Whole Life Insurance
Whole life is the most common type of permanent life insurance. With whole life insurance, your premium payments remain the same over the life of the policy. You can choose how often you'd like to make premium payments, too – annually, semiannually, quarterly or monthly.
Some whole life policies can be paid up after a certain number of years. When you purchase a policy, you'll know how the cash value will grow over the life of your policy.
Advantages and disadvantages of whole life insurance
There are numerous reasons why clients should buying whole life insurance. It'snot complex. The payments are the same every month. And some whole life policies can be paid of in its entirety after a certain number of years.
Whole life insurance is designed for the long-term, so before you purchase be sure to think about your ability to meet premium payments on time over the life of the policy. Although life insurance is predictable, whole life insurance isn't very flexible. Customizing is not an option. But, because it’s so predictable and dependable, whole life insurance may be a good option for you.
Keep in mind that as your life starts to change, so will the needs of your life insurance. You should weigh any associated costs before making a purchase. Life insurance has charges and fees including costs of insurance that differs based on the insured person’s age, health and gender. There are additional charges for riders that customize a policy to fit your individual needs.
Life insurance is a contract between an insured an insurer or assurer, where the insurer potentials to pay a chosen beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also start payment. The policy holder naturally pays a premium, either regularly or as a lump sum. Other expenses are also sometimes included in the benefits. Life policies are legal contracts and the terms of the contract describe the limits of the insured events. Specific eliminations are often written into the contract to limit the duty of the insurer; common examples are claims relating to suicide, fraud, war, riot and civil commotion.
- Life-based contracts tend to fall into two major categories:
- Protection policies – designed to provide a benefit in the event of specified event, typically a lump sum payment. A common form of this design is term insurance.
- Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US) are whole life, universal life, and variable life-policies.
Pros on Life Insurance
When it comes to term life insurance, some people think that the death benefit stays the same. throughout the whole term life insurance. Whichever type you get, depends on if it stays level.
There are decreasing policies that start at a higher price, and have a lower death benefit as you get older.
There is a difference with term and increasing policies. They are clearly the opposite. You may consider these policies if your obligations as a provider will increase over the term of the insurance. In these cases, an increasing policy may be the right choice if you’re thinking about adding children or assuming a home mortgage, or taking an education fund for the children.
Level term policies are the standard (stay the same). With these policies, the death benefit and the premium stay the same over the entire term of the policy.
When you first hear the terms and rates for the best term life insurance (preferred, preferred plus, and standard rates), the prices advertised are extremely low. To get the best rates, you must be in excellent health, not smoke or use tobacco, have no history of substance or alcohol abuse, be within the average weight category (not obese), have average (not high) blood pressure and cholesterol levels.
Preferred rates and standard rates are the higher rates for those with higher health risks.
The majority of people who get life insurance do not qualify for preferred plus rates.
When people are talking about premiums, they need to be sure the policy you are purchasing has guaranteed premiums for the life of the policy. While you may simply expect that this is the case. Then you are open to premium increases with no notice.
Do you need life insurance?
Life insurance policies are available in different forms which comes from the kind of life insurance policy they have chosen. A type of life insurance is known as term life policy. It is a kind of life insurance that is offered in different lengths ranging from 10 to 30 years. The policy premiums paid annually differs depending on the different factors used to calculate policy costs. Average term life insurance rates provide protection for specific time period, considered as policy length. The typical insurance policy is likely to be valid for 20-30 year costing as less as $100 to even $200 every year. Policy terms depends on the insurer age and health factors to determine the average term life insurance rates.
A renewable policy is one that can automatically be renewed at the end of the term without an additional medical exam.
This can be an important point, if you have a history of medical problems in the family or have gained weight over the course of the term. However, for someone in good health, the premiums on a renewable policy can be higher than you would pay somewhere else. Convertible policies can be converted from term to another type of life insurance before the end of the policy or anytime before the end of the policy.