a ccording to The Street, roughly 44% of Americans do not have life insurance. Yet it is the one type of insurance that every living person would use at some point, and when that time comes, not having life insurance imposes a tragic burden on the remaining family members. The last thing your loved ones need when you die is the disheartening realization that you did not buy life insurance, and someone—who may be financially unprepared to do so—is going to have to pay the bill. Cheap life insurance.
The Best Way to Purchase Life Insurance
It isn't difficult to find life insurance offerings and information. The most common options include:
Responding to a direct mail offering by returning a card and buying a mail order policy;
Calling a number seen on a TV advertisement;
Purchasing a policy through your employer;
Working with an agent to customize a policy best suited for your needs.
It should be obvious that the final option is the best one. People who purchase policies by mail order or over the phone often do not understand the type of policy they are getting. They are responding to the appearance of a low priced policy. If you aren't educated in the fine print of life insurance, you could end up with a policy that has a very short term, a policy that doesn't pay until after a waiting period, or one that goes up in price every time you cross a particular threshold, such as an age bracket.
20 year life insurance policy
Purchasing through your employer may be an option, but be aware that most group policies end when you retire or leave that particular employment. By law, all group policies are convertible, but the conversion premium is usually quite unattractive.
When you use our convenient online service you will have instant access to up to eight prequalified companies who can provide life quotes in your area and can get you connected with professional agents who will know how to find a company that offers policies to fit your needs. Also, a good agent will answer all your questions and help you keep your policy up to date for many years into the future.
The price, or premium, that you will pay for life insurance varies widely depending on certain factors:
Desired face value (the amount your insurance will pay when you die)
Your age and your health are the two factors that determine what type of insurance and the amount for which you are eligible. Of course, the younger you are when you purchase life insurance, the lower your premium will be.
Health is a major factor in life insurance premiums. If a person has severe health issues or health threatening life style issues—such as tobacco use, drug use, or obesity, he/she might still be able to find a policy, but it will be much more expensive.
The face value should be determined by what you need—not just a number that sounds satisfactory at first guess. This is where a knowledgeable agent can help you calculate the usable assets, the needs of surviving family members, and the possibility of unpaid bills as well as the cost of the funeral itself.
Choosing The Life Insurance Right for You
Life insurance comes in three basic flavors—Term, Whole Life, and Universal. Within those categories, companies can "modify" any type they offer, but they must disclose that it is "modified term," "modified whole life," and so forth. Modifications are generally in the company's favor; a good agent should be able to help you avoid them.
Insurance for a set period of time, often 20 years, but if you are over 65, you may be unable to get more than 10 years of coverage. Term is inexpensive for high face values because in most cases the Term expires, and the insured never claims the benefit. Nevertheless, if you need a lot of insurance during your working years and won't need it after retirement, Term is the least expensive of the three types.
Guaranteed Whole Life
Just as it sounds, Whole Life is insurance for as long as you live. If it is a level policy, the premium and face value will never change, and the policy will earn cash value that you can borrow against in the event of an emergency. Since the company will have to pay the benefit at some point, whole life is obviously more expensive than Term. However, it is the most worry free type of insurance to have, and can be reasonably priced if purchased at younger ages.
Universal life is a flexible permanent life insurance. If properly funded, it is good to age 121, and usually the premium will not change. However, you can change both the premium and the face value if the need arises. That is, for a period of time you could pay the "minimum" premium, which would keep the policy in force temporarily while you find a new job, recover from a crisis, etc. Eventually you would need to increase the premium in order to properly fund the account and pay the cost of insurance. If you pay the target premium from the start, and do not borrow from the policy, you would usually never need to increase the premium.
Universal life is the most complex to understand because it actually has two accounts—a savings account where your premium and interest are deposited, and the insurance account. As the savings grows, it continues to pay the cost of insurance which increases as you get older. In a crisis, you could actually withdraw funds from the savings account, but at some point, you would need to either replace that money or increase your premium.
How to life insurance
Universal life is popular among those who understand it because it is less expensive than whole life but will serve the same purpose. You need to work with an agent to know if this type of policy is right for you.