Life Insurance - How Much Coverage Should You Get?
How does a person determine how much coverage he should get when it comes to life insurance? What kind of insurance should a person get when they are confronted with the question of ample coverage for their family's needs? There are a number of kinds of insurance a person can choose from and a number of many different insurance companies they can approach for these. These companies offer many different benefits for each kind of insurance they have and knowing which insurance to choose for the kind of benefits your family needs can be a pretty daunting task. How much coverage does a person need to get for it to be called enough for their family?
Understanding Term versus Permanent
Let us first start the assessment of ample coverage for you by comparing two of the main categories of life insurance available to you: term and permanent or whole. Term life insurance is a kind of insurance that allows a person to pay for their life insurance in a span of a few years that can run between ten to thirty years. The premiums of this kind of an insurance policy remains the same over the years, and the amount that your heirs can claim in the event of your untimely demise is the amount that is stated in the policy's terms. A whole or permanent life insurance policy us one that keeps you paying a premium for the duration of your life and the amount that is added up until the day of your passing is the amount that your family will be getting in life insurance benefits.
Knowing the Pros and Cons
The coverage you get is dependent on the kind of insurance you avail of, whether term or permanent. It is however wise to know that permanent insurance can cost more but can give you a lot more benefits that is not associated with your death:
- Permanent or Whole Life Insurance. One of the things that you can gain with a permanent or whole life insurance policy is the reduction of premiums over a period of time. These kinds of insurance policies have what is called an overpayment amount that is charged together with the premiums you pay during the first years of your policy. This overpayment or cash value amount is invested by the company that holds your policy and the earnings of this amount is then used to pay off some part of your insurance premiums in the later years of your life. Another thing that makes this kind of life insurance attractive to those who get it is the possibility of using part of the money they put into the insurance in the later years of their life, even when they are still hearty and hale.
- Term Life Insurance. This kind of an insurance policy is good for those who are just starting out in life but want to make sure that their families are well taken care of in any eventuality. Term life insurance offers people the kind of coverage they need in case they lose a loved one in an untimely manner. Since this insurance offers a person coverage that does not need to mature for their families to claim the benefits if they do die unexpectedly, this is the choice that people often make for their insurance choice. While the sum does not increase in time with the payments that are being made, as long as payments are made on time and regularly, the policy remains active. Even after payments have stopped at the end of the payment term, the policy remains active.
What Is a Guaranteed Issue Life Insurance Policy?
This is an alternative to the regular term life insurance policies you see. A guaranteed issue insurance policy is basically a kind of insurance that is given out to individuals who do not want to take a medical exam to be able to qualify for a regular insurance policy. This is often taken by those who have existing medical problems and is often more expensive than the regular insurance policies that you find.