Why Whole Life Insurance?
The first step towards making the best choice is understanding what kind of insurance you exactly need. Life insurance policies vary widely. There are whole life insurance policies and term life insurance policies.While term life insurance policies can only pay the face amount to the named beneficiary, considering of course that it is within the length of time you are insured, whole life insurance policies will pay the term policy plus the investment component. The investment component may come in form of bonds or stocks. It will build enough funds from which you can borrow while you are alive. When you die, the cash value raised through the investment component will also be given to your beneficiaries.
Although whole life insurance policies can be costly, it is found well-suited to those who want enough financial security. It helps that whole life insurance rates can also be diminished if you compare whole life insurance rates from different insurance companies. You can also find a good deal by being mindful of the factors that may affect the cost of your premiums.
The Deciding Factors
Generally, insurance premiums are affected by several factors including age, gender, state of health, and occupation.
- Those who are older would naturally be asked a higher premium. That’s why insurers advise that you get yourself insured as early as possible. Do not wait until your senior years because it will only make your insurance costs go high. After all, accidents do happen and it is ideal that you are prepared early on.
- Men do not usually live as long as women do so they are charged a higher insurance premium by about 30%. In Europe, the Court of Justice ruled out gender as a factor for determining insurance premiums. In that case, insurance policies for women may be seen to go up by about 20% while those for men will drop by 5%.
- Anyone with a health condition may be charged with a high insurance premium, no matter what age or gender. If you choose to lie about your health, your policy will not pay out and insurers are not stupid. You should keep that in mind.
- Those who are in risky occupations may also be charged a higher premium than the rest. A skydiving instructor would typically pay higher than a librarian, even if they are in the same age, gender, and even if they are both in perfect health.
- Giving up some bad habits may help you lower your costs. If you are smoking like a chimney, the skyrocketing premiums may help you quit. Then again, you need to be at least a year clear before your smoking habit can have an impact on your premiums.