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1/5/2009
Monday morning
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Topics taken from open source list. I hope you find this useful.
This site is for our clients only as an information resource.
| Whole life insurance protects you throughout your whole life, i.e., it is
permanent. The insurance is also structured to include some form of
savings or investment feature in addition to the life insurance policy.
Because it is permanent and includes an investment feature, it is much more
expensive than term life for the same amount of coverage. There are many
types of whole life; the differences are mainly in the way your premiums
are invested to build up a cash value. The three basic types are the
traditional whole life, universal life, and variable life, though other
varieties like the variable universal life and interest sensitive whole
life exist. The three basic types are described below. |
| To pick a life insurance policy that is best suited for you, you should
consider the advantages and disadvantages and relate them to your
particular situation. However, if you are the breadwinner of a young
family with limited resources (which is true of most young families), you
will most probably be better off with term life because you will be able to
afford a greater amount of death coverag e for the same amount of premium.
On the other hand, if for any reason you want coverage throughout your life
or for more than 20 years (e.g., because of health reasons or for estate
planning purposes), then a whole life policy may be your best bet. |
| Universal Life, differs from the traditional whole life by investing the
premiums in fixed-income securities that provide better rates than the
traditional whole life. You can choose to use the accumulated cash to buy
more death coverage or to pay the annual premiums, or both. |
| After deciding on the type of life insurance that is best for you and how
much insurance you need, the final step is to shop around for a good
policy. The best way to do this is most probably through a group policy.
If you belong to any professional organizations or groups, check if they
have a group life insurance program. If you cant go through that route,
then call up a couple of insurance agents (you can get numbers from the
phone book or from newspaper adverts). Ask them for quotes, do a
comparison, and then decide your best option based on the price and
financial rating of the insurance company. You can also get life insurance
information from the internet (e.g., http://www.insure.com) or through
brokers that provide quotes from different insurance companies. You should
also check about the life insurance benefit at your place of work. Most
organizations have a life insurance benefit in place that is bundled with
health insurance. The typical coverage from work place insur. |
| Term Insurance
Term insurance is the purest form of life insurance, consisting only of a
death benefit without the frills. It is for a fixed term varying from
one to 20 years, after which it must be renewed. If you die during the
term, your benefits are paid to your beneficiaries. Term life insurance
premiums are cheaper compared to whole life which makes it possible for you
to afford more coverage with the same amount of premium. |
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