Life Insurance Tips

There are two basic types of life insurance: temporary and permanent. Temporary is term life insurance. Permanent falls into three categories: Whole life, univeral life, and variable annuity.

Follows are some tips about all types of life insurance:

  • Consider purchasing a level of insurance coverage at the given benefit amount.  That is, better rates are given at coverages of $100,000, $250,000, $500,000, etc.
  • Be sure that you are provided with an illustration for the policy that you have chosen. If the company will not provide one, find another insurance company.
  • Purchase a level-premium policy. The illustration should show that your premium payment is guaranteed to not increase.
  • Don’t purchase permanent insurance as an investment or for the cash-value. During first 10 years, your premiums are not invested – they pay the insurance company’s cost. Bear in mind that usually policies don’t accumulate much cash value until after the 12th year.
  • Determine the needed period of coverage in order to buy the correct policy so as to make premium payments affordable. For example, in the case of only needing insurance for 10 years, purchase term.
  • Shop around to find the best rate from may quality insurance companies.
  • Be positive that insurance company is financially stable and will be able to pay a claim should you die. Insurance companies can be researched at http://www.ambest.com.
  • Avoid riders. Avoid riders such as accidental death and waiver of premium riders because they are seldom needed.
  • If you are are required to take a medical exam, do not use caffeine and sugar for 24 hours before the medical exam. Schedule the exam early in the morning, and don’t drink or eat anything but water for at least eight hours prior.
  • Investigate if a group life insurance plan is available at your workplace. Seldom do these group plans require a medical exam or physical.

When considering the purchase of life insurance, do not hurry into buying expensive permanent life insurance before investigating if term life insurance will meet your needs. Sometimes, fees charged for life insurance policies with investments do not provide requistite benefits. It is important to remember that when purchasing life insurance, you are hoping that you’ll live, but you are also buying in case you are wrong. It is quite important to leave your family protected should you pass away – your family is your most important asset.