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Navigating through all the different types of life insurance can seem daunting. At Aflac, we want to help simplify your search and guide you toward finding the life insurance policy that best fits your lifestyle.
Depending on your coverage goals, your family size, your income, and financial aspirations, there may be one type of life insurance more suited for your specific needs than others. Let’s dive deeper into how life insurance works, the types of policies available, and how you can choose life insurance that’s best for you and your loved ones.
While there are various life insurance options, these plans tend to function similarly. Whether you have life insurance that lasts your entire life or just 20 years, you must pay regular premiums in order to receive your benefits. Most life insurance plans have a benefit that is paid to the beneficiary when the policyholder passes.
Depending on the type of life insurance policy, there may be other benefits available. Some life insurance plans offer benefits that can be used while the policyholder is still alive. These benefits may come in the form of a cash value component that can be used to help cover medical expenses or everyday costs of living.1
Each life insurance plan is distinct, so it’s crucial to understand the different types of life insurance. Read on to discover which life insurance option may be best for you and your family.
Like its name suggests, whole life insurance is a permanent coverage type that lasts your entire life. The benefit will be paid to your beneficiary whenever you pass. This may be a more expensive option upfront, but the benefits can be more secure in the long run.
Whole life insurance may be the best type of coverage if you are looking for guaranteed support for your loved ones on any timeline. It may also be a wise move if you are hoping to factor in long-term financial planning.
On the other hand, term life insurance provides coverage for a set term or specific amount of time. At Aflac, we offer multiple term lengths in 10, 20, and 30-year increments. This plan may be a more affordable route. However, the policyholder must pass during the designated time frame of the plan for the beneficiary to receive benefits.
There are additional term life insurance considerations to make as well. In some cases, you may be able to extend the length of your term life insurance policy if you outlive the time frame (subject to limitations and exclusions). This depends on your history of payments and the established guidelines of the insurance carrier. Many customers typically compare the costs and values between term and whole life insurance.
Universal life insurance works a bit differently than both term and whole life insurance. It’s a type of permanent policy that has an investment portion. This portion, otherwise known as the cash value, can grow throughout the life of the policyholder. The growth takes place in a tax-deferred account at a stable rate.
This type of life insurance plan also allows for greater flexibility, as you may be able to adjust the premium payments and benefit value over time.2
As a business owner, it’s important to make sure your employees feel safe and seen. Group life insurance is a great option if you are looking to provide benefits for your employees or members of an organization. Aflac gives you the opportunity to offer your hard workers term or whole group life insurance options.
How much you are looking to spend on premium payments, how much coverage would you like to secure for your family, and the access to cash benefits are all important determinants to consider when deciding what the life insurance policy is best for you.
Don’t wait until it’s too late. Help cover yourself and your family with affordable coverage from Aflac.
Even after learning the differences between each type of plan, it can be confusing to pick the life insurance policy that best meets your needs. Talking to an agent always helps, but there are also a few key factors that can help you narrow down your decision.
If budgeting is your biggest concern, term life insurance may be the best choice. If you have many dependents, whole life insurance may be a better route. However, if financial planning and cash value are most important to you, universal life insurance may be a strong option. Lastly, if you are a business owner, group life insurance might be the best life insurance option.
Assessing how many dependents you have can help clarify how much life insurance coverage you need. You can reflect on what figure feels right and talk to an agent about how to work this into your plan. The coverage options vary depending on what’s offered in each different type of life insurance plan.
Some life insurance options have extra benefits that may make your plan worthwhile. For example, some insurance carriers offer long-term care riders that can be added to life insurance plans. These types of riders allow policyholders to access a portion of the policy’s death benefit every month to pay for long-term care costs.3
We recommend you determine which additional elements are non-negotiable for your needs. If cash value is a top priority for you, your life insurance options may start to slim down. Reading the fine print and understanding the benefits within each plan can help tip the scale too.
Lastly, getting some numbers in front of you always helps paint a clearer picture. You can request a quote from Aflac and try our life insurance calculator to start planning for the future now.
At Aflac, we offer whole and term life insurance policies that are flexible to help meet you and your family’s needs. Our plans are portable, so you can take them with you if you move or change jobs. Now that you understand each type of life insurance, you can make an informed decision about your family’s future and choose the life insurance coverage that is best for your loved ones.
1 & 2 Investopedia. Life Insurance Guide. Updated: May 25, 2022. Accessed: Oct 24, 2022. https://www.investopedia.com/terms/l/lifeinsurance.asp
3 Investopedia. Long-Term Care. Updated: Sept 6, 2022. Accessed: Oct 24, 2022. https://www.investopedia.com/long-term-care-rider-4802409
Content within this article is for informational purposes and does not constitute legal, tax or accounting advice regarding any specific situation. Coverage may not be available in all states. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies/riders have limitations and exclusions that may affect benefits payable. For complete details, including availability and costs, please contact your local Aflac agent. In Idaho, Oklahoma, and Virginia, Policies ICC64100–ICC64300 and ICC64500; Policies ICC1368100–ICC1368400; In Arkansas, Policies A64100AR-A64300AR and A64500AR; Policies ICC1368100–ICC1368400; and Policy Q60100CAR. In Idaho, Policy Q60100CID. In Oklahoma, Policy Q60100COK. In Arkansas, Idaho, and Oklahoma, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C.
Aflac coverage is underwritten by Aflac. In New York, Aflac coverage is underwritten by Aflac New York.
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