Exploring Your Life Insurance Options
Term life, whole life, universal life, guaranteed issue life – it all seems so confusing. Many workers know that they need to buy life insurance, but it can be difficult to know where to start. There are so many different life insurance options out there, and finding the best coverage at the best possible price can be quite a challenge.
One of the best places to start when it comes to finding the best possible life insurance coverage is with an understanding of the different types of life insurance products on the market. Knowing the difference between term life, whole life, universal life and other types of coverage is an important first step toward getting the highest quality coverage at the best possible price.
Term Life Insurance
For many workers the best coverage is also the most basic. Those who are looking for a simple and straightforward life insurance policy may want to explore the world of term life insurance. As the name implies, term life insurance provides coverage for a specific period of time, known of course as the term. The length of the coverage will vary according to the policy, but in most cases it will range from 5 to 30 years.
If the insured is still alive at the end of the term a new policy can be written. This new policy will also be in force for a specified term at a specified premium. Many workers like the simplicity and straightforward nature of this type of policy. Unlike other more complicated life insurance policies, term life provides only a death benefit – there is no investment element involved.
Term life insurance also tends to be a great deal less expensive than comparable whole life and universal life policies. Since the coverage provides only a death benefit with no cash value, the premiums can be quite affordable, especially for young and healthy applicants.
Guaranteed Issue and No Medical Exam Life Insurance
It just stands to reason that the premiums on a life insurance policy will be influenced by a number of factors, including the health of the insured. This is certainly true in most cases, and many life insurance companies will require their applicants to submit to a medical exam. Even so, there are a number of term life policies on the market that do not require a medical exam. There are also life insurance policies that promise that all applicants will be accepted.
These life insurance policies are known as no medical exam life insurance and guaranteed issue life insurance. This type of coverage can be very attractive for many people, especially those who feel that a preexisting medical condition or health risk would cause them to be turned down. Of course these policies can have their drawbacks as well, most notably higher premiums than comparable policies that require a medical exam.
Universal Life Insurance
While term life insurance provides coverage for a set period of time, universal life insurance coverage takes a different approach. Universal life insurance provides an element of investment along with the standard death benefit, and that investment element can be quite attractive for many people.
Universal life also has several other advantages, including an adjustable benefit that is allowed to build up over time. The investment returns will vary along with the market, but this type of insurance can be quite rewarding over time.
Many insurance shoppers also like the fact that universal life insurance can provide workers with flexible premiums. This type of flexibility can keep the policy affordable and allow the coverage to change over time. Since life insurance needs change often over time the built in flexibility of a universal life policy can be quite attractive.
Whole Life Insurance
While many life insurance shoppers like the low premiums that term life insurance promises, some of those shoppers are put off by the limited term of these policies. In fact the limited nature of term life insurance can be a real disadvantage for many, and some people simply prefer to purchase coverage that will last as long as they do.
The answer for those shoppers may lie in a whole life insurance policy. As the name implies, whole life insurance is designed to cover the insured for his or her entire life. In addition to the lifetime coverage, the amount of the death benefit will remain level as well. In addition some policies provide a level premium for the life of the policy, making it an affordable way to get the needed coverage.
There are of course many different kinds of whole life insurance policy on the market, and it is important for applicants to shop around for the best coverage at the best possible price. No matter what type of coverage is ultimately chosen it is always important to shop around and compare coverage levels carefully.
The Ins and Outs of the Life Insurance Game
The world of life insurance is a highly specialized one, and it is important for life insurance applicants to educate themselves as much as possible about the ins and outs of the insurance industry. Learning as much as possible about the different types of coverage is one of the best ways to get the best possible life insurance coverage at he lowest possible price.
Comparing coverage levels and premiums is important, but it is just as important to determine how much life insurance coverage is needed. And while factors like the future cash value of the policy are important, the main purpose of life insurance coverage is to provide men and women with peace of mind and the assurance that their families will be taken care of in the event of an untimely death. It is therefore essential to choose a death benefit level that will accomplish this important goal. For some that will mean choosing a death benefit that is sufficient to pay off the mortgage on the family home. For others it will mean a lump sum sufficient to pay the family’s expenses for life. Still others will want enough coverage to pay for the college costs of their children. No matter what the needs, it is essential to understand the different types of life insurance and make a wise choice.