Insurance is especially important for newlywed couples. Though we never feel like shelling out money each month, it is a good thing to have coverage just in case- especially when you're starting a new family. Another thing that no one ever likes to think about is death. It can come quite sudden or after a prolonged illness. Either way, it is something that people tend not to be prepared for. Not only is it hard to prepare emotionally for it, but financially as well. That is why insurance companies offer things like life insurance. As a new bride or groom, you will have to look over your options carefully. Generally speaking, there are two kinds of life insurance policies: term life insurance and permanent life insurance (often just referred to as simply “life insurance”).
Permanent Life Insurance
The first type of insurance is permanent life insurance. This type of insurance is what most people think about. When you are younger, you may take out a life insurance policy. This policy will cover you in case of your death from the date that the policy began until the day you die. You never lose the insurance unless you fail to pay the premiums or somehow you break the contract.
Term Life Insurance
Terms life insurance is not what people normally think of when it comes to life insurance. Typically, people think of the aforementioned permanent life insurance. While permanent life insurance sticks with you during your entire life, term life insurance is not meant for that. Term life insurance is meant to cover temporary periods in someone's life. Basically, if you have a sudden illness that came out of nowhere, you may fear the worst. In that case, you may be able to get term life insurance in case that worst actually happens.
Pros and Cons Compared
With both life insurance contracts, you will need to pay monthly installments in order to keep the coverage. The major difference is between the time that the policy runs. With permanent life insurance, you are locked into fixed premiums for the remainder of your life. With term life insurance, a policy holder pay a fixed premium for the time of the insurance policy. After the term life insurance policy is over, you are no longer guaranteed the fixed premiums. A policy holder will have the option to continue on with unfixed premiums or end the contract.
Term life insurance policies technically cost less. Due to the short length of time, you technically pay less over the course of the coverage. With permanent life insurance, you may pay for sixty years of coverage depending on when you start the coverage and when you pass away.
Difference in Premiums
This difference in premiums is due to the fact that term life insurance does not require an insurance payout. If the policy holder does not die during the course of a term life insurance policy, then a beneficiary will never receive a payment. For permanent life insurance policies, the policy holder will pass eventually, so there will be an insurance payout to the beneficiary.
Recently married couples have a lot to think about when it comes to starting a new life together. Life insurance may not be the first thing that you want to think about – and that is okay. Eventually though, it is probably a good idea to have that talk with your spouse.As you start a new life together, it is not always easy to come to terms with the thought of death. Eventually, it will probably be a good idea to look over life insurance options with your spouse. Like most insurances, no two insurances are the same. Make sure to research and thoroughly read any policy before you or your spouse sign the contracts. Make sure to ask the representative of your insurance company plenty of questions if you do not understand something. As a precaution, make sure to keep an updated copy of your policy for your records. Each type of insurance will need a benefactor in the event of death. Talk this over with your spouse to see whom should be benefactors on a life insurance policy.