February is Insure Your Love Month. This is the seventh year of the Insure Your Love Campaign, coordinated by Life Happens. Buying life insurance to protect the ones you care about is an expression of love. Valentine’s Day falls in February, which makes it the perfect time to remind people of the need for proper life insurance planning to benefit their loved ones.

Why Is It Important to Have Life Insurance?

Life insurance provides a death benefit to your loved ones after your death. If your family is depending on your income, it can help protect them financially in case something unexpected should happen to you. Death benefits from a life insurance policy can replace lost income, help your loved ones pay off debts, cover future education costs, and pay for your funeral expenses. Permanent life insurance that accumulates cash value on a tax-deferred basis can play an important role in your long-term financial planning.

What Are the Different Types of Life Insurance?

Life insurance falls into two basic categories – term life insurance and permanent life insurance.

Term Life Insurance

This type of policy provides protection for a specific term or time period. Policy terms are usually 10, 20, or 30 years. This type of coverage may be the best option if you only need life insurance for a certain length of time, for example, until you pay off your mortgage or your children graduate from college. The main advantage of term life insurance is affordability. Other benefits include simplicity and flexibility. The two main decisions involved are how long you want the policy to last and how much coverage you want. You can choose a policy term for as little as one year or for up to 30 years or more.

Permanent Life Insurance

This type of life insurance policy provides protection that continues until your death, provided you continue to pay the premiums. It also accumulates cash value on a tax-deferred basis, similar to assets in retirement savings plans. You can access that money in the future for any purpose, such as college tuition, a down payment on a home, or retirement. Premiums are higher for permanent life insurance than for term life insurance policies, because of the additional benefits they provide. There are many different types of permanent life insurance.

What Are the Factors Affecting the Cost of Life Insurance?

Permanent life insurance is generally more expensive than term life insurance for the same amount of coverage. Other factors that affect the cost of life insurance include:

• Age: The older you are, the more you will pay for life insurance.
• Gender: Women generally pay less than men because they have a longer life expectancy.
• BMI: Insurance companies use body mass index as an indicator of overall health in calculating the cost of life insurance.
• Medical history: Healthier people are usually approved for lower rates because they have less risk of dying in the near future.
• Smoking and tobacco use: If you smoke or vape, you will pay more for life insurance.

Other factors can play a role in the price of life insurance. Our agent can help you find the best available rates for the life insurance coverage you need.