A Guide to Buying Life Insurance

Life insurance is something that most of us need, but all of us hope we never have to use. It is not as much about us as it is the family or business partners we leave behind. You don’t want to leave them in a bind during their time of grief. Learning more about what’s available to you makes getting life insurance quotes easier.

There are several kinds of life insurance policies. All serve different purposes ranging from raw coverage to investment plans.

Whole Life Insurance

As the name implies, whole life is designed to cover you for your whole life. You purchase the policy, and at the end of your life a beneficiary gets the face amount of the policy.

Depending on the policy, some reach the point of being paid up. That means that no more monthly premiums are required because it is now a “paid up policy”.

Some policies allow you to borrow from their cash value. You can pay the amount you borrow back over time so that the policy reverts back to its face value. If that amount is not paid back, it is taken out of the benefit at the end of your life.

The premium, or the cost of whole life insurance, stays the same throughout the life of the policy. If you get it when you are young, it will remain affordable all your life.

When getting life insurance quotes, it is important to know exactly how your policy will work so there are no surprises at the worst time. Every policy has its own peculiarities, and one little detail can make a big difference.

Term Life Insurance

Term life is insurance you buy that only lasts a certain amount of time, or a term. This may be as little as a year, or as much as thirty years. It’s convenient if you just need life insurance to get you to a certain point in your life.

When you are young, term life is the most affordable way to get a lot of insurance. The downfall is that as you get older and the term expires, renewing becomes very expensive.

Because of the nature of the insurance, term life is very convenient for insuring loans. For example, rather than purchase costly loan insurance for a five year car loan, get quotes for a five year term life insurance policy and you will probably find it is cheaper. You can also use a version of this kind of insurance to insure a home loan.

Universal Life Insurance

Universal life has a built-in savings feature that offers a small amount of interest on the cash value of the policy. You can increase your premiums on the policy to increase the cash value. A close relative of universal life is universal variable life, which has many investment options. If you are getting universal variable life insurance quotes, be sure your agent helps you understand this intricate policy because there are fees involved due to the savings plan feature.

Variable Life Insurance

Variable life also offers investment options in vehicles such as stocks, equity funds, bond funds and money markets. While your investments are in a variable life account, they are not taxed. You can also use the interest earned to pay the premiums. If you are looking for a simple life insurance policy, this may not be for you.

When getting any kind of life insurance quotes, always use a reputable agent. An agent who is too eager to sell you a certain kind of policy may be more interested in his commission than your coverage.