People with common sense and are having a family should and must get life insurance policy. Some of them could not get life insurance though they want to get it with absolute good intentions. Either they are under insured or the insurance coverage is not enough to cover their requirements. If that individual dies early in his/her life, the family is set to go thru a horrible time thereafter. This is mainly due to the unawareness of individuals about low cost term life insurance policies. They are offered at a very low rate to consumers especially people with clean habits and a healthier lifestyle.
One should know that today we have different types of life insurance policies to meet our varied need. It is true that the most common policies are whole life policies with a saving component included in the package. However, in comparison to term life, all such policies are quite overpriced. If you want the coverage at affordable rate, you have to opt for the term life; and as I said, you have to do that while you are still young and healthy.
However, if you put whole life vs term insurance, the whole life policies, in spite of their higher rates, may come out a real winner. This is because:
• The term life policies are sold only for a stipulated period and the death benefit is paid only if the insured dies within the stipulated term while the death benefit in a whole life policy is payable whenever the death takes place provided the policy has been kept valid with regular payment of premiums..
• Moreover, the term life policies are pure life insurance policies and hence they do not offer any investment opportunity. Consequently, if the insured outlives the term, he does not get any return out of the money he had paid. A whole life policy on the other hand can be cashed out once the need for insurance is over and consequently, even if you outlive the policy, you have a tidy sum at hand.
Let us understand this and relate it to something real in life. Always remember, once you feel the need for insurance is complete, you feel you no longer need insurance and thus the validity of the term should not be an issue to you at all. If you are smart enough financially, you will know that you do not need coverage for more than 30 years. If you want it for lesser than that, you can still get in term life and the insurance rates are also altered accordingly.
When you are on the verge of getting term life insurance quotes, you will notice that they are often sold for 1/5/10/15/20/25/30 years only. You should take an informed decision on what could be right for you. The answer in determining the right coverage is simple. It’s a pure death benefit type of policy and as the purpose is to provide you income while you are still alive. Thus, one needs coverage to get income as long as the insurable interest is present for insured to take coverage for.
Identifiying pointers are the retirement age, the age of your children and your outstanding as on date and the amount of time you need to become self insured etc., When you are deciding the number of years, give a few years etc., in case you need additional time later. If you are able to reach that stage earlier, you would not worry about these additional time at that point.
Term life policies do not give any cash as return will not be an issue once you are financially stable. Thus, whole life policies do mix death benefits with cash value which will be tax deducted and invested again into the market. They are able to do it simply because they are charged at that higher rate. Also, they stay on for life. If you want to terminate the policy, there is penalty that is levied on the individual for doing so. If you decide to cash out the policy when you are alive, you will never be able to enjoy the complete benefits from it as well.
For insurance purpose, it is always better to opt for term life and invest separately for self-insurance. However, if you want that at reasonable rate, always avoid the no medical life insurance policies. Because these policies are sold without verification of your actual health condition, they are priced to cover all sorts of possibilities. However, on the pro side if you want immediate coverage or have some peculiar health or lifestyle problem, these polices may be the only option you have. Talk to your broker about it too.
Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on life insurances and instant term life insurance quotes, visit his site today.
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