10 Must-Know Tips For Life Insurance
Life insurance is an essential part of the lives of many individuals, especially ones where there is a primary breadwinner in the family. Obtaining life insurance can be a daunting task that is both complex and can include a lot of paperwork. Fortunately, there are a number of tips that will help you to obtain the most beneficial life insurance for you and your dependents. The following are a series of some such tips:
1) Two Policy Types to Choose From
The two types of policies that are available are pure insurance coverage and term policies. There are several whole life insurance variants as well which combine pure term insurance and investment products.
2) Insurance is Not Purchased but Sold
Insurance agents are responsible for selling most of the life insurance policies that are available in the United States. This is due to the fact that the industry of insurance has an interest in obtaining whole-life policies at high profit.
3) Whole-Life Insurance is Pricier
Policies that have a component of investment will cost significantly more than insurance term policies. Because of this, numerous people who purchase whole-life insurance cannot afford their payments.
4) Whole-life Insurance Policies Structured Around Estimates
The agent will quote returns as an estimate and not a reality. In order to attract customers, these agents typically estimate the returns as higher than they actually will be.
5) Separate Your Insurance and Investments
Instead of using your life insurance to make investments, invest in other places that do not require whole-life policies.
6) Purchase Adequate Term Coverage
You should not skimp when it comes to life insurance, particularly since the rates are currently quite low.
7) Select the Appropriate Policy Term
You want to make sure that the policy lasts for a period long enough to take care of any dependents until they are independent.
8) Purchase Policy While Healthy
Older individuals as well as those that are not particularly healthy will pay higher insurance rates. Because of this, purchase insurance early but not before you have dependents.
9) Be Truthful
Do not be misleading when it comes to your application in order to obtain a lower rate. If you lie and you file a claim, they may discover that you were untruthful and refuse to pay the amount.
10) Shop Online
Purchasing insurance is quite easy because of the Internet. You can obtain quotes and avoid irksome salespeople.
Whatever you decide to do or how you approach getting life insurance, be sure to get it. Speak with multiple agents and brokers and obtain as much information as possible.
How To Get Good Life Insurance For Less
Carrying enough life insurance to guarantee that your loved ones will be able to maintain a decent standard of living should you pass away is a prerequisite for a head of household. Doing so at a price you can afford may not be easy. As a result, people are always on the lookout for a life insurance policy that covers the essentials without breaking the bank. Following are a few tips on how to get good life insurance for less.
Life Insurance Defined
A life insurance policy is a contract between you and an insurance provider that entitles someone you name to receive financial compensation in the event of your death. In that way the people you love will be able to continue to live a somewhat normal lifestyle without worrying about paying the bills. For this peace of mind, you make periodic payments to the insurance company. Upon your death, the insurance company releases a check for the agreed upon amount of money.
Types of Life Insurance
When you take out a life insurance policy, you will have two basic choices: term or whole life. They serve the same purpose, but go about it differently. With either type you will be able to provide coverage for your family’s needs, but there are advantages and disadvantages to both types of coverage. You will need to decide what type of insurance will work best for you and your family.
Term Life Insurance
With term insurance, your policy will cover you for a specific period of time, determined by your agreement with the insurance company. At the conclusion of that time period you will either have to extend the term, or take out a new policy. You can stay with the same company or seek coverage elsewhere. Probably the greatest advantage of term life insurance is the fact that the premiums are relatively low, especially when compared to a whole life policy.
Term insurance is fairly popular with single people and young married couples just starting out. In addition to the lower monthly payments, term life insurance has the added benefit of being relatively simple to understand, because the conditions of the policy are usually limited. However, term insurance can be hard to get as you grow older or at least more expensive. You could even be denied coverage due to a medical condition that may have developed since you took out the original policy.
Whole Life Insurance
Although it serves the same basic purpose, a whole life insurance policy is fundamentally different. The major difference between term and whole life insurance is that a whole life policy usually remains in effect from the time you take out the policy until you either cash it in or pass away. You are allowed to cash in a whole life policy because the premiums you pay every month are invested, so the value of the policy increases as the investments become more valuable.
If you wish, you can take out a loan against the value of the policy, or you can simply cash out and take whatever interest has accrued. This will, however, terminate the policy. Whole life policies come with numerous choices as far as the details of coverage are concerned, especially when compared to term life insurance policies, which are fairly simple. Another thing to take into consideration is that with a whole life policy your monthly or annual payments will be significantly higher.
Choosing the Right Policy
Once you understand your options it’s time to make a decision on the type of policy that will work best for you. Although term life insurance is cheaper to get, and the premiums are less, a whole life policy may reap financial rewards down the line that may make it a viable option. You will need to weigh the pros and cons of each, and then decide.
Buying Life Insurance
Once the decision on the type of policy you want has been made, it’s time to go shopping. Call local insurance companies and get some quotes. Explain that you’re on a budget, and want to keep your costs down. After you’ve talked to them, go online and get some cheap insurance quotes from various insurance providers. Compare the online quotes with those you received from your local insurance providers. The online quotes may be lower. If so, return to the local companies and inform them of the results of your research. They may be willing to meet or beat the online quotes.