage in place.
Unfortunately, the unthinkable can happen at any time. Without adequate coverage, your family can face substantial financial challenges in the event of your death. While it’s never fun to discuss, finding a life insurance product sooner rather than later can act as a safety net when needed. Even if you’re a new graduate or you’re thinking about what’s best for your children, it's never too early or too late to begin researching insurance policies.
Factors to Consider when Comparing Life Insurance Products
Before you purchase a life insurance product, there are a few important factors to consider. To ensure you have the most up-to-date information, it’s always smart to work directly with an insurance agent who can provide the resources needed to help you make informed decisions. Still, here are a few things to keep in mind when comparing life insurance products.
Policy Type
When it comes to life insurance products, there are several types of policies available. Your agent will work closely with you to discuss the different options and which one is suitable for you based on your lifestyle, finances, and coverage requirements. The two main types of policy options are term and whole life insurance.
- Term Life Insurance: Life insurance policies intended for a set amount of time are called term policies. Term life policies are typically in place for 10, 20, or 30 years and can be renewed at the end of the term. There is no cash value, although the application process is often more simple than a whole life policy.
- Whole Life Insurance: A life insurance policy that doesn’t expire is whole life insurance. With this policy type, you are required to make premium monthly payments until it is time to collect the death benefit after the policyholder has passed on.
If you are looking for a long-term plan, a whole life insurance policy may be best for you. Plus, there are death benefits that can provide some financial stability after a loved one has passed. Alternatively, term life insurance policies are often easier to qualify for and tend to have lower premium rates. Be sure to speak with an insurance agent to discuss each policy type and determine which one is best for you.
Amount of Coverage
Life insurance products don’t provide a one-size-fits all option when it comes to coverage. Every family has different needs, so it’s important to research how much coverage might be best for you.
To start, your coverage depends on your health. In fact, it’s one of the main considerations when applying for a policy. If you or a family member has ongoing health conditions, your coverage options will differ from someone who is generally healthy.
Further, your coverage amount also depends on some lifestyle factors. For instance, younger policyholders tend to have lower rates that increase as they get older. Additionally, if you are married, you can expect a low insurance rate as a result of having a low-risk status, in comparison to policyholders who are single or divorced.
Financial Status
In order to qualify for a life insurance policy, you need to be able to afford the premium payments. Gather information regarding your income, expenses, assets, and liabilities. With this information in hand, you can accurately determine how much coverage you can afford to help you and your family cover expenses when an emergency occurs.
It’s smart to develop a strong foundation of financial literacy and get to know the different types of life insurance products. Life Happens is a nonprofit organization that provides educational resources about insurance and related products, making them easily accessible so more people can make well-informed choices for the future. With more information regarding life insurance options and affordability, you’ll be able to make a strong decision for yourself and for your family.
4 Advantages of Buying Life Insurance Early
The sooner you purchase a life insurance policy, the more benefits you’ll get to see down the line. By allocating more time to your future financial planning through life insurance policies, you can see an array of additional advantages. Let’s take a look at what you can expect as a result of purchasing a life insurance product now.
Investment Opportunities
Did you know that 23% of Americans purchase a life insurance policy in order to save money for retirement? While term life insurance doesn’t carry cash value, whole life insurance policies allow you to put a portion of premium payments toward the cash value. This money will grow over time, tax deferred. The sooner you begin making these premium payments, the more cash value you will have later on.
Low Premiums
The sooner you purchase a life insurance product, the lower your premium will be. This allows you to lock in a minimum rate before facing increased premiums in the future. Someone who is young and healthy will be granted a lower premium rate in comparison to someone who is older and whose health has, potentially, declined.
Underwriting
When applying for insurance, you’ll have to undergo underwriting. This involves an assessment of your health to determine your level of risk in relation to how likely you are to pass away soon. The younger you are, the healthier you tend to be. So, undergoing underwriting early in your life can improve your chance of being approved for a life insurance policy as you will be deemed a low-risk individual.
End-of-Life Planning
You should be planning now for end-of-life care and expenses. Even if you’re perfectly healthy now, it’s always best to anticipate what is coming. This includes financial stability toward the end of your life. Applying for a life insurance policy now will put you in the best possible position for stable finances later on.
As you make premium payments in accordance with your coverage plan, you can grow your life insurance benefit, as long as that is included within your specific policy. This death benefit can be used for a variety of factors, including medical care, funeral costs, and any remaining debts after the policyholder has passed.
Compare Life Insurance Products with an ELCO Agent
Now that you have an idea of some of the factors that impact premium payments and advantages of becoming a policyholder now, it’s time to compare the options available for you. The independent insurance agents from ELCO Mutual are happy to work closely with you, get to know what you’re looking for in an insurance policy, and help you filter through the best product options for you.
To learn more about our life insurance products, connect with one of our independent insurance agents today!
