Who Needs Life Insurance?
Many people think about life insurance with a number of misconceptions in mind. They believe that it is only needed by very old or who are nearing the expected end of their life. Some of them believe that it is only needed by those who live dangerous lives, climbing mountains or driving race cars. While it is correct that these people do need to have some sort of a policy because of the risks that they take and the increased odds that the policy will soon be needed, these are not the only people who could benefit from a coverage plan. The truth is that everyone could use life insurance, perhaps more than they realize.
The thing that people need to remember is that a life insurance plan is not about them. It is not about what they do or what they want to get out of life. It is not something that they will ever use, that they will ever benefit from in any real sense. A life insurance plan has an entirely different goal. It is designed to help the person’s family, the people that they love the most in the world. These are the people who need to be considered when a plan is being looked at, which is why everyone could use one.
Life Insurance for Your Family
For those who are the sole providers in their families, it is easy to see the benefits of such a plan. For a husband who works while his wife stays home with their two young children, a plan is invaluable. All that the husband has to do is think about what would happen to his children if he were gone. All that he has to do is think about how his wife would not be able to pay the rent, buy groceries, or even pay for his funeral. She could if she got a job, of course, but then she could not be there for the children. Something would have to be sacrificed.
Even those who are not the sole providers need to think about the future of their family. A wife who works to bring in half the income needs to consider getting coverage because her children may not be able to go to college if she passes away. The husband would not be able to support the entire family on his income alone. The children may even stay home to help the husband. This would be a noble gesture, but the wife surely will be distressed to see her children giving up on their hopes and dreams in order to make ends meet.
When the Something Unexpected Happens
People can never anticipate accidents. If this were possible, they would never happen. While it is true that mountain climbers are at a higher risk of death than those who stay home, a car accident can come at any moment. Icy roads in the winter can make a typical drive turn deadly in a moment. A drunk driver at night can come into the wrong lane unexpectedly and cause a lethal accident. Accidents can occur at work or at school. Because of this uncertainty, it is incredibly important that everyone has some sort of plan in place at all times.
Planning for the Future
Life insurance should really just be looked at like any other sort of plan for the future. People put a lot of time and effort into setting up retirement funds and investments for a time that is a long way off. For some reason, however, they tend not to think about life insurance as this same sort of investment even though it is one that could prove even more important.
In the end, life insurance is about a person providing for those that they love while they are alive and after they are gone. No one can know when their life will end. Just because this is an uncomfortable subject does not mean that people should ignore it and not take steps to protect against the worst. With a little bit of planning, a person’s family can be safe no matter what happens. This can remove a ton of the stress from modern life; it can allow a person to truly relax and enjoy life with knowledge of their family’s security.
How to Research Online
Life insurance is something that seems to be put on the back burner for many families, but it is something that everyone should think about. There are far too many stories of young men or women that are just starting a family that are struck with tragedy. If anything, it is even more crucial when you are starting a family to be protected by life insurance. When children are young, it becomes very difficult to care for them when one of the parents passes away.
Given the importance of life protection, people can easily be overwhelmed when they start looking for a proper insurance company and the policy which best suits their needs. There are advertisements on television, and the phone book is also filled with ads as well. Add the internet to the list and you will quickly see how difficult it can be to find just the right insurance. However, there are a few things to keep an eye out for to ensure that you get the coverage that you need.
Find the Right Company
When you are looking for quotes online, research is the key. There is no way to avoid the bombardment of advertisements you will receive when searching for life insurance, but it is possible to keep away from the ones that are not the best for you. With the advancement of technology, it has become increasingly easier to learn what people think about certain products, and insurance is no different. By simply reading about experiences that other people have had, you may learn about certain companies and how they treat their customers.
However, learning about different life insurance companies and their reputation will only get you so far. After you select a few providers you are interested in, you must take the time to read what they cover. Most providers offer more than one type of coverage, and it is crucial that you understand the differences between them. Take the time to read and compare online insurance rates and see what makes them different. For example, there are several different types of insurance that can be provided.
Types of Life Coverage
Life insurance is a form of investment in one’s future in case they are not there to fulfill their financial obligations. It consists of a contract between the insured and an insurance company to pay a predetermined amount to the insured’s named beneficiary, so long as the premiums are current. Life insurance can be used to provide food, shelter, education for the children, or take care of any other financial obligation assumed by the insurer during their lifetime. If one is young and single and essentially free of obligations, they may consider waiting before buying a policy. However, some policies return significant dividends and interest over a lifetime, so it is advisable to buy as early as possible so the rates can be locked in.
Whole Life Benefits
While there are many different types of insurance policies available, the two most common ones are whole life insurance and term life insurance. Whole life policies, as the term implies, provide coverage for the entire life of the person insured. This type of policy has both insurance and an investment component built into it. The premiums paid are partially used to cover the administrative expenses, while the remaining is used towards the insurance and the investment portion of the policy. The investment component can be borrowed against or withdrawn by the policy holder, otherwise it accumulates in cash value. Withdrawing can, however, reduce or terminate the death benefit. Premiums can be paid throughout the insured person’s life or a portion like ten or twenty years. The interest on the investment part of the policy is normally tax-free until the time of withdrawal.
Whole life insurance has a number of benefits. One major benefit is that once purchased, the premiums are locked and do not rise for the life of the policy. The policy lasts for a lifetime, meaning that one does not have to go through the qualification process and medical examinations repeatedly. A part of the premium is invested on behalf of the individual on a long term basis and if when one is older, retired, or the death benefit is no longer needed, the policy may be cashed out. The drawbacks are that premiums are costly and not everyone can afford them. One can do much better by investing the savings portion of the premium payment on their own, because saving devices offering better tax breaks are available. Usually, it takes a minimum of ten years for these policies to accumulate any real cash value.
Term Life Qualities
Term life policies are the most straightforward and least expensive types of policies available. It is basic insurance without any cash value, which is most commonly available for terms of one, five, ten, and fifteen years. Should the insured individual die within the policy time frame, the beneficiary is paid the face value of the policy. Should the insured person live longer than the policy term, the policy expires and pays nothing. Many people find this type of policy more suitable as it provides the basic protection needed, while allowing them to invest their own money as they choose where they can get higher yields. When the policy expires, the individual must re-qualify by retaking the physical exam and completing other formalities.
Term insurance policies are usually suitable for young families because with growing children budgets are tight, yet coverage is needed to provide the family with security. Term life is good because it is cheap, so more coverage can be afforded and it is simple. It can be renewed whenever necessary, while one can build up their own savings in a way that is more suitable to individual needs. Term life policies can be compared to renting as opposed to owning. If the term is outlived, a lot of money is spent and there is nothing to show for it in return. Whole life policies, on the other hand, do provide a forced nest egg at the end of the policy, however small it may be. A newer policy option is now available that addresses the concept of “wasted” money. It is known as return-of-premium term life insurance, and it returns the premium paid at the end of the policy term, however, it costs 25% to 50% more than the conventional term policies.
Search For Policies Online
When you find a couple of companies that fit your requirements, it is then time to start looking for quotes. This is the most important aspect of getting the right life product because it lets you know how much you will pay for coverage. Do not always assume the most expensive one is the best; you might end up paying for it later on. Also, if any policy sounds too good to be true, it probably is. While getting quotes was like pulling teeth back in the day, you can now receive several offers right here in seconds. If you are serious about getting the best rates, now is the time to act. By comparing the products given, you will then be able to choose the company and coverage which suits you and your families future needs.