Term Life Insurance Articles
Deciding Which Type Of Life Insurance Policy To Purchase
2011-11-09
Before buying a life insurance policy, buyers need to carefully consider which type of insurance to buy. There are three major types of life insurance: term life, whole life and universal life insurance, along with dozens of insurance sub-types that offer special advantages to certain types of buyers. In order to choose an appropriate policy, it's important to understand the differences between these major types of insurance and to know where to find information about the sub-types of insurance, as policy type can make a major difference in insurance premiums and how benefits are paid out after beneficiaries make a claim.
Term life insurance is absolutely the most popular and well-known type of life insurance, as it offers a low-cost way to financially protect family members and other beneficiaries. In a term life insurance policy, beneficiaries are paid if the insured dies within a set term, usually from five to 30 years. If the insured doesn't die, coverage typically ends, although many policies offer buyers a chance to renew with higher premiums. Universal life and whole life insurance are very different products, as they provide an aspect of investment for buyers. Premiums paid into universal and whole life insurance policies are eventually returned to the policy holder with a small amount of interest. However, these are much more expensive than term life insurance and can be less flexible.
There are also dozens of sub-types of life insurance that offer different benefits to specific types of coverage. For example, buyers might decide to protect mortgages with special term life insurance policies that have decreasing benefits. There are also convertible term life insurance policies, which can be changed into whole life policies after a certain point. The best way to find out about different sub-types of life insurance is to discuss options with an insurance agent, although life insurance websites can also be an excellent source for learning the key differences and advantages of various types of insurance. Reading through a few life insurance quotes can also be very helpful.
Unfortunately, there's no tried-and-true rule to use when selecting a type of life insurance policy. Buyers should consider all of their investments and discuss the matter with a financial planner to set up a long-term plan that provides financial protection while building investments, either through a universal life insurance policy or through other investments like a 401k or money market account that is protected by term life insurance policies. However, independently researching life insurance options can still be enormously beneficial for buyers. Understanding the differences between insurance products can make it much easier to choose an appropriate plan and can drastically cut down on life insurance costs.
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Before buying a life insurance policy, buyers need to carefully consider which type of insurance to buy. There are three major types of life insurance: term life, whole life and universal life insurance, along with dozens of insurance sub-types that offer special advantages to certain types of buyers. In order to choose an appropriate policy, it's important to understand the differences between these major types of insurance and to know where to find information about the sub-types of insurance, as policy type can make a major difference in insurance premiums and how benefits are paid out after beneficiaries make a claim.
Term life insurance is absolutely the most popular and well-known type of life insurance, as it offers a low-cost way to financially protect family members and other beneficiaries. In a term life insurance policy, beneficiaries are paid if the insured dies within a set term, usually from five to 30 years. If the insured doesn't die, coverage typically ends, although many policies offer buyers a chance to renew with higher premiums. Universal life and whole life insurance are very different products, as they provide an aspect of investment for buyers. Premiums paid into universal and whole life insurance policies are eventually returned to the policy holder with a small amount of interest. However, these are much more expensive than term life insurance and can be less flexible.
There are also dozens of sub-types of life insurance that offer different benefits to specific types of coverage. For example, buyers might decide to protect mortgages with special term life insurance policies that have decreasing benefits. There are also convertible term life insurance policies, which can be changed into whole life policies after a certain point. The best way to find out about different sub-types of life insurance is to discuss options with an insurance agent, although life insurance websites can also be an excellent source for learning the key differences and advantages of various types of insurance. Reading through a few life insurance quotes can also be very helpful.
Unfortunately, there's no tried-and-true rule to use when selecting a type of life insurance policy. Buyers should consider all of their investments and discuss the matter with a financial planner to set up a long-term plan that provides financial protection while building investments, either through a universal life insurance policy or through other investments like a 401k or money market account that is protected by term life insurance policies. However, independently researching life insurance options can still be enormously beneficial for buyers. Understanding the differences between insurance products can make it much easier to choose an appropriate plan and can drastically cut down on life insurance costs.
