Thursday, February 14, 2019

Term vs. Whole Life Insurance Policies For Newlyweds

Today’s blog post on Susie's Reviews is about understanding term vs. whole life insurance policies as part of a sponsored post with Mason Finance.

Term vs. Whole Life Insurance Policies For Newlyweds

Life insurance for newlyweds is usually not your focus as you prepare for the on the big day But after you are married, it’s an important topic for young couples.

Many people don’t think about getting life insurance until they have children. You may not need a lot of life insurance as a newlywed couple without children, but you at least need some basic life insurance coverage.

Marriage means accepting responsibility for another life. Once the honeymoon is over, it’s time to get back to real life and what that responsibility really means.
Life insurance for newlyweds should be on your agenda because it gives you peace of mind knowing you will be able to take care of your new spouse if something happens to you.

Most newlyweds are enthusiastically looking forward to a happy and healthy life together and this can easily obscure the unfortunate reality that bad things happen to people every day. Being prepared is a selfless act that makes it possible to support a surviving spouse as well as any children so they can continue without a financial burden. Read below to learn about Term vs. Whole Life Insurance.


Term Life Insurance

Term life insurance is the most affordable type because the coverage does not last a lifetime. Instead, your insurance will last for a term of 10-30 years. This type of policy has no cash value accumulation. That means you will need to pay your premium every month but you will get nothing back if the policy eventually expires.

You will have guaranteed death benefits for as long as the policy is in effect. The premium you pay will likely be fixed for a certain period of time and then it may get higher.

Cash Value Life Insurance

How about cash value life insurance? This type of life insurance does cost more to begin with, but will remain in force for the insured’s entire life as long as the premiums are paid. This type of insurance has a built-in savings account that grows tax-deferred over the life of the policy, which can then be used as retirement savings. Though more expensive, more of the cash value policies pay out their death benefits than term policies. Plus, cash value policies can eventually accumulate to the point where they become paid up, which means that you won’t have to make any more premium payments to keep the policy in force.

Cash value accumulation can eventually become a substantial asset for you after you have paid premiums into the policy for many years. And policy loans may not need to be repaid, but rather they will simply reduce the amount of cash value and face value remaining in the policy. There are several types of cash value policies.

Whole Life Insurance

Whole life insurance is more expensive than term insurance because it lasts a lifetime. Whole policy premiums are fixed for the rest of your life, as long as you make your payments, and the policy has guaranteed cash value. This means your policy will actually build value that you can borrow against.

Universal Life Insurance

Universal life insurance has flexible life insurance premiums and pays interest to the policy’s cash value. It is different in that its death benefit can fluctuate. The rate of interest that it pays will also fluctuate according to prevailing interest rates. Some universal life insurance policies pay interest that is calculated according to the performance of an underlying financial benchmark, such as the S&P 500 Index.

Variable Universal Life Insurance

Variable universal life insurance invests its cash value in a collection of mutual fund sub-accounts, which invest in stocks, bonds, cash and real estate. The cash value in this type of policy is not guaranteed and will rise and fall with the stock and bond markets. Regardless of the type of cash value insurance you have, you will be able to access the cash value in your policy at any time. You can do this either by direct withdrawal or by taking out a loan against the policy, but the death benefit will be reduced by any outstanding loan amount when the policy pays it out.

Which One to Choose

When it comes to deciding which life insurance policy is best for you, you’ll want to consider the different factors. For instance, what is your disposable income? Do you have debt obligations? What are your financial needs? Be sure to shop around online, as well as in person, so that you get several life insurance quotes from different companies before you purchase any type of coverage. Doing this will give you a better idea of what’s available. Your financial adviser or life insurance agent can also help you find the policy that works the best for you.  Make sure to check out this life and viatical settlement calculator.


Term vs. Whole Life Insurance Policies For Newlyweds


What are your plans for choosing a life insurance policy?

19 comments:

  1. This is great! I never thought about insurance before now. Thank a lot really.

    Chad
    www.mosaicslab.com

    ReplyDelete

  2. Great to know for those close to the wedding. An advice I was just looking for!

    ReplyDelete
  3. Great tips! It's funny how much there is to consider when you get married, more than just, you know, what are the wedding colors and where it's going to be and who's invited.

    ReplyDelete
  4. I have to admit that I didn't think about insurance! Great reminder!

    ReplyDelete
  5. Life insurance is must. And I am totally agree on this. This is an great reminder for all who are waiting to get insurance

    ReplyDelete
  6. Thank you for spelling this out. So many people are unaware of their options

    ReplyDelete
  7. Great to learn about the importance of life Insurance and hope it reaches more people. People who started to work should immediately gettting one, this is for your own protection and the earlier you get, the cheaper you have to pay.

    ReplyDelete
  8. I know I have some amount of life insurance with my job, but i would like to look into more. These are great things to think about when it comes to life insurance.

    ReplyDelete
  9. We only did all this recently after our daughter was born. My advice to anyone reading this is to plan a little further ahead. We were mid 30’s doing it and the cost increased substantially from what it would have been late 20’s/early 30’s

    ReplyDelete
  10. This is such an important topic not only for newlyweds, but just for people in general!

    ReplyDelete
  11. Great post. I must admit i am not insurance person but i know all its benefits, it's timei look into it and take it seriously.

    ReplyDelete
  12. This was a very informative post! If I every get married I will refer back to this. However I can still use this info today. Thank you

    ReplyDelete
  13. A lot of good advice here for couples to think and talk about, I am sure it will help many.

    ReplyDelete
  14. Insurance is very overwhelming. A lot of people, especially young people, don't want to think about it. Thinking about death is scary.

    ReplyDelete
  15. I like the way you broke down the different types of insurance. I could have used this list in 2001! Thanks!

    ReplyDelete
  16. I really had no idea that there are so many various types of life insurance available. This is so important to have as we don't know when life can take unexpected turns.

    ReplyDelete
  17. My husband and I really need to think about this. We didn't consider it as newly weds and now we have a 4 year old child and no life insurance.

    ReplyDelete
  18. This is such a very informative post! This is an great reminder for all who are waiting to get insurance

    ReplyDelete
  19. Interesting post – some great tips and advice here! I will send this over to my cousin who is getting married x

    ReplyDelete