What You Need to Know About Life Insurance in Pennsylvania
Protect your family for a lifetime with life insurance.
Trying to decide if you need to buy life insurance without all of the facts is impossible. Trying to figure out how much life insurance you need to buy is difficult. The truth is life insurance isn’t about you. It’s about protecting your family and loved ones you leave behind from financial hardship.
What is your life worth? That’s a hard question to answer. To figure it out you need to estimate how much you will make between now and retirement and calculate your monthly expenses. If you were to pass away tomorrow, how big of a financial strain will that place on your family? Having an active life insurance policy in place is the only way to assure that your loved ones will have the financial resources they need to survive after you pass away.
Understanding Life Insurance Types
There are three types of life insurance policies available: whole life, universal, or term life insurance. Before you make a choice, make sure you understand their differences.
Whole life insurance is a form of permanent life insurance that lasts your entire lifetime. This type of life insurance builds cash value over time and is often purchased as an investment. You are not subject to tax payments as it increases in value. You have the option to borrow against it or surrender it for its cash value when needed. If you decide to borrow against the policy, you are required to repay the loan with interest. The biggest benefit of a whole life insurance is the premiums remain the same for the life of the policy.
Universal life is another form of permanent life insurance. Unlike whole life, it offers flexible premiums and costs less. As your needs change, you can tweak a universal policy to reflect those changes. Another great benefit to a universal life policy is that you can use the interest you earn to pay for the premiums.
Term life insurance is the opposite of permanent life insurance. You can buy insurance for a specific period including 10, 20, and 30-year terms. This life insurance costs much less, but it doesn’t build cash value over time. Once the term expires, you have to repurchase coverage, and in most cases, the premium will increase because you are older.
Reasons to Change Your Existing Life Insurance Policy
Whether you have life insurance already or you are looking to buy coverage, there are times in your life when it makes sense to re-evaluate your coverage. Here is a list of crucial life changes that require a life insurance review:
You get married or divorced
Your family grows - children and grandchildren
- You open a new business
You expand an existing business
Your spouse or children’s health needs change
Your health changes
You become a caregiver for a parent or grandchild
You buy a new or bigger home
You want to invest in your children’s or grandchildren’s education
You are concerned about retirement
You refinanced your home
You receive a large inheritance
You have a large estate to account for