Don't Let Life Insurance Get You Down
Don't Let Life Insurance Get You Down
Taking out, or even thinking about, life insurance is a weighty enough undertaking without having to worry about what it all means and whether you are taking out the right form of life insurance and at the best possible costs. If you have done any research at all on the subject recently then I am sure that you were, momentarily at least, taken aback by the sheer multitude of life insurance products available and not a little confused at where to go next. It need not be that complicated, however, and there are basically two over arching kinds of life insurance namely with profit and without profit. There are different kinds of life insurance within each of these categories so let's look at without profit life insurance first.
There are three main types of life insurance that are defined as without profit and the first is term insurance. With term insurance you agree with the insurer to cover your life for a specific number of years. You can opt for level term (fixed payments for the duration of the period you choose) or decreasing term (which is used specifically to cover you for diminishing financial responsibilities such as debts, which you hope to decrease as you get older). Credit life insurance is the next type of without profit life insurance and it is very similar to decreasing term life insurance, the major difference being that it was designed especially to cover against installment type debt. Finally, Whole life insurance is a policy whereby you contract with the insurer to insure your life for a specific amount of money. This amount will be paid out, only at your death, to your beneficiaries, but you can arrange to finish paying your premiums before then and still retain the life cover you have paid for.
Contrarily, with profit life insurance allows you to make use of the cash value of the life insurance policy as long as the policy remains in effect. At the moment here is only one type of life insurance policy in this category, namely Universal life. Insurance companies created this kind of policy in order to give you as the policy holder more flexibility throughout your life. While it is indeed more flexible it is also more complicated and in order to work an Universal life insurance policy has its own separate investment account. Every time you make a monthly payment (which will of course vary depending on your benefits and cover) it will be paid directly into this account. So how does it work? Every month the system works out how much money is available in the investment account and then it deducts this amount from the life cover and benefits stipulated in your policy. Thereafter you will only purchase cover on the balance. In very simple terms as your investment grows in value you will need to spend less money every month in order to sustain your policy until a point when the value of the investment is equal to or greater than your agreed cover and benefits. And at this point you can opt to stop paying and still retain your life insurance cover.
While there are various additions to all the above types of insurance an understanding of these basics should stand you in good stead when it comes to making what could be the most important decision of your life. Life Insurance Roanoke VA - 33 Secret Tips To Not Get RIPPED OFF Competition Between The Government And Private Insurance Companies Over 50s Life Insurance With Gifts - How To Obtain It Better Life Insurance For Seniors And Other Retirement Planning Tips General Life Insurance with Added Benefit Is Life Insurance Coverage Too Late For Everyone Over 50 Years Old? Take Pleasure In The Architecture And Nightlife PROFESSIONAL INDEMNITY INSURANCE: Be Aware Of Your Duty Of Care Why Young Families Want To Have Term Life Insurance Life Insurance Salisbury NC - 33 Secret Tips To Not Get RIPPED OFF Get Life Insurance In Australia Why Term Insurance? A Independent Consultant's Life in 2010 and Beyond Life Insurance In Plain English