The two types of life insurance are term and permanent.
Term Life Insurance
With a term life insurance policy, you pay premiums for a set number of years called the “term.” If you die during that time, the insurance company pays the death benefit to your beneficiaries, the people you choose to receive it. If you don't die during the term, you and the insurance company can part ways, or you may be able to renew the policy, but your premiums will increase a lot.
Permanent Life Insurance
Permanent life insurance is different. There is no set term. It lasts your entire lifetime as long as you continue to pay the premiums. It pays a death benefit if you die, and it has a cash value component that can grow over time. Why build cash value in a life insurance policy? Because the cash value is a benefit for living. Through tax-free loans and withdrawals the cash value can help fund retirement, pay for college and deal with unexpected emergencies. Remember, in order to have enough cash value for a loan or withdrawal, you want to properly fund your policy. Term and Perm, two different types of life insurance policies, both offering valuable protection.
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The Financial Pros and Cons of Permanent Life Insurance
There are both pros and cons to purchasing permanent life insurance. If you can afford the higher premiums, permanent life insurance allows you to provide a death benefit to your beneficiaries without the constraints of term life insurance. A permanent life insurance policy also allows you to invest in an account with a tax advantage, which you can borrow from or use during the lifetime of the policy.
Some of the cons to buying a permanent life insurance policy include expensive premiums, falling behind on payments and having to cancel the policy, and overusing the cash value so that it reduces the death benefit payout.
The Pros and Cons of Term Life Insurance
Term life insurance is a great option for those who want to provide a death benefit but can’t afford the high premiums of permanent life insurance. The premiums on term life insurance are much lower and it allows you to choose the length of time you need coverage for, usually ranging from one to thirty years.
However, there are some drawbacks to using term life insurance. Term life insurance does not offer the investment opportunities that permanent life insurance has, and if you outlive your policy there will be no payout. Additionally, it may become more expensive to renew your term policy as you age.
Most Popular Life Insurance Companies in Oregon
A company's market share is the number of insurance premiums it writes compared to all other companies in the state. It is usually expressed as a percentage. The higher the score, the more financially stable a company becomes.
In Oregon, insurers who control most of the market are more likely to pay out customer claims. According to MoneyGeek, Northwestern Mutual has the highest market share in Oregon at 9.49%. The seven leading insurers account for 36.11% of all businesses in the state.
Oregon Insurance & Life Insurance Laws You Should Know
It's important to become familiar with the laws regarding life insurance in Oregon, whether you're a consumer or an insurer. Here's a brief rundown of the regulations to keep in mind:
- Free look period - The free look period allows buyers to cancel their policy within a certain number of days and receive a refund. Most policies have a 10-day free look period, but in Oregon, buyers have up to 30 days to replace their coverage.
- Grace period for missed payments - A policyholder in Oregon is given 31 days to pay any late life insurance premiums unless they notify the insurer of their discontinuation of the policy.
- Time allowed to settle a claim - If you file a claim in Oregon, your insurer is required by law to pay it out right away. If they don't, they could face some major penalties.
- Contestable Period - The Oregon life insurance policy states that you are not allowed to contest the validity of a policy unless it has been in force for two years or if nonpayment of premiums occurs. If there was no fraud and an error was made on your initial application, after two years, your insurer cannot cancel the policy.
Why Bend Health Insurance?
Bend Health Insurance is an independent insurance agency in Oregon that specializes in helping customers find affordable insurance policies. With decades of combined experience, Bend Health Insurance can provide you with personalized service and guidance to help you choose the right policy for your needs and budget.
At Bend Health Insurance we understand how important it is to have a reliable insurance policy in place. We will work with you to find an insurance plan that meets your needs and provides the right coverage at the best price. We can also help you compare policies from different providers and guide you through the process of selecting a provider.