Many Americans do not fully understand life insurance and what it does for them. Some do know that life insurance can help you pay your bills should you die unexpectedly. However, many do not understand how expensive it can be or how life insurance policies work.
Life Insurance Advantages
Global Life Insurance has many advantages over term life insurance and whole life insurance. Global offers term life insurance without a medical exam, accidental death benefit and death benefits that are paid to the beneficiaries if you die. They also offer a low cost single premium that does not require a cash value buildup. On top of that, they offer an affordable monthly premium that is based solely on your ability to pay. On top of that, global policyholders are entitled to dividend payments and capital appreciation.
American Income Life Insurance also has advantages over other life insurance policies. Unlike other policies, American Income policies do not require a medical exam. They also have no premiums, dividend payments and capital appreciation. However, American Income policies offer renewal benefits at an affordable rate with a one-time payment. Unlike Global, American Income policies pay their death benefit on the first month of coverage and do not require a medical exam.
To get an idea of the different rates available, you can get free online quotes from AM Best, Moody’s and Standard & Poor’s. You can view all the terms and conditions and premiums for each company. You can choose a company that will give you good rates and adequate coverage limits. With free online quotes you can compare all the different policies and premiums.
Another advantage is that insurance companies use your current financial strength ratings to determine your premiums. If your ratings are poor you will pay more for life insurance policies. Good ratings, on the other hand, can save you money.
You will also need to decide whether you will surrender value or not with your life insurance policy. With surrender value, the death benefit will be paid out to the beneficiary. In most cases, the beneficiary will receive a lump sum. If you do not have any investments or cash value in your life insurance policy, your surrender value will be zero. So if you die, your beneficiaries will receive nothing.
There are two types of whole life insurance policy – term life insurance policies and universal life policies. Universal life policies provide more flexibility and are less expensive. They offer more choices for the premium amount, which allows term life insurance policyholders to buy additional terms at a discount. Term life insurance premiums stay level for the life of the policy. Because premiums are based on your risk level and income, term life insurance policies are more affordable for many people.
A lot of people choose to take advantage of the earnings component of term life insurance policies. The earnings components of term life insurance policies work like a savings plan for your future income. When you begin to make money your premiums from the policy become income. This allows you to build a nest egg for your later years.
One of the advantages of whole life insurance policies is that they provide an accumulation of cash values, which will pay the cost of your final expenses, funeral costs and taxes. Your cash value grows tax-free as long as you don’t withdraw it before you stop receiving payments. This can give you peace of mind about your family’s future. Another advantage of whole life insurance policies is that they are a renewable term investment plan. They offer an excellent opportunity to borrow against the policy while building your retirement savings.
Some people choose term life insurance over whole life insurance because they are more flexible. They can cancel their whole life policy and get a term life insurance policy in the event of a death. Term policies also offer a flexible payment option. With a term life policy, your death benefit may increase or decrease, depending upon your investment earnings. Your death benefit will never be less than the death benefit of your whole life policy, which guarantees your family a specific amount upon your death.
Most individual life insurance plans offer a platform for building financial strength. To determine your financial strength, the rating services will review the health history of you and your dependents. Ratings services use the highest of available information to determine your individual rating. The purpose of rating individual life insurance is to inform potential customers about your financial strength and the state of your life insurance. Financial rating services will let potential customers know if you or any member of your family has filed a personal bankruptcy, been convicted of a felony, or is under any type of court supervision.
Some individuals want to pay a lower premium for permanent life policies because they do not anticipate any major medical problems. Insurance companies offer this type of policy for individuals who do not anticipate any major medical problems and who are within their own lifetimes. For these policies, you will have lifetime coverage and no negative credit rating. The cost of these policies may be more expensive than whole life insurance policies. If you need the most affordable permanent life policies, an affordable term life insurance policy may be the best choice for you.