Life Insurance - Which Type of Policy is Right For You?
Most people like to sidestep the task of shopping for life insurance. The reasons include death being to scary to think about, difficulty understanding it, not feeling a need for it, not qualifying or not being able to work it into a budget.
The truth is that there are times in your life when you probably do not need a policy, but these times are few, relative to the times when it is important for the financial health of your loved ones.
The seemingly limitless choices available can make your head spin. They are not easily understandable by the average person. Don't worry: All the the different policies can be decoded. Your life insurance agency can be a great resource. Following is basic information you need to know:
Straight life insurance is also called whole life or permanent. Your premiums are set for life when you purchase the policy as is the death benefit. In general, the younger and healthier you are when you purchase the policy, the lower your premiums for the rest of your life.
As long as your premium is paid, your beneficiary will receive the proceeds when you pass away. Straight life policies accumulate cash values that you can borrow or withdraw if needed. Remember that borrowing will reduce the amount that will be paid to your heirs, if it is not paid back.
Annuities are a form of life insurance that not only has a death benefit, but can also create a stream of income for you while you are still living. There are several types of annuities, but there are two basic types; fixed and variable.
A fixed annuity pays a fixed yield and has pre-determined payout to you while still alive depending on the date that you annuitize the policy and how many years the insurance company estimates you will live to collect those payments. You also can elect to pay a fixed payment monthly in exchange for a fixed monthly benefit for a specified period of time.
A variable annuity performs in a similar way, but can potentially pay much better benefits because your premiums are invested in the stock market. You have the potential to earn or lose money just like a regular investment. Your actual monthly payout, should you decide to annuitize depends on your success with your investments. There are also other choices available with annuities, but you should talk with an agent for more explanation and discussion about whether or not this is a good route for you.
Perhaps the most attractive kind is term life coverage which is the easiest to understand and is the most economical. Term life is for a specific term (example 10 years), and will pay to your heirs only if you die during the term of the coverage.
Young families can purchase a high amount of coverage relatively inexpensively to ensure that young children will be cared for in the case of the death of one of the partners. Term life insurance does not build cash value.
Burial insurance is self explanatory. It is meant to pay funeral expenses.
Mortgage life is like term life but usually more expensive. The purpose is to pay off the mortgage in case of the death of one of the borrowers on the mortgage. The value declines at about the same rate as the mortgage balance declines. Inexpensive term coverage, which retains a consistent life amount through the term of the policy, is a better value.
For more specific information about what type of protection would be best for your situation, it is always recommended that you do your own research, and of course, check with an agent who can answer your questions. - 23211
The truth is that there are times in your life when you probably do not need a policy, but these times are few, relative to the times when it is important for the financial health of your loved ones.
The seemingly limitless choices available can make your head spin. They are not easily understandable by the average person. Don't worry: All the the different policies can be decoded. Your life insurance agency can be a great resource. Following is basic information you need to know:
Straight life insurance is also called whole life or permanent. Your premiums are set for life when you purchase the policy as is the death benefit. In general, the younger and healthier you are when you purchase the policy, the lower your premiums for the rest of your life.
As long as your premium is paid, your beneficiary will receive the proceeds when you pass away. Straight life policies accumulate cash values that you can borrow or withdraw if needed. Remember that borrowing will reduce the amount that will be paid to your heirs, if it is not paid back.
Annuities are a form of life insurance that not only has a death benefit, but can also create a stream of income for you while you are still living. There are several types of annuities, but there are two basic types; fixed and variable.
A fixed annuity pays a fixed yield and has pre-determined payout to you while still alive depending on the date that you annuitize the policy and how many years the insurance company estimates you will live to collect those payments. You also can elect to pay a fixed payment monthly in exchange for a fixed monthly benefit for a specified period of time.
A variable annuity performs in a similar way, but can potentially pay much better benefits because your premiums are invested in the stock market. You have the potential to earn or lose money just like a regular investment. Your actual monthly payout, should you decide to annuitize depends on your success with your investments. There are also other choices available with annuities, but you should talk with an agent for more explanation and discussion about whether or not this is a good route for you.
Perhaps the most attractive kind is term life coverage which is the easiest to understand and is the most economical. Term life is for a specific term (example 10 years), and will pay to your heirs only if you die during the term of the coverage.
Young families can purchase a high amount of coverage relatively inexpensively to ensure that young children will be cared for in the case of the death of one of the partners. Term life insurance does not build cash value.
Burial insurance is self explanatory. It is meant to pay funeral expenses.
Mortgage life is like term life but usually more expensive. The purpose is to pay off the mortgage in case of the death of one of the borrowers on the mortgage. The value declines at about the same rate as the mortgage balance declines. Inexpensive term coverage, which retains a consistent life amount through the term of the policy, is a better value.
For more specific information about what type of protection would be best for your situation, it is always recommended that you do your own research, and of course, check with an agent who can answer your questions. - 23211
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In the San Francisco Bay area, call on Stoneridge Financial for advice and assistance with life insurance and other insurance related investment products. Powered by SEO 2.0 Services
posted by X - Men @ 3:04 AM
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