| Purpose of Life Insurance
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| | when they sell a policy.
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| If you die, life insurance is designed to
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| | The life insurance industry is very
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| provide financially for those you have
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| | competitive with hundreds of companies
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| left behind and have listed as your
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| | offering policies. This is a benefit for
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| beneficiaries. In buying life insurance
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| | the consumer, because competition tends
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| you, the insured, enter into a legal
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| | to aid the buyer; however, this can also
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| contract with the insurance company, also
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| | be seen as a detriment because the range
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| known as the insurer. Basically, the
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| | of choices can make finding the right
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| contract states that if you make your
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| | policy from the best company daunting.
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| monthly insurance payments in a timely
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| | Your search will be easier if you
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| manner, your family or other
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| | consider four basic criteria in making
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| beneficiaries will receive a specific
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| | your selection-rates, budget, service,
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| amount of money when you pass on.
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| | and stability.
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| Although some may find the idea of life
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| | Rates: Because it is such a competitive
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| insurance distasteful, it is considered
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| | business, life insurance rates vary
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| to be essential in protecting the fiscal
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| | greatly from company to company. Find
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| health of your spouse and children should
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| | three to five policies with attractive
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| they find themselves fiscally taxed due
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| | rates for the amount of coverage you
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| to your death.
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| | desire.
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| Types of Life Insurance
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| | Budget: Once you've found these policies,
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| There are two primary types of insurance:
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| | be sure the premiums are within your
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| permanent life and term life insurance.
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| | budget. It doesn't make any sense to go
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| Each provides specific types of
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| | forward with any of these contracts if
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| protection for your loved ones.
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| | you aren't going to be able to afford
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| Term life insurance, the simplest form of
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| | them.
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| life insurance, is designed to protect
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| | Service: In determining the quality of
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| your family for a specified length of
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| | each company's service, you can do two
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| time or "term." Term policies, which
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| | things. If you are going through an
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| range from 1 to thirty years, provide a
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| | agent, you'll be determining the quality
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| one-time death benefit but no cash
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| | of that person's service when you talk to
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| savings. This means term policies only
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| | them about the benefits of buying
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| provide benefits as long as the insured
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| | specific policies. The same is true if
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| has paid the premium, which is the cost
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| | you buy directly from an insurance
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| of the insurance. Premiums are divided
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| | company without going through an agent.
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| into equal monthly payments that are
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| | Do they answer your questions clearly? Do
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| assessed for the entire period of
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| | they seem to know what they are talking
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| coverage. If you bought a policy that
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| | about? Do they leave out important
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| covered you for a three-year term, then
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| | information?
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| you would make 36 equal premium payments
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| | By considering at least three companies
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| on that policy.
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| | and/or agents, you'll be able to compare
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| Permanent insurance is designed to offer
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| | their ability to answer questions and to
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| both a death benefit and an investment
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| | give you their undivided attention. Along
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| return after a length of time. Because
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| | with interviewing potential agents and
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| this type of insurance offers a long-term
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| | companies, you can check with your state
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| savings plan, premiums are higher than
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| | insurance department to see how many
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| those for term life insurance. Common
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| | complaints, if any, they have received
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| types of permanent insurance are whole
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| | concerning the company and/or agent.
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| life, universal life, and variable
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| | Stability: An insurance company's
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| universal life.
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| | economic stability is directly connected
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| Term vs. Permanent
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| | to their ability to meet their future
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| Term life insurance is especially
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| | financial obligations. In other words,
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| appropriate for those who desire coverage
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| | you want to make sure an insurance
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| for a specific length of time and who
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| | company will be able to pay your death
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| have limited funds. Because it is less
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| | benefit. The following companies rate
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| expensive than permanent insurance, term
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| | insurance providers' fiscal soundness.
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| can offer more coverage for less money.
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| | A.M. Best
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| This is useful to people who have
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| | Oldwick, New Jersey 08858
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| children, mortgages, and various types of
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| | 908-439-2200
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| loans. The right amount of term can cover
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| | Moody's Investors Services
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| these expenses and more. However, if you
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| | 99 Church Street
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| still desire coverage after a term
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| | New York, New York 10007
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| policy's period ends, factors such as
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| | 212-553-0300
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| poor health and age will result in higher
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| | Standard & Poor's Insurance Ratings
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| premiums when you buy a new policy.
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| | Service
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| Permanent insurance, although more
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| | 55 Water Street
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| expensive, allows policyholders various
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| | New York, New York 10041
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| benefits, including a premium that will
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| | 212-438-2000
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| not change as you age or if your health
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| | Weiss Research
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| deteriorates. Also, permanent insurance
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| | 4176 Burns Road
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| will usually accrue monetary value,
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| | Palm Beach Gardens, Florida 33410
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| offering the policyholder a return on
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| | 800-289-9222
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| their investment that they can access as
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| | After going through these four steps you
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| worth builds.
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| | should be able to compare each company,
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| Whole or ordinary life is the most common
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| | agent, and policy and make an informed
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| form of permanent insurance. With whole
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| | choice.
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| life your premiums and the face amount of
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| | One more important place to check for
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| the policy are fixed over the life of the
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| | affordable life insurance is your
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| policy. Your premiums must be paid
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| | employer. Many businesses offer very
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| regularly. A more flexible policy, where
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| | competitive group rates, usually for term
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| you can pay premiums at any time in just
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| | life policies.
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| about any amount, is universal life. With
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| | How Much Life Insurance is Enough?
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| this kind of coverage, you're allowed to
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| | Some people will say that you can never
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| modify the death benefit amount according
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| | have enough life insurance. However a
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| to your needs.
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| | common rule of thumb is to buy at least
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| A variable life policy carries both a
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| | five times your yearly income. Many
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| death benefit and monetary value. The
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| | policies include a double indemnity
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| value of this policy is dependent upon
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| | clause, which means your beneficiaries
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| the performance of investments. You
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| | receive double the value of your death
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| select the investments for your portfolio
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| | benefit if you should die suddenly in an
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| and the better they perform the higher
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| | accident or due to some violent event.
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| the death benefit and cash value of the
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| | In asking yourself "how much is enough,"
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| policy. Some policies offer a minimum
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| | you'll want to make a list that includes
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| death benefit regardless of how your
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| | yearly expenses, large debts (such as a
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| portfolio functions.
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| | mortgage), and long-term or future
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| Variable-universal life carries elements
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| | expenses (such as college tuition).
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| found in both variable and universal
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| | You'll know you're adequately covered if
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| life. You get the risks and possible
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| | your death benefit provides for large
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| rewards of a variable policy and the
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| | debts, with enough left over for at least
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| flexibility of universal coverage.
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| | one year of living expenses and for
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| Choosing a Life Insurance Company and
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| | investing or sheltering for long-term or
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| Policy
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| | future expenses.
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| There are some important things to
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| | Finally, you need to decide what you want
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| consider when buying a policy. Be sure to
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| | to get out of your life insurance. Is it
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| shop around before buying life insurance.
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| | simply a specific period of coverage with
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| Consumers can buy insurance directly from
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| | a large death benefit or do you want your
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| an insurance company via the Internet or
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| | life insurance to be part of your long
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| over the phone. Buying this way is
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| | range fiscal planning? Considering and
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| usually cheaper than going through an
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| | answering all of these questions will
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| insurance agent because the agent
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| | help you find the policy that's right for
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| receives a commission, called a "load,"
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| | you.
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