What You Should Know About Permanent Life Insurance

Life insurance is basically a contract between an insurer contract and an individual insurance policyholder, where upon the insured individual’s death, the insurer promises to compensate a designated beneficiary an amount of money in return for a monthly or annual fee paid by the policyholder. The benefit of a life insurance policy is that it helps provide funds for dependants or beneficiaries upon the policyholder’s demise. Therefore, life insurance has been around for many years and is a highly regulated insurance product. Life insurance is often underwritten by a group or association policies, depending on the business or group policyholder.

There are two basic types of life insurance, namely; term and whole life insurance. Term insurance is payable only for a fixed period such as a term of five years up to a maximum of fifty years. Whole life insurance, however, is completely different in the sense that it does not have a fixed term. It is generally payable to the surviving beneficiary upon death or a specified amount, either a set amount or the actual cash value of the policy. For both term and whole life insurance there are certain factors which affect premiums and their prices vary with the age of the individuals, health history, gender, family history, occupation, and criminal record.

As you may now know, your health plays a huge role in determining how much coverage you will need. You can choose to have as much coverage as you want but your premiums will be more expensive because you are considered a higher risk. When applying for life insurance coverage amounts you should provide details about your current physical condition. The doctor may advise you on how much coverage you need based on your current health conditions. If you are medically fit, then you may feel that you do not require too much coverage.

After getting a quote from the life insurance company, you should contact your relatives or friends to find out how much they would be able to afford to cover you. You should also consider the number of years you intend to work for the insurer and your retirement age. If you have a spouse or children who are still at school or college, they may contribute towards the cost of your policy. In case of accidental deaths, the beneficiary should be someone who is very close to you like a sibling or a parent. If you have a mortgage or rent, the beneficiary should be someone who can take care of your other assets.

You should decide whether you want to choose a term life insurance or permanent life insurance and then start looking around for the best deal. A term policy gives you more protection for your money, whereas permanent life insurance provides more income for the beneficiaries. Whole life insurance provides an investment option for those who are young at heart and intend to stay working until they die. However, there are many factors which influence the rates like the health status of the applicants, their professions, age and whether they smoke or not.

There are many options available for choosing the type of life insurance cover. There are basically three types of life insurance policies which include whole life insurance, variable universal life insurance and term universal life insurance. For getting the right kind of plan you should go through the different options thoroughly to find the best option for your circumstances. It is better to buy a policy for all the beneficiaries at one go so that the burden of paying the funeral expenses and the probate fees is shifted to them. In such a scenario, if any one of your beneficiaries dies, the death benefits will be paid directly to the benefactor. Thus, whole life insurance, variable universal life insurance and term universal life insurance are the types of plans that are most suitable.

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