What You Must Know About Life Insurance
You might not think that life insurance is a vital aspect of coverage, but it is. Because it is so important, many policies might try to charge you too much for coverage that you do not really need. Read this article for advice on how to get the best life insurance for you.
When you are planning on purchasing a life insurance policy, select an independent broker. Independent brokers can generally offer more selection in terms of policy and cost than a broker who works exclusively for a specific insurance company. Company brokers are limited to the products their company sells, and may also be pushed by the company to recommend a particular product.
Don’t buy life insurance until you’ve taken the time to look around and compare policies. Premiums vary by as much as 50% from one company to the other: make sure you compare quotes online to find where your cheaper options are. Ensure that every quote you get is based on the knowledge of the existing medical conditions you have.
If you are looking to purchase a life insurance policy and you are a smoker, try to quit. This is because most life insurance companies will not provide insurance to a smoker, as they are more at risk of getting lung cancer and other smoking-related conditions. Companies that will provide insurance to a smoker will usually charge higher premium rates.
Try to get life insurance through a financial adviser, instead of a broker. The brokers make commissions off of life insurance policies, while financial advisers charge flat fees. The adviser will be more helpful with finding the best policies for their customer’s needs, while the broker will want to suggest policies that will provide them a higher commission. This isn’t every broker, but it could be if no good relationship is formed with them and the customers.
Don’t waste time with the “guaranteed issue” insurance policies if it is possible. These “guaranteed” policies are targeted at individuals with serious pre-existing health conditions who have no other choice. Getting a guaranteed life insurance policy does not require you to get a medical exam. You will have to pay higher premiums though, and the coverage may only be available for limited amounts at face value.
When you are looking into life insurance, always remember to research the quality of the company. There are rating agencies for rating insurance companies, so check them out to help you decide which company offers what you need yet has a solid financial background and has been able to meet all its financial obligations.
If you want to have some control and decision-making power over the money you invest in your life insurance, consider a variable, universal life insurance policy. With these policies, you have the ability to invest part of your premium in the stock market. Depending on how wisely you invest this portion of your money, your death benefit can increase over time. You should have some knowledge of the stock market if purchasing this type of policy or enlist the aid of a financial professional.
Permanent Life Insurance
When choosing life insurance policies, make sure you understand the difference between term and permanent life insurance. Term insurance is good for a set period – once it expires – the insured does not receive benefits. Permanent insurance, while more expensive, accumulates cash value and is guaranteed to stay in force, as long as the policy payments continue.
Choose permanent life insurance if you want to build cash value. Building cash value in a life insurance policy helps you have additional cash for the future. The insured can borrow the cash value at a low-interest rate. They can also use it to pay the premiums. The cash grows tax-free, and some financial planners recommend it as a way to cover estate taxes as part of a comprehensive financial plan.
Consider a convertible policy if you cannot decide between term or permanent life insurance. This type of life insurance policy starts out as term life insurance, and if they choose to before the term expires, the insured can convert the policy to permanent insurance without having to take a new medical exam.
If you would prefer a permanent life insurance policy but can only afford term insurance, buy a convertible policy. At any point during your term policy, you can choose to convert to permanent life insurance. This helps keep rates lower when you are younger, and as you advance in your career your budget might have more room for permanent coverage. You will not have to take any medical exam to convert, which is important if you have developed any health conditions.
To save money on your life insurance policy, understand the difference between term insurance and permanent life insurance. Term insurance should cover most financial need and debt, and it may not be necessary for you to purchase an expensive permanent whole life policy. Purchase what you currently need, and then make adjustments if your needs change.
Get to work when your insurance term is about to end! If you still have good health, you should pursue a new term policy. If your health is failing, keep the term life policy you have, but convert it to whole life. You can possibly preclude a new exam in doing so, and permanent life insurance policies are lower in cost than term insurance in your later years.
Permanent life insurance can be more costly, but can protect you from becoming “uninsurable.” This kind of insurance doesn’t expire even as you age or even if you contract a severe medical condition. This is sort of like payback for paying your premium on time for many years.
When purchasing life insurance, make sure you recognize and understand the difference between permanent and term policies. If a permanent life insurance policy is too expensive, select a term policy that will cover most of your debt and other needs. Then, when you’re financially ready, you can convert it to a permanent policy.
Make sure you have the exact coverage you need in your life insurance policy. This will ensure anyone you leave behind will be taken care of and your final costs will not drain their bank accounts. The tips in this article will ensure that you are getting the coverage that is right for you.