Most commonly life insurance is purchased because an individual wants protection against dying and leaving their family with financial burdens. There are other reasons people buy life insurance policies such as using it pay estate taxes. There are some business relationships that will require life insurance.
When you are in the market for a life insurance policy be sure you know what you need. Don’t waste your time with anyone who is trying to sell you life insurance like it is an investment. Your life insurance policy is being purchased for the protection it will offer you and your family.
Insurance professionals agree that term insurance is the best life insurance offered to consumers. Term insurance differs from whole life insurance because you don’t build up any cash value over the life of the term.
With term insurance you pay every year for the cost of your insurance. These costs will usually increase every year as your chances of staying alive the next year get smaller. Term policies are generally renewable on a yearly basis. There are some companies that have level premiums or a decreasing death payout for a stated period of 1, 5, or 10 years, or a specified age.
Whole life insurance is commonly purchased with a level premium. The beginning years of this type of policy will have a higher annual premium than a similar term insurance. This is because whole life insurance premiums are level and may end up paying less than a term policy.
The upside is that whole life insurance policies build up cash value that allows the policy holder to withdraw or even borrow against. With a whole life term policy you can pay for a specified number of years on what is called a limited payment basis. You can also opt to pay a single lump sum premium.
You are able to check the financial stability of a life insurance company through one of the many national rating companies. You can locate some of these online or at your local library.
The world of life insurance policies is a competitive market which provides consumers with lower prices. Be willing to get premium quotes from several different providers in order to make sure you are getting the best possible life insurance coverage for your money.
Most of us are trying to cut our premium costs but keep the same amount of coverage. You can make this possible by going through a direct writer which is a company that operates without commissioned agents.
Remember that there are bad seeds in every industry. Don’t let some fast talking agent talk you into unnecessary benefits or to change your coverage to another policy with the promise of better benefits.
If you are confused with a policy don’t be afraid to ask questions. There are plenty of reputable life insurance companies that are more than happy to explain all the details of the coverage they are offering. If you are talking with an agent that is finding it difficult to explain the policy terms then you should look somewhere else. If they are already having trouble that isn’t a good sign.
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