We don’t like to think about our own demise, especially when it involves leaving loved ones behind.

Yet tackling the planning for your eventual death is one of the most thoughtful things we can do to provide for the ones we leave behind. As you shop for a life Insurance policy, focus on the ways that you can help your family.

Use our guide below to learn about what type of insurance you might need, along with your reasoning and the amount of coverage you’ll need.

Learn About the Types of Life Insurance

Some policies cover you for a set period of time. If you die during that time, your beneficiaries receive a payout. 

If it expires before you die, there is no payout. This type of policy is called term life insurance.

Contrast this with whole life insurance. This type of policy lasts your entire life, although it’s usually more expensive than term life insurance. It includes some cash value, and you can often withdraw against that value or borrow money from the policy.

Universal life insurance is somewhere in between term and whole life, with a set age that the policy will end (around age 100). You don’t usually get much cash value, which means the payments are lower than whole life.

Sometimes a life insurance company will let you convert one type of policy into another before you lose benefits. Visit this link for more information: https://paradigmlife.net/blog/converting-military-life-insurance-to-whole-life/.

Both whole life and universal policies have set premiums that don’t increase. Additionally, your death benefit amount won’t change.

Examine Your Why

What is your reasoning behind wanting a life insurance policy? While it may seem obvious to you, there are plenty of reasons that people take out a policy. The best life Insurance Policy is the one that fulfills your needs and provides the peace of mind you’re looking for.

Some people buy life insurance to cover their burial costs. This gives them the assurance that their family won’t have to shoulder the burden.

Life insurance policies can also cover any debts remaining after your death. Some use life insurance policies as a way to build wealth or provide living expenses for their families for a time period after their death. You can even donate to a cause using your life insurance policy.

Decide How Much Coverage to Carry for Your Life Insurance Policy

Once you know about the types available and your reasons for buying life insurance, you’re ready to decide how much coverage you need.

If you’re only hoping to cover funeral expenses, then your coverage can be minimal. For living expenses for your family, you can use your annual salary as a starting point. Multiply it by the number of years you want to give your family to grieve.

Your coverage will determine your monthly premiums. Talk to your insurance agent about how much your policy will cost and which type is right for you.

Providing for the Future

Choosing a life insurance policy can be a difficult decision, but with the information above you can make the right choice.

Knowing which type, why you need it, and how much coverage you need will help you select the policy that makes the most sense.

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