Buy Life Insurance Policies
Telling someone you’d like to buy life insurance is kind of like telling someone you want to buy cereal. Do you want Cheerios, Fruit Loops, Raisin Bran, Golden Grahams, or one of the other dozens and dozens of options?
Someone looking to buy life insurance policies will also face several options. Do you want a cheaper term policy, such as Level Term, Group Term, Renewable Term, Increasing/Decreasing Term? Or do you want something permanent, such as traditional whole, universal life, variable life, or something else? And once you choose what type of insurance you want, what death coverage do you want? There are a lot of differences between these types of policies. However, there is one thing that stays the same no matter what: the younger and healthier you are, the cheaper the policy.
Understanding Term Versus Permanent Before You Buy Life Insurance Policies
Typically term life insurance policies are referred to as death insurance. It usually lasts 20 or 30 years, and you pay the same premium every month regardless of what happens to your health later in life. A healthy 30-year-old woman who doesn’t use tobacco can purchase a $250,000 policy for about $25 a month. Permanent life insurance policies usually provide coverage throughout your entire life, and usually are perceived as investment tools. They often build cash value over the term of the policy. Sometimes the company cuts you a check when you turn 99 or 100. Opponents of this type of policy often argue that you would be better off just buying term and then using the rest to pay off debt, to save, or to invest. Then there’s the hybrid type of policy, which starts out as term, but allows you to convert it later on. This is usually cheaper than whole or universal life, but slightly more expensive than traditional term.
Understanding Term Life Before You Buy Life Insurance Policies
Level term life insurance policies come with a fixed amount over a period of time. Increasing term means that the death coverage can increase although the premiums generally stay the same. Decreasing term means that the death coverage can decrease although the premiums generally stay the same. Convertible term is the policy that was referred to above as a “hybrid.” With this policy, you have the option of changing your term policy to a permanent one. With group term, a group of people — often in a business — can get a group rate in order to have a reduction in their monthly premium. Term life insurance is one of the cheapest types of insurance you can get, especially compared with health, vehicle or homeowners insurance policies.
Understanding Permanent Life Before You Buy Life Insurance Policies
Customers who look to buy life insurance policies will realize permanent life insurance isn’t quite as cheap. Actually, these can often cost more than car insurance or homeowners insurance, but often proponents of whole or universal life insurance say that these policies end up paying back dividends, and allow customers to build up cash value over time. Universal life insurance is used in part to insure yourself, but also in part to invest your money in bonds and other investments. The earnings the customer makes on his or her investment is credited to the policy. The premiums are often flexible with this complex type of insurance. With whole life, the policy remains for the customer’s entire life, and the insured is required to pay into the policy every year. Variable life insurance is a type of whole life, in which the death benefit and cash value can vary based on the investments that are made. These are often branded as being less risky than stocks, because the death benefit won’t drop below a certain amount. As you study your options as you seek to buy life insurance policies, you’ll find that there are different trains of thought on whether you should purchase whole, universal or term life. However, it often depends on what your goals in life are. To receive a free insurance quote today, go to the top of the page and enter your zip code.