Let’s face it we aren’t getting any younger and the clock keeps on ticking. But there are things that you need to think about to prepare yourself for the future.
Most people don’t want to talk about it. It’s something that is taboo, but if you don’t plan for the future, then you’re looking at heavy costs.
Unfortunately, dying comes to us all. But if you want to be able to leave something behind for your loved ones you are going to need some form of life insurance.
But which one do you pick? Do you go with the higher premium in order to leave a huge chunk of change behind? Or do you go with the one that has lesser monthly payments that just covers your final costs?
When it comes to figuring out what plan you need, it is something that needs to be thought out well in advance.
“This is a comprehensive article, if you already know which policies are available to you; please scroll down to read the comparison.”
There are several plans to pick from to ensure that all your loose ends are tied up and there’s something left over. So which one should you pick?
Types of Life & Burial Insurance
Companies will sell you a wide range of life insurance. But sometimes that underwriting can get a little confusing.
To help you sort through this information below is a list of 5 typical insurance policies that you can get.
Term Life
Term life insurance offers coverage for a specific amount of time. It is written as a means to help your dependents if you pass on unexpectedly.
As long as you die within the term or time limit of your policy you can rest assured that your beneficiaries will receive the payment for your policy.
When it comes to picking a term life insurance, you will find that they are in increments of 10 years. Most people get them for 10, 20 or even 30 years.
The benefit of getting a term life insurance policy is that the monthly cost for the premium remains the same for as long as you hold policy.
One thing to know about this policy is that your monthly payments correspond with the amount of time your terms for.
So, if you got a 10 years policy you will be making payments for 10 years. This policy is good for those who are in their midlife and do not see their untimely death but one a backup plan in case something happens.
Ideally you would want a policy that corresponds with how much your family you will need should pass away.
Only you will be able to calculate these costs. But you should definitely consider how old your children are in their needs as well as your spouse’s needs when making plans to buy term life insurance.
Whole Life
Whole life insurance is the plan you want if you’re looking for lifelong coverage. There is also the ability to include an investment component which is a cash value that grows over time in which you don’t have to pay taxes on its gains.
The bonus of the whole life insurance is that you can borrow money against your account or give up the policy for cash.
One of the benefits of whole life insurance is the fact that you can earn money as an investment. You also have the ability to keep your premiums at the same rate for as long as you live and your beneficiaries will get the funds guaranteed.
Guaranteed Universal Life
The guaranteed universal policy is the middle ground between term and whole. It has become increasingly popular for individuals looking for a long term policy but wants something less expensive.
However, it is important to note that guaranteed universal life insurance is not the same as whole life insurance.
One of the main differences in this policy is that it does not have an investment option. You cannot build a stash of funds the way whole life collapse.
This is the reason why the guaranteed universal offers low monthly payments without the heavy burden of the whole life.
On the plus side guaranteed universal offers policies that are set to age instead of time. Where the term life sets your rates for as many years as you want your policy, guaranteed universal sets it for your age.
So, if you want to be 110 when you pass away, and nature is with you can set your guaranteed universal life insurance to that age.
Survivorship Life
When it comes to planning the future, you have to ask yourself who your beneficiaries are.
If you are a couple with no children and are looking to give money to charities or to relatives then the survivor life insurance policy may be for you. This policy is joint life insurance and only pays out when both parties on the policy died.
This type of coverage is unique as it ensures that the beneficiaries receive the funds to help pay for the estate taxes. It is important to note that those on the policy do not have to type at the same time.
If one person on the account passes away, and the second goes 10 years later as long as the premiums have still been paid the death benefit will be paid out to the beneficiaries.
The advantage of “survivorship life” insurance is that it’s easier to qualify than other insurances on top of having lower premiums. Plus, it offers the opportunity to build up a cash value to help the surviving spouse should they need it.
Burial Life Insurance
As the name implies, burial life insurance is strictly to help those left behind pay for funeral costs.
It’s shocking to know that in this day and age the cost for a funeral can go up to $9000 or more. With this policy, you can pay it over time or in one lump sum. But it is not like the other policies on this list.
This insurance is strictly to cover your final costs. There is no lump sum that goes to beneficiaries. And it is one of the easier policies you can get.
There are no medical exams that need to take place and it is easily purchased online or even over the phone. The policy never expires.
It is important though to understand that some companies require you to pay two years’ worth of your premiums.
On top of that, some policies only ensure you to the age of 100. While some may believe that they won’t reach that age one out of 10 people who live past the age of 60 is expected to make it past 90.
A burial policy can be purchased in smaller amounts depending on what your final requests are. After all these policies are strictly for those who want to take care of their burial costs without having to leave it to those who are left behind.
This plan allows you to pay for everything upfront so at the time of your passing your family can mourn in peace.
It is important to know that burial life insurances policies are simply whole life insurance policies just with a fancy marketing term.
Things to Consider When Looking for a Policy
Going over these different types of insurances can be a bit confusing. You have to understand what it is that you need out of policy.
Are you looking to leave a large sum of money to those left behind?
Or do you just want to take care of your final costs such as cremation, funeral, or other debts?
You also need to think of whether you may need to sell the policy. After all, life happens and having a policy that earns interest as you pay is a good way to keep extra savings account for when times get tough.
This is where things get a little complicated. The two most popular insurances that you can get is the whole life insurance and the term life insurance.
Both policies allow you to leave behind funds that can be used for anything, not just funeral costs. On the other hand, if you’re looking at just burial insurance, you can rest assured that you will have it until you die.
What to Look Out for When Picking a Policy?
You must understand that any “guaranteed policies” should only be looked at as a last resort.
Usually, the guarantee means bigger monthly premiums with a two-year waiting period. These two years waiting time is for after you die. Meaning your family will get the funds, even if you die of natural causes, for two years after her death.
Never think that your age or your health disqualifies you from getting the insurance policy that you want.
Many companies offer life insurance to those 85 or over. These policies are great to cover the funeral expenses.
Burial Insurance vs Life Insurance
Getting a burial life insurance policy may seem like a great idea. After all, you know that your family will not have to fit the bill during their time of grief. However, this type of insurance raises some serious red flags.
Despite the marketing gimmicks that company’s use when promoting this type of insurance it is not necessarily the best way to go.
Many life insurance policies allow your loved ones to have more than enough to not only bury you but have extra left over for their needs.
When it comes to burial insurance, you have to pay close attention to the policy and how the funds are allocated.
You will see policies that offer immediate benefits and graded benefits. The difference between these two is simple.
Immediate benefits imply that your beneficiaries will get 100% of the funds to pay for your funeral. Or as the graded benefit only pays out a portion depending on how long the policyholder lives.
For example, a policyholder with graded benefits who dies within the first year will only leave behind 25% of the death benefit.
If the policyholder dies within two years of getting the insurance, then beneficiaries are looking at 50% payout.
How to Get Insured?
Applying for any insurance is incredibly simple. It is a three-step process that anyone can do. To kick things off, you need to contact an independent broker that has access to multiple insurance companies.
The first step begins with your health. Whichever companies you go with require you to take a simple physical. Those companies that state that they do not require a health exam usually cost more. To get the best rate you need to get a health exam.
The second step is to assess your health exam and find the companies that will work with you.
No doubt you will be able to get lots of quotes from different places. The best way to pick one is by cost.
You are looking for a company that offers you lower monthly premiums with a higher payout. We made your task easy; we have the most advanced comparison tool that you can use.
Finally, the third step is applying for your policy. There is an application that must be filled out and sent to the insurance company.
Once you have been accepted you will be sent a welcome packet and the insurance company will mail you your policy within 10 business days.
Final Thoughts
Nobody knows when they’re going to pass. The important thing is to be prepared. Getting some form of life insurance will help those left behind and that is the bottom line.
Far too often people do not think about these things and their loved ones are left footing the bill.
But just because you’re older or in poor health does not mean that you shouldn’t get a policy. There are several companies that you can look at that will help you.
When it comes to picking out your policy, you should understand that any guaranteed policy is going to cost more.
Despite the fact that burial insurance will guarantee that you have the funds to pay for whatever bills come up during your passing it should only be considered as a last resort.
Any policies that allow you to earn interest are worth looking into. You don’t know what the future holds. And with an insurance policy that you can get cash on will help you to pay for unexpected things that come up.
Ultimately though is your choice. But is not one that should be made quickly. Do your own research to find the best policy for you.
