Wedding bells are ringing, and it can be an exhausting process. The dress, the tux, the cake, the hall, the flowers, there’s too much to handle. Let’s not forget about the vows. ‘Til death do us part? A lifetime of moments ahead, but also a lifetime of planning that starts once those rings slip on each other’s fingers.
Creating a life together means preparing for better and for worse, and nothing is worse than the untimely loss of a loved one. The death of a spouse is an emotional toll, but also a financial one. That’s where different types of life insurance can help create a backup to rely on in those situations. Many couples now approach term life insurance as an affordable way of protecting loved ones against fiscal struggles.
Term life insurance is simple and affordable, intended to cover families over a set period of time. In exchange for monthly or yearly premiums paid for the duration of the length of the term, the insurer will provide protection. The term length can usually depend upon what hurdles are still along the way. For example, until the children are adults or the mortgage is paid off.
If you were to pass away within the term, a payout known as a death benefit would be paid to the beneficiaries on the policy. That death benefit can be used to take care of the financial burdens that come after the loss of a loved one, such as funeral arrangements and other end-of-life expenses, which does include day-to-day bills like a mortgage or even child care.
There are alternatives to term life insurance, the most common being permanent life insurance. Permanent or whole life insurance coverage is basically just as it sounds—coverage for the rest of your life. With permanent life insurance, there is no need to gauge life events like retirement and graduation. Beneficiaries will receive the death benefit regardless of when the deceased departs. Lifetime coverage policies also include a cash accumulation feature that builds up over time.
You can take out loans from the cash value along the way to pay off day-to-day expenses like schooling and retirement, but it’s important to remember that accessing the cash value through borrowing will reduce the death benefit. Also, it increases the chance the policy will lapse resulting in a tax liability if the policy terminates before your death.
While the main difference in these two policies is the length of the policy period, another huge difference is on your wallet. Whole life insurance does cost more than term life insurance. Plain and simple. Term life may be better suited for those who have substantial funds set aside for retirement or are just looking for a springboard to assist their partner in day-to-day finances. Permanent life insurance is a better option for those seeking a product with a cash value component or wants to make life insurance part of a long-term financial strategy.
One of the easiest ways to figure out what would be in the best interest of you and your beneficiaries is to use a Life Insurance Calculator. These are easily accessible and free to allow for quick analysis in as little as five minutes. These calculators cover not only life insurance policies but also temporary and permanent disablement, trauma and income protection. Most of these applications will provide an idea of just how much insurance premiums will affect your bottom line, and in some cases, direct you to the policy that is best for you.
Remember, at the end of the day, this is a safety net for the future. Life insurance is there for you to enjoy the now with your new partner for life, and a bright future together. Compare life insurance providers with iSelect as you and your partner head towards your biggest moment yet.