Guide to Life Insurance
Life insurance is a plan where a person pays on a regular basis (usually monthly) in exchange for the promise by the insurer to pay a designated amount upon the death of the insured person.
Other events, such as terminal illness or critical illness may also trigger payment. The policy holder typically pays a premium, either regularly or as a lump sum. Other expenses, such as funeral expenses, are also sometimes included in the premium.
Why Buy Life Insurance
Unlike other forms of coverage, life insurance protection does not really benefit the person who is insured, but this insurance is used to protect those left behind.
This could be a spouse, partner, children, or anyone that you want financially protected in the event of loss or tragedy.
Why to buy this type of insurance? Here are the answers:
- Life Insurance can pay for your final expenses, such as burial costs, estate planning and administration costs, debts and medical expenses, so that your loved ones will not be unexpectedly burned by these costs.
- It can protect your loved ones from income loss and financial catastrophe. Whether you have young children, a spouse or even elderly parents that depend on your income, in the event of death your Life Insurance policy can serve as a partial replacement for that lost income so that your loved ones do not endure financial crisis.
- Life Insurance can be an inheritance to your heirs even if you currently have no assets.
- Life Insurance can also be a form of savings account since some policies allow you to build cash value, which can be withdrawn or borrowed at your request.
How to Save on Life Insurance
If you want to save on this type of coverage, compare life insurance quotes first in order to get the right life insurance policy. You can do this on your own by comparing life quotes from different life insurance companies online.
When you compare your life insurance quotes make sure you provide them with accurate details. A good or a competitive quote should provide you with adequate cover at a reasonable premium.
If you really want to save on life insurance, use the form at the top of the page, compare quotes and get the best price.
What to Look for in a Good Policy
- A good policy should be able to pay full benefits to the named beneficiaries in the event of death. The benefits should also be flexible to suit different needs and requirements of the policy holder. For example life policies that can be converted from term policies to whole life are a good example of a good insurance policy. A good life insurance policy should also have some additional or alternative policy benefits like mutual funds, annuities and retirement planning.
- One of the easiest ways to determine whether a life insurance policy is great or not is to check the prices associated with it. Generally, those policies that are considered great are going to have a low price on them. However, you need to keep in mind that just a low price is not enough. It has to be a low price for a significant amount of coverage. Any life insurance policy should be designed to provide sufficient financial safety to the family and close ones of the policy holder in case of the policy holders death.
- You can only get a good policy from a financially stable and reputable company. There are many life insurance companies in the U.S. today but not all of them are reputable. New companies are starting up and some have been in the industry for some time. You will therefore need to do a proper investigation first before you can choose your life insurance service provider. Also find out whether they are registered and licensed to sell life insurance products.
Common Forms of Life Insurnace
Whole Life Insurance
Whole life insurance requires fixed payments on a fixed schedule. These policies guarantee coverage up to a certain age (usually 100 years of age).
They guarantee a death benefit, so even if the insured individual outlives the policy, a death benefit will still be paid. They also carry cash value, which means that they can be liquidated.
Universal life Insurance
Universal life insurance allows payments of any amount at any time (up to certain government-stipulated maximums). Coverage from these policies can be maintained indefinitely. The policies carry cash value, which means that they can be liquidated.
Variable Life Insurance
Variable life insurance is a type of whole-life insurance policy providing a death benefit that varies according to the performance of an investment portfolio managed by the insurance company.
Variable Universal Life Insurance (often shortened to VUL) is a type of life insurance that builds a cash value.
In a VUL, the cash value can be invested in a wide variety of separate accounts, similar to mutual funds, and the choice which of the available separate accounts to use, is entirely up to the contract owner.