If you've never worked as an insurance agent, you probably have no idea what half of those complicated "insurance words" mean. That can make the decision of buying a particular type of life insurance very confusing. Here's a few things that will help you along your way to making an educated decision.
Well, let's take a look at some basic types of policies. The two most common types of policies that people purchase are whole life and term life.
Whole life insurance is a permanent policy that you keep until you die (your whole life). The rates are designed to stay the same (your monthly premium payment) and the benefits (death benefit amount that is payed out and the cash value) is guaranteed. This type of policy accumulates what is known as "cash value" which is roughly 2% of the amount that you pay in premiums each month that accumulates over time. This accumulates as a cash amount that can be borrowed as a loan. The life insurance policy can be used as collateral for a cash loan, although not exactly a wise idea as it will be deducted from the death benefit when the policy is paid out.
Term life insurance is a temporary policy that is only for a specific "term" or "period of time". This is the most common type of policy that you see advertised on TV with very low rates. There's quite a bit of fine print in some of those TV commercials so proceed with caution if you feel tempted to call in. Term policies do not accumulate cash value and when your policy renews at the 3, 5, 10, 15, 20, 25 or 30 year mark, your premiums will go up based on your age (and health condition) at the time of policy renewal.
Yours truly was a life insurance agent (me, the author) and I would make a recommendation if you're trying to decide which type of life insurance is right for you. If you are young, buy a whole life policy and lock in that low rate. At least get enough whole life that it will cover your burial expenses. If you want a large amount of coverage while you're younger to handle things if the unexpected occurs, buy a more inexpensive, large term policy to last you through those critical years.
Your next question is probably "where". You can save quite a bit of money by comparing what different companies can offer you, and this can be done without having to apply for insurance (which is a good thing). http://www.LifeInsurance4All.com/ is a free tool that you can use to compare insurance rates and policy differences side by side, without having to apply for insurance. Best of luck in all your endeavors, Christy Love.
Christy Love is a retired life insurance agent with over 30 years of experience in helping people protect what matters most... their family.
Article Source:http://EzineArticles.com/?expertView the Original article
