What kind of insurance is needed to pay my debts off at death? I don't want to leave my wife burdened.
I know there is a type insurance that does this. We are just buying a home and I want to set it all up correctly.
Answers | 7
There are many different types of policies depending on your situation. A few of the most common policies are Term, Universal Life, Indexed Universal Life, and Whole Life.
The goal of life insurance is to provide a measure of financial security for your family after you die. So, before purchasing a life insurance policy, you should consider your financial situation and the standard of living you want to maintain for your dependents or survivors. For example, who will be responsible for your funeral costs and final medical bills? Would your family have to relocate? Will there be adequate funds for future or ongoing expenses such as daycare, mortgage payments and college? It is prudent to re-evaluate your life insurance policies annually or when you experience a major life event like marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a house or business.
Term Life allows you to pick a period of years such as 5,10,15,20, & 30 year term. Though these policies are economical nearly 90% lapse do the the high cost of converting or keeping the policy after its term. Once the policy is expired, it is up to the policy owner to decide whether to renew the term life insurance policy or to let the coverage end. This type of insurance policy contrasts with permanent life insurance, in which duration extends until the policy owner reaches 100 years of age
Universal Life insurance which combines the low-cost protection of term insurance with a savings component that is invested in a tax-deferred account, the cash value of which may be available for a loan to the policyholder. Universal life was created to provide more flexibility than whole life by allowing the holder to shift money between the insurance and savings components of the policy. Additionally, the inner workings of the investment process are openly displayed to the holder, whereas details of whole life investments tend to be quite scarce
Index Universal Life which A permanent life insurance policy that allows policyholders to tie accumulation values to a stock market index. Indexed universal life insurance policies typically contain a minimum guaranteed fixed interest rate component along with the indexed account option. Indexed policies give policyholders the security of fixed universal life insurance with the growth potential of a variable policy linked to indexed returns.
Whole Life A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component pays a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against.
Everyone individual life insurance needs are like fingerprints no two situations are the same. Contact a licensed insurance specialist who is not a captive agent that can give you options and supply you with highly rated life insurance carriers.