Basically, all life insurance policies are either term insurance or whole life insurance, or a combination of the two. However, there are many different forms or variations of life insurance policies. With universal life insurance, you are able adjust the premium and the policy to the amount you think you need. For a person who wants to have control of the financial and investing aspect of their insurance policy, their option will be a variable life insurance policy. So, What Is A Term Life Insurance Policy? As the name suggests, a term life insurance policy provides insurance protection for a precise period of time, such as 5, 10, or 20 years. At the end of the term period, the policy expires with no accumulated cash value, and no benefits are payable. The death benefit is only paid if you die during the term period. Term insurance policy can also be defined as insurance that is actuarially designed to expire before you do. Although the premiums on term insurance are generally low, they increase substantially as your age increases. Due to this reason, a term life insurance policy is the most economical when purchased at a younger age and when the term is longer. Although the short term renewable policies would initially be less expensive, the premiums start to increase significantly after middle age. As an illustration, in an annual renewable term insurance policy with a $200,000 death benefit, the annual premiums might look something like the example below. Remember, these are just examples to show the difference of cost with age. $300 / year age 35 $900 / year age 50 $2,500 / year age 65 What Is A Whole Life Insurance Policy? Whole life insurance is the most common type of life insurance sold. A whole life insurance policy remains in force until you either die or reach age 100, as long as you pay the premium as scheduled. Whole life insurance is also known as ordinary life, or permanent insurance. The main characteristics of a whole life insurance policy are level premiums, level face amounts, guaranteed values, and a relatively high degree of safety. Whole life insurance builds a living benefit through its guaranteed cash value. This enables the policy owner to access this cash for emergencies, as a supplemental source of retirement income or for any other needs. Another important feature of whole life insurance is that it includes both insurance and a savings aspect. Whole life insurances are often used for long term financial planning. The policys other positive feature is the level premiums. So basically you always know what the cost of insurance will be, and you never need to be worried about your monthly premiums going up, thus giving you some peace of mind. The risk factor of a whole life insurance policy and company is much different than it is for something like an auto policy. When an insurance company issues an auto policy, it hopes that the policy holder will be a safe driver and will never be in an accident. On the other hand, when an insurance company issues a whole life insurance policy, it knows it will someday be called upon to pay the claim. It is now very easy and convenient to shop around and compare the many different companies and policies online. This will ensure that you get the best premium that meets your needs. It is worth it to take time to get several life insurance quotes and check to see how they are rated with the BBB. Its important to look into the financial standings of the insurance companies you are considering before you sign up for any type of life insurance policy. If you do your part of getting all the necessary information, you will easily get the best whole life insurance policy online. |
