The process of choosing a life insurance policy can seem daunting. It is an important decision that you have to make. Here are a few tips to help you narrow down your life insurance options.
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Term Life Insurance
It covers you for a specified period. It enables you to match the range of your needs to the length of the term policy. For instance, you might buy a 20-year freedom life insurance to ensure that you will have adequate funds to pay for your child’s college fee. You may also purchase a term life policy to repay a debt that will need to be repaid in a specified period.
Term life insurance enables you to buy a term policy even with a limited budget. Term life policy only pays when one dies during the term of the plan. Therefore, it has a lower rate per thousand of death benefit compared to freedom life insurance. With term life insurance, coverage stops if the term ends when you are still alive unless you renew or buy a new policy. Unlike permanent life policy, term life insurance doesn’t allow you to build equity in the form of cash savings.
Permanent Life Policy
For as long as you are alive, a freedom life insurance is inevitable. With a permanent life insurance, you are entitled to payment whether you die today or 100 years to come. Permanent life insurance enables you to save and grow on a tax-deferred basis. You can use the savings element to pay your premiums. You can also use it for any other purpose. Even if your credit is shaky, you are allowed to borrow these funds. Collateral for your loan is the death benefit. If you die before your loan is rapid, the insurer deducts what is due the company before giving the remainder to your beneficiary. Nonetheless, permanent life policyholders pay a higher premium than term life insurance holders. Nevertheless, the premium for permanent policyholders remains the same irrespective of your age. The value of your permanent life insurance can increase significantly every time you renew it.