Finding the right life insurance policy can be a complicated and confusing process. You have to know the ins and outs of the different types of life insurance, and thats after you’ve figured out whether or not you even qualify, or if you even need insurance. Thats where we come in?we can make the policy-shopping experience a smooth and easy one so that, when your time comes, your loved ones will be provided for.
The different types of life insurance include whole life insurance, term life insurance, universal or variable universal life insurance, no-load life insurance, and mortgage life insurance. Mortgage life insurance lets you have your mortgage immediately paid off upon your death, so that your family can live without a mortgage as long they own the house. We will explain these different types of insurance, so that the choices won?t seem so overwhelming.
? Term Life Insurance: With term life insurance, you pay a fixed premium over a determined period. If you die within that time, the insurance company pays the specified amount but, if you outlive your term life insurance policy, you lose what you pay in and have nothing. Another problem term life insurance poses is the possibility of the premium increasing after a certain interval. In many cases, you may purchase another insurance policy after the term expires, but usually at a significantly higher rate.
* Whole Life Insurance: Whole life insurance is just that you will be covered all the way until your death. Whole life insurance is measured two ways, it has a face value, which is the amount that would be paid out in the event of death or at policy maturity, and it has a cash value, which would be the worth of the policy if you were to cash it out and receive a lump sum before your death or before your policy matures.
-Universal life insurance: This kind of life insurance differs greatly from the two above. In this insurance type, your premiums go into investments such as bonds, mortgages, and money market funds. Your investment funds pay for your death benefits, which you agreed to in life. What if the investment fund I have created does not prosper? Do not worry your guaranteed minimum will be paid. This life insurance policy tends to be more flexible and allows you to change the benefits and premiums. This makes universal life insurance ideal for younger couples and families.
? Variable Universal Life Insurance: With variable universal life insurance, the amount of the death benefit is highly dependent on how well your investments perform over the years.
* No-Load (or Low-Load) Life Insurance: This type of policy is beneficial in that companies will sell these to you at a flat rate that isn’t based on commission, so more money goes to the final payoff instead of elsewhere. A financial advisor can be helpful when determining how much life insurance you’ll need in order for your family to live the way they live now if you were gone, which will in turn decide the rate at which you’ll pay for the policy.
Susan Reynolds is the webmaster for a leading South African Life Insurance website. For more information visit: http://life.insurance123.co.za/
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