Life insurance can feel confusing and overwhelming. You might feel so distraught by the idea of choosing one that you just keep putting it off. For your sake and your family’s sake, take the time to understand life insurance. Here are three types of life insurance explained so you can understand which insurance will fit your needs and benefit your family.
Whole-Life Or Term-Life Insurance
There are several types of life insurance, but the most general one is whole-life or term-life insurance. When you have life insurance, your appointed person or people receive a lump sum when you pass away. There is a difference between whole-life and term-life insurance. When you purchase term-life insurance, your dependents are guaranteed the lump sum if you pass away during the term of the insurance, which is typically either 10, 20, or 30 years.
During the term, you’re paying into the insurance. With whole-life insurance, your family is guaranteed a sum no matter when you pass away. The policy also has a cash value that grows throughout your lifetime, so it’s a great investment for your family. Both whole-life and term-life insurance policies are beneficial to your family’s security, so you really should have at least one or the other if you want to ensure your family is well cared for.
Critical Illness Or Trauma Insurance
Critical illness or trauma insurance provides protection if you are struck by a serious medical condition. This could be the result of a car accident or a cancer diagnosis. Having this type of life insurance will protect you and your finances if you’re unable to work, which allows you to spend time recovering, not worrying about money. Different providers cover different illnesses and services, so make sure you’re checking with your provider to see what is and isn’t covered. Often the full expenses associated with several illnesses will be covered, while the partial expenses of others will be covered.
If you know you would want in-home care services if something were to happen to you, make sure that’s covered by your insurance. Having an illness or trauma insurance will make you feel safer and can reduce the risk of going bankrupt if you’re diagnosed with an expensive disease and unable to work. Don’t put the burden on your family of taking care of you and the finances. Find life insurance with iSelect and rest easy at night knowing your family is covered.
If you pass away, your funeral will cost anywhere from $4,000 to $15,000, depending on what your family would like to do for you. They will have to pay for the funeral director, transportation, the casket, the death certificate, and the cremation or burial. All these costs add up to a huge expense for your family members, one they may not be able to afford. Don’t let your family worry about money while they’re also grieving your loss.
Funeral insurance will provide your family with a lump sum they can use to pay the associated costs. This can provide your family with peace of mind during this difficult time. When you take out funeral insurance, make sure you know if you’re going to be paying capped or uncapped premiums. With capped premiums, you only pay up to the amount of your coverage and then the insurance continues for free until your death. With uncapped premiums, you continue to pay into the insurance until your death or a certain age.
Understanding life insurance is crucial in assisting your family financially and emotionally. Take out the right life insurance and provide your loved ones with peace of mind and security.