Life Insurance: What You Need to Know

Life insurance is something every person should have. After all, no one really knows when they will leave the earth and it’s important that loved ones are well taken care of in the event that this happens. However, it is important to note that there are different types of life insurance currently offered by providers. Hence, prospective policyholders would need to shop around and understand all the basic terms before signing up with any company. That being said, following are some of the things every person has to know before opting for life insurance.

What Type?

There are several types currently available right now: term life, whole life, cash value life and universal life.

Term life usually consists of a finite set of years chosen by the policyholder. Should he or she die within this specific time span, then only then could the family receive payment from the insurance company. This is usually offered for 5, 10 or 15 years and may even be renewed or continued if the specific amount lapses. Some policies allow for conversion to other life plan types should the policyholder choose to do so.

Next up is the Whole Life policy which covers the whole life of an individual. The payment for this type of insurance is slightly higher than the Term Insurance as it would be covering the rest of a person’s existence. Payment would also be done as long as a person is alive and the premium for month stays the same throughout. There are actually two parts for the whole life insurance . The first is the actual coverage of the policy while the other acts as a investment which earns interest over the years.

Cash Value Life is the most flexible of all insurance types. Basically, it also offers protection for policy-holders covering their entire lifetime. Unlike the whole life policy though, some premiums are subject to changes depending on different factors. Hence, the type of benefit this insurance affords also varies. That being said, few people tend to choose this insurance type especially since the economy seems to be working against it.

Universal Life

This is much like Whole Life plan in the sense that there are two distinct accounts – the actual policy and the investment. The only difference is that the rate of growth varies which means that policyholders have a better chance of getting more than they originally paid for. What’s great about this one is that there is a minimum payable amount for the insurance. This means that even if the company has financial problems, they are bound to provide the minimum amount stated. However, should the company experience excellent growth in investments, the policyholder would also experience a rise in their benefits.

Life insurance Requirements

Individuals applying for life insurance usually have to go through a series of physical examinations. This would let the company know how much risk they are taking in insuring this person before providing them with a quote. Other considerations would also include the person’s lifestyle, the health history of their family and sometimes their credit score.

Finding Cheap Life insurance

Ideally, individuals who want to find inexpensive life insurance should take a good look around. Ask for quotes from different companies online to get the best deal possible. If one is affiliated with other insurance companies, it might be a good idea to apply with them especially if they are offering bundle discounts. Other unlikely ways of lowering one’s insurance rates is living a healthier lifestyle like quitting smoking or holding off on alcohol consumption.

When it comes to life insurance, every person must realize that the requirements and regulations of companies vary. Hence, make sure to question them individually about what they can and cannot provide.

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