Life is precious to every person on earth and the most prudent way to shield your family from the financial burden of death is to get life insurance. It can pay for almost all the major disasters in an individual’s life. If the person is suffering from a chronic illness, it bears the medical expense. Life insurance money can be used in cases of a severe accident. After the death of the policyholder, the insurance pays for his funeral and other related ceremonies. Thus life insurance is a big financial assistance not only when a person is alive but also even after it.
However the extent to which a policy will be active or beneficial depends on the kind of life insurance policy taken by an individual. For instance, the term life insurance policy is all about protecting a person for a term before he dies. But if the individual dies during the policy term, the beneficiaries receive the benefits. Term life insurance is ideal for those who want that specific needs such college tuition; mortgage payments and car payments should be cared for at their death. This insurance is also favorable for the families who cannot afford to pay large monthly premiums. It is also good for senior citizens who know that they will kick the bucket soon. Many companies associate different terms and conditions with the term life insurance policy and so offer several types of it. The term life insurance an also be converted to any other form of insurance such as whole life insurance.
The people who seek to insure their entire life and are ready to pay big premiums throughout should go for a Whole Life insurance policy. This policy is good for young but not meant for the old. The whole life insurance has a distinguished “cash surrender value” feature. The cash value (composed of cash value and dividends) keeps on incrementing annually according to a specific schedule in your whole life insurance policy. Many whole life policies reward the policyholders with dividends that can augment the entire cash value.
Besides these kinds of life insurance policies are also health insurance policies. These policies are devised for those suffering with chronic illnesses particularly cancer. Such policies are difficult to acquire (for very few agencies offer them) and are usually offered at high premiums. The health insurance may pay for some of the patient’s treatments but it does not pay for everything.
Prior to purchasing a life insurance policy, a person should make a prudent assessment of his current situation and needs. Accordingly he should look up Internet, consult friends and relatives to find either a reliable insurance company or an agent. Choosing from where (insurance company and agent) and what kind of policy to adopt is a challenging task that requires lot of consideration and discussion. It is also important to compare rates from many companies to ensure that you get the most affordable rate for your particular needs.
Many life insurance companies require you to take a medical exam to qualify for coverage. It depends on the amount of life insurance you are requesting, your age, and the insurance company. A life insurance medical exam will typically mean you’ll have to give a sample of blood and urine, and an examiner will measure your height, weight, and blood pressure. If you don’t want to go through with an exam, then there are other options. There are some life insurance carriers that offer instant issue term life insurance with no medical exam required. You answer a few simple questions to get a free quote online. If you like your rates, you can apply online and get approved for your life insurance policy in as little as 15 minutes, if you qualify.
This no exam life insurance coverage is offered through life insurers that are rated “A” (Excellent) by A.M. Best for financial strength. You can even pay your first premium online with a credit card and get your policy “In Force” today. Every policy comes with a 31 day money back guarantee, no questions asked. It is a great option for people who are afraid of needles or someone who wants coverage quickly without the hassle of a medical exam.
If you need coverage today, or just don’t want to take a medical exam or blood tests, this is the solution for you. It’s the quickest, easiest term life insurance policy available online. Compare rates now.
The first thing you need to do when you start shopping for life insurance is to figure out how much life insurance you really need. There are many ways to determine this. Here are a few:
The Rule of Thumb Method: Take 5 to 7 times your annual gross income and that would be the amount of life insurance coverage you should carry.
The Expense Calculation Method: Add up all your expected expenses should you die, including: expenses for your burial, an emergency cash fund, money to pay your current debts, mortgage, college tuition, and any replacement income needed for your family,. Now, add these all together to determine your total life insurance needs.
The Income Replacement Method: Decide how much of your current annual gross income your family would need for them to maintain their present lifestyle and standard of living. The average is 70% of your current annual income. What you want to do is purchase enough life insurance so that the proceeds, if invested at an after-tax rate of return of 8%, would generate enough income for your family.
Let’s use an example to show you how this works: If you earn $30,000, then your life insurance policy should provide $21,000 of annual income for your family. $30,000 times 70% equals $21,000 of annual income. Now, if your family invests the proceeds of your life insurance policy, they need to receive $21,000 annual income from that investment. $21,000 divided by 8% (rate of return) equals $262,500 of life insurance protection.
I would say that a combination of all three of these methods is best because everyone’s age, health status, and marital and financial situation is different. Be sure to speak with an experienced agent for more guidance on the right amount of life insurance coverage or your family. Get a free quote today to compare multiple rates from the top carriers.
Term life insurance is usually considered a short term solution (5-30 years) for one or more short term or fixed term needs like a mortgage, car loans, or college funding for your children.
Term insurance makes a lot of sense when you are young with a growing family, because the rates are low and the benefits are high.
- Term insurance is purchased for a specific number of years.
- Premiums are lower than whole life insurance, especially in the early years of the policy.
- Premiums increase with age or at renewal of your policy depending on the type of term life insurance policy you choose.
- Term insurance builds no cash value.
- Based on a study at Penn State University in 1993, less than 1% of term life policies ever pay a death benefit. People usually outlive or discontinue their policy.
- Most term life insurance policies cannot be renewed past the age of 80.
Why Do I Need Term Life Insurance?
Term life insurance offers you a way to provide cash for your family in the event you die. The money your beneficiaries receive from your life insurance policy can be used to pay for your burial costs and final expenses. It can also be used to pay off credit card debt, a mortgage or rent and other living expenses for your family. Life insurance benefits can also be used to pay for college tuition, provide money for retirement, provide cash to pay your estate taxes, or provide a stream of income that can help your family maintain their lifestyle. Also, the death benefit paid from a life insurance policy is usually income tax-free.
If you are thinking about getting some term life insurance coverage for your family, be sure to speak with an experienced agent about your situation. Get a free quote today to compare multiple rates from the nation’s top carriers.
