Life insurance is weird. It has its own set of rules, and it’s built around something none of us really like to think about it. Still, we all know it’s important. If you’re ready to start seriously looking at policies, a little advice can go a long way. This Chambers Bay Insurance guide will simplify life insurance and how it works in University Place, WA.
Term is one of the more common policy types — especially for anyone under retirement age. Term policies are set for a specific number of years. They usually range from 10 to 30 years. You pay a monthly fee, and if the policy has to be claimed, it pays a predetermined amount. A lot of employers include these types of policies as a perk. The thing to understand about a term policy is that once it expires, it no longer covers you (or anyone attached to the policy), and you have to look for a new one.
Whole life is the counterpart to term. A whole life policy, as the name implies, will cover you for your whole life. It works kind of like an investment account. The premiums you pay are put into an interest-accruing account. Whatever the policy is worth at the time it is redeemed is what you get. The interesting thing about whole life policies is that they aren’t exclusively redeemed when someone passes. Many have clauses that allow you to cash out the policy after a certain amount has accrued or certain conditions have been met. The biggest thing to understand is that term policies usually pay out far more than is paid in. With whole life, the payout is equal to the total payments invested plus whatever interest they earn.
Universal life policies are very similar to whole life policies. They primarily grow value by investing your premiums and compiling interest over time. The major difference is that universal plans are much more flexible and more closely tied to investment returns. Depending on how they are managed, they can produce significantly more or less value than a whole life policy.
Clearly, there’s a lot to consider when shopping for life insurance. If you want to have a deeper look at the different options and how they mature, having a talk with your Chambers Bay Insurance agent certainly wouldn’t hurt. They’ve been serving University Place, WA, long enough to give you sound advice.