What is Life Insurance and How Does It Protect Myself and My Family?

Posted by Michelle on Dec 20, 2019 12:00:00 AM

What is Life Insurance and How Does It Protect Myself and My Family?

What is Life Insurance? Life Insurance is an Insurance Policy in which you pay a small premium amount at a certain frequency and in return the insurance carrier agrees to pay a large sum to your beneficiaries in the event of your death. This tax-free lump sum will assist your beneficiaries in covering your final expenses, provide income protection, assist in estate planning and mortgage protection and will also assist in legacy purposes for your family and beneficiaries. There are Three Main Types of Life Insurance Policies which all offer unique strengths and benefits. 



Term Life Insurance covers your life for a certain “term” or period which you select. These terms can be anywhere from 1,5,10,20,30 years or more. Term is the cheapest and most cost effective of the three main types of life insurance as it only pays if the insure dies during the term of the policy. A few reasons you may choose Term Life Insurance is for mortgage protection or income replacement, especially if you have young children or dependents. Under these circumstances, a term plan, for a period until your children reach earning maturity, may be a good option to ensure that they are adequately provided for in the event of your death.



Whole Life Insurance, also known as Traditional Life is designed to cover you up to 100 years of age after which the policy will be completed and paid out to you. Unlike Term Life, Whole Life never expires and the benefit payed to your beneficiary will be payed upon your death no matter how long you live. This policy also builds a cash account which is a great resource for retirement planning and wealth building. If you choose a policy under a mutual company such as Mass Mutual the policy may also pay dividends directly to you. The price for Whole Life is locked in and will never change, which makes it a great option for legacy planning, covering final expenses, and retirement planning.



Universal Life insurance is also referred to as a flexible premium plan. It is a hybrid type of life insurance that can be built to run as a term or whole life plan.  Universal Life plans are extremely customizable and can be designed to cover you for 10 years or 100 years. Reasons for choosing Universal Life are its flexibility and ability to be used like a whole or term policy making it an all-purpose solution for your needs. A type of Universal Life plan is a Fixed Index Universal Life plan which is a great option for those looking to build retirement income. 


Do You Know Which Life Insurance Plans are Best for You and Your Family?

When purchasing Life Insurance there are many factors you must consider in order to ensure that you get the most adequate coverage for you and your family’s needs. You must consider who is depending on your income? Who would be responsible for your final expenses when you pass away? How can you use life insurance as a retirement tool? What life insurance is correct for you and how much coverage is required to provide for your family? These choices can be very intimidating but do not worry we are here to help! United Benefits can guide you through the entire process and ensure that you get the best coverage for your unique situation and needs. We have assisted thousands of federal employees and would love to help you too, click below to schedule a free consultation!



New call-to-action

Topics: Life Insurance