Life Insurance Pros and Cons List
Life insurance is a way to provide financial protection for your family or designated loved ones should something unexpected happen to you. Two types of policies are very common: term life insurance and whole life insurance.
There are certain pros and cons to consider before investing into a policy that protects you.
List of the Pros of Life Insurance
1. It can be permanent insurance.
If you purchase whole life insurance, then it is permanent insurance, assuming your premiums are paid each month. Beneficiaries of the policy receive the death benefit no matter what. Term benefits offer this as well, though they do have a term deadline that may cause the policy to expire.
2. It can build cash value.
If you have a life insurance policy, then you have something which can build up value over time. In some policies, the growth of your cash is even guaranteed.
3. It is affordable.
If you are in good health, you can obtain a $250,000 life insurance policy for a very affordable rate. As you get older, whole life insurance tends to become cheaper than term life insurance. Both options, however, give you the chance to have your estate be able to protect your loved ones.
List of the Cons of Life Insurance
1. It always has a cost to it.
You must make monthly payments on your life insurance policy to ensure that it remains active. Even missing just one month may be enough to have your policy canceled, which would prevent your estate or beneficiaries from being able to make a claim.
2. It can take time to build up cash values.
Although insurance policies can build up a cash value over time, it can be a long time before there is enough value there to make a meaningful impact on your finances. With whole life insurance especially, you’re looking at 10-20 years for some people – and you need to make your monthly payments to get there.
3. It may not cover all types of death.
Most life insurance policies will not cover suicide within the first 24 months of the policy. Some policies may have additional stipulations. For the most part, however, a standard life insurance policy will cover any cause of death.
If you’re looking for an easy way to give your family future financial protection, then life insurance is an affordable investment to consider.