Talking about life insurance may feel morbid because the death penalty is only paid out if the policyholder dies. It is one of the most effective and best ways to ensure that you provide for your loved ones should the worst happen. Although there are many life insurance options, the two most popular are term life and whole life insurance. As the name implies, term life insurance is only valid for a specific period – usually 10, 20, or 30 years. If you die within the active period of the policy, your beneficiaries will receive the death benefit that you select when the policy is first opened. Conversely, whole life insurance is valid from the day it is processed to when you die – assuming that the premium continues to be paid. Although whole life insurance is the most expensive of the two options, it does include a cash value component that grows with time and can serve as a lifeline in times of financial need through a loan if necessary.
When deciding how much life insurance to purchase, you’ll want to consider your total assets. Start by adding your obligations such as a mortgage, student loans, and credit card loans together, and then include future needs like funding a child’s college education. You’ll want to be sure that you purchase enough life insurance to cover all your outstanding debts and anything that you are saving for in the future.
For help in knowing how much life insurance to purchase, give DJ Kauffman Agency in Hutchinson, KS a call. We’ll help determine the appropriate amount of life insurance needed while also helping you choose between term and whole life. Give us a call today to learn more information.