Life Insurance – Do You Need It
When researching any type of insurance on one’s life, one needs to know there are a few kinds to look at and pick from. These are the basics to know about before making a decision on a life insurance policy.
The first, and most common, is term life insurance. The name was derived from the fact that the policy and your coverage are good for a special term, which is the length of the policy. The terms run between ten and 30 years and usually are chosen in five year increments.
One drawback with term insurance is that you need to actually die during the term of the policy in order to have your survivors benefit. One reason term insurance is so much cheaper is that the insurance company is actually betting on whether you are indeed going to die.
One type of life insurance is called “term”. It simply means that if you have a term policy your survivors will be paid only if you die during the term of the contract or policy. A policy usually runs for anywhere from 5 to 40 years with five year increments in between. The healthier you are, the lower your premiums. Term is the cheapest kind of life insurance.
Cash value insurance is another option. Also referred to as whole or universal life, this type of insurance is much more expensive for even less coverage. Unlike term, a policy will cove you you for your whole life, but of course you are paying premiums for your whole life as well.
Whole life also has a savings portion of the policy. The company usually guarantees you a return on your investment, but the company actually keeps most of it; you really only see about 3-4%. Read the first few pages of your policy, that is where it discusses your investment return.
Also when you are reading the fine print, you should look for the section that talks about exactly what funds will be paid out upon your death. Your family doesn’t get the cash value and the death benefit! They get the death benefit – the face value of the policy. The company keeps your cash value.
When you are reading the policy, you should look for where it explains just what will be paid out at your your death. It’s also important to know that no policy pays for itself after so many years. What happens is that at some point the company just starts taking money out of your cash value. Agents like their customers to think that after about 19 years no more premiums need to be paid. Premiums are due, but they are taken out of your cash value portion, reducing it significantly. If you ever need a loan, you might not have enough left.
When your trying to get Life Insurance quotes picking the best place first can seem daunting. But to get the best costs on Life Insurance, you need to look around and compare. Head online to get the best costs today!
