Life insurance is a contract between the insurance company and the policy owner. Life insurance protects the beneficiaries of the policy holder financially in the event the policy holder’s death. Life insurance offers the policy owner “peace of mind” knowing that their loved ones are financially protected if the policy owner dies. If you are the primary source of income for your family, it is a good idea to have a good life insurance plan in place to ensure your loved ones can continue the same quality of life.
In general there are two separate types of life insurance plans: term life and cash value life. There are also many different combinations of each of these types of plans, so it is important to understand the differences and benefits of each type. You should consider talking to a qualified insurance agent to gain a better understanding of all of your life insurance options.
The most basic type of life insurance is Term Life insurance. This type of insurance pays the beneficiaries a prearranged sum of money in the event of the policy holder’s death. Term Life insurance does not gain any additional value during the life of the plan, which is important to consider.
Cash Value life insurance is different in that it does gain additional value during the life of the plan. As the plan matures it will gain additional value, which the policy holder can withdraw, invest, or borrow against this additional value. This offers more flexibility for the policy holder, and is usually more expensive than Term Life insurance.
The right type amount and type of life insurance for you depends on many factors. How many beneficiaries need to be covered, the budget of the policy holder, and the length of coverage needed all factor into the decision process. There is a common rule of thumb to cover 6-8 times the annual gross income of the policy holder. This does not count any unearned income or investments. It is important to talk to an insurance agent to better understand how much coverage you need and what type to choose.
Our customers from Albuquerque, Las Cruces, Santa Fe, Rio Rancho, Roswell, Farmington, South Valley, Alamogordo, Clovis, Hobbs, and other great cities throughout New Mexico use our services to find the cheapest New Mexico life insurance. Our vast network of insurance agents and brokers can answer any questions you have, and find the right life insurance coverage within your budget.