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Are You Shopping For Life Insurance? Read These Tips!
Life insurance is something that people overlook because they don't plan on dying anytime soon. Frankly, nobody does, and that is why families are left destitute and struggling when the a parent or spouse dies suddenly. Life insurance is a way of taking care of your family in the event that you no longer are here. This article can answer questions and help you get the insurance you need.
Being in good shape can save you money on a life insurance policy. Before you begin looking for a life insurance policy, take care of any health issues you have control over, such as smoking, weight problems, high blood pressure, and other health concerns that you can affect with diet, exercise, and attention. A glance at insurance charts will tell you that you will save a considerable amount on life insurance by taking good care of your health.
An insurance plan is not a buy-it and forget-it purchase. You will need to revise your insurance plan as things change in your life and you get older. Changes in marital status, having children, or reaching retirement age are all reasons to review your plan and make adjustments.
When you are thinking about how much life insurance to purchase, it's a good idea to get at least eight or ten website times the amount of your annual income. With this amount, if something happens to you, your dependents will be able to invest wisely and continue to take care of their living expenses in the long term.
It's a good idea to review your life insurance policy each year to see if it still meets your needs. If you've had any big changes in your life such as a new child or the purchase of a home, you may have to modify your policy to reflect your new situation.
To get a good life insurance rate, purchase life insurance while you're still young. Rates are lower the younger you are, and you can keep paying the same rate as time goes on. You may not need life insurance now, but you'll need it in the future. Being proactive about your life insurance will help you get a great policy for a low cost.
As you read, life insurance is incredibly important to your current and future financial planning and so is understanding all the different kinds. With this understanding, it makes it easier for you to determine what policies fit your personal needs. Following these simple tips, is a very good starting place.
What is whole life insurance?
Whole life insurance is a type of permanent life insurance, which means the insured person is covered for the duration of their life as long as premiums are paid on time. Permanent life insurance is different than term life insurance, which covers the insured person for a set amount of time (usually between 10 and 30 years).
Whole life insurance is the most common type of permanent life insurance policy that people purchase, according to the Insurance Information Institute (III).
Like most permanent life insurance policies, whole life also offers a savings component called "cash value." Read on to learn more about the benefits of whole life insurance.Certain aspects of whole life insurance can make it an appealing choice.
- Your premiums are fixed and will never go up, regardless of market conditions.
- You may be able to withdraw funds or take out a loan.
- Your death benefit is guaranteed as long as you make the required premium payments.
Whole life insurance provides fixed premiums and fixed death benefit
In most cases, the premium and death benefit stay constant for the duration of a whole life insurance policy, says the III. A universal life insurance policy, on the other hand, may offer the option to adjust your premiums or death benefit over time.
Because whole life insurance gives you fixed premiums and a fixed death benefit, you won't have to worry about increased premiums as you get older. And, your loved ones will also know how much to expect when your life insurance benefit is paid out after you pass away.
Whole life builds cash value
A whole life policy can serve as a source of emergency funds for you if something goes wrong, or you may be able to take out a loan against the policy. That's because a portion of each premium payment you make is funneled into a savings component of the policy called the "cash value."
Over time, the cash value of your policy increases, and you may have the option to withdraw funds or borrow against it. The rules on how and when you can do this vary by company and policy. Your insurer may also offer guidelines to follow so that you don't inadvertently reduce the policy's death benefit or create a tax burden1.
Whereas whole life insurance comes with fixed premiums and covers you for the duration of your life, a term life policy only covers you for a set amount of time – typically between 10 and 30 years. At which point you’d have to renew or purchase a new policy.
Additionally, whole life has a “cash value” component, but term life insurance does not.
Both whole life and universal life insurance are types of permanent life insurance policies in that they cover you for your lifetime. The difference is universal life insurance allows you to increase your death benefit or lower your premiums once your policy accumulates enough cash value – while whole life comes with fixed premiums and benefits.
The cost of a whole life insurance policy depends on several factors, including how much coverage you buy and other things.
When it comes to paying your premiums, you'll typically be able to make a fixed annual payment for a whole life insurance policy. Some life insurance companies may also offer the option to pay monthly, quarterly or twice a year. Be aware, however, that paying premiums more frequently than once per year may incur additional fees.
Once you’ve accumulated sufficient cash value you, you may be able to withdraw it like you would from any savings account or borrow against it like a loan. You may be able to use it toward paying premiums but using it all up could cause your policy to lapse.
Requirements around how you can use and access cash value may vary from insurer to insurer and policy to policy.
A whole life policy gives you lifetime coverage and comes with a cash value component. But there are different types of whole life policies that have specific requirements around cash value, payments and more.
Here are the different types of whole life insurance policies you may come across.
https://www.allstate.com/resources/life-insurance/whole-life-insurance
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