Life insurance is a hard topic for many people, especially young people, to have. However, once you start a family in Utah and people start relying on you for financial support to survive, it quickly turns into a conversation you have to have with representatives at the Greg Alldredge Agency.
Types of Life Insurance
The first part of the discussion is determining what types of life insurance policies are available in Utah. There are many types, including:
- Term: Term policies cover a policyholder for a set amount of money and for a specified amount of time. These policies are generally more affordable than the others, but there are significant drawbacks. Once the policy term expires, you will have to go through the entire process to get another one. This normally results in higher premiums due to an increase in age and other factors.
- Whole: Whole life does not have an expiration date written into a policy as a term policy does. As long as you pay your premiums, the policy will remain in effect. Whole life policies build cash value depending on the return on investment that the insurance company makes with the premiums. You can usually borrow from the cash value in exchange for a reduced death benefit in case you cannot pay it back. The downside to whole life is the cost, at least initially, and the medical exam requirements.
- Universal: This type of policy provides a death benefit and cash value, but the cash value grows, in part, through the premium paid. The premium can be broken into two parts: how much is needed to cover the cost of insurance and how much is left over. The amount left over amount is added to the cash value of the policy. These policies also grow in cash value depending on the return on investments an insurance company makes with the premiums.
How to Choose?
Deciding on which types of policies to choose to use can be complicated, and there are a lot of things to consider like the affordability and coverage of each type. The best thing to do is to call the Greg Alldredge Agency to get the information you need to make an informed decision. Call us today.