subject: Choosing Term life Insurance [print this page] Choosing Term life Insurance
What is the best insurance for you
The process of choosing life insurance can be a very hectic and bewildering process. Note that if you do not need it, then don't buy it.
Do I really need life Insurance
The needs in life insurance depend on you the policyholder's situation and state of affairs. If you are single or do not have any dependents who rely on you, then you don't need it. Generally if you do not make any contributions to your family's income you probably do not need to get life insurance, it may just be too costly for nothing although you will die someday. If you however do have dependents and a family that relies on you, you have to get one. You children will have to continue with college after you are gone and pay the bills too, so life insurance can prove very crucial here.
How much Insurance do I need
The amount of life Insurance you need will depend on the many factors. These factors could be the number of people that depend on you, the amount of your income, the lifestyle you follow and the amount of debts you owe. Generally you may need between six and ten times your yearly salary.
What Policy type should I buy
The issue of which policy is most suitable has been in debate for a long time. Term versus Whole life insurance have battled as some think that if you are young and do not have any serious illness or dependants to look after, the best insurance to go for is the Term Insurance as it will offer benefits at death, but however no cash back.
With Whole life Insurance, it offers the policyholder a death benefit together with money back. Although it looks so lucrative, it however costs much more and is expensive. This is because most of the cash policies are given up during the first few 7 years and therefore making the coverage costly and expensive. In the early years high commissions and fees limit the cash value. Because of the complex set up insurance policies are built on, most policyholders never get to know how much insurance firms are getting in to their pockets from premiums.
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