Life Insurance is a good way to protect your future. You should look at the basics of life insurance before delving into a policy however. Not all policies are the same. It can be overwhelming at times, with all the terms and factors to consider.
Why do people buy life insurance? They buy life insurance for the pure fact of leaving family or a business with plenty of money to manage life without them. People want to leave this earth knowing there assets are protected. If you have no family, business or charity you wish to take care of then you should not invest.
The most popular of them all is Term Life Insurance. Term is simple and affordable to most budgets. Term Life is buying Life Insurance for only a specified length of time. Terms can be 10,20 or 30. If you out live your term the policy pays nothing.
There are pros and cons to a term life plan. One disadvantage is that once your term is up you lose the policy. So if you out live the term nobody gets anything once you die. The good thing is if you get ill during the term premium and policy do not change for the life of the term.
Whole life insurance is another choice. Whole life covers you for your whole life. It never ends as long as you continue to pay the premium. Premiums can go up every year however. You continue paying the premium up until the day you die.
The advantage to Whole Life is it earns cash value. Cash Value is an amount of money you can receive if you should surrender your policy. Not to be confused with the Face Value. Face Value is the guaranteed amount your dependents will receive at your death.
There is also universal and this insurance is for the more seasoned shopper. It combines investment and death benefit. You invest into money market, stocks and bonds which will contribute to your death benefit. However no matter who well your investments go you will be guaranteed a minimum amount to pay out at the time of death.
Last you have a variable. Variable works just like universal only the insurance company guarantees nothing. It is all based on your investments. Many people opt for a combination of these kinds of policies. They may have a Term policy as well as a Universal Policy.
1 comments:
Interesting article on life insurance. I’ve certainly found that if you want life insurance quotes, the most important thing is to shop around and compare rates from top companies. I bought a policy through ReliaQuote, but there are also other options, such as MatrixDirect and SelectQuote. The moral of the story is that taking a few minutes to compare multiple rates will save you money over the years.
Post a Comment