Life insurance is not only important because it protects your family from financial ruin if their main source of income stops, it’s also a financial tool that can impact your investments and other insurance policies. Columbus insurance agents can help you select the right type of life insurance that will maximize your financial position.

Different Life Insurance Policies

Term insurance is the least expensive coverage. It has a time limit or term, and during that period your family is covered if you unexpectedly die and leave them with a home mortgage and other debt to pay. When that time period is finished, your family is not covered, and you’ll need to think of getting another policy. This is one reason people look to long-term coverage that will last throughout the policy holder’s lifetime.

Permanent life insurance builds cash value and protects your family. Part of your premium goes to the insurance company to cover their risk and part goes into a savings account. You can use this savings account as collateral to get a personal loan, although there may be some restriction about the interest rate of the loan. You can also use some of your savings account if you need cash, but there may also be restrictions about when you can withdraw cash. Permanent life insurance is available in three basic plans:

With whole life insurance, your savings builds value according to a set schedule, and you can find out the exact value of your policy annually.

With universal life insurance you get a fixed interest rate. This means your interest rate will never go below a guaranteed minimum rate.

With variable universal life insurance, you can invest your savings account in the stock market if you wish.

How to Select a Policy?

The life insurance policy you need will depend on several factors. If you don’t have any young dependents or massive debt, you may only require term insurance.

It is recommended to talk to an investment professional to determine what type of policy is best for you. Some of the factors your family may have to deal with after you are gone are:

• Household expenses

• Outstanding debts

• Emergency needs

• Funeral expenses

• Educational costs if applicable

• Taxes

Your life insurance needs may change as your lifestyle changes. You may get married, have children or get a promotion and upgrade your lifestyle. A professional financial adviser can help you put it all into perspective and select the right policy.