Life Insurance Policy – The What, Why and How Of A Life Insurance Policy

A life insurance policy could help you to provide your family with financial security when you die and can no longer look after them. In this article I will discuss the what, why, how, when and where of a life insurance policy. If you are wondering about getting life insurance, then you may want to read this.

What is a life insurance policy?

A Life insurance policy is a contract between an insurance company and the insured which promises to pay out a certain amount to your beneficiaries in the event of your death.

It also sets out the provisions of the life insurance coverage. These provisions include premiums, loan procedures, face amounts, and the designation of beneficiaries, among many other clauses.

Policies may be for term or permanent cash value types of coverage.

Why is a life insurance policy essential?

The benefit from a life insurance policy is not for you. It is to provide for your loved ones, but after you have gone.

After your death, the life insurance money is paid to those who rely on you to give them a secure standard of living, which they might lose if you should die. This is money when they need it the most, with no income tax or publicity.

How does a life insurance policy work?

Term life insurance is only for a certain period of time, and if the policyholder dies during the term of insurance he/she receives the death benefit. In the case of the insured person dying after the policy expires, however, no benefit is paid.

At the end of the term period, the policy expires with no accumulated cash value, and no benefits are payable. Term is the cheapest, but it’s unlikely the death benefit will be paid since the life insurance policy will probably lapse before you actually die.

When a person has family and becomes ill, not only does the sick person need support, but also the family often requires relief. Short-term income protection is an added coverage to life insurance and provides extra cash to cover the family’s needs when one spouse is ill.

You will need to decide on the amount of term life insurance before you start to shop around. Most companies have effective savings rates at $250,000, $500,000 and $1 million.

When can you take out a life insurance policy?

You may be able to get a lower premium for your insurance if you have lowered your cholesterol, lost weight or quit smoking.

A 35 year old nonsmoking male in excellent health can buy a $500,000 term life insurance policy for about $700 per year.

Keep in mind your age determines the length of time the term policy will have a guaranteed level premium. You may not be able to get more than a 10 year guarantee if you are over 50 years of age, so start while you are still young.

Where can you find a life insurance policy?

Finding a life insurance policy is something that you should not rush into.

If you are planning to apply directly for life insurance, then you may find it easier to apply online. All this information will enable you to make the right decision about the best company to get your most suitable life insurance policy from.

Getting online term life insurance quotes can be a very effective and convenient way to save you both time and money when shopping for term life insurance. The quotes are free and you’re never under any obligation to accept any quote that is offered to you.

Life Insurance Quote FAQs

The acronym FAQ stands for Frequently Asked Questions. Most people are generally interested in purchasing a life insurance policy, in order to leave behind something worthwhile for his family. Prime importance is given to life insurance and people need their queries to be answered and doubts, cleared. The Internet has made it easy to shop, compare and obtain life insurance quotes online. A few clicks on the mouse can fetch all relevant information, from several websites. This increases his chances of getting the best online insurance quotes.

A life insurance professional can give the quotes on his website or can buy them from the person who accesses these quotes. Some of the frequently asked questions are about changing a beneficiary on a life insurance policy and whether someone, other than a relative, can be named as a beneficiary of a life insurance policy. Other queries are about the insurance products available for disabled children or the donation of the life insurance policy to a charity. There are enquiries about group life insurance and insurable interest. People also ask about the advantages and disadvantages of buying a life insurance from the employer and a company.

People enquire about ways of lowering cost of insurance, pension benefits, separate policy for a child and the appropriate age of buying a policy. Many a times they ask about the smoker?s rates for life insurance. Some people are interested in the conversion of part of a term life insurance to permanent life insurance. Others ask about the rates of return of life insurance policies. There are personnel and online sites that answer all queries. A little research does well, when investing in life insurance. It is important to be absolutely updated and appraised on the policies available. It is a once in a lifetime investment.

Comparing Life Insurance Leads

With competition increasing in the life insurance sector, the agent has no alternative but to get as many leads as possible and from as many sources he or she can. Good leads are one of the strong pillars of business for any life insurance agent. Hence, it becomes very important to not only get as many leads as possible but to also be sure that the leads are worth following up further.

It is for such reasons that an agent has no other option but to compare life insurance leads from various companies. Various Internet-based and telemarketing companies are in the business of providing life insurance leads. Obtaining leads from such companies can be a smart move on the part of the agent. He can hire, on a trial basis, different companies that provide leads and follow up further on the leads.

When comparing life insurance leads, it is extremely important to find out how many leads were converted in the end. An agent cannot know for sure the worth of the leads until he or she calls or meets the prospects and tries to sell them an insurance policy. If the lead company has been good and honest enough, there should not be much difficulty in selling policies to interested people. On the other hand, if the lead has been obtained by unscrupulous methods, it could very well mean that the person is not ready for a life insurance policy and may express anger at being approached about a policy. The response of the prospective customer will clearly show the extent of hard work put in by the company providing the leads.

Bad leads are dangerous, as they eat up a lot of time and energy of the agent who strives to get the client, but since the person was never ready for a policy and was instead tricked to part with his address and numbers, it could turn into a big road block for the agent.

Term Life Insurance – Who needs It

Term life insurance is a basic, vanilla, type of life insurance. It is an insurance policy covering a specific individual, for a specific dollar amount, for a specific period of time. If the insured dies during the term of the policy, the policy pays the face value to the beneficiary. The policy has no cash value or surrender value, when it expires it is done.

Term life insurance is much less expensive than whole life insurance. Term insurance is often used in addition to whole life when doing financial planning. If there are known or anticipated expenses coming due in the future and savings or other insurance may not be enough to cover them a term life insurance policy may be purchased with a long enough term to cover the anticipated event, perhaps a child’s college education.

Term life insurance is the most widely used type on life insurance policy. Because of its generic nature term insurance is commonly sold online. Online insurance quotes are easily found and a comparison of policies is quick and easy. When comparing term policies you only need to consider the face amount desired, the premium being charged and the stability of the issuing insurance company.

Term insurance policies must be renewed each time they expire. Some policies allow you to renew at the end of the policy’s life span at a specific rate, often the then current rate. Some policies let you convert to a whole life insurance policy at some future date. This type of policy would work well for a young person with a limited budget wanting basic insurance in case they were to die and wanting to cover expenses, but anticipating buying whole life in the future when they were earning more money or started a family.

The important thing to remember when purchasing a term life insurance policy is to shop around and compare what policies are being offered.

Term life Insurance – A Superior Understand That Pays

A term life insurance policy is a cost-effective option at a period in your life when you can’t risk being without life coverage but are financially challenged. However, it does have its disadvantages. If you know how to take care of those you’ll enjoy the best of both worlds.

It has two major disadvantages: It’s lack of flexibility and the risk of being declared uninsurable. However, these two broad disadvantages could be easily tackled…

You may not be able to get any life insurance protection when you need it most in your life. This is since you’d have to reapply at the expiration of the period or term you bought. Some folks are deemed uninsurable when they reapply and are, therefore, compelled to be without any form of life insurance protection.

To cancel out this demerit, request for a term life insurance policy that is convertible to whole life plans and/or request for guaranteed renewal to ensure you can always renew when you current term expires.

You can quickly switch to a whole life policy if you buy a term life insurance policy that has convertibility as a feature This allows you to take advantage of the good points of any policy type at different points in your life.

You enjoy the advantages of paying a lot less for considerable coverage when you have a small budget and then change over to another policy as soon as things improve with your finances.

Using quotes sites for comparison shopping will allow you save quite much on your term life insurance policy. Requesting quotes from not less than three quotes sites raise the chances that you would get more savings. This is it because you have a broader basis for doing more thorough comparisons.

What is Term Life Insurance

Term life insurance is in fact the original form of life insurance. It is commonly considered to be a pure form of insurance protection. This is due to the fact that it builds no cash value whatsoever. This is as opposed to the case of permanent life insurance like whole life, universal life and variable universal life. Term life insurance is not permanent. This is because it covers you only for a specific period of time that is the relevant term. If the insured individual dies during that particular term, the death benefit is paid to the specified beneficiary. Since the term expires, many a time the insurer does not have to pay out. This makes term insurance perhaps the most inexpensive way to purchase a considerable death benefit on terms that are on coverage per premium dollar basis.

As term insurance is not of a permanent nature its primary use is usually to provide coverage for the temporary financial responsibilities of the insured. Such responsibilities may include college education for dependants of the insured, dependent care, consumer debt and mortgages. However the responsibilities are not limited to just these listed items. There is however a main disadvantage of term life insurance. This is that the coverage provided by such term insurance such that at the end of the term, the coverage ceases. Now after this ceased coverage any new policy has to be underwritten newly and that too this time according to the current age and health of the policyholder at the time of underwriting.

On the flip side when a complete or whole life policy is taken out, the individual insured has a guaranteed insurability for the rest of his or her life and this coverage is regardless of any alteration in the health of the individual.

This does however mean that the initial premiums of the whole life coverage are likely to be higher than that of term insurance coverage. Therefore it depends on your personal needs and situation in order to decide which plan is ideal for you.

How Your Family Benefits From Your Term Life Insurance Policy

Having a term life insurance policy benefits your family in two important ways.

First, it gives you and your family long-term peace of mind. Knowing that your family’s needs are covered in the event you die can help put your mind at ease.

Second, term life insurance gives your family financial protection. For example, you can use your policy to make sure your spouse and children have enough money to meet their needs if you die. Or you can use your policy to make sure you have enough money to pay for your mortgage; you simply specify that your policy is in effect until after your final mortgage payment date. Same with your children’s education-just make sure the policy expires after the college graduation date. If anything happens to you, your children will still have the resources necessary to get their all-important education.

How do you buy this type of insurance? It’s very easy! “Whole life insurance” is much more complicated and expensive. In contrast, some term life insurance companies don’t even require a medical examination. You can buy a policy online in just minutes!

You apply by answering a few short questions about your age, height and weight, and general health. Immediately, you get a quote-free of charge and free of obligations. If it meets your budget, you can pay online…even print out your policy. And in just a few minutes, you have insurance for your family and the peace of mind that comes with it. No physical examination required. No blood test. No urine test.

How much insurance should you buy? The answer is simple: buy enough to cover your needs. Term life insurance is very affordable; whole life insurance is expensive. So don’t cut corners-your family’s security and peace of mind are at stake! Buying enough coverage is one of the smartest, most cost-effective investments you can ever make.

Beyond buying insurance to cover college or mortgage payments in the event of an emergency, some people have other reasons for making the purchase. For example, some people have health complications that may prevent them from getting ordinary life insurance; term life insurance is ideal because they may be able to get a policy with no medical examination required. Other individuals-for personal or religious reasons-avoid doctors, blood and urine laboratory tests, needles and syringes, and all other aspects of a medical examination. Term life insurance without a medical exam may be the best-or in some cases, the only-choice they have.

Older individuals also may choose term life insurance without a medical examination. Many ordinary insurance companies simply deny older people coverage because of their age. And some people make end-of-life plans by using the death benefit of their policy to pay for their funeral expenses…so their family doesn’t have to worry about it.

And that’s the whole point-life insurance isn’t really for you; it’s for your loved ones. Protect your family-make sure they get all the benefits of term life insurance.

How to Find the Best Rates On Life Insurance in Nevada

At some point in each person’s life, often not long after they’ve married or, especially, right after having a child, the realization begins to dawn that none of us are immortal. That is often the time that we first decide that we need life insurance – and then the race is on the find the best rates on life insurance in Nevada.

When shopping for life insurance the first decision one needs to make is which kind of life insurance to buy: whole life or term insurance.

Whole life, as the name implies, is insurance that is good for your whole life. You buy it once and unless you want to upgrade or make alterations in your policy at some point, that’s it for life. Whatever premium rate is in effect for the amount of the policy and your age at the time you take out the policy is the rate you will pay for the rest of your life.

Term insurance, on the other hand, is a life insurance policy that is good for only a certain number of years – called the term. It is generally possible to buy term life policies for 5 years, 10 years, 20 years and 25 years; sometimes for longer terms. Your premiums will be based on your age at the time you take out the policy, the amount of the policy, and the number of years (the term) that the policy will be good for.

The premiums you will initially pay for term life insurance are almost always lower than the premiums you will pay for whole life insurance. The difference is that when it comes time for you to renew your term insurance policy you will be forced to pay a higher premium than you did before due to the fact that you are now older than when you took out the first policy.

In other words, the premium for whole life insurance is level for the life of the policy, whereas the premiums for term insurance keep going up – sometimes substantially – each time you must renew your policy.

But regardless of which type of insurance you choose, the problem of finding the best rates on life insurance in Nevada remains the same.

What can you do? Don’t smoke or use tobacco products, and if you already do, stop. Smokers pay considerably higher rates than non smokers. If you are overweight, do whatever is necessary to lose weight. Join a gym or a professional weight-loss program. The healthier you are the lower your life insurance premium.

If you drive a flashy sports car or muscle car, trade it in. If you have a dangerous job, let this be your reason to change careers. Anything that puts your life at risk will raise your life insurance rates.

Keep your credit rating healthy. Believe it or not, people with better credit ratings get better rates on their life insurance.

And, of course, go online and compare policies and rates. But don’t stop at comparing rates at just one website – compare rates at 3 or even 4 different websites; each website will have its own set of companies that it will use for comparisons, and you need to see the rates of as many different companies as possible in order to find the best rates on life insurance in Nevada.

Low Cost Life Insurance Policies

A life insurance policy not only provides financial security to the survivors, named in the insured?s policy, but also an emotional support. The affordability of such insurances may vary from person to person, according to their incomes and personal preferences. A number of options are available, from economic deals to adequate coverage.

One of the most common and popular low cost insurance policies includes the term life insurance policy. The premium of a term life Insurance is much lower than for a whole or universal life insurance policy. This is especially helpful if the investor is young and healthy. The investor can save the difference in the premium amount and invest it elsewhere. The invested money in turn would fetch an interest amount, as an additional income for the person.

The premium amount is decided, keeping in mind the assets, income level, debts and credits and child support expenses in mind. Some of the insurance companies provide life insurance calculators. This helps the clients to calculate and prepare a rough estimation of their investment expenditure. Life insurance policies come in different packages. The terms and conditions depend on the duration and coverage. The insurance agents of the various companies help in analyzing and selecting the appropriate plan, offering a combination cost-effectiveness and maximum coverage.

Various options of low cost policies offered by the different companies can be found online. These policies can be short-term policies or discount rates offered in case of a combination of more than one policy. Investors may choose according to their preference. It is advisable to do so only after checking and comparing the quotes offered by these companies. Alternatively, they can take the help of the company brokers to understand and decide on the policy. A little research goes a long way in making the right investment.