Life insurance is one of the most common forms of insurance there is, not least because we all need it at one time or another in our lives. Life insurance is a bet you never want to win but remember, it is a gift from you to your loved ones when you are no longer here to care for them yourself.
The most frequent question asked by the insurance holder is how much he can be insured for. The answer is not as simple as we think of because it depends upon your personal status. There is a formula used extensively by the industry which gives an amount that shows how much your liabilities will be covered such as mortgage, other loans and credit cards and it also give claimer an additional salary of two years.
Life insurance policy is of two types known as whole life affordable insurance and term life insurance. The most important thing is to take correct decision for your loved ones or family about there future finances because once you have taken a decision you can not go back and correct it.
Life insurance is same like a bet between insurance company and policy holder. You bet that you will be dead with in some set period of time and if you die in that time period you will win and insurer has to pay some decided amount of money which he has promised to your loved ones. And if you live just one day more against life term policy you and your family will get nothing. The best point in this policy is that it is cheap investment and the policy requires no further investment for the premiums which is used to cover insurance for the life time. Life insurance quotes can be obtained from different life insurance companies online or just by paying a visit to their office.
Whole of life policies are rather more complicated. Premiums are usually higher as part of the premium is diverted into an investment fund within the policy. The premium is reviewed periodically, say every five or ten years, to see if the premium can support the level of cover being provided. In later years, cover may not be available for the premium being paid so the investment fund may then be used to supplement the premium and maintain the life cover required.
In this light, many people believe that a whole of life insurance policy is a better deal - after all, there is an investment that can be built up too! In many circumstances this is short sighted, and if you are buying a home for the first time or have a young family that are financially very heavily reliant upon you, then your budget may not stretch to the insurance cover needed under such circumstances. This is where a cheaper term insurance policy comes into it's own and can provide the protection without breaking the bank.
Whole of life insurance policies are however, very attractive as they provide the opportunity to provide insurance coverage throughout the entire life of the policy holder. The cash value that is built up over time also can be a valuable and ready source of funds in cases of emergency outside of a policy holders' normal financial planning. Whole of life insurance policies are frequently used by clients who are exposed to paying substantial inheritance taxes upon death and do not wish the taxman to decrease the value of the estate available for beneficiaries so a policy can be used to pay the tax instead.
When you are comparing and considering a life insurance policy, the first thing to do is to clarify and define your needs before moving on to costings and conditions. Establishing how much you need to insure yourself and for how long you will need the cover selected will allow you to tailor your insurance cover ar more exactly to your actual needs.
When ever you are going to be insured your main focus should be on your actual insurance coverage needs but not on the amount of premium or underwriting payments to policy maker. Once your mind is clear what you actually want for your beneficiaries than it would be very easy to select or find the right life insurance policies for your family and you make your life and loved ones life secure from all the financial constraints.
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