There are essentially two kinds of life insurance. Or, as some call it, "death insurance" or "funeral payments". In any case, both have the same purpose." to give your family some money to replace what they are losing with your death.
The first, and most common, is term life insurance. The name was derived from the fact that the policy and your coverage are good for a special term, which is the length of the policy. The terms run between ten and 30 years and usually are chosen in five year increments.
Term costs less because the carrier is assessing their risk as to whether or not you will pass away during the coverage years. For your family to see any money, you need to die during the tenure of the coverage.
They charge depending on your level of insurance risk and then they determine how likely you are to die during the time they are covering you. Your premiums will increase if you are over 50, have heart problems, survived cancer, or are a smoker - these will surely put you into a high risk category.
Universal life is another kind of insurance. Also called cash value, it costs more to be covered for less. Unlike a term policy, cash value will cover you for your entire life, but of course you are paying premiums forever, too.
Whole life also has a savings portion of the policy. The company usually guarantees you a return on your investment, but the company actually keeps most of it; you really only see about 3-4%. Read the first few pages of your policy, that is where it discusses your investment return.
Even though the company might promise you a huge return, you yourself will only get a tiny portion of it. The company helps itself to the money you make.
When you are reading the policy, you should look for where it explains just what will be paid out at your your death. It's also important to know that no policy pays for itself after so many years. What happens is that at some point the company just starts taking money out of your cash value. Agents like their customers to think that after about 19 years no more premiums need to be paid. Premiums are due, but they are taken out of your cash value portion, reducing it significantly. If you ever need a loan, you might not have enough left. - 33372
The first, and most common, is term life insurance. The name was derived from the fact that the policy and your coverage are good for a special term, which is the length of the policy. The terms run between ten and 30 years and usually are chosen in five year increments.
Term costs less because the carrier is assessing their risk as to whether or not you will pass away during the coverage years. For your family to see any money, you need to die during the tenure of the coverage.
They charge depending on your level of insurance risk and then they determine how likely you are to die during the time they are covering you. Your premiums will increase if you are over 50, have heart problems, survived cancer, or are a smoker - these will surely put you into a high risk category.
Universal life is another kind of insurance. Also called cash value, it costs more to be covered for less. Unlike a term policy, cash value will cover you for your entire life, but of course you are paying premiums forever, too.
Whole life also has a savings portion of the policy. The company usually guarantees you a return on your investment, but the company actually keeps most of it; you really only see about 3-4%. Read the first few pages of your policy, that is where it discusses your investment return.
Even though the company might promise you a huge return, you yourself will only get a tiny portion of it. The company helps itself to the money you make.
When you are reading the policy, you should look for where it explains just what will be paid out at your your death. It's also important to know that no policy pays for itself after so many years. What happens is that at some point the company just starts taking money out of your cash value. Agents like their customers to think that after about 19 years no more premiums need to be paid. Premiums are due, but they are taken out of your cash value portion, reducing it significantly. If you ever need a loan, you might not have enough left. - 33372
About the Author:
When your trying to find Life Insurance quotes picking the correct place first can seem daunting. But to get the best costs on Life Insurance, you need to look around and compare. Head online to find the best costs now!
