Life insurance offers protection against the death of the sole breadwinner in the family. By purchasing life insurance, you will be able to enjoy a peace of mind. The benefits of life insurance are not subject to the tax therefore your family can use them to take care of their life in various ways. Life insurance offers coverage for necessary expenses such as medical cost, burial cost, and taxes on real estate. The insurance company will supply fund to the family during the readjustment period until the family members manage to find a job. In addition, the insurance company will provide compensation for ongoing financial needs such as tuition fees, pension, utility bills, baby sitter cost and etc.
In single premium life insurance, the policy holder is required to pay a onetime premium. Single premium life insurance offers a minimum death benefit for the family members. The family members will receive a lump sum payment as agreed in the contract. The payment will be deposited in a cash value account. The deposit will benefit from a minimum interest rate. The policy holder has to pay for an annual fee to cover up the administrative cost. You can take a loan against single premium life insurance. The loan terms are usually favorable. Many companies structure the single premium life insurance plan in such a way that it will avoid death benefits.
Term life insurance offers a protection within a limited time frame. Normally, term life insurance provides coverage for 1, 5, 10, or 15 years. If the policy holder died within the time frame, the insurance company will disburse the compensation to the beneficiaries. The insurance company won’t offer compensation if the policy holder passed away after the time frame. Term life insurance is suitable for people who need a temporary protection.
Insurance companies offer two types of options including renewable and non renewable policies. Renewable policies will automatically renew the existing policy when the term is finished. Non renewable polices require the policy holders to sit for another health questions in order to qualify for the new policy.
Insurance companies also offer convertible and non convertible term life insurance. Convertible insurance can be converted into other types of life insurance such as whole life insurance, variable life insurance and universal life insurance. Non convertible insurance cannot be converted into different types of life insurance.
Whole life insurance insures against the entire life of the policy holder. The premium can be paid annually or for a portion of the life term for example 10 years, 30 years and etc. If the policy holder dies, the insurance company will pay a fixed death benefit along with the balance accrued in the cash value account.
Consumers who want to save many can take advantage of the insurance search engines to find cheap life insurance plan. However, the price should not be the deciding factor when coming to purchase life insurance plan. Before applying for a life insurance, make sure the company is reputable so that you won’t be cheated.
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