Charles Goodman Group: Trusted Bedford Insurance Agents
When it comes to taking out a life insurance policy, you have a choice between permanent life and term life coverage. All life insurance policies offer a death benefit to your beneficiaries, but permanent life also includes a cash value fund that collects interest as you invest money in it. Premiums for permanent life policies are higher, but a portion of each one goes toward your cash value fund. When this fund gets big enough, you can use it as collateral for tax-deferred loans. In contrast, term life policies offer simpler coverage with lower premiums and fewer benefits. A Bedford insurance agent can explain your options in detail and guide you to the policy that best suits your finances, lifestyle, age and health condition. There are different types of permanent life insurance, including whole life, guarantee universal life, index universal life and variable universal life. Each type of universal life insurance gives you the flexibility to pay your premiums when you feel financially secure doing so, and variable policies tie your cash value fund to financial products such as stocks or mutual funds.
If you decide to purchase only a term life policy, you can choose between level, annual and decreasing coverage. With level term life, you can choose a length of time for coverage, and at the end of the policy, either your beneficiaries receive a death benefit or you must renew your policy.
A trusted insurance agent from the Charles Goodman Group of Bedford can assist you with any questions regarding automobile insurance or life insurance.
Usually, renewing a term life policy results in higher premiums because you’ve aged 10, 20 or 30 years. An annual term life policy is renewed annually, and while the death benefit stays the same throughout the life of the policy, the premiums increase each year. Decreasing term life offers fixed premiums and a death benefit that decreases each year until it reaches zero. You may only want to take out a term life policy if you feel confident investing your own money in stocks, mutual funds or other financial products, but it’s still a good idea to have a separate investment account for your death benefit so that your insurer can manage this fund for your beneficiaries.
With whole life insurance, you have the assurance that your death benefit and cash value fund will never decrease. These policies usually have higher premiums than universal life coverage because they’re not able to adjust to market fluctuations. After taking out a whole life policy, you usually can’t increase your coverage or change your death benefit, so take some time to decide before buying coverage.