While there?s not necessarily an age at which you?re too old to get life insurance, some people are not candidates for life insurance, despite what insurance sales representatives would have you think. Many consumers have not been given adequate information about the differences between whole and term life insurance, amongst other differences in the types of insurance policies. We want to make that information clearer, so you can understand and make informed decisions about life insurance. Lots of people don?t know whether life insurance is necessary for them. While many avoid the issue by saying that they will not be able to take money with them when they die, they should consider whether the loved ones they leave behind will need money. It is for the good of your spouse and/or dependents that you should investigate your life insurance options.
There are many varieties of life insurance. Choosing which will depend on your needs. There is term life, whole life, universal/variable universal, no-load, and of course mortgage life. Mortgage life insurance can be great for families with a mortgage. Upon your death, your mortgage is paid and your family can live mortgage free as long as they maintain ownership. It is no wonder with all this confusion most people decide to do nothing. Let us take the mystery out the life insurance options and allow you to make an education choice.
? Term Life Insurance: With term life insurance, you pay a fixed premium over a determined period. If you die within that time, the insurance company pays the specified amount but, if you outlive your term life insurance policy, you lose what you pay in and have nothing. Another problem term life insurance poses is the possibility of the premium increasing after a certain interval. In many cases, you may purchase another insurance policy after the term expires, but usually at a significantly higher rate.
-Whole Life Insurance: This type of insurance differs from term life in that it covers you for your entire life, and you still pay a monthly premium. In addition, you can decide to cash in your policy for a lump sum if it no longer needed. Whole life insurance has two values. Its face value is when the policy matures, or in other terms when you die. The cash value is the amount you will receive if you cash it in, or if your policy matures.
* Universal Life Insurance: This policy will invest your premiums into bonds, mortgages, and money market funds. This makes universal life insurance a bit more flexible, as you can adjust the details of the policy to fit your means. This fund created by your invested money pays for the pre-decided amount when you die. There is a minimum amount that is guaranteed to you if your money doesn’t do well in the market.
-Variable Universal Life: This insurance type depends heavily on the outcome of your investments. If your investments are doing well, then your death benefit will be greater.
? No-Load Life Insurance: Low-load or no-load life insurance generally includes less expenses than most conventional life insurance policies. More of the money you pay in is put toward earning more money for you, instead of going toward other expenses like commissions. Financial advisors will usually sell no-load or low-load life insurance policies for flat fees rather than commission. One of the first questions you need to ask yourself when making decisions about life insurance is how much of it you will need. We urge you to discuss these matters with your financial advisor and your accountant. They will be able to help you determine the right amount according to your budget, you?re your family?s unique needs and standards.
Susan Reynolds is the webmaster for a leading South African Life Insurance provider. For more information visit: http://life.insurance123.co.za/
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