Many people opt for term life insurance rather than whole life, or permanent, insurance for many different reasons. Term life insurance is also commonly referred to as term assurance, and is the original form of life insurance developed. Term life insurance actually builds no cash value over time, so it is not considered to be a relevant investment for retirement purposes or financial planning. Term life insurance actually provides coverage for a limited amount of time, which is the relevant term.
Once the term life insurance period has ended, you will be able to choose between dropping the policy or to continue paying annually, usually at an increased premium, to continue the coverage. Most term life insurance policies cover a period of ten, fifteen, twenty, and twenty-five years, although custom policies can be written for individuals, based on need. If the policyholder should die within the covered term, the death benefit will be paid to the beneficiary named on the policy, usually a spouse or child.
Term life insurance is the most affordable way to purchase and maintain a substantial death benefit in which you pay for coverage on a per premium basis. This type of insurance works much like every other type of insurance coverage in that you pay monthly (or quarterly) premiums in exchange for coverage contained within the policy. As long as the premium payments are kept up to date and the term has not expired, claims filed will be satisfied. Furthermore, it is important to know that you should not expect premium returns if you never file a claim. Term life insurance is purely risk protection for you and your loved ones.
Because term life insurance provides death protection for a predetermined period of time, also known as the term, it may very well be the simplest form of life insurance known. Term life insurance is ideal for the family living on a budget that needs temporary life insurance protection. This type of insurance can be purchased in large amounts (for long periods of time) at very low premiums, which most people can afford. This flexibility and affordability is ideal for a family who needs just a little extra coverage as they raise their young children, or in case they need to pay off loans in the case of one partner’s death.
As term life insurance is not meant to be permanent life insurance, in most cases it can only be renewed up until you reach the age of 85 or 95, depending on your state. Aside from that, however, it may be the perfect solution if you do not have any other form of life insurance but do have a spouse or family to worry about, should you pass away.
In many cases, just with almost any other insurance plan, you will need to undergo a basic physical exam in order to qualify for the term life insurance policy. Usually, this is conducted by a nurse employed by the insurance company and is done to make sure that you are insurable. However, the medical exam is not mandated by all companies, as some will accept new policyholders without any type of medical screening other than a simple questionnaire.
Sunday, January 18, 2009
LIfe Insurance : The Benefits of Whole Life Insurance for the Younger Set
There are many misconceptions about the various types of life insurance that exist. The complex language that is often used in describing life insurance has a lot to do with the confusion that many people have about life insurance.
Take whole life insurance for example. Many younger people don’t realize how beneficial whole life insurance can be to them simply because of their age. Many of them are equally unaware of the other benefits of whole life insurance.
How can you benefit from buying whole life insurance at a younger age? First you need to know that “whole life” means that the coverage provided by your plan continues even as you reach retirement age and beyond, as long as you always pay your plan premiums on time. But because you are younger, the costs of your life insurance will be stretched out over more years, reducing the annual costs of your premiums. Your whole life insurance accrues interest yearly, adding to its value. It is easy to surmise then that having the added years of youth on your side-will permit the value of your insurance policy to grow more than it would if you bought it at age 60 or later.
Hopefully because you are younger you are still relatively healthy and won’t have to worry about possible health problems for many years yet. You may be aware of potential health risks you may face as you get older because of a family history with certain diseases and health issues. But it is impossible to predict exactly what our health will be like 10, 15, or 20 years on down the road from now. What you don’t want is to find yourself older, less-insurable, and faced with paying for medical expenses with your retirement nest egg.
Whole life insurance protects you from the expenses of unforeseen future health problems that could otherwise consume your retirement money at a time when you should be free to enjoy the fruits of your many years of labor. Whole life insurance also has the protection of a guaranteed benefit to be paid upon your death. When we are young, we often don’t like to think about our own mortality. But none of us knows for sure how long we will be on this earth. Being financially prepared for when our time here comes to an end: liberates us to freely enjoy life ahead, without the worries about rising funeral and burial costs, and our desires to leave behind a financial gift for our loved ones. .
You may have been led to believe that because whole life insurance offers comprehensive coverage and lifetime benefits, that it isn’t an affordable option for the younger set, and especially for those raising families. This is not true however. With our present economy as it is, many people are struggling just to stay afloat. So you may be asking yourself if it makes any sense to go the expense of buying whole life insurance during these tough economic times. This is a valid concern. But consider the greater financial hardships your family could be faced with if something were to happen to you. How would they be taken care of in your absence? Protect them and give yourself the reassurance of that protection for your loved ones with whole life insurance.
Take whole life insurance for example. Many younger people don’t realize how beneficial whole life insurance can be to them simply because of their age. Many of them are equally unaware of the other benefits of whole life insurance.
How can you benefit from buying whole life insurance at a younger age? First you need to know that “whole life” means that the coverage provided by your plan continues even as you reach retirement age and beyond, as long as you always pay your plan premiums on time. But because you are younger, the costs of your life insurance will be stretched out over more years, reducing the annual costs of your premiums. Your whole life insurance accrues interest yearly, adding to its value. It is easy to surmise then that having the added years of youth on your side-will permit the value of your insurance policy to grow more than it would if you bought it at age 60 or later.
Hopefully because you are younger you are still relatively healthy and won’t have to worry about possible health problems for many years yet. You may be aware of potential health risks you may face as you get older because of a family history with certain diseases and health issues. But it is impossible to predict exactly what our health will be like 10, 15, or 20 years on down the road from now. What you don’t want is to find yourself older, less-insurable, and faced with paying for medical expenses with your retirement nest egg.
Whole life insurance protects you from the expenses of unforeseen future health problems that could otherwise consume your retirement money at a time when you should be free to enjoy the fruits of your many years of labor. Whole life insurance also has the protection of a guaranteed benefit to be paid upon your death. When we are young, we often don’t like to think about our own mortality. But none of us knows for sure how long we will be on this earth. Being financially prepared for when our time here comes to an end: liberates us to freely enjoy life ahead, without the worries about rising funeral and burial costs, and our desires to leave behind a financial gift for our loved ones. .
You may have been led to believe that because whole life insurance offers comprehensive coverage and lifetime benefits, that it isn’t an affordable option for the younger set, and especially for those raising families. This is not true however. With our present economy as it is, many people are struggling just to stay afloat. So you may be asking yourself if it makes any sense to go the expense of buying whole life insurance during these tough economic times. This is a valid concern. But consider the greater financial hardships your family could be faced with if something were to happen to you. How would they be taken care of in your absence? Protect them and give yourself the reassurance of that protection for your loved ones with whole life insurance.
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