Wading through the insurance world in order to discover the right type of insurance can be an arduous task. Many consumers are inundated with information and find it difficult to sift through all the information available to them. Also, people find it difficult to determine the costs associated with life insurance. Life insurance plays an important role in your personal financial plan.
Getting started on your path to insurance requires you to first evaluate a few things:
- Determine which household members should be covered by life insurance.
- Discover if life insurance is offered through work
- You may not need life insurance if you don’t have any dependents and no one relies on you for financial support
Buying Life Insurance
The traditional method of purchasing insurance has always been through an insurance agent or insurance broker. However, now the insurance landscape is changing with the internet becoming the choice for getting competitive insurance quotes online. Consumers can receive quotes on auto insurance, business insurance, disability insurance, home insurance, life insurance, and more.
In other words, barriers to insurance accessibility have been taken down; now the consumer has choice of getting low insurance quotes through the power of the internet. You can use trusted sites such as, MyOnlineInsuranceQuotes.com as a resource and to get low competitive insurance quotes for various insurance types including life insurance.
Life insurance should be considered if you have family or others that depend on you for financial support. Basically, there are two types of life insurance policies, term and permanent. You have to evaluate which suit your need.
Types of Insurance
Term Insurance is the most common and least expensive form of life insurance. A term insurance policy is for a period of time, 10, 15, 20, 30 years, and may be renewable at the end of each term. Your premiums are level for the term of the policy.
Whole Life offers a lifetime of protection and has a cash value component. You must continue to pay premiums, for your entire life to continue the policy in force. A portion of your premium payments accrue as cash value.
Universal Life is a variation of whole life and has a cash value component. Unlike, whole life insurance, premiums and the face value of the policy can be increased or decreased. Typically, universal life insurance provides a guaranteed return on cash value. However, there are drawbacks to this policy such as, high fees and interest rate sensitivity. Universal life policy fees can total upto 5% to 7% of your premium. Also, you might see premiums increasing as interest rates decline.
Variable Life offers fixed premiums and gives you control over cash value investments. You can invest the cash value in securities including, stocks, bonds, or money market funds. The death benefit and cash values can fluctuate based on the investment performance. The cash value is not guaranteed. The Fees for these policies can be 6-8 percent of your premium. Policy stays in force as long as the premium payments are made.
Variable Universal Life is the most aggressive type of policy. Unlike, variable life insurance you can readjust your premium and face amount of the policy. You have investment control over the underlying securities. There are no guarantees on portfolio performance only the original face value death benefit is guaranteed. This policy is best suited for affluent consumers.
Conclusion
Life insurance is a critical part of sound long-term financial planning. Life insurance that best meets your needs depends on your personal lifestyle, financial circumstances, among other variables. Discuss with a financial advisor your financial goals to see which type and how much life insurance you need. Once you have determined that, you then go on the internet to get the most competitive insurance rate quotes.