Planning for the future is always a good idea, especially when it comes to life insurance. In order to obtain life insurance, the policyholder will pay a premium to the selected insurance company during the course of their lifetime. In return, the insurance company will “pay a sum to named beneficiaries when the insured policyholder dies,” writes Amy Fontinelle for Investopedia.
When shopping for life insurance plans, it’s easy to become overwhelmed. There are several options available, each with its pros and cons. However, as an employer, it’s essential to your employees’ wellbeing and peace of mind that you offer life insurance plan options that will meet their needs and desires. We’ve broken down the types of life insurance plans to help you get a better grasp of each branch of life insurance and what they cover:
Term Life: Out of the various types of life insurance, term life is the most affordable for the policyholder, thanks to low premiums. With term life insurance, the policyholder will choose the length of the contract that they want to pay, ranging from a few years up until the policyholder turns 65. However, “term life doesn’t build cash value that you could someday borrow against,” writes Lisa Green for Nerdwallet. Plus, the end of the contract means the policyholder may need to purchase another life insurance plan or try to extend their existing one.
Whole Life: Just as the name suggests, whole life insurance requires the policyholder to pay premiums over their lifespan in order to keep the insurance active. Many people select whole life insurance for the additional benefit of a savings component that can, in some cases, accumulate cash value.
Universal Life: Like whole life insurance, universal life insurance can also be purchased to last a lifetime. What makes universal life insurance unique is that the policyholder is able to withdraw funds from the policy, which is then adjusted come time for the payout to beneficiaries.
If you’re an employer and still aren’t sure which life insurance policies are ideal, connect with one of our insurance professionals today. Our team at LHUI in Seattle, Washington, can help you decide which employee benefits are right for your organization. We will meet with you to understand your requirements to serve your employees best. No matter the size of your organization or type of insurance needed, we promise to work alongside you to make sure you make the right decision for yourself and your employees. Schedule a consultation with us today!