How to Choose the Right Quote for Life Insurance
Before picking an appropriate quote, it is important to develop a good understanding of the different types of life insurance policies available in the market. Some provide permanent cover for the insurer, while a few others offer only temporary coverage. These policies also vary from one another in terms of price and flexibility of coverage.
Types of life insurance
Term life insurance
Whole life insurance
Universal life insurance
Variable universal life insurance
Term Life Insurance
Is a form of insurance policy that offers temporary coverage to the investor with no cash value option. It can be useful when there are immediate expenses for the investor to address such as funding children's education or covering mortgage costs.
Pros and Cons of term life insurance
Term life insurance is one of the cheapest forms of insurance policies available in the market. This makes it a good short-term proposition for investors to address any current or immediate financial concerns. For e.g.: A health 45 year old non smoker can easily go in for a million package with a 30 year term at the rate of $200 a month as premium costs.
The aspect of offering temporary coverage can be both positive and negative attribute to term insurance. The positive aspect being that this kind of policy can come in useful to your dependents until they are old enough to earn on their own. This could include funding your spouse until retirement benefits kick in or till your children are able stand on their own feet. It is ideal for people to in for a 30 year term life insurance policy when they have new born member in the family.
They are easy to buy and one of the least complicated forms of policies
Since term life provides only temporary coverage, the investor is left with no cash value option upon its expiration. Unless you have made arrangements for alternative forms of income, you could find your self in a sticky wicket once your term life policy expires at the end of 30 years. By this time you will be much older which will make other forms of insurance policies a much more expensive affair.
It should not be looked upon as investment option. You are not going to generate any cash value at the end of the term. So make sure that you make arrangements for alternative income sources when you heading towards retirement.
Whole Life Insurance
This form of insurance offers permanent coverage to the investor with cash value options. It comes with fixed rate of premiums for the entire duration of the policy even though it is more expensive than term life. The cash value accumulates as you pay your premiums over time making it stable form of investment for your future that comes with guaranteed protection.
The flip side is it is more expensive than term life insurance. Also there chances that you might not receive dividends, which enhance the value of your policy.
Universal Life Insurance
These too offer permanent coverage while providing more flexibility to the investor in terms of timing of payout, death benefits, premium rates and other aspects. Through this the insurer can choose to increase or decrease the value of his policy from time to time depending on financial situation.
This form of policy is a little more complicated than term life or whole life owing to its flexibility. This also brings with it a certain element of risk as well. Cash value of your policy is based on fixed rates which is calculated on a periodic basis. So with falling rates the cash value of your policy could also suffer possibly leading to higher premiums
Variable universal life insurance
This form of policy offers permanent coverage along with investment options for the insurer. It is quite similar to universal life insurance in many aspects while it also does enable the investor to indulge in investing his or her cash value on other funding options. This provides the investor with considerable growth options.
This form of policy has its share of risk as well. With an investment portfolio, cash value of your policy can be substantially impacted during market downturns. Also if you happen to be late on your timely premiums, it could affect the cash value of your policy.
Selecting the right kind of life insurance quote
Make it a point to study in detail the different types of life insurance policies that you can find on the web. Before you start comparing quotes understand what amenities fall within the coverage for each policy and analyze your profile to better judge which type of policy would suit your requirements the best.
Go online and fill out a form in any one of the many insurance forums that you find on the Internet. You will shortly be contacted by local agents to further discuss what kind of package you are looking to buy. It would also be a good idea to contact multiple agents which will help you better understand the pros and cons of each policy. By contacting multiple agents you can also compare several quotes and buy a policy that is most sound and affordable among them.