Understanding Life Insurance Before Purchasing

Your goal, when opting for protective life Insurance in Peoria AZ, is to guarantee your family is protected in the event of your death. This insurance may be used for a number of purposes, to pay off a home, pay funeral expenses or help your spouse move forward with life. The problem many encounter when purchasing protective life insurance in Peoria AZ is they aren’t sure if they should purchase term or whole life insurance. There are advantages and disadvantages to each which need to be taken into consideration before this decision is made. No matter which type you purchase though, you are transferring the risk of your death to another party during the policy term.

Those who choose to purchase term insurance lock in a rate for the policy term. If you die within the policy term, the insurance company then pays named beneficiaries the death benefit outlined in the policy. Terms vary greatly with this type of policy and the person purchasing the insurance runs the risk of finding he or she can no longer obtain insurance once the term runs out, for a variety of reasons.

Permanent or whole life insurance, in contrast, remains in effect until your death. They don’t expire at a certain time, but you pay more for this luxury, often a great deal more. There is a savings component attached to this type of policy so part of the premium you pay each month accrues for future use. Taxes aren’t paid on any gains and the money can be used to help supplement your retirement. Riders may be added to policies of this type also, which can be of help when one has been diagnosed with a terminal illness or other health condition. The premium remains stable throughout the life of the policy, as long as payments are made as agreed.

Experts disagree as to which type of policy is best. Some state that the term should never be purchased as, once the term expires, the premiums continue to increase until the policy becomes unaffordable. Others believe the high premiums seen with whole life policies make them unreasonable for most people. Sit down with an insurance agent to determine which type of policy best meets your needs now and in the future. Your personal circumstances dictate which type of policy you need and a licensed agent can help you determine which is best for you.