What does "affordable life insurance" mean to you?
For some, life insurance means security, knowing that their family or business is safe should they unexpectedly pass away. On the other hand, some fear pushy salespeople and feel unable to understand the product.
By learning about the different life insurance policies available you can make an informed decision that will give you peace of mind and satisfaction when choosing the right affordable life insurance for you.
Three main types of policies exist. They can be described as follows:
Whole Life
Whole life insurance is a permanent insurance. As long as premium payments are paid, the policy stays in effect for a lifetime.
The cost of whole life insurance premiums will usually be more than the cost of an equivalent amount of term insurance because the cost is averaged. While the cost of term insurance goes up with each renewal, whole life insurance never needs renewing. Whole life premiums stay the same regardless of the age of the policyholder.
Some policies allow the holder to borrow against a savings option, though this is not always available.
Universal Life
Also a permanent form of insurance is universal life insurance. Like whole life the policy is in effect until you die. You never need to renew the policy (regardless of health) and the premiums will never go up.
Universal life also incorporates other financial services including a savings plan that can be made in addition to the policy. The policy can otherwise be surrendered, the savings that have been accrued being given in exchange. Policy owners can select additional options, such as adding another covered person to the policy, taking over management of their own investments, and paying premiums from the savings that have accumulated.
Because of the many options offered, universal life insurance is usually the most costly type of life insurance.
Term
Term insurance is less expensive than either of the other two types. Term insurance policies are effective only for a selected term, such as 1, 5, 10, or 20 years.
Term insurance makes sense for young families who expect responsibility for dependants and high debts - such as a mortgage - to end by the end of a 15-20 year term. Unlike other forms, term insurance has no cash value, and can neither be borrowed against nor cashed in. The cost of premiums will rise with renewal, which is needed if the policy owner wishes to maintain coverage past the end of a term.
A more affordable life insurance can be achieved by using term insurance to cover basic financial needs while saving separately, and it may reduce insurance needs in later life. This must be balanced with the long-term protection which is sacrificed.
Policy Riders
If the need exists, certain policies allow their owner to purchase other options.
Sometimes, these additions are called 'riders'. This includes adding a spouse, including disability income insurance, Accident and Sickness (A&S), Accidental Death and Dismemberment (AD&D) as well as customized choices for taking loans or cash payouts on certain policies.
If you talk with an insurance broker, they can help you wade through the sea of features and choose those that meet your needs; this will allow you to get the most affordable life insurance possible. With the understanding you'll gain, you'll be able to choose wisely, conserving your hard-earned cash and ensuring that your family or business is properly secured.
Article Source: http://www.orbitaloc.com/
Ed Brancheau, The Insurance Egghead, assists individuals, families and businesses find an affordable life insurance quote. Visit his website, The Insurance Egghead, for tons of free advice and guides about health, dental, vision, accident and life insurance.
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