Types of Life Insurance Pt 6
Sorting through coverage information to decide which type of life insurance policy is best for you can be confusing. You want to find the best life insurance at the most affordable rate, but calculating the return of premium on a short versus long term insurance plan is best done with the help of a qualified agent.
The Difference Between Whole and Term Life Insurance
Whole life insurance policies, as the name implies, are purchased to cover your whole life, while Term life insurance is purchased for a specified period. Term life insurance , sometimes called death protection only life insurance, can be purchased in increments from one to 30 years, and upon death of the policy holder, pays the face value of the policy.
While term life insurance premiums are low for the stated period, the cost of renewing at the end of the term may be substantially higher. The premiums of whole life insurance, on the other hand, are the same throughout the life of the policy.
Insurance companies offer several types of whole life insurance and vary in the way they invest the premiums . Some allow you to pay above the minimum and let the policy holder choose the way it’s invested.
Determine the Amount of Whole or Term Life Insurance Benefit Needed
There are several factors to consider when trying to determine the amount of life insurance to purchase, including, but not limited to:
* Funeral expenses
* Debt pay off amount
* Amount needed for college funds
* Amount needed for survivors living expenses
* Mortgage payoff
* Value of current assets
The length of time it will take for your survivors to be self supporting must also be taken into consideration before you finalize the life insurance policy.
Convertible Term Life Insurance
If you only feel you need a large amount of insurance until your children are grown, through college, or until the mortgage is paid off, a term life policy for that amount of time may be a part of your complete financial plan.
Some term life insurance policies allow a conversion feature. Seek the advice of insurance agents to see if the possibility exists to obtain less expensive term insurance for now, and if financial or family circumstances may change in the future, change part or all to a permanent plan. Check to make sure the company allows the change with no medical exam.This also applies to term life policies.
The Difference Between Whole and Term Life Insurance
Whole life insurance policies, as the name implies, are purchased to cover your whole life, while Term life insurance is purchased for a specified period. Term life insurance , sometimes called death protection only life insurance, can be purchased in increments from one to 30 years, and upon death of the policy holder, pays the face value of the policy.
While term life insurance premiums are low for the stated period, the cost of renewing at the end of the term may be substantially higher. The premiums of whole life insurance, on the other hand, are the same throughout the life of the policy.
Insurance companies offer several types of whole life insurance and vary in the way they invest the premiums . Some allow you to pay above the minimum and let the policy holder choose the way it’s invested.
Determine the Amount of Whole or Term Life Insurance Benefit Needed
There are several factors to consider when trying to determine the amount of life insurance to purchase, including, but not limited to:
* Funeral expenses
* Debt pay off amount
* Amount needed for college funds
* Amount needed for survivors living expenses
* Mortgage payoff
* Value of current assets
The length of time it will take for your survivors to be self supporting must also be taken into consideration before you finalize the life insurance policy.
Convertible Term Life Insurance
If you only feel you need a large amount of insurance until your children are grown, through college, or until the mortgage is paid off, a term life policy for that amount of time may be a part of your complete financial plan.
Some term life insurance policies allow a conversion feature. Seek the advice of insurance agents to see if the possibility exists to obtain less expensive term insurance for now, and if financial or family circumstances may change in the future, change part or all to a permanent plan. Check to make sure the company allows the change with no medical exam.This also applies to term life policies.
posted by Ivon T. Hughes at 11:10 AM
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