And should you get a term or whole life policy? Here are the differences…
GREENSBORO, N.C. — Budgets are tight. You’ve got car insurance, health insurance, and home insurance. Is life insurance even in the conversation?
It should be if you answer yes to this question: If I were to die now, would anyone endure a financial hardship?
“Life insurance is not just for parents, it’s not just for older adults, it’s for anyone who has someone who depends on you. So if you have a family, a partner, a business, so that they are able to maintain the lifestyle they currently have, pay the mortgage, keep the business afloat,” said Kimberly Bell, State Farm Insurance.
The next question would be, what kind of life insurance do you get? Term or whole? Nerd Wallet put out a snapshot comparison.
Term Life insurance is generally cheaper. It covers you for a set period of time, like 10 years or 30 years. When you’re done paying the premium, the coverage is over.
When it comes to whole life, the annual payments are much more expensive, but the coverage lasts your entire life, and you’re building a savings account that you can either cash out or borrow against. Whichever you choose, the cost of either term or whole depends on your age.
“The older you get, the more expensive it becomes. I tell folks to look at your budget, and if you’re going out for coffee every day, they can roll life insurance into the budget,” said Bell.
Here’s a quick look at how the prices go up depending on what age you are when you buy coverage. For example, a 20-year-old woman in good health would pay $2,600 a year for a whole life policy, but if you go to get a life insurance policy at 50 years old, it’s $9,000 a year.