Best Life Insurance Plan Options

If you are currently thinking about estate planning and are considering purchasing life insurance, it is important to consider a number of different options. As an article in Consumer Affairs explains, while many Americans decide not to purchase life insurance (some simply because they do not recognize its value), a life insurance policy “can provide financial help to your family by covering final expenses in the event of a death.” Life insurance is extremely important for any family to consider regardless of the family size, but as that article points out, “many people are underinsured or have the wrong policy, especially women who are the primary breadwinners for their family.” As you may already know, there are a number of different life insurance options that can be particularly valuable for seniors, although no single insurance policy can be best for all persons in a specific age group.

What should you know when choosing a life insurance policy? First, we will discuss tips for choosing a life insurance company. Then we will discuss life insurance policy options.

How Should I Choose My Life Insurance Company?

When you are deciding between and among different types of life insurance policies, how can you know which is best to suit your individual needs? There are many different kinds of life insurance products, and as you age, your specific life insurance needs probably will shift. As such, from the start, you should be sure to consider the following issues:

• Whether your insurer has options for upgrading or downgrading your policy: given that needs to indeed change over time, particularly as Michigan residents age, it is important to work with an insurer on a policy that can be upgraded or downgraded, according to the Consumer Affairs article, as your individual needs change.
• Whether your insurance company is stable: as the article points out, since purchasing a life-insurance policy is a “very long-term proposition,” it is essential that you pay for a policy that will be able to provide for your family years down the road. To be sure, according to Consumer Affairs, the “need for company strength and stability cannot be overemphasized.” As such, you should check ratings for your insurer through AM Best, S&P 500, Weiss, and Moody’s. In addition, you should explore the rating history of the insurer and whether there have been significant changes in the ratings over the years (particularly a decline). And finally, you should investigate the company’s financial statements to ensure its stability.

What Life Insurance Options Are Available?

What are some of the different policy options you can choose? The following are examples of a wide variety of insurance products:

• Term life insurance: this type of life insurance policy is a structured policy that provides a benefit for a particular number of years. Typically, this is among the least insurance, or most affordable options.
• Universal life insurance (UL): this policy is a cash value life insurance policy. It is also one type of permanent policy, which means that it is designed to last for the entirety of your life (in other words, it will not expire). It accumulates cash over time, which means that you may be able to borrow against the life insurance policy. Since insureds can borrow, tax-free, against a UL policy, the premiums often are higher than or other types of policies.
• Whole life insurance: this policy also is a cash value policy and is the another type of permanent policy. But, unlike a UL policy, the premiums are fixed.
• Variable life insurance: this type of policy is also a permanent policy, but it is different from the others in that there is more risk. This policy “invests in mutual funds providing potential greater returns (and losses),” according to the Consumer Affairs article.
• Survivorship life insurance: this type of policy is another form of permanent insurance, and couples purchase this type of policy most often. It pays a benefit after both persons pass away.

Contact a West Michigan Estate Planning Attorney

If you have questions about life insurance policies and the options that are best for you, do not hesitate to speak with an experienced Michigan family trust lawyer. An advocate at our firm can speak with you today. Contact the Law Offices of David L. Carrier, P.C. to learn more.