Should You Consider Getting Life Insurance for 2017?
The New Year should also bring new contemplations. You're a year older now. Maybe you've started a family or have just gotten engaged. Is it time to consider getting life insurance?
According to the National Institutes of Health, one of the biggest factors to consider when getting life insurance is whether you have someone who'd suffer financially if you, God forbid, aren't alive. But they also say that you shouldn't get life insurance if your family has many people contributing support or if you have other financial resources that acts as insurance (like an extensive stock portfolio or real estate investments).
If you're the sole supporter of your family but have heard scary stories about insurance companies not paying beneficiaries, here's the differences.
Term life insurance only pays your beneficiary if you die – if you outlive the term of your policy, the money is gone. This is the type of insurance that doesn't get paid or finds some sort of loophole in the event of your death. In fact, over 90 percent of term life insurance policies don't get paid!
That statistic is heavy – that means you're trying to beat the odds and morbidly hope you die before the policy ends so that your 20 years of monthly payments goes to your children. But it also depends – if you're 50 or 60 and get a term life insurance policy of 20 years, the chances of you dying are greater.
Whole life insurance is the insurance policy that you should consider
These policies pay out over 85 percent of the time.
Why? It's because you're buying a term life insurance policy with an investment portion, which makes the total monthly cost higher. The investment portion is used by the company to invest in, but you get the investment's accrued income. As you pay your monthly premiums, your investment gets larger and so does its income. After some years, the investment's income will self-pay the monthly premiums and you won't have to pay anything anymore! The insurance company pays your beneficiary regardless of what age you die – and your beneficiary gets everything you've paid plus all the income the investment has accrued.
But the type of life insurance you should get depends entirely on your financial situation, age, health, and commitment. If you're over 60 and in good health, you should take out a 30-year term life insurance policy because you'll probably pay less than $180,000, but your beneficiary is guaranteed over $500,000 unless you outlive the age of 90. If you're diagnosed with a terminal illness, like lung cancer, you can still get life insurance that's guaranteed to pay your beneficiary a lot more than you've spent on premiums.
Depending on the industry you work for, your life insurance policy can also be held by the company you work for. This means your policy payments might be tax deductible – basically you're getting a policy for free because its cost is coming out of taxes you were supposed to pay.
It's 2017, and you may now have dependents. It's worthwhile to consider getting a life insurance policy. Choose whole life insurance plans over term life insurance plans if you're young and healthy. Choose term life insurance plans if you're over 60 or have a terminal illness.