Believe it, or not, life insurance is very useful; in fact, it’s a necessity. The word gets thrown around occasionally, but this is largely a misconception born from actual scammers taking advantage of the system. When used appropriately, for its intended purpose, life insurance provides much-needed financial stability right when it’s needed the most.
First, it’s a good idea to understand what a Suncorp life insurance quote is and what the two main policy types are. Typically, you’re going to go for either a Whole Term Policy or a Term Policy.
WHOLE TERM VS. TERM – WHAT’S THE DIFFERENCE?
When you purchase a whole term policy, you’re buying into a life-long, permanent, contract with the insurer, in exchange for death benefits and the accumulation over time of tax-free cash through various investment incentives.
Due to its permanence, this isn’t a policy type that is typically recommended by financial experts; commissions, fees, and outrageous cancellations procedures and costs tend to make it a little less desirable of an option.
However, the whole term policy does have its uses. For example, if you have an illness that is likely to only metastasize as you get older, a whole term policy purchased in advance might save you a considerable amount of money down the line, when term policies are more expensive due to pre-existing medical conditions.
On the other side, though, is the term policy which provides coverage for only a set term of years, typically 20 to 30. These policies are offered on a fixed-rate, with no extra fees, but also, no added investment incentives. Not such a big deal when you consider all of the excellent investment opportunities available; life insurance is meant to provide for loved ones left behind, not for investment for profit.
Furthermore, a term policy allows a little more flexibility; if you make the purchase when it’s recommended—when you start a family—you’re set up for the first 20 to 30 years of financial occurrences. If you apply when you’re young and healthy, you’ll be set up with a very low premium until you’re in your 50s or 60s. At which time, you may have already invested your money via other avenues and can repurchase a policy that better fits your current financial standing.
Life insurance consultant and author, Tony Streur, talks about the long-term benefit of purchasing a term policy here, “Term coverage is the appropriate coverage for most individuals, as their needs are for a certain term of years, while their other assets accumulate, such as retirement savings.”
WHY IT’S IMPORTANT & NOT A SCAM
No one wants to believe that something could happen to them, but tragic things happen every day that leave families in a financial lurch. Funeral costs are expensive and they can come at a time when a family has just lost their primary bread winner. Suddenly, children can’t afford college tuition, stress descends, and a fun-loving family turns into a sad, grieving, and financially broken affair.
What’s really unfortunate is that there are so many Americans out there who really do have that mentality of “it’ll never happen to me”, but what happens when it does? Who is left behind to pick up the pieces and suffer? Your loved ones; don’t you want to safeguard their future, no matter what may, or may not, happen to you?
The research outfit dedicated to the insurance industry, called LIMRA, conducted a study in 2012 that set out to determine just how many American families had no plan at all when it comes to safeguarding their own financial future. The results? 64% of them will be left in a lurch if their primary source of income should shut off; 11 million of these families had children in their household under the age of 18.
If you’re considering purchasing life insurance, consider it as it was meant to be considered—Will my family be financially taken care of should I die? If the answer is no, then go sit down with a financial advisor and let them explain how life insurance works, how it can work best for you and your financial situation, and take your family out of harm’s way.