By: Emily Ferreira, Managing EditorMany people are concerned about how their families would survive financially if they were to suddenly pass away. This worry leads them to take steps to ensure their loved ones will be provided for after their death. These steps may include having adequate savings, owning stocks and mutual funds or having a good life insurance policy.
Life Insurance
In the event that something unfortunate happens “before your time,” life insurance can provide your family with the financial resources to help them adequately recover. Even if you live to a healthy old age, leaving funds behind for loved ones can lessen the strain of final expenses.
Life insurance is generally sold as either term life insurance or whole life insurance. The amount of coverage and the type of policy desired is generally based on certain factors that influence your life. Things such as age and general health will dictate how much is to be paid for a life insurance policy.
Generally, when one considers purchasing any kind of insurance, their first action should be to do some research on the kind of policy they want. Usually this is done on one of the countless online insurance company websites or by speaking to an insurance agent. If you are reading this you are probably still in the research phase.
After you have a basic idea of what you want, a sales representative can offer insurance quotes. If you would prefer to get this information while on the Internet, you could even visit any life insurance website and request an online life insurance quote. It is generally a good idea to get several rate quotes to compare prices and find the best deal.
Before your life insurance policy goes into effect, most insurance companies require a physical to ensure that you provided them with accurate health information. Once this stage is finished, you will be the proud owner of a life insurance policy.
Term Life Insurance
While rates are based on age and health, policy type will normally be determined by personal preferences and lifestyle. Term life insurance is a temporary option that provides younger adults with basic protection, while allowing them the flexibility of choosing a more appropriate policy as their lives develop and change.
Term policies are generally available in five-year increments or until an agreed upon age.
These temporary policies are usually sold with the understanding that clients have the option of upgrading their policy to a permanent, whole life insurance policy later. This helps to ensure insurability as they age.
For people who have been diagnosed with a chronic or even terminal illness, finding a life insurance policy may be impossible. However, someone who already has a term life insurance policy in place and is diagnosed with one of these unfortunate conditions can upgrade their policy to whole life, as long as they do so before their term life policy expires.
Because of this benefit, it is easy to think of term life insurance as “insurability insurance”. It allows the comfort of knowing no matter what happens, you will always have the insurance options available needed to take care of your family.
Whole Life Insurance
Whole life insurance is the kind of policy most often purchased by life insurance consumers. These policies are permanent and cannot be canceled unless you fail to pay premiums.
Many choose to purchase life insurance policies at a young age because this protects from paying the higher rates charged to those who are advanced in years. The younger a person is when they purchase their policy, the less their monthly premiums will be. Whole life insurance rates are determined at the time you purchase a policy and remain stable for the duration of the policy.
In addition to the basic coverage that life insurance provides, whole life policies also offer owners investment opportunities. These investment plans are aimed at providing policyholders with sound retirement plans.
Many life insurance policies are structured around stocks and bonds. As these mature, the policyholder begins to receive annual dividends. These dividends can be reinvested in mutual funds, which can then be retrieved when the insured reaches retirement age.
In Conclusion
Many people want to be able to provide for loved ones after they are gone. Whether it is a working, single mom trying to ensure her children’s futures or an elderly gentleman wanting to make sure his burial does not burden anyone, the desire to look after the next generation is strong in all of us. Life insurance is set up for just this purpose.
