How to Compare Life Insurance Policies: A Beginner’s Guide

Currently, around 41 million Americans say they need life insurance coverage but don’t have it. If you are looking to get a life insurance policy for the first time, it can be hard to know how to get started. Between comparing different life insurance companies, requesting multiple quotes, and determining how much coverage you need, it might be easier to just give up.

Have no fear! Read on to learn how to compare life insurance policies to make the whole process easier.

Whole Life Insurance

As long as you pay the premiums, whole life insurance lasts until you die. It’s a popular option for many, as your premiums generally stay the same. On top of that, you get a guaranteed death benefit rate that doesn’t change. One downside to this option is that it’s generally more expensive. If you’re on a budget, it may not be a realistic option for you.

Term Life Insurance

Unlike whole life insurance, term life insurance only lasts for a pre-determined amount of time. So, you can buy a policy for a “chunk” of time like 10 or 20 years. If your policy comes to an end and you’re still alive, then you’d need to purchase new coverage for another set amount of time.

If you let your coverage lapse and you pass away, then your family won’t get any payout. Term life insurance tends to be a cheaper option, especially if you’re younger and in relatively good health. Your premiums are also locked in for the length of the policy. However, after it ends, your premium will likely go up for the next term.

To learn more about policy options, visit the Paradigm Life website.

Universal Life Insurance

Universal life insurance is another popular option. There are two types that you can choose from: Guaranteed and Indexed policies.

Guaranteed Life Insurance

Like whole life insurance, the payout is guaranteed with a guaranteed life insurance policy. Your premiums also won’t change over the life of the policy. However, instead of lasting your entire life, you can choose the age at which you want the benefit to last. So, you might choose a policy that lasts until you’re 90.

It also tends to be a cheaper option, but it has very little cash value. And, if you miss a payment, you could forfeit the policy completely, so keep that in mind.

Indexed Life Insurance

Finally, indexed life insurance is linked to the stock market index. Your specific policy will detail how the formula is determined, but the cash value can grow over time based on how the market performs. However, since it’s variable, you’ll need to spend more time monitoring the investments. This makes it more work than the other policies.

Compare Life Insurance Policies

Now that you know more about what’s available to you, you should have a better idea of how to compare life insurance policies. With a little research, you can pick the perfect option for your and your family’s needs.

To read more lifestyle content like this, check out the rest of our blog today.