Types of Life Insurance
There are many types of life insurance available on the market today, and choosing among them can be difficult. With that in mind, one should seek the life insurance product that best fits one's situation and needs.
General Information on Term Life Insurance:
Term life insurance is one of the most widely available and useful life insurance products on the market today. In general, the term life product is more affordable than whole life or universal life products, which allows one to obtain a larger face amount or death benefit for a lower amount of premium. Rates for term life insurance are driven by a number of factors, primarily the age of the insured, the face amount of the policy and the rating tier of the policy. Most companies have a rating tier system by which they rate their life insurance applicants. Younger applicants who are healthy and who are willing to have a paramedical screening in which their blood pressure, pulse, etc. are verified by a health professional, will get preferred rates which are lower than the standard rates.
Types and Uses of Term Life Insurance
A very common type and use for term life insurance is a mortgage protection policy. The basic logic behind the mortgage protection policy is to obtain a term life policy that matches the amount of one's mortgage to pay it off in the event of one's death. For example, if one has a two hundred thousand dollar mortgage on a thirty year term, then one would get a corresponding thirty year term life policy with a two hundred thousand dollar face amount. Traditionally, the popular type of term life for mortgage protection has been decreasing term. Decreasing term life policies have a decreasing face amount that falls as one's mortgage balance falls over time. However, this product has fallen out of favor due to the fact that statistically, people do not stay in one house for 30 years and that the premium stays the same, while the benefit or face amount decreases. Many insurance professionals now recommend a regular level benefit, level term life policy for mortgage protection purposes that will be useful at any time in the policy period.
Term Life Insurance: Summary
Younger applicants will always get better rates than older applicants and those with medical conditions regardless of the insurance company. Some medical conditions such as forms of diabetes will prevent an applicant from obtaining a standard term life insurance policy.
General Information on Term Life Insurance:
Term life insurance is one of the most widely available and useful life insurance products on the market today. In general, the term life product is more affordable than whole life or universal life products, which allows one to obtain a larger face amount or death benefit for a lower amount of premium. Rates for term life insurance are driven by a number of factors, primarily the age of the insured, the face amount of the policy and the rating tier of the policy. Most companies have a rating tier system by which they rate their life insurance applicants. Younger applicants who are healthy and who are willing to have a paramedical screening in which their blood pressure, pulse, etc. are verified by a health professional, will get preferred rates which are lower than the standard rates.
Types and Uses of Term Life Insurance
A very common type and use for term life insurance is a mortgage protection policy. The basic logic behind the mortgage protection policy is to obtain a term life policy that matches the amount of one's mortgage to pay it off in the event of one's death. For example, if one has a two hundred thousand dollar mortgage on a thirty year term, then one would get a corresponding thirty year term life policy with a two hundred thousand dollar face amount. Traditionally, the popular type of term life for mortgage protection has been decreasing term. Decreasing term life policies have a decreasing face amount that falls as one's mortgage balance falls over time. However, this product has fallen out of favor due to the fact that statistically, people do not stay in one house for 30 years and that the premium stays the same, while the benefit or face amount decreases. Many insurance professionals now recommend a regular level benefit, level term life policy for mortgage protection purposes that will be useful at any time in the policy period.
Term Life Insurance: Summary
Younger applicants will always get better rates than older applicants and those with medical conditions regardless of the insurance company. Some medical conditions such as forms of diabetes will prevent an applicant from obtaining a standard term life insurance policy.
posted by Ivon T. Hughes at 3:03 PM
0 Comments:
Post a Comment
<< Home