Life doesn’t always go our way. Most people hope for a long, healthy life. Unfortunately, an unexpected illness or injury can derail those plans and force our families to change course.
Nobody wants to think about a loved one dying prematurely. But planning ahead by purchasing a life insurance policy can offer survivors some financial protection as they cope with the loss. And educating yourself on your options and reading Trustpilot reviews can help you choose a reliable provider to ensure your loved ones are covered.
What is life insurance?
If someone dies while their life insurance policy is in force, their beneficiaries get a payout. They can use this money to cover medical or funeral costs, pay off a mortgage, fund a child’s education, or however else they see fit.
This can be an important financial planning tool if you have people who rely on you financially or logistically. If you’re the main wage earner in your family, your family will lose your income when you die. They would then need to replace that income or reduce their spending.
Here’s why one customer purchased life insurance from Choice Mutual:
Parents and caregivers who don’t work outside the home might also need life insurance. If a stay-at-home parent died suddenly, the other parent would need to hire help to keep the house running and the children cared for. A life insurance payout could allow the surviving parent to hire help and continue working.
What types of life insurance are available?
Life insurance comes in a few different flavors, including term life, whole life, and supplemental life.
What is term life insurance?
Term life insurance covers you for a specified term, often 10, 15, 20, or 30 years. A homeowner might choose a 30-year term life policy in case they pass away while their spouse is still paying off the mortgage. A new parent might choose a 20-year term life policy to cover their children in case the parent dies before their children are financially independent.
This customer chose a 20-year term life insurance policy from eFinancial Life Insurance:
Term life insurance is a popular option, because the premiums tend to be lower than whole life or supplemental life insurance. The simplest form of term life insurance is level term. This means the premiums remain at the same level throughout the term.
With a yearly renewable term, you’re insured for a year at a time with the option to renew your policy each year at a higher premium.
What is whole life insurance?
While term life insurance covers you for a specific term, whole life insurance covers you for the entirety of your life, provided the premiums are paid up.
It also accrues cash value that you can access while you’re still alive using a tax-free loan or withdrawal. Some people use this cash value for a down payment on a home or their children's higher education. However, borrowing or withdrawing from your whole life insurance policy means your survivors get a smaller death benefit later on.
Because whole life insurance offers policyholder benefits beyond death and covers you for a longer time frame, the premiums are generally more expensive than term life insurance for the same payout. And remember that checking Trustpilot reviews can help you evaluate the best whole life insurance providers for your needs.
What is supplemental life insurance?
Supplemental life insurance is often available as an employee benefit. Some companies buy a small amount of life insurance for each employee and then allow those employees to purchase additional coverage.
Some people don’t qualify for term or whole life insurance privately due to their health, so supplemental life insurance purchased through an employer offers an alternative. Trustpilot reviews can assist you in finding supplemental life insurance policies that are well-regarded by other customers.
How do I compare life insurance policies?
There are several factors to consider when shopping around for life insurance.
How much coverage do your survivors need? Add up expenses like funeral costs, your mortgage, your kids’ college education, and your family’s living expenses. If you’re working, life insurance should replace your income, plus give your survivors a little extra for funeral costs or medical expenses. Some experts recommend buying a policy worth 10 times your income, plus whatever you’d plan to contribute to your children’s college education.
How much can you afford in premiums? If your budget is tight, you might consider buying term life insurance, since the premiums are lower.
Is your insurable need time-limited or indefinite? If you need to insure your loved ones until the mortgage is paid off or your kids reach adulthood, a term policy might suit your needs. But if your need lasts longer than 30 years, you might opt for whole life insurance.
Do you need a policy that accrues cash value? Or would a simpler term life policy suit your needs? Some people plan on using the cash value while they’re still alive to pay for future medical costs or a child’s education. Of course, there are other ways to fund these needs.
Life insurance can take many different forms, but its primary goal is giving your loved ones peace of mind in case something happens to you. Understanding different types of insurance can help you prepare for the unexpected. The right policy can free them from financial worries at a difficult time. Reading Trustpilot reviews can also help you choose a company you can trust, ensuring you make a well-informed decision for your future.
Trustpilot is a review platform that is open to all. The companies and profile pages referenced in this article are provided for informational purposes only and are not recommended, endorsed by, or representative of the views of Trustpilot. The Trustpilot companies linked in this post are expected to abide by Trustpilot’s Guidelines, but have not been reviewed for compliance.
