Life insurance is something that is mentioned often, but to many of us, it is still a vague concept. But, choosing the right life insurance plan is one of the most important things you can do when it comes to estate planning and ensuring that your loved ones have a secure future. It can be difficult to think about the future, and it is easy to put off making decisions about life insurance and other estate planning choices. That being said, educating yourself on your various options and speaking with a skilled estate planning attorney can make the process a lot easier. Read on to learn more about life insurance options in New York.
What is life insurance?
In simple terms, a life insurance policy is a contract between you and an insurance company. In exchange for premium payments during your lifetime, insurance companies will provide your beneficiaries with a lump-sum payment upon your death.
What are the Different Types of Life Insurance?
Since everybody’s financial situation is unique, there are various types of life insurance policies. The three primary types of life insurance policies are as follows:
- Whole life insurance: Permanent life insurance made to provide you with lifetime coverage. The premiums are generally higher in a whole life insurance policy and are usually fixed payments with a cash value. Since the cash value functions as a savings component and may accumulate tax-deferred over time, it is sometimes used as an estate planning tool, allowing you to preserve the assets you plan on transferring upon your passing.
- Universal life insurance: A lifetime coverage insurance policy. These policies are flexible and may allow you to raise or lower your premium payment or coverage amounts throughout your lifetime. Because of the lifetime coverage, however, a universal life insurance policy will generally come with higher premium payments than term life insurance.
- Term life insurance: Term life insurance replaces lost potential income during working years. These insurance policies can assist your beneficiaries and help ensure your family’s financial goals are reached. Though term insurance can replace lost potential income, life insurance benefits are paid in a lump sum, as opposed to regular payments.
You should strongly consider hiring an experienced attorney to discuss which of these policies is best for you.
If you have any questions or concerns about life insurance or any other estate planning matters, contact our firm today.
Contact our Firm
The Lauterbach Law Firm is proud to serve clients throughout Rockland County who are faced with legal matters related to estate planning, real estate, foreclosure defense, landlord-tenant law, business law, and criminal defense. If you require the services of an experienced team of attorneys, contact The Lauterbach Law Firm today to schedule a consultation.