Let us start you on the first step.
Watch the video below to learn about the two types of Life Insurance and how to combine them for a better price!
When getting your first Life Insurance Policy, you first need to pick between Term and Permanent Insurance.
Term Insurance is like your car – you pay into it when you need it and when you don’t, you cancel. These policies are very affordable but aren’t worth anything and the prices will go up when you renew. Common terms are ten or twenty years.
A 35-year-old couple buying Term Insurance for a 20-year term and a $500,000 benefit, would pay roughly $70 /month together.
Permanent Insurance is a more robust option. You have a policy as long as you’re paying the premium and the price won’t go up. These policies can also accumulate a cash value that you can withdraw, invest, or use to pay for the policy itself. As you can imagine, these policies are much more expensive.
A 35-year-old couple buying Permanent insurance with a $500,000 benefit would pay roughly $400 /month together.
Here’s the trick to getting a better price: COMBINE THEM
Most of the expenses we have today, we won’t have in retirement. Because term insurance increases in price so significantly as you age, it’s generally not a good long term solution. And permanent insurance is out of many peoples’ price range.
BUT if you buy term insurance that will cover your 35-year mortgage and a permanent insurance policy that will pay a small sum of money when you pass away (to cover funeral expenses, etc.), your price will be much lower. It’s called stacking.
In the example below, you can see that our sample couple bought insurance at age 35. They bought term coverage that they will keep until they’re 65 and don’t expect to have the same expenses. They also bought a small permanent insurance policy to cover their end-of-life expenses.
If our example couple above chose to do that, they would pay roughly $170 /month together.
Working with a Life Insurance Broker is the best way to view your options from many different insurance companies and find one that works for your lifestyle and values.