Life Insurance – Types, Policy Coverage, Rates
Most people have at least one type of insurance. Car insurance is mandated by law, and health insurance is often acquired through employment. However, life insurance is a more serious type of coverage that needs to be made through personal choice. Anyone who is considering applying for life insurance should have at least some basic knowledge of the types of plans out there, how they work, and what kind of benefits they can expect to receive.
Why Is Life Insurance Important?
No one likes to think about their death, but the fact is, it will happen someday. Not only will your loved ones be left behind to grieve you, but they will also have funeral costs, mortgage payments, credit card bills, loans, and tuition to deal with on top of losing your income support. A best life insurance policy can make sure that the beneficiaries can not only pay the bills associated with the funeral, but make up for some of the lost income and even pay off the mortgage or college funds for the children if need be. This is why it is so important to make an informed decision when it comes to buying life insurance.
Life Insurance Basics
With all of the specialized terminology in the world of insurance, shopping for a life insurance policy can seem like learning a second language. One of the most common terms you will see is “premium”. Premiums are the monthly or yearly payments submitted to the insurer for the coverage. The “face value” of a policy is the amount of death benefits receivable, and a “cash value” is a portion of a savings policy that can be spent by the policyholder. Finally, a “beneficiary” is an individual or entity that will receive payment upon the death of the policyholder.
Term Life Insurance
One of the most common types of life insurance is term life insurance. This is the cheapest form of life insurance, and the coverage lasts for a pre-determined period of time at a set premium. Term life insurance coverage can be purchased in durations such as 5, 10, 15, 20, 25, or 30 years. Short term life insurance is available as well. This type of coverage can be beneficial to those in transitional periods between jobs, schools or other forms of insurance. Most term life insurance policies come with a renewal option if the policyholder should desire an extension. Learn more about the types of term life insurance plans available.
Earning Money Through Permanent Life Insurance
There are some types of life insurance that can actually be used as a financial investment. The most common is whole life insurance. This is a permanent type of life insurance policy that comes with a savings account. As long as the policyholder pays the premiums, the coverage will be locked in at a certain rate with the account eventually earning cash value.
Universal life insurance is similar, but is more flexible in terms of cost and earnings. Policyholders also have more options with universal, including the ability to adjust the amount of potential death benefits.
Variable Life Insurance Policies
Another type of interest-earning insurance, a variable life insurance policy offers the advantages of fixed premium costs and the ability to control the cash value. The policy’s cash value can be invested in stocks, bonds or other options. The cash value and total death benefit may fluctuate according to the choice of investment. A variable universal life insurance policy is similar, but the death benefit, or face value, is the only guaranteed financial exchange. Variable universal life insurance offers the most aggressive kind of investment coverage, and should probably only be purchased by sophisticated, qualified investors.
Life Insurance Quotes Online
With the advent of Internet shopping, the days of long phone calls and driving long distances to hire expensive insurance brokers or agents are banished. Instant online life insurance quote comparisons allow potential applicants to submit some basic information in order to find and compare multiple life insurance companies and policies, ensuring they buy from the best insurers with the most affordable rates.
By comparing free quotes online, TheLifeInsuranceQuote.com helps consumers find the best life insurance rates, quickly and easily. Enter your zip code to begin a life insurance quote now and compare different life insurance types to get an affordable policy for you and your family’s financial needs.
