Life Insurance

Quite often, when clients come into Shults Insurance Agency Inc. for an insurance review, they ask if they need life insurance. We tell them "no, you don't." That's because life insurance is not for the person whose life is insured, it's for his or her loved ones, the ones who would be left behind in the event of their passing. With the benefit, children can pay for tuition, spouses can make mortgage or rent payments, pay off debts, or make up for gaps in retirement income. And although it's difficult to think about, life insurance benefits can pay for funeral expenses.

Term Life Insurance or Whole Life Insurance?

Their next question is what kind of life insurance is best for me? Whole life or term? That question takes a while to answer. But the short version is it depends.

• Term life insurance is appropriate for most people. It is the more affordable of the two. It covers the insured party for a specific number of years, and if he or she doesn't pass away within that time period, it expires with no payout. People only have to make two decisions when purchasing term life insurance. What amount they need, and how long a term they want. While small policies are available for under $50,000, there are some that pay out a million or more. As for how long a term lasts, policies are usually sold in increments of five, from five to thirty years. At the time of purchase, they lock in the premium they will pay, and make payments either annually or monthly. In many cases, the policy can be extended, for another term when the current one expires, but the premiums will be higher
• Whole life is a permanent type of life insurance, so naturally, it costs more than term life. Most whole life policies come with a cash value account which builds in value over time. Eventually, the account may have accumulated enough money to allow the insured to take out a loan against the policy to pay for significant expenses like college or a down payment on a house in New Jersey. Whole life insurance doesn't expire, premiums remain the same throughout life, as does the death benefit.

Of course, there are pros and cons to each. To find out which fits your New Jersey lifestyle, give us a call or come in to visit. Our door is always open at Shults Insurance Agency Inc.