Shawn Meaike Discusses How to Choose the Best Life Insurance for Your Individual Needs

Shawn Meaike knows that deciding what type of life insurance to buy can be a complicated matter. He suggests looking at multiple factors to decide what works best for your individual needs.

Why should I purchase life insurance?

Life insurance brings financial security to your family in the event of your death. It will help cover a variety of potential costs including funeral expenses, medical bills, mortgages or rent and college costs for your children. 

What are the different types of life insurance?

Shawn Meaike explains that there are many different types of life insurance products on the market. You may have heard the terms universal life, whole life, term, and other indexed options. But the two most common types of life insurance policies are whole life and term life insurance.

What is term life insurance?

Term life insurance is an insurance policy you buy for a certain amount of time or a term. You can purchase term life policies in various time increments, but the most common are 10, 20, or 30 year terms. During that time, you pay a monthly or annual premium, and should you die during this term, your family receives a death benefit for the amount of coverage you selected.

The benefit to term life is policies are cheaper than whole life or universal life policies. However, they have no cash value and when the term expires, you have no coverage and the money you have paid is non-refundable. Think of term life as coverage for a specific term at a lower cost than other insurance products. If you die during the term, your family is covered.

What is whole life insurance?

Whole life insurance is good for your whole lifetime and pays a death benefit to your family when you die. Unlike term insurance, its coverage does not expire at the end of a term though its coverage does end if you stop paying your annual or monthly premiums. Whole life also accumulates a cash value over the life of the whole life insurance policy.

A whole life insurance policy is good for people who want to provide a death benefit for their family and don’t want to invest that money, but rather leave it in a fixed percentage during their lifetime where it can accrue cash value. It is considered a type of permanent life insurance.

Universal life insurance is also considered a permanent life insurance but it’s more flexible than whole life insurance. If you have universal life insurance, you can adjust your premiums and death benefits. It offers investment options since policyholders can borrow from this type of life insurance policy.

How do I choose what’s best for my needs?

When choosing what type of life insurance plan is best for your family, there are many factors to consider if you die prematurely. Shawn Meaike suggests considering the following.

  • What the death benefit would be used for? Funeral expenses, medical expenses, security for your family?
  • How many years of income would your family miss out on?
  • Does your spouse have the ability to work?
  • How many children do you have and how old are they?
  • Is it likely they will attend college?
  • How much savings and investment do you have to cover their expenses?
  • How much can you afford to spend for this coverage?

Once you have figured out the answers to those questions, you can decide how much coverage you need and how much you can afford to pay either monthly or annually.

Shawn Meaike
Shawn Meaike of Family First Life writes about startups and business news