Plan for Your Future with Life Insurance

July 17, 2019

Plan for Your Future with Life Insurance

As you look toward your future, what do you see?  Whether you’re just starting a family or easing into retirement, there’s one part of planning you shouldn’t overlook:  life insurance!  Now, your needs will vary as you move through different stages of life, but that’s why having a knowledgeable advisor at your side is equally important.  At Bounds Accounting, we believe in helping you prepare for the future.  Which is why we offer everything from tax forecasting services to retirement planning to life insurance policies.  To find the plan that’s right for you, we first need to cover some basics.

There’s a Time for Term Life Insurance 

If you’ve heard of term life insurance before, then you’ve probably also heard a number of conflicting opinions about it.  While it’s true that it’s not for everyone, it also serves an important purpose when planning for the future.  Arguably one of the simplest forms of life insurance, this type gets its name from the length of time—or term—it lasts.  Most companies offer 10-, 20-, or 30-year options that pay out your chosen benefit within that time frame.  Once the end of the term has passed, though, you’ll have to reevaluate your needs and decide whether to renew for a new term, let it lapse, or pursue another form of life insurance.

Since its pretty straightforward, and has a finite timeline, it’s a great option for people just getting started!  Maybe at this point, you aren’t really sure how much you’re going to need for the future. But you still want to have something in place for your family.  Term life insurance could be an affordable solution that offers you flexibility moving forward.  It’s also ideal for covering debts that will only last for a limited time.  A 30-year mortgage pairs nicely with a 30-year term life insurance policy, for instance.  However, if you’re uncomfortable with the temporary nature of this coverage, you have other options to explore! 

Whole Life Has Its Benefits, Too

Also known as permanent life insurance, this type of plan comes with true long-term benefits.  As the name implies, it’s designed to last for your whole life—at least until age 100. Once you’re approved, you’re securing your ability to keep this policy for as long as you want!  You won’t have to worry about your coverage lapsing or having to re-apply years into this process.  Which often makes it a popular choice for estate planning.  
Most forms of whole life insurance also include cash value, which is essentially the interest you’re accumulating for the premiums you pay each week, month, or year. Thanks to this component, you have more options about how to use it in the future.  You’ll be able to borrow against it if you need to - although your insurance company may charge interest as you pay it back.  Or you can use this amount in advance and the carrier will subtract it from the death benefit your beneficiaries receive later on.  

Because of these advantages, your insurance premiums will likely be higher for whole life than they would for term life.  Even if you sign up at a very young age.  Still, which option you ultimately choose will depend upon your individual plan for the future.  Who says you have to pick just one?  For you, it might make sense to purchase a smaller whole life insurance plan now alongside a larger term life policy.  You might even look into more exciting options, like universal or variable life insurance!  If you’d like a personalized consultation, just contact Bounds Accounting.  We have offices throughout Carroll County, Maryland and Southern Pennsylvania.  Our experienced advisors would be more than happy to help you with this part of your planning!