You may have your eye on planning date night and buying flowers this month, but February is also a great time to review your life insurance policies and consider if there have been any changes in your life. A marriage, a new birth, your child headed off to college in the fall? Life’s turning points need protection.
Also, according to a 2016 Insurance Barometer Study, 35% of people wish their spouse or partner would purchase life insurance, while 12% aren’t sure how much life insurance coverage their spouse or partner has.
Younger insureds are more likely to follow a budget and have money set aside for emergencies. But according to a survey by online platform Bestow, 75% of millennial parents are currently without life insurance.
Should you buy term life insurance or whole life insurance?
Term life insurance provides coverage for a specified period of time, and as such, it’s generally much less expensive than whole life insurance. However, term life policies don’t accumulate any cash value over time, whereas whole policies do. This means that if you don’t end up passing away before the end of your policy’s term (which is what you want, of course), your family doesn’t get any financial benefit from that policy.
Whole life insurance provides coverage for your entire life. Furthermore, whole life insurance policies accumulate cash value, which means you can cash one out at any time and collect a lump sum instead of a death benefit. Why might you do that? Say you’re 65, retired, and your kids are grown adults in good financial shape. You might choose to utilize that cash rather than wait for your family to get it after you die.
The downside of whole life policies, of course, is that they’re more expensive than term policies. On the other hand, some people use them as investments, or as a means of forced savings, so if you can swing the higher premiums, you’ll have more flexibility down the line.
No matter what type of life insurance you choose to get, the key is to secure coverage sooner rather than later. Being young doesn’t make you invincible, and there’s no reason your children should have to suffer financially if the unspeakable does indeed come to be.
Contact us for a review or more information at (608) 643-3000.
