|
|
|
|
|
|
|
|
Saving On Your Life Insurance By Choosing Right PolicyMost people are reluctant when it comes to shopping for insurance. We don't like this process and often prefer just to forget about it. Once you find out how to compare two policies and select the policy that gives you adequate sense of security, as well as financial support, you can short-circuit. All people need different amount of life insurance coverage, which is based on various factors such as your budget, your age and health, your lifestyle choices, etc. No one wants to leave their families without enough resources to meet basic living expenses and realize future goals. Not only will your family suffer the loss of their beloved one but also they will have to overcome the financial difficulties. Depending on their current financial resources and ability to overcome the financial and emotional blow, your death may mean many disastrous consequences for your family. A person gets life insurance to make sure that there is money available to maintain the financial life for those who will still be living and have a future. Insuring your life you take a selfless step towards better care for your spouse and/or your kids just like you would protect them from dangers and difficulties in life. Experts suppose that your beneficiaries will be financially safe if you are covered for eight times your annual salary. Families who have young children have a clear need for a greater amount of life insurance. You must aim higher than eight times your salary if you have two or more children under the age of ten. Get Life Insurance through Your Personnel Office If you have a full-time job you may consider getting life insurance through your personnel office. Your employer may offer you the insurance policy as a perk of your job. Some companies provide policies, giving your family twice your annual salary or more, in the event of your premature death. You can also be offered to purchase group insurance at a lower price. Which Policy Is Best For Me? Life insurance may be divided into two main types - temporary and permanent or following subtypes - term, universal, whole life and endowment life insurance. There are also related life insurance products (no load, joint life, survivorship life, single premium whole life, modified whole life, group life insurance, senior and preneed products) which should be considered when choosing a policy. Some of the insurance policies and related products are described below.
Term life insurance provides coverage for a specified term of years for a specified premium. This policy doesn't accumulate cash value. It is a so-called "pure" insurance, where the premium buys protection in the event of death and nothing else. A policy holder insures his life for a specified term. If he dies before this term is up, his family receive money. If he doesn't die before the term is up, he receives nothing.
Permanent life insurance remains in force until the policy matures, unless the policyholder fails to pay the premium duly. Permanent insurance builds a cash value that reduces the amount at risk to the insurance company and thus the insurance expense over time. This means that a policy with a million dollar face value can be relatively expensive to a 70 year old. The policyholder may withdraw money, borrow the cash value, or surrender the policy and be given the surrender value. However, if he doesn't pay back the money before his death, his survivors would receive much less. These policies do earn some interest, but not nearly as much as you could get by investing that money yourself. The greatest advantage is that term life insurance premiums are incredibly lower as little as $3 per $1,000 in coverage. The four subtypes of permanent insurance are whole life, universal life, limited pay and endowment.
No-load policy is sold without agents, so there is no commission. You accumulate cash value the first year, as opposed to whole life policies where the agent receives your first year's entire cash buildup as his commission. As a rule, no load policies are twenty percent cheaper that cash value policies.
Joint life insurance is either a term or permanent policy insuring two or more lives with the proceeds payable on the first death or second death.
With this type two or more people are covered under the same policy. The cash is given when the first person dies. Single survivorship policies are more expensive than a single term policy but about one-third of the cost of covering two people under two separate policies.
This policy involves only one premium which is to be paid at the time the policy is issued.
It is term insurance covering a group of people, usually employees of a company or members of a union or association.
These policies are designed to address needs of an aging population.
This type of insurance is intended specifically to cover funeral expenses when the insured person dies. Related Articles |
Types of Life Insurance
|
|