Money Talks | Do you need life insurance? – KCENTV.com

TEMPLE, Texas — What are your options when it comes to life insurance? 

According to Bankrate.com, 54 percent of Americans have life insurance, but during that study it was determined that millennials and younger people in general way overestimated the cost of life insurance. 

Per experts, locking in a term policy when you are younger can save you a lot of money. That’s because between the ages of 25 and 50, the rates for a male rise 258 percent!  

There are options if you don’t want to spend a lot of money, but want to make sure that your family and loved ones are still covered? 

We asked certified financial planner Neil Vannoy, and he told 6 News, “All life insurance is either ‘term’ or ‘permanent’. Term insurance is temporary insurance, doesn’t build up cash value, and is the least expensive way to get coverage.”

Of course, you might want to make sure whenever you pass that money will go to the one’s that you want. 

“Permanent insurance is designed to provide coverage for the rest of your life, and it’s designed to build up cash value that could eventually be used to pay the premiums,” said Vannoy.

Just understand that all of that money that you are investing into life insurance, could be better used in the market or with other investments. 

Vannoy told 6 News, “whole life” and “universal life” are two of the most common types of permanent life insurance. 

Permanent insurance will have much higher premiums than term, but a portion of the premium goes toward building the “cash value” of the policy after the cost of insurance is paid.

So there are pros and cons for each type of policy, Vannoy said that you need to understand what’s best for your needs before making your decision. 

“The great thing about term insurance is that it’s low cost, but the downside is that the coverage isn’t guaranteed for life and your life insurance needs can change over time,” said Vannoy. “The nice thing about permanent insurance is that it provides lifetime coverage, as long as you pay the required premiums, but permanent policies are expensive, complicated and since most of them pay high commissions, they are often sold for the wrong reasons”

Life insurance is there to help a spouse or young children, should you suddenly die. When you are older and your children are established and hopefully you have some property and finances to leave them, insurance isn’t nearly as necessary, and it wouldn’t be as financially catastrophic should you die suddenly.