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Insurance takes a number of forms and can provide wonderful relief for many people. Long term insurance is mainly long term health care insurance as well as life insurance which is paid for at the death of the insurer.
There are a few varieties of life insurance, some of which are –
- Variable Universal
- Final Expense
- Increasing and Decreasing Term
Perhaps the most familiar and basic life insurance is Term- and Permanent life insurance. But even with just these two categories, there are different types to choose from.
♦ Term Life Insurance
Term Life is popular because it’s affordable. It is purchased for a certain length of time, which can even be as little as being a 5-year policy or it could be a 30-year policy. There is also a one-year term life insurance option which is renewable.
There are some kinds of term life insurance where the death benefit goes down over time and which is known as decreasing term life insurance policies. The policy will come to an end when the death benefit comes down to nothing.
♦ Permanent Life Insurance
It differs from term insurance in that it offers death benefit protection as well as a cash value aspect. It doesn’t have that time limit component found with term insurance.
It is far more expensive than term life insurance for the same amount of coverage. It does accumulate that cash value through its savings component but you pay a premium for this feature. It is designed to last for the rest of the insured’s lifetime.
♦ Universal Life Insurance
This is permanent life insurance, where you get to choose how much of your premium goes into your cash value account and what amount goes toward funding your death benefit.
The lower the amount you pay toward your death benefit, the lower the amount is your beneficiaries will get. These policies also have a maturity date when you reach a certain age, upon which you receive a lump sum.
♦ Final Expense Life Insurance
This is quite an appropriate name for the last expenses you’ll have on planet Earth. It usually comes as a short term life policy that will cover things such as medical expenses and your funeral. If you don’t have dependents, it is a good low-cost life insurance.
How to Choose a Life Insurance Policy Provider
When choosing a life insurance policy, it’s essential to consider the financial solidity of the insurance company, market ethics, products, premium life insurance costs, customer service, and market ethics.
- Financial Solidity: Choose an insurance company that’s financially stable and secure. It should be able to pay your claim when the need arises.
There’s no complete guarantee for insurance products, like bank protection by the Federal Deposit Insurance Corporation (FDIC). That’s why it’s crucial to choose a company that has been financially sound for several years.
- Product: Choose an insurance provider that offers a wide range of coverage, enhancements, and flexible payment options, all of which must be in accordance to your needs.
Take note that not all products are the same. Make sure to know what you’re getting before signing or paying anything. Determine the terms and conditions and read the fine print. If you’re in doubt of an insurance plan feature add-ons, or general coverage, don’t hesitate to ask follow-up questions.
- Premium Life Insurance: Premiums differ among insurance companies because some have features that other providers don’t have. Compare insurance plans based on their policy type, age, policy features, and the amount of life insurance you’re considering buying. You can do this step by visiting the insurance providers’ website or making phone calls to these respective companies.
- Customer Service: It is best to have an easy to approach insurance provider, in which you can immediately talk to a representative if you have concerns or questions. Ensure that their customer service employs are real live agents or there’s a toll-free customer service number you can call whenever you need assistance.
Check the Company’s Market Ethics: Check if your prospective insurance company had significant consumer complaints by approaching your state’s insurance department. You can also read reviews online, like review websites, online community forums, and social media platforms, such as the insurance provider’s Facebook page.
Good Financial Sense Required
You can see that the insurance industry is quite complex with ever-changing technologies. With life insurance, being underinsured can cause panic and it is why you need to review your contents each year.
Making the right choice between the different life insurance products and your finances can be tricky. It is why it is so worthwhile taking a look at Good Financial Cents and the Money Uprising Movement for useful tips on how to do the journey of life with enough money in your pocket – always.