For many, the idea of purchasing life insurance is an uncomfortable subject. Educated clients, however, are more likely to buy a life insurance policy that works well with their lifestyle, budget, and needs, as opposed to those who avoid it altogether. By understanding the basics of life insurance, you are more likely to benefit from your life insurance plan rather than regret it, and are poised to be better prepared when choosing the policy best suited to you and your family.
Life Insurance Policy Basics
There are a lot of common misconceptions surrounding life insurance, especially about how it works, why one policy is superior to another, and more. By exploring the various types of life insurance policies, you can identify which approach works best for you. Once you know what you are looking for, you can continue by requesting quotes from multiple insurance companies. Ultimately, the following information will ensure you get the best rate possible, paired with the most favorable coverage.
Term Life Insurance
As the topic of many targeted TV and internet ads, term life insurance has become arguably one of the most discussed forms of life insurance on the market. Clients pay their premiums for a specific amount of time, and if the policyholder dies within the term, the insurance company pays out a benefit. However, if the policyholder’s death should take place outside of the term, beneficiaries receive nothing.
Whole Life Insurance
While whole life provides death benefits, this kind of life insurance also provides a cash value that accumulates over time. The death benefit extends to age 100, and it utilizes a fixed premium that does not increase with age. The accumulating cash value will increase until the policyholder reaches the death benefit (at 100 years of age).
Universal Life Insurance
This insurance policy is a hybrid between variable and whole life insurance. As the most flexible form of life insurance, universal life doesn’t require annual out-of-pocket premiums to be paid into the policy. Investment returns offer stability, and premiums offer lump-sum payments for an agreed-upon frequency.
Indexed Universal Life (IUL)
Unlike variable life insurance policies, where cash values are subject to changes in the stock market, IUL guarantees a minimum annual return. However, the cash value can grow at market rates should the stock market perform positively.
The Importance of Protecting Your Family’s Future
Why leave your family’s financial future up to chance? You can secure financial stability for your loved ones by using a life insurance policy as a safety net should you unexpectedly pass away. By paying your premiums, you ensure your family wonâ€™t have to face expensive funeral costs, lose a college fund, or, worse, have their home foreclosed. By laying the groundwork with a life insurance policy, you are setting your family with the ultimate protection in financial stability.
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.
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