Life Insurance Policies: Types Of Life Insurance

Editor — Mon, 30 Nov 2009 04:11:05 +0000

A lot of individuals have considered getting life insurance policies. However, what has always confused individuals is the types of life insurance they should get. We have briefly outlined the types of life insurance policies available on the market. Below listed are some of the more common insurance policies.

Types of Life Insurance Policies To Choose From

Term Life: This type of life insurance policy usually ranges from about 1 to 30 years. If during the term of the life insurance policy you, the policyholder should die, the beneficiaries nominated by the policyholder get the entire amount of the policy. If however the policyholder should live beyond the term of the insurance policy, the beneficiaries do not get anything. With these types of life insurance policies you so have the option of renewing the term of your life insurance policy but it is usually at a higher rate.
Whole Life: This type of life insurance policy is unlike a term life policy. Under this policy you are covered for the entirety of your life. In addition to this what you might also be interested in knowing is that the premiums on the policy, is a bit more that than the actual premiums required to cover the policy. The extra amount goes towards a cash holding account, the amount of which you can decide on how to invest. Usually these accounts out grow their limits owing to the dividends being received by the investments made. If you live past the insurance term the amount equal to the death benefit of your policy is paid upon maturity.
Universal Life Openness: With this type of life insurance policy you do not get to choose where the cash account is invested. However this policy gives you a lot of flexibility as far as your premium payments are concerned. The policy will stipulate the maximum and minimum amounts that need to be paid, however when and how much is going to be paid is left up to the discretion of the insured. It must also be remembered that while this extremely similar to a whole life policy. The investment decision does not vest with the insured. In addition to this, should you wish to make any amendments to your insurance policy, like increasing the level of cover etc. you will be required to go through the insurance underwriting process again. This may also include an additional medical examination.
Variable Universal Life: This is a truly hybrid account. This type of life insurance combines all the benefits of a universal life and flexible account. The consumer has the option to decide where and into which investment subaccount the funds will be deposited. The customer also has the discretion of determining the amount of premiums to be paid and when they are going to be paid, as long as they remain within the guidelines of the policy. In addition to this consumers can also get themselves a guaranteed death benefit and also make taxable withdrawals from their cash accounts. It may of interest to know that most of these policies offer a guaranteed benefit irrespective of how your investments have performed.

These are some of the life insurance policies available on the market today. Consumers should consider their personal circumstances and needs and their risk tolerance prior to making a selection with regard to their life insurance policy or provider.

References:

Types of Life Insurance Policies – 360 Degrees of Financial Literacy

Life Insurance Policies: Things To Know About Life Insurance

Editor — Wed, 11 Nov 2009 04:15:07 +0000

Everyone knows about it and everyone knows it’s benefits but what most consumers do not know are the simple facts about their life insurance policies and how with the power of knowledge they can save themselves not only a lot of money but also heartache should the need to make a claim ever arise. Here are some things to know about life insurance policies.

Life Insurance Policy Information

Evaluate Your Options: In a complex business environment such as we have today, the age-old principle of “one size fits all” is long gone. Make sure that you look around and consider a few insurers before settling on one provider for your life insurance policy. This will allow to you find the insurer best suited to your needs. In addition you will also be able to make sure that no one provider is over-charging you.
Level Of Cover: When reviewing life insurance policies, often people make the mistake of under insuring just to save on the level of premium they have to pay. By doing this you put your loved ones in a whole lot of strife. In the event of an untimely death of a contributing family member the funds from the insurance pay-out are some times insufficient to pay the existing liabilities. The best way to calculate your required level of life insurance cover is to take your existing liabilities on a monthly basis and calculate them by the number of months of life expectancy you feel you may have. For instance if you feel that your monthly liabilities are $1,000 per month, and you feel that you are going to live for another 30 years, multiple $1,000 by 360 months (12 months X 30 years), and the resultant figure is $360,000 worth of life insurance cover required.
Rates And Health Go Hand In Hand: This basically means that the healthier you are the better the life insurance rates you will get. The simple reason for this is that your health determines how much of a risk you are to the insurance company. The healthier a person the lesser the risk of a claim due to a premature death etc. Hence it is important that you do not have ay major health issues when applying for comprehensive life insurance.
Do Not Delay Buying Life Insurance: A lot of clients wait till their twilight years prior to considering getting life insurance. In a lot of cases if you wait too long to get a life insurance policy, your application is either rejected owing to factors like age and ailment or your premiums are through the roof. It is always advisable to get life insurance policies early as not only are you healthier, but you are also a lesser liability from the insurance company’s point of view.
Review Your Cover: One common mistake people make is that they do not review their life insurance cover and often make the mistake of keeping whatever cover they had started out with. This could be an issue in the future. If your liabilities have increased or beneficiaries of your policy have changed, these factors may need to be taken in to consideration, when increasing your level of cover or modifying your existing cover.

These are certain facts about life insurance policies that consumers should keep in mind when considering their life insurance options. It must be remembered that life insurance is one of the most important insurance policies that a individual can take out. Hence it is important that you consider all your options prior to settling.

References:

Top 10 Things to Know About Life Insurance – Insurance.com
Ten things you should know about life insurance – Yahoo Finance

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Life Insurance Policies: Types Of Life Insurance

Types of Life Insurance Policies To Choose From

Life Insurance Policies: Things To Know About Life Insurance

Life Insurance Policy Information