Types of Life Insurance
There are many kinds of life insurance. I think you should know these because you might just find out that you need one of these.
Life Insurance
- Term Life
- Whole Life
- Universal Life
- Variable Life
Not only do you need to know how each one
works but you need to learn how to keep more
money when you purchase them.
Term Insurance Explained
If you choose term life insurance, you will only be covered for the term of the policy. Usually term policy comes in 10 year term or 20 year term. At the end of the term you will have the option of continuing coverage. However because you will be older you premium will increase.
Advantages of Term Insurance
1.
Premiums are usually low
Premiums are usually lowDisadvantages of Term Insurance
1.You are covered for a limited time
You are covered for a limited time2.Premium increases if you decide to continue your coverage with that insurance company
Premium increases if you decide to continue your coverage with that insurance company3.No cash value buildup
No cash value buildupWhole Life Insurance
If you choose whole life insurance, you will be covered for life, that is, if you continue to pay your premium.
Advantages of Whole Life Insurance
1.Covered for life instead for a limited time
Covered for life instead for a limited time2.Premium does not increase or decrease but rather stays the same through life
Premium does not increase or decrease but rather stays the same through life3.Some policies can be paid up after paying for a long time
Some policies can be paid up after paying for a long time4.Builds up cash value
Builds up cash value5.Can request the cash value and let the policy lapse.
Can request the cash value and let the policy lapse. Be careful about this option because you will not have life insurance coverage if you let the policy lapse) I guess this option is something to consider if you have sufficient life insurance coverage through another policy.
6.Can borrow the cash value but will have to pay it back with interest or it will be deducted from the death benefit when you die.
Can borrow the cash value but will have to pay it back with interest or it will be deducted from the death benefit when you die.Disadvantages of Whole Life Insurance:
1.Premium are usually higher than term insurance
Premium are usually higher than term insurance2. You have to pay back your own cash value with interest
Universal Life Insurance
Universal life insurance is a combination of whole life insurance and term life insurance. Like Whole life it can build up cash value. Like term life it can be purchase a limited about of time.
How to Buy Term Insurance
1) Decide on what amount of life insurance you want
2) Call several insurance agents or insurance companies
3) Ask do they offer Term Insurance
4) Ask them to explain the insurance to them
5) Ask them to give you an insurance analysis
6) Do a comparison of insurances
7) Decide on which agent or company you want to use
8) Apply for the insurance
9) Answer all questions on the insurance application truthfully
10) If approved the insurance company will send you a life insurance policy
What your policy should have on it:
- Insured Name
- Policy Effective Date
- Policy Number
- Issue Age
- Sex of Insured
- Class
- Amount of coverage
- Beneficiary
- The policy should also have a section on the following things
- Description of Benefits
- End of Term Period
- Premium Period Beginning Date and Monthly Premium
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