- Written by
Harold
- Posted May 31, 2010 at 3:00 pm
One of the things I hear often is that Life Insurance is too confusing. Many consumers are confused by the types of policies and which might be best for their needs. Let’s look at the four basic types of life insurance policies with a short definition and recommendation for each:
1. Term Life Insurance–least expensive. Great for a young person or couple just starting out. You can provide more protection for things such as the mortgage , college funding, and life expenses for the growing family. You buy this product for a “term” or period of time such as 10, 20, or 30 years. After the term expires, you may or may not be able to renew depending on factors such as your health and policies provisions. Also, you will pay a higher premium after the initial policy so we recommend that you look at a longer term–such as 30 years.
2. Whole Life Insurance–the Granddaddy of life policies. This is a traditional policy with built in features that provides for cash value and dividends. More expensive in the beginning, but has the cash accumulation feature which can be used to pay the premium in later years, to purchase more insurance, or to take as a loan for other reasons. It is also known as permanent insurance as the policy is usually issued to age 100 or beyond.
3. Universal Life Insurance–a flexible life insurance policy. You may raise or lower your death benefit and premiums. The policy has a cash accumulation feature that can be used the same as in Whole Life. However, because of this feature the policy does have a higher premium requirement. There are also fees associated with this policy that should be reviewed carefully with your agent.
4. Variable Life Insurance–life insurance and investment account. With this policy, you have both and you invest the cash value of the policy in funds offered by the Insurance Company. This type of policy requires that the agent be licensed in both insurance and investment products. Variables such as rate of return, market conditions, and interest rates can affect your particular investments. An understanding of investment markets would be helpful if you are considering this type of policy.
I hope that this short introduction to Life Insurance Policies was helpful. Please contact me if I can provide more detailed information..
When it comes to showing our love, we sometimes go over the top with a crazy, silly or extravagant gesture. Other times we express our love in a quiet, tender act. But why all this talk about love on an insurance website? Is there anything “loving” about life insurance? Actually, life insurance is all about love. The main reason we buy life insurance is because we love people and want to make sure they’ll always be protected financially, even after we are gone.
