If you have not yet taken out a life insurance plan, or are thinking of modifying or changing a current plan you have in place, it is best to research the options available to you so you can find a policy that best suits your individual needs and situation.
The two main types of life insurance are whole life insurance (which also is referred to as permanent insurance) and term life insurance.
There are many other types of policies that stem from these two main types.
Once you have figured out whether a term policy or a whole policy is best for you, the process of taking out a life insurance plan is simplified.
A November 30, 2006 article posted on Insurancefinder.com, “About life insurance,” discusses the basics behind taking out a life insurance policy as well as the benefits of both whole and term policies.
Let’s first start out with the basics:
“Life insurance is insurance that will protect your family and/or specified dependents in the event of the policy holder’s death. In general, it is an essential component in planning for the future.”
Contrary to popular belief, everyone should take out a life insurance plan. It is especially important if you have children or other dependents that rely on your income.
“A good life insurance policy would handle the financial responsibilities you left behind so family members wouldn't be burdened. Unlike the funds from an estate, the benefits from a life insurance policy will shoot straight to the beneficiaries, without any roadblocks.”
Now, let’s look at the two main types of insurance available; term and whole life. Some people may say that one type is better than the other, but it really just depends on your specific situation, and the things you want in a policy.
“Remember, the decision to buy a permanent or a term life insurance policy will depend on your situation, your age, your financial well-being, and other factors.”
Term life insurance protects the insured person for a specific amount of time such as 10 or 20 years. Here are some things that make term insurance attractive to some buyers:
“It's straightforward. If you die during the term of your policy your beneficiaries get paid -that's all there is to it. It's inexpensive. You aren't paying anything extra to fund a savings account or cover investment fees. And because the market is so competitive for term insurance, companies have a huge incentive to keep prices low.”
Whole life insurance protects the insured for the duration of their lifetime. One of the biggest benefits of some whole life insurance plans is the cash value option that lets you take money out of your policy for any unexpected expenses that may crop up, or even for investment opportunities. The options are endless.
“Flexibility. A permanent plan can give you access to some or all of the premiums that you have been paying for in a way favorable to your taxes. It's with you until you die. This type of policy coverage is guaranteed for your life with no out of the blue payment increases.”
Contact an LEI life agent today to discuss the various life insurance options that are available for you and your loved ones.
|
