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Life Insurance

When it comes to life insurance, the jargon and terminology may be a bit intimidating. When you take time to learn what is available and evaluate your needs, you can find the best life insurance for you, and your family’s needs. Use the following information to learn more about life insurance, and why it is important to protect your loved ones with this type of policy.

Types of Life Insurance

There are two basic types of life insurance:

  1. Term Policies: These are policies that provide pure insurance coverage;
  2. Whole Life Policies: These policies combine the pure term insurance with an investment product to build cash value.

Term Life Insurance

This is the more affordable option for those wishing to provide financial support for their beneficiaries in the event of their death. Term life insurance is also much easier to understand than the whole life option. This type of insurance is available in certain, pre-determined lengths of time, which are referred to as terms. The typical terms that this insurance is available in include 5 , 10, 15, 20 and 30 years. This means that during this period of time, the providing company offers premiums that will not increase.

This means that as long as you are able to pay the premiums on time, the company that has issued the policy cannot cancel. When the term of your policy is reached, you can opt to either start a brand new life insurance policy, or continue the policy you currently have with a rate that will reflect factors such as your lifestyle, age and current health.

Whole Life Insurance

Whole life insurance policies are more expensive than term life policies. They also offer more features and benefits for those who choose this option. They offer level premiums and insurance coverage for your entire life, under the stipulation that premiums are paid on time to keep the policy current. Another appealing aspect of a whole life policy is the fact that it can provide a cash value accumulation that is offered on a tax-deferred basis. This can be used whenever you need to help with any situations in your life. Keep in mind, any policy loan will accrue interest and decrease the death benefits for the amount of the loan and the interest that has been accrued.

The Importance of Life Insurance

Life insurance is an important consideration no matter how young or healthy you are. As an important member of your family, you contribute to their livelihood, if you should die the loss of your contributions will hurt your family. Purchasing a life insurance policy will provide your family with financial support in the event of your death.

Getting a Life Insurance Policy

There are certain considerations that life insurance companies take into account when creating a life insurance policy for you. Some of these considerations include your age, your health and your lifestyle. For example, a smoker will likely pay higher rates than a non-smoker.

The Bottom Line

The fact is that, as a member of your family, purchasing a life insurance policy is the responsible thing to do. Upon purchase, you will be presented with various payment options, which will ensure that your family is cared for, even in the instance of your death.

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