Its not even as fun as binge-watching a show on Netflix.
But if youre going to start adulting, its time to think about life insurance.
The first problem youll run into?
The subject is so intimidating.
Its enough to make you shake your head and walk away.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
Should you get term or universal life insurance?
What is Term Life Insurance?
Term life insuranceis exactly what it sounds like.
This is the simplest, cheapest and most popular kind of life insurance policy.
Lets say youre a 30-year-old woman and sign up for a 20-year term, $500,000 life insurance policy.
That could cost you as little as $17.25 per month.
Did you know?
If you stay alive that long congratulations!
What is Universal Life Insurance?
Universal life insuranceis a whole different ball of wax.
The downside is its more complicated and more expensive.
Its more permanent and more flexible.
Universal is a kind of permanent insurance.
Its sort of a hybrid between a life insurance policy and a savings account.
A universal policy has a cash value that builds up as long as you keep paying premiums.
Under no circumstances do they get nothing.
I refer to term insurance as If you die and permanent as When you die.
Well go over the pros and cons of each option.
But first, a word about why you should look into life insurance in the first place.
Its Not For You.
Its For Your Family.
You figure itll take weeks to get approved, and will require stacks of paperwork and signatures.
Thats the stereotype, but its actually a lot simpler these days.
Companies likeHaven Life, for example, offer more streamlined ways to get life insurance.
Unlike traditional life insurance providers, these online-only platforms provide instant decisions on applications for coverage.
Then, youd potentially have to wait weeks to hear back on whether or not youre approved.
Term Life vs. Universal Life Insurance
So, should you go with term or universal life insurance?
Lets ask some industry veterans.
Thats a bold take!
Now, most advisors wont state it that definitively.
But if you cant, use the old adage: Term policies are best for people with jobs.
Permanent policies are best for people in diapers (children and seniors).
Thats because, Smith explains, these two kinds of policies really are designed for different purposes.
While universal life does have cash value, it should never be viewed as an investment, Smith says.
Its more of a rainy day savings fund if all other avenues have been exhausted.
But you should know when it comes to insurance, universal life insurance is much more expensive.
How much more expensive?
To receive the same amount of coverage under a cash value policy would cost over $3,000.
Financial advisers say there are more efficient ways to sock away money for your survivors.
Dont be sold on permanent insurance for the investment or cash-value feature, advises personal finance websiteInvestopedia.
For the first two-to-10 years, your premiums are paying the agents commission anyway.
Who buys universal life?
Its called whole life insurance.
Its likeuniversal lifeinsurance, except it has fixed premiums and a fixed death benefit.
The advantage:There are no surprises.
You know exactly what youre paying and exactly what youre getting.
The disadvantage:Its even more expensive than universal life.
If you have further questions, get yourself some professional advice.
One size doesnt fit all, and everyones finances are different.
Asking Term Life or Universal Life is only the beginning.
Your turn: Do you have life insurance?
Disclosure: This post includes affiliate links.
Were letting you know because its what Honest Abe would do.
After all, heison our favorite coin.
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.
As the title implies, hes not getting any younger.
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