A life insurance policy is basically a mutual agreement between your insurance carrier and you. You agree to pay a certain amount of premiums for a stipulated number of years. In return, the insurance company agrees to pay your beneficiary a certain amount of benefits if you should die during the tenure of the contract. This is the dynamics of term insurance which is the most basic and most affordable life insurance you can opt for.
Whole or permanent life insurance includes an investment factor. It attracts customers because premiums paid accrue interest after a period of time. This interest is then added to the death benefit. However, because of the investment factor, whole life policies are more expensive than term life policies. There is debate on whether the investment factor in a whole life policy is really worth it. If you were to invest the difference between paying for term life and paying for whole life, the interest you accrue on that amount through a long-term investment plan would be greater than what a whole life insurance policy would pay you. Using a life policy as an investment is something you should consider carefully as there might be other options available that could make your money work harder for you.
Coming back to the basics, death benefits are what life insurance is all about. If you have someone who depends on your income, you need life insurance. Insurance is not complicated. It is a means of making up for the economic loss a family would experience if an earning member died. This means, after your death, your family would have enough money to afford a comfortable lifestyle. Ideally, your death benefits should be able to cover any debts, the mortgage and other priority expenses such as college education for your children or a daughter’s wedding. When you deviate from the simple purpose of term insurance, purchasing a life insurance policy tends to become complicated and more expensive.
There are several types of term insurance policies you could consider:
- Return of Premium – If you survive the term period, premiums you have paid are returned to you without interest.
- Renewable – This gives you the option of renewing your policy for another term without have to prove insurability.
- Decreasing – Premiums decrease towards the end of the term.
- Convertible – This gives you the option to convert a term life policy to whole life.
- Level term – This type of term insurance keeps your premiums fixed throughout the term period.
If your main objective is to protect your family in the event of your untimely death, then pure life insurance is what you need. A basic term life policy is affordable and will meet your requirements. You can find the best term life simply by using the services of reputable online life insurance quote providers. They offer independent and objective recommendations that can save you up to 70 percent on a life policy. Fill in the questionnaire and you’ll receive the best estimates from reputed insurance companies.
AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term insurance rates by comparing thousands of insurance policies from dozens of top-rated carriers.
About the author
Denise Mancini-Blonda is manager of public relations and marketing communications for AccuQuote. In addition to overseeing all corporate media relations, internal executive and employee communications, she plays a key role in the overall content development of the company’s online and offline marketing campaigns. This entails overseeing and implementing AccuQuote’s social media, blog and podcast strategies, as well as its word-of-mouth marketing campaign.