Compare Life Insurance
People seldom want to think about death when they look to their future, but doing so is a financial responsibility to your family. Compare life insurance policies to determine which ones will give your dependents the most benefit while still making sense for your budget. Enter your zip code in above to to compare life insurance quotes online from competing life insurance companies for free!
There are different types of life insurance, such as term life, whole life, variable life, universal life, and universal variable life. Each type of life insurance provides a different benefit and has a different cost, so your lifestyle and budget will play a factor in deciding which type of life insurance is right for you.
You can compare life insurance products and see what the benefits are of each one. Once you decide on the right kind of life insurance then you can shop around to compare rates and see which insurance company can give you the most affordable option.
Choosing a life insurance company is important, so cost cannot be the only consideration. It is a good idea to review an insurance company’s background and make sure they are a strong company with the financial backing to payout their policy holders’ benefits.
Types of Cash Value Policies
There are several types of life insurance policies that offer cash value benefits in addition to a death benefit. Whole life, variable life, universal life, and universal variable life are all types of cash value life insurance policies.
Whole life insurance is a low risk investment that provides a death benefit while accumulating cash value at the same time. This is a very simple and basic life insurance policy with a fixed premium that is guaranteed for life. The rate will never increase provided you pay your premium on time every time when it is due.
The insurance company manages your investments for the cash value portion of your policy. You have the option of receiving dividend checks or using your earnings to pay down your premiums owed. Unlike some other life insurance policies, you also have the option to withdraw funds if needed.
Variable life insurance also provides cash value in addition to a death benefit. Your premium rate is a fixed rate for the life of the policy, but the investment portion of your account delves into slightly higher risk funds so your cash value has a greater chance at growth but also stands a greater risk.
Universal life insurance is one of the more flexible insurance plans, giving you flexible premiums and flexible face values. Although this policy earns market rate interest, as the policy holder you do not have the option of splitting your investment into different money market funds.
For the person who wants complete control over the investment accounts for his life insurance policy, there is universal variable life insurance. Universal variable life insurance lets the policy holder make all of the investment choices, shifting the burden of gains and losses to the person who owns the life insurance policy.
Term Life Insurance Policies
Term life insurance is one of the simplest forms of life insurance you can buy. It does not come with any cash value options, but it provides a death benefit to the beneficiaries upon the death of the policy owner.
Since there is no cash value to a term life insurance policy, this is usually one of the least expensive policies to buy. You can select how long you want the policy in effect, such as 10 years or 30 years, so you have even greater flexibility in choosing the life insurance that is most sensible for your family’s needs.
For example, a 25-year-old male with a child may choose to buy a life insurance policy for 20 years to cover the childhood years of his dependent. The policy limit he chooses represents the amount of the death benefit. So, if he buys a million dollar policy then his beneficiaries will receive a million dollars when he dies. If he does not die during the 20 year term then there is no death benefit payout nor is there a refund in premiums.
Determining Life Insurance Benefits
No matter what type of life insurance policy you decide on, you need to determine how much coverage to buy. There are many different formulas for calculating how much money your family will need when you are gone. It is also important to decide who in the family should have life insurance.
Many people feel that children do not need life insurance unless there is an unusual exception. Those same people tend to think that life insurance for the single person without dependents is also an unnecessary expense. This is a personal choice and needs to be considered individually.
There is also much debate as to whether everyone in the household should have life insurance or just the family bread winner. However, what some people forget to consider is that financial contributions do not necessarily mean physical income.
This means that if there are two adults in a home and one works to support the family financially while the other one stays home to support the family emotionally and physically then both parties are contributing the financial well being of the family. Consider the amount of expenses that will have to be paid out if the non working family member dies. Housekeeping, laundry, meal preparation, errands, chauffeur expenses, and day care are a substantial cost of hidden value that is provided by most stay at home parents.
In order to determine how much life insurance you need, you have to analyze your household expenses. As a general rule of thumb, your family should receive a minimum death benefit that is equivalent to approximately two years of your annual income. The basis of this is that it will take approximately two years to get reorganized and create a new budget if necessary.
Compare Life Insurance Companies for Financial Strength
Once you determine how much life insurance you need and what kind of life insurance policy you want, then you have to choose a life insurance company from which to buy your policy. Since life insurance policies tend to be long term, it is important to choose a life insurance company that has proven longevity and a strong financial status.
Life insurance companies are rated on a regular basis by official institutions such as A.M. Best, Moody’s, and Standard and Poor’s. Each organization has a different rating system but they all take into consideration the company’s assets and debts. They also review the amount of premiums and claims that are taken in and paid out every year.
The internet makes insurance shopping easy, allowing you to compare rates and get information with the convenience of browsing from the privacy of your own home. You can also use the internet to research different companies and read reviews about them to see how they handle customer service or how fast they pay out claims.
It is important to find a good insurance company for your life insurance policy. When you compare life insurance policies, consider all aspects of the complete transaction. Learn about all of your life insurance options, such as term life, whole life, variable life, universal life, or universal variable life, and then consider which one is best for you. Look at the total cost, the complete benefit package, and the life insurance company itself.
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