Awareness on Insurance Benefits
People must be aware of the benefits of insurance coverage. Having an insurance protection gives you an assurance that your beneficiaries will not be left in a difficult situation at the time of your death. Insurance coverage must be treated as a necessity and not just an alternative which you will only avail of when the fancy strikes you. The assistance that insurance benefits provide to your family cannot be underestimated because without the amount that will be given to them when you are gone, they might encounter problems later on especially when you have some unsettled debts.
Choosing the right insurance policy that suits your needs requires careful study and prudence. The way to handle this is by not immediately succumbing to offers made by insurance companies or agents. Most likely, they will present to you the most beautiful package along with powerful sales talk. In the end however, you may realize you bought the wrong plan and that you could have opted for other types of policies. It pays to know all the types of policies and make comparisons before settling for a particular plan. Evaluate your financial status also to know if you are capable of sustaining the payments up to the end. Find out the riders, benefits and investment prospects of the insurance policy you are getting so you and your beneficiaries can enjoy the returns in the long run. Bear in mind that the returns must be more than the premiums. Remember always that insurance policies are investments too and you are putting your money with the expectation that your beneficiaries will gain from it in the event of your passing.
Certified Life InsuranceThere are many cases wherein you are guaranteed a life insurance even if you do not go through the regular process. You need not answer questionnaires regarding your health status. You will only be asked to give your age and presto, you are issued a life insurance upon payment of the premiums. There is also a type of coverage which transportation systems issues to their passengers. Each person is covered with a fixed amount in case of death from accidents. This is a carpet coverage plan because everyone’s life is insured during the course and as long as the person is under the custody of the transportation company. Again, there is no need to answer medical questions because every individual is entitled to coverage regardless of his age and state of health.
Group insurance coverage is also a type of guaranteed life insurance. This is common among employees under one company. The corporation takes care of the insurance premiums and as long as a person is employed with the company, he is covered by a policy. This indeed is a convenient way of securing insurance coverage on one’s life. However such policies cover only small amounts and your coverage is only good while you are under the employ of your company.
Life Insurance Comparison
Here are the different life insurance comparison, options, and their various features. Most of them are similar in many ways but nonetheless there are varying points which can help you in deciding which plan is suitable for your needs.
- Whole life insurance
- Term insurance
- No exam life insurance
- Final expense insurance
- Universal life insurance
- Mortgage life insurance
Whole Life Insurance
Whole life insurance is also called permanent life insurance because it does not lapse. It is in effect up to the insured person’s 100th year which practically means up to the time he dies. Policyholders prefer whole life insurance policy because of its dual benefits. It serves as savings for a person because his premiums accumulate in time. On top of the accumulated payments are interests and dividends that are added to the basic premiums. Since there is no expiration date for this type of insurance, the insurer has the leeway to invest the premiums in other ventures. And because your money is part of the investment, you are given a dividend portion from its earnings. One significant advantage of whole life insurance is your option to withdraw the total premiums you have contributed when your policy reaches its maturity date. Otherwise, if you decide to leave the premiums with the company your beneficiaries will benefit from the proceeds at the time of your death.
Whole Life Insurance policies are not taxable. The accumulated interests of your payments can likewise be credited for future payments. As a whole, this type of life insurance is a good form of inheritance which your beneficiaries can partake of when you die. Nonetheless, although whole life insurance seems to be the most beneficial of all types of plans, it has its disadvantages. Premiums are high and you have no way of controlling the investment aspect because it is the company that decides where to put your money.
When you speak of term insurance, the first thing that comes to mind is its coverage period. Unlike whole life insurance which has no expiration date, term insurance is good only during a certain period of time. Nonetheless it is renewable and can be converted as well to another type of policy such as permanent life insurance. Term insurance policies are easy to obtain because they are granted to most people even with no medical interview. The coverage amount determines the amount of premiums to be paid which are usually lower than those with whole life insurance plans. Commonly, people buy term plans that last within a year which must be renewed before they lapse to ensure continued protection.
No Exam Life Insurance
Life insurance policies usually require medical examination on the part of the insured person. With no exam life insurance however, there is no need to undergo the examination, neither is there is need to answer medical questions. This is the easiest way to avail of protection and financial security for your family. Although premiums are higher than the regular life insurance plans, securing a no exam life insurance policy is like taking one important measure of protecting your family from monetary burden.
Final Expense Insurance
This type of policy pertains to burial insurance that takes care of the funeral expenses when an insured person dies. This policy is under the umbrella of whole life insurance plan and aims to assist the bereaved family of a deceased person with regard to burial requirements. One reality that a person has to face in life is that in both life and death there are expenses to take care of. And although burial expenses can be said as final expense for an individual it can still put weight on the family of a deceased person he has no insurance coverage. Availing of final expense insurance is a sound idea however it is not considered as an endowment benefit as it covers only the funeral costs. When everything has been settled after the interment, the loved ones who are left behind do not have capital money to start from unless the deceased also has another policy such as term or permanent life insurance.
Universal Life Insurance
This insurance policy is tailor made for seniors. It falls under the permanent life insurance form. The premium costs are flexible as well as the face amount of death benefit which may either go up or go down in relation to your present financial status. When you have contributed substantial amount of premiums, failing to settle payments on schedule will not terminate the insurance contract. The problem however lies on the inadequacy of your premium payments in relation to the face value of your policy. When the amount of contributions is not enough to cover future fees, the insurance policy will not be terminated but the insurance amount is decreased. Premiums for universal life insurance can be higher but you can withdraw from the contributions when there is need. Note however that the number and frequency of withdrawals is limited.
Mortgage Life Insurance
To help your beneficiaries in settling your outstanding loans upon your death, mortgage life insurance is necessary. This type of insurance policy is in effect as long as the mortgage still exists until the death of the borrower. If the debt has already been paid when the borrower dies, the mortgagee no longer receives the payment from the insurance company. Mortgage life insurance can have fixed or level premiums that do not increase. There are also policies that follow the decreasing term insurance plan in which the policy amount decreases as the outstanding debt amount also decreases due to payments made by the borrower.
Tailor Fit Policy
There is no tailor fit policy that can provide the exact needs of policyholders. Even if a policy is said to be perfect, there will always be areas where the stipulations are not very ideal for the insured person. Be that as it may, there are easy remedies for this issue. You must find the policy that offers the best benefit and with premiums that you can afford to pay through time. Making comparisons of the various kinds of life insurance policies also help in determining the ultimate protection package for your loved ones.