Whether you like it or not, life is expensive. We spend our early adult years building a career that will enable us to live out our desired lifestyle. In some cases, we start families and buy our dream homes. We then have to think about providing the best education possible for our children, so saving for college is added to the equation. We also want to build up our investment portfolios as well as putting plans in place for later life. So yes, life is expensive but you’re planning and working towards all of these costs and goals, so what’s the problem?
What if a health risk suddenly derailed your carefully built plans?
Whilst accidents and death are most certainly gloomy thoughts, it’s important to think about your loved ones. Would they be taken care of financially if anything was to happen?
It’s a conversation that over the years, has been dodged and ignored by millions, often until it’s too late. And having relocated to the US and enjoying an improved way of life, it’s probably not at the top of your list of priorities. But shouldn’t it be a no brainer to protect what we have spent so many years carefully building, with a little careful planning now, you can be confident of protecting your loved ones along the way.
Term Vs Whole Life Insurance - Which One Is Right For You?
In the majority of cases, a person’s lifestyle is dependent on their salary and if this is the case for you, it is critical to take out a life assurance policy. There are two types of insurance to choose from, term and whole life.
Term Life is pretty straight forward. It only covers you for the period you need it. Because of that, it is less expensive but it’s important to know that this policy is only good for a certain period of time and after that, it will expire. Many people use this kind of policy to provide for their families in the years they are earning, so if anything was to happen it would replace your salary and allow your families to live the life they are accustomed to.
Whole Life insurance is a little different. It is a form of permanent life insurance and unlike term life, it never expires as long as you keep up with the premium payments.
Whole life policies are sometimes referred to as investments, this is due to the fact it can provide some “cash value” in addition to the death benefit. This cash value grows slowly at a guaranteed rate and is tax deferred, meaning you don’t pay taxes on your gains.
Which one should you choose?
Firstly, you need to ask yourself, what is the purpose of life insurance to me? And which can I afford?
If you are wanting to replace your income and protect your family if anything unforeseen happens and you don’t want to pay the hefty premiums, then Term Life could be for you. However, if you want more financial flexibility, the ability to borrow against the policy for future financial needs, a tax deferred cash value and a policy that is locked in for life, then whole life could be what you are looking for.
At Skybound we know that making a decision on which type of Life Assurance cover to setup can be daunting, and taking one out based on reading an article isn’t advisable, which is why our team of experienced Advisers are on hand to help you answer the questions most British internationals are asking.All of our advisors are US licensed Advisory Representatives, meaning they are well placed to advise in all areas of personal financial planning including Life Assurance. So, get in touch today for more information.