For obvious reasons, purchasing life insurance is an emotionally charged decision. Still, it is an important move that could save loved ones from financial hardship. This is especially true if you are the main income earner within your family.
It is a smart idea to consult a legal professional to discuss any concerns you have related to life insurance, wills, and estate planning. An experienced estate lawyer can provide feedback and advice based on your particular circumstances.
One of the most common challenges that come with purchasing life insurance is knowing the difference between the various policy types. Below is a basic breakdown of the most common insurance plans.
Term Life Insurance
Term life insurance is generally the most affordable. These plans aim to provide a specific and reliable premium for a set amount of time. Options to increase the premium are usually available to clients who exceed the plan's duration.
Whole Life Insurance
According to CNN Money, these plans guarantee a specific cash amount at the time of death, and they usually require a steady payment plan that rarely changes. Given the guarantee, this plan ends up being a more expensive choice but can offer greater financial security should the worst happen.
Equity Index Life Insurance
A form of whole life insurance, equity index policies tie potential earnings to a specific market index. For many, this is an attractive option since, depending on the stock market at the time of death, one can accrue greater payouts than other plans would offer.
Universal Life Insurance
Universal life insurance plans have the benefit of providing a tax-free cash value, but they come at a higher cost than other policies. Many people find universal life insurance attractive since there is the option to adjust the premium each month. It is also possible to borrow against these types of policies, though this can be a risky decision.
When choosing a life insurance policy, the advice of a Wheaton estate planning attorney may prove invaluable. For legal services in Wheaton, contact the Illinois law office of Stock, Carlson, Flynn & McGrath, LLC today at 630-665-2500.