Whole Life Insurance Comparisons - Doing It Right
a fact of life, all of them have to move forward. They have to lead their life and to lead the life; they will need a big amount of money. So,
the question that arises in their mind is from where to get this big amount of money? The relatives come to visit them and show their
sympathy. They provide the emotional support but none of them provides the financial support. The family members need the financial support as
they have to lead their life. They have to pay the lifes expenses such as the mortgages, the house rent, the food bills, the electricity bills
or the children education fee. It is the life insurance comparison only that can help you in the monetary terms. Hence, life insurance is very
fruitful one.
In order to answer the question, "What is life insurance?" you'll first want to learn as much as you can about the various types available. At
its core, a life policy is a contract between you and the insurance company to pay a benefit to the person you name as your beneficiary in the
event of your passing. But there are many types of life coverage, and choosing the right one will take a bit of study and the guidance of a
qualified professional. Comparing the similarities and differences of the different policy types and consulting with a broker will help arm
you for the crucial decision of which type of policy to get.
Life insurance is a necessity even if you have, so far, neglected to invest in it. In fact, the average person waits for some life changing
milestone before looking into it. Getting married, having a child, or even witnessing the death of a loved one are all events that typically
inspire someone to purchase a life policy for themselves. Unfortunately, the different aspects of insurance are not commonly taught in school
or found in a book. That means when the time comes to purchase life insurance, people may be confused about their options. This is
understandable.
Let's clear up some of the uncertainty about life insurance by taking a look at the different types available. This will provide you with the
basic understanding about the different life policies, helping you to make the choice about which one is right for you.
Term Life: A term life insurance policy is the type of insurance that is closest to car insurance. It has no value unless you use it, just
since your car insurance has no value unless you have an accident. The policy does not accumulate cash value. Term is generally considered
"pure" insurance, where the premium buys protection in the event of death, and nothing else.
Whole Life: In most cases, whole life insurance provides lifetime death benefit coverage for a level premium. Premiums are a bit higher than
term insurance when the policyholder is younger. But when you consider that term insurance premiums rise with age, the cumulative value of all
premiums paid across a life time are pretty much equal between whole life and term life. Part of the whole life insurance contract states that
the policyholder is entitled to a cash value reserve, and it's guaranteed by the company.
Universal Life: Universal life insurance combines permanent insurance coverage with flexibility in your premium payment. A universal life
insurance policy includes a cash value, so that means it also offers the potential for greater growth of cash values. The premiums you pay
into the policy combined with the interest accrued increase the cash value, however the cost of insurance reduces your cash value. The
surrender value of the policy is the amount payable to the policy owner after applicable surrender charges, if any.
Limited-pay: Another type of coverage is Limited-pay life insurance. With this plan, all the premiums are paid over a specified period. After
that, no additional premiums are due in order to keep the policy in force. Common limited pay periods include 10-year, 20-year, and are paid
out at the age of 65.
Accidental Death: This is a limited life insurance policy designed to cover the insured should they pass away due to an accident. Accidents
include a wide range of injuries and incidents, but the policy does not typically cover deaths resulting from health problems or suicide.
Accidental death policies very rarely pay a benefit. This is because the cause of death often is not covered by the policy, or the coverage is
not maintained after the accident until death occurs. If you have this type of policy, it's a good idea to be very clear about what it covers
and what it excludes.
Endowments and annuities are a little more complex types of insurance that can offer investment and tax shelter features. You may want to
discuss their benefits and complexities with your agent or broker.