Despite the fact that life insurance is marketed as an “older” product, buying a policy while you’re young is actually a smart move. Young, healthy people have the opportunity to lock in the lowest possible rates for life insurance coverage, and a well-thought-out policy can help cover you (and any future additions to your family) well into your 50s, or even into retirement.
Whole Life Insurance
Whole life insurance is a type of permanent life insurance that offers lifelong coverage, consistent premiums and a guaranteed return on the policy’s cash value.
Whole life insurance is a good policy to buy if you:
- Need coverage that lasts for your entire life.
- Want the payments to stay the same (called level premiums).
- Want a guaranteed return on the cash value that builds up within the policy.
Return of premium (ROP) is a type of life insurance policy that returns the premiums paid for coverage if the insured party survives the policy's term, or includes a portion of the premiums paid to the beneficiary upon the death of the insured.
ROP is a good policy to buy if you:
- May only need to protect your family from long-term expenses and ensure they wouldn’t need to sell the home if you died prematurely.
- Are looking for inexpensive term insurance with the benefit of having the money spent on premiums returned if the death benefit is not paid.
- Are divorced. ROP can be a good fit for divorced parents. When minor children are involved, the non-custodial parent is usually required to maintain life insurance for the benefit of the custodial parent and/or children.
- Are planning to pay for your child’s college tuition, an ROP policy can help. If you die during the term, the death benefit ensures your child can still afford college. If you outlive the policy, the refunded premiums can go toward paying off student loans.
Guaranteed universal life (GUL) could be looked at as a combination of term life insurance and whole life insurance. A GUL can provide lifetime coverage at more affordable pricing than a whole life insurance policy. This product may be ideal for individuals who want lifelong death benefit protection, but don’t need the fancy extras other permanent products offer, such as cash value.
Universal Life is a good policy to buy if you:
- Have a special needs dependent
- Have a small business
- Have debt that is expected to last until or into retirement
- Need estate tax protection
- Want to leave an inheritance
- Are older and your term policy ended but you still want coverage
Individual disability insurance is simply income protection. You can’t predict what your health will be in the future. You may stay active and eat healthily, but most disabilities are actually caused by unexpected illnesses, such as cancer, and accidents.
A long-term disability can have more severe consequences on a family’s expenses than the death of a provider. With the death of a provider expenses decrease because there is one less family member. If the provider is disabled, expenses increase due to the cost of providing care for the disabled person.The purpose of disability insurance is to replace the income of the person who is now unable to work due to sickness or an accident.
Why Disability Insurance Is Worth The Investment:
- Even if you save 10 percent of your salary, a one-year disability could eliminate many years of savings.
- As someone who is unable to work, you may be unable to afford loan repayments
- The Social Security Administration denies about 65 percent of all claims and pays benefits for total and permanent disabilities only. Workers’ Compensation benefits are limited to only occupational diseases or injuries that occur during course of employment. Even if you were to be granted benefits from either, it’s likely these sources may not be enough to maintain your lifestyle.
Health insurance is a type of insurance coverage that covers the cost of an insured individual’s medical and surgical expenses.
Health Insurance is good to buy if you:
- Want essential health benefits critical to maintaining your health and treating illness and accidents.
- Want protection from unexpected, high medical costs.
- Want to pay less for covered in-network health care, even before you meet your deductible.
- Want free preventive care, like vaccines, screenings, and some check-ups, even before you meet your deductible.