What is life insurance? Everybody seems to know that they need it, but few people actually understand the importance of life insurance.
Life insurance helps replaces the loss of income. Life insurance covers the debts of things like a home, car, or credit cards. Life insurance can never replace the loss of a loved one, but it can help keep some normalcy in place.
It is easy to understand that you need life insurance if you are married, and especially if you have kids as well. Many times I have a client not realized that life insurance for the stay at home spouse is as important, if not more important, than the spouse that works all day. Usually the working spouse just assumes that they can continue working and making a living. But who will pay for the child care while you are working those long hours? Who will transport the kids to all of their activities during the afternoon? Something to think about.
You have probably heard about the two different categories of life insurance, term and permanent. Term insurance is good for the term of the policy, like 10 or 20 years. It is usually the least expensive type of coverage, mainly because there is less likely a payout during that term period. With permanent insurance, if the premiums have been paid, there will be a payout someday.
Most people have some type of life insurance from where they work, and think that is enough. But with the climate of downsizing, and people changing jobs, you might want to think about buying your own insurance as well. Because if you only have life insurance from work, what happens when you are unemployed?
I hear younger people mention that they will think about life insurance when they get older. But guess what? As you get older, the cost of life insurance goes up. Why? Because nobody lives forever. And the younger you start a life insurance policy, the more the cash value will increase on a permanent type of policy. There are some policies available where you can borrow money from your life policy where there is basically no interest, because the interest you would have to pay is being negated by the interest the money is making in the policy. There are also options where some of the value can be invested in the stock market. These policies are a great way to build and protect wealth.
When you look at term life insurance policies, make sure there is a guaranteed insurability clause in the policy. This allows you to convert your term policy into a permanent-type life insurance policy, even if you have a health issue develop after you start your term policy. You may have to pay higher rates based on that health issue, but you will be able to get a permanent-type life policy. Without that option, you could be declined on a new policy.
When I am asked what the best type of life insurance is, my answer is, the one that you can afford. Life insurance is worthless if it goes out of force because you cannot pay the premiums. I have heard the phrase, buy term, invest the difference, but I have only met a couple people who actually do invest the difference. One idea I like to offer is to combine the term policy with the permanent policy. When the kids are out of the house, maybe you do not need as much coverage. Maybe you will do better with a smaller permanent life policy, and a larger 20 or 30 year term policy. It will be less expensive than starting a permanent life policy in 20 or 30 years, that is for sure.
There are many life insurance companies out there, both in the phone book and online. Make sure you choose a company that will be there when the life policy is needed. Find someone who is more interested in you than in just making another sale.
Article Source: http://EzineArticles.com/?expert=Tim_Kealy
Life insurance helps replaces the loss of income. Life insurance covers the debts of things like a home, car, or credit cards. Life insurance can never replace the loss of a loved one, but it can help keep some normalcy in place.
It is easy to understand that you need life insurance if you are married, and especially if you have kids as well. Many times I have a client not realized that life insurance for the stay at home spouse is as important, if not more important, than the spouse that works all day. Usually the working spouse just assumes that they can continue working and making a living. But who will pay for the child care while you are working those long hours? Who will transport the kids to all of their activities during the afternoon? Something to think about.
You have probably heard about the two different categories of life insurance, term and permanent. Term insurance is good for the term of the policy, like 10 or 20 years. It is usually the least expensive type of coverage, mainly because there is less likely a payout during that term period. With permanent insurance, if the premiums have been paid, there will be a payout someday.
Most people have some type of life insurance from where they work, and think that is enough. But with the climate of downsizing, and people changing jobs, you might want to think about buying your own insurance as well. Because if you only have life insurance from work, what happens when you are unemployed?
I hear younger people mention that they will think about life insurance when they get older. But guess what? As you get older, the cost of life insurance goes up. Why? Because nobody lives forever. And the younger you start a life insurance policy, the more the cash value will increase on a permanent type of policy. There are some policies available where you can borrow money from your life policy where there is basically no interest, because the interest you would have to pay is being negated by the interest the money is making in the policy. There are also options where some of the value can be invested in the stock market. These policies are a great way to build and protect wealth.
When you look at term life insurance policies, make sure there is a guaranteed insurability clause in the policy. This allows you to convert your term policy into a permanent-type life insurance policy, even if you have a health issue develop after you start your term policy. You may have to pay higher rates based on that health issue, but you will be able to get a permanent-type life policy. Without that option, you could be declined on a new policy.
When I am asked what the best type of life insurance is, my answer is, the one that you can afford. Life insurance is worthless if it goes out of force because you cannot pay the premiums. I have heard the phrase, buy term, invest the difference, but I have only met a couple people who actually do invest the difference. One idea I like to offer is to combine the term policy with the permanent policy. When the kids are out of the house, maybe you do not need as much coverage. Maybe you will do better with a smaller permanent life policy, and a larger 20 or 30 year term policy. It will be less expensive than starting a permanent life policy in 20 or 30 years, that is for sure.
There are many life insurance companies out there, both in the phone book and online. Make sure you choose a company that will be there when the life policy is needed. Find someone who is more interested in you than in just making another sale.
Article Source: http://EzineArticles.com/?expert=Tim_Kealy
