Nearly everyone understands the fundamental purpose of life insurance, to provide a payout upon a policyholder's death, but it is not always that straightforward. Life insurance can be used for different reasons, such as providing financial security to loved ones, securing a loan, or used as an investment tool. If you want a quick refresher on this essential insurance product, check out NH Life Insurance Basics.
NH Life Insurance Basics
Why Buy Life Insurance?
In general, if others depend on you for financial support, life insurance plays a critical part in their financial well-being in the event of your death. No one likes to think about dying, but as we all know, it is inevitable.
The Basic Types of Life Insurance
Generally speaking, there are two types of life insurance available in New Hampshire: term life insurance and permanent life insurance. What is a better policy? That depends on your situation at a given time.
Term Life Insurance: As the name implies, term life insurance is a policy that is in effect for a specific length of time, typically 20 - 30 years. If the insured passes away during that term, the beneficiaries (those selected to inherit the benefit) will be paid.
Whole Life Insurance: As the name also implies, whole life insurance is a type of permanent life insurance, other than term life insurance. The basics are that it too provides a death benefit upon your passing, but it also builds up a cash value that can be borrowed against or withdrawn.
What Type of Life Insurance is Best: Term or Whole?
Like everything in insurance, it depends.
Term life insurance is more affordable than whole life policies, given there is no cash value until the insured is deceased. It can help ensure you and your family's financial security during the vital years of paying for a mortgage, cars, daycare, and further education. A useful guide is to buy enough to get you through when kids have graduated and are self-sufficient, and the house is paid off, which is typically your biggest asset.
Whole life insurance is more expensive than term life insurance, especially at the start, but premiums tend to remain stable for the policy's term, which may benefit some. It also builds cash value over the term of the policy to act as an investment account.
Who Needs NH Life Insurance?
When one thinks of a job, it is often associated with a paycheck. Though losing a paycheck could be financially devastating, so could access to childcare and home upkeep. If a spouse within your household stays home with the kids, both spouses would need life insurance to cover the financial loss of an unexpected death.
If someone relies on your income to cover essentials like food, housing, and education, life insurance is essential to ensure those things are covered with our without you.
If you don't have many of assets, you may still need a minimal life insurance policy for the expenses associated with a funeral or settling of your estate.
How Much Does Life Insurance Cost in NH?
Again, like everything in insurance, it depends.
Not surprisingly, life insurance premiums are based primarily on life expectancy data. This would include age, gender, health issues, and whether you smoke. Another factor would be how much coverage you want to buy and the length of the term (if buying term insurance.)
As premiums are driven mostly by age, don't put off buying life insurance. Overall, the younger you are, the less likely you will have health issue, and the less you will pay in premium.
How to Get Life Insurance in New Hampshire?
Television and the internet are flooded with ads for life insurance because it is something that everyone needs. To ensure you are getting a NH policy right for you, shop within New Hampshire and talk to a local agent.
HPM Insurance has a licensed and experienced life agent, Tom Hutton, on staff that can talk to you about your options.