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  • Writer's pictureManny

How Do I Know What Type of Life Insurance is Best For Me?

There are several types of life insurance, including term life insurance, whole life insurance, and universal life insurance. The best type for you will depend on your individual needs and circumstances.

Term life insurance is generally the most affordable option and provides coverage for a specified period of time, such as 10, 20, or 30 years. It is a good choice for those with a need for temporary coverage, such as to cover a mortgage or other debt.

Whole life insurance is a permanent policy that provides coverage for the entirety of the policyholder's life. It also includes a savings component, known as the cash value, which can be invested and can grow over time. Whole life insurance is a good choice for those who want a lifelong coverage and looking for a long-term savings option.

Universal life insurance is a type of permanent policy that combines a death benefit with a savings component. The policyholder can adjust the death benefit and premium payments, making it a more flexible option than whole life insurance.

Many people rely on life insurance through their jobs for coverage. However, if you leave your job, your life insurance coverage will likely be terminated unless you have a conversion option that allows you to convert the group coverage to an individual policy. Some group policies allow you to convert the coverage to an individual policy, but you will have to pay the premiums yourself and the coverage may be more expensive or may not provided all the coverage benefits available (like Living Benefits, for example). It's important to check the terms of your group policy to see if it offers a conversion option, and if so, what the terms and conditions are. Additionally, you may want to consider purchasing an individual life insurance policy to replace the coverage you will lose when you leave your job.

What problems does life insurance solve?

Life insurance can help solve several problems for individuals and their families. Some of these include:

  1. Financial protection: In the event of the policyholder's death, a death benefit is paid to the beneficiaries, which can help cover expenses such as funeral costs and living expenses.

  2. Income replacement: For those who rely on the policyholder's income, a life insurance benefit can help replace that lost income and help the beneficiaries maintain their standard of living.

  3. Mortgage protection: Mortgage protection life insurance can help pay off the outstanding mortgage balance in the event of the policyholder's death, so the beneficiaries don't have to worry about losing their home. If the borrower dies while the policy is in effect, the death benefit will be paid to the lender to pay off the remaining mortgage balance. This type of insurance can provide peace of mind for borrowers and their families, as it can ensure that their home will not be lost in the event of their untimely death.

  4. Business protection: For business owners, life insurance can be used to provide financial protection for the business and its employees in case of the owner's death.

  5. Estate planning: Life insurance can be used as a tool for estate planning, to help pay for estate taxes and ensure that assets are distributed according to the policyholder's wishes.

Life insurance helps protect the financial well-being of loved ones, helps replace lost income, and can provide peace of mind knowing that financial obligations will be taken care of in the event of death.

You can (and probably should) own more than one life insurance policy. Some people choose to have multiple policies to provide different types of coverage or to meet different needs. For example, you might have a term life policy to cover a specific need, such as paying off a mortgage, and a whole life policy to provide lifelong coverage and a savings component.

You could also own more than one policy to increase your overall death benefit, to cover different reasons, or to cover more than one person.

It is important to note that having multiple policies can be complex, and it's a good idea to consult with a financial advisor or insurance agent to ensure that your policies complement each other and don't duplicate coverage.

It is also important to keep in mind that if you own multiple policies, you will be paying multiple premiums which can be a significant cost. In some cases, it might be more cost-effective to purchase a single policy with a higher death benefit.

We recommend to consult with a financial advisor or insurance agent to determine which type of life insurance is best for you. They can take into account your income, assets, debts, and other factors to help you make an informed decision.

For more information or to speak with one of our advisors, email us at or call us at (503) 217-4150.

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