Whole Life Insurance Rates

For many people life insurance is not the most interesting of subjects. It can also be a bit of a maze, with many bewildering terms and names. But it is a very important subject as it gives consumers a way of safeguarding their beneficiaries’ (normally family or dependents) financial well being in the event of death or serious illness.

At its most basic, life insurance is a legal contract between the policyholder and the insuring company. The policyholder pays an amount of money called a premium to the insurer. In return, the insurer agrees to pay out a sum of money if the policyholder dies or suffers terminal or critical illness. This money is paid to the policyholder’s beneficiaries.

This means that if you are the policyholder and you die then your family will benefit financially from the payment of a lump sum by the insuring company.

Life insurance policies fall into two broad categories:

1. Protection policies such as term insurance. These life insurance policies provide a (normally lump-sum) benefit in the event of a specified event such as death.
2. Investment policies such as whole life, universal life and variable life. The main objective of such policies is to provide capital growth by regular payments of premiums.

Based on what you have so far read, it is clear that the best life insurance for an individual to have is the kind that is in force when you die. If you have no insurance when you die then no insurance company will pay out a lump sum. Both term and whole life insurance will pay out a lump sum to your beneficiaries should you die while the policy is in place and has not elapsed.

But term insurance will only insure you for an agreed period of time. If you happen to die outside of the policy period your beneficiaries will not benefit from a pay out, unlike a permanent/whole life insurance policy which continues to provide cover to you and your beneficiaries until your death, regardless of when it happens.

If you work for someone else and part of the employment package includes term life insurance then this will obviously be of benefit to you. You may get this free, or you may be able to buy it cheaply via your work because group life is the least expensive term insurance available.

Here are some things to think about when deciding which life insurance is best for your set of circumstances:

• First, work out how long you want your life insurance coverage to be in place. Do you want it place throughout your life? This will give you maximum coverage but will no doubt come at a hefty premium. Instead, you might want to cover a specific period of time, until your partner retires from work for example.
• What would you like your life insurance policy to cover? For example, do you want to have funeral arrangement coverage, pay off outstanding debts and offset the loss of your income?
• It makes sense to buy a term (fixed length) insurance policy with an increasing premium if the contract will be in place for less than five years.
• If you want term insurance over a longer period (anywhere between 5-20 years) then buy one with a level premium.
• Buy a permanent/whole life policy if you wish to provide a death benefit for your family no matter how long you live.
• Obtain multiple quotes and make sure to carefully review all the small print and exclusions.

Author: Jeremy Meek
Article Source: EzineArticles.com
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