With all of the uncertainty in the world, more people are taking a good look at their financial situation and trying to mitigate their risk level. Some are considering starting up a side business to hedge their bets in case they get furloughed or become unemployed. Local ventures, such as baking and delivering bread, are growing as people try to come up with realistic small cottage industries that would keep their money going even if they were laid off. Another concern comes to the forefront when we face unknowns like we are encountering in our world today. Most people can barely afford rent on a home, much less all of the monthly expenses, without both partners working each week. As mortality rises from illnesses such as COVID-19, couples are increasingly forced to consider how they would survive financially and emotionally if something happened to one or the other. Fortunately, life insurance can help provide a solution that help with the financial risk.
Permanent Vs. Term Insurance
Although there are many different forms of life insurance that pay death benefits, two of the most common are permanent and term policies. With the permanent, or Whole life, option the insured has coverage that never expires. In addition, this type of protection accrues cash value over time that can be leveraged or used for retirement expenses in the future. If you choose to purchase a term life policy, you’ll save a lot of money when compared to permanent coverage. With a term policy there is a preset length of time that is covered and a specified death benefit. If the insured were to pass away before the end of the term then the beneficiary will receive the agreed upon benefit payout.
Quality of Life Policy Options
Within the realm of insurance there are coverage options that help improve our quality of life and our chance of surviving. Long-term care insurance is designed to offer help in the event we need special assistance to recover or keep on living. When you try to decide if this protection is right for you it’s helpful to consider if there is a support system you could rely on in a time of need. As you look for the best long term care insurance, you should also consider your gender as women tend to outlive men and therefore typically need more years of care. Another specialized form of protection is Accidental Death and Dismemberment (AD&D) coverage. While these policies are usually inexpensive, they often have caveats that prevent them from paying the death benefit if you die from a health issue, medical procedure or something like a drug overdose. If you lose a limb and can’t work, however, you will receive a portion of the death benefit amount.
Specialized Forms of Life Insurance
There are additional options you can consider if you are shopping for life insurance. First-to-die coverage is offered to couples or partners and pays out when the first individual passes away. Second-to-die, or survivorship insurance pays out upon the second partner’s passing and is often used as a vehicle to avoid estate taxes. If you’ve ever watched late night TV, you’ll be familiar with final expense, or burial, policies. This form of cash benefit coverage provides money to pay your funeral costs. Another type of policy that can come into play if you have a substantial mortgage or loan debt is Decreasing Term Life. With this type of protection your mortgage or debt is paid in full in the event of your passing.