The Types of Life Insurance Policies
Life Insurance can often be a difficult topic to get your head around as there are so many different insurance companies with different premiums and so many different types of life insurance policies. It can also be an unpleasant experience to go through as planning for one’s demise is never an enjoyable process to go through. If you have finally managed to choose a type of insurance, though, then the problems continue to mount as now you have to deal with things such as the term life insurance calculator and a variety of different insurance agents.
For simplicity, this article will talk about the two main types of life insurance policies:
• Term life insurance
• Whole life insurance
Term life insurance
Term life insurance is generally useful for older people as it’s easier to manage and covers a shorter period of time than whole life insurance. There are many different types of life insurance policies, but if you are retired then it’s highly recommended that you take out term life insurance instead.
The way term life insurance works is that you take out a policy which will last for a predetermined period of time, which could be anything from five years to twenty years, and then you pay a certain amount of money for that amount of time. The only downside to this though is that if you purchase a ten year policy and you are still alive and well after these ten years then your dependents are entitled to nothing.
The only way out of this is to renew the policy, usually with much higher premiums, or to convert it into a whole life insurance policy. If you choose neither then you will get nothing back and you will no longer be covered by any life insurance. This is why it’s advised that you only take out term life insurance if you are in a high-risk job or you are retired as many people can easily underestimate how much time they have left.
The final step is to use all the factors which hinge on the premiums to calculate the cost of your term life insurance policy using a term life insurance calculator or by going to visit an insurance broker.
Whole life insurance
Whole life insurance is a better option if you want to be covered for your entire life while you are younger. This is because the premiums of a whole life insurance policy never changes over time so if you take it out while you are young you can guarantee low premiums for the rest of your life.
Whole life insurance poses a lot less risk when compared with term life insurance because it can never expire which means your dependents will always be covered should you die suddenly or whether it’s confirmed a long time before you pass on.
Something which should be noted, though, is that while whole life insurance is designed to last for the rest of your life this is not the case with some insurance companies. A clause which is entered into many insurance contracts states that the policy will expire on the holder’s 100th birthday so at that point they must renew the insurance policy. Not all insurance companies have this clause but some do so watch out for this.
Whole life insurance vs term life insurance
There are pros and cons to all the different types of life insurance policies, but to give a generalised view it’s best to purchase term life insurance if you are ill or retired whereas it’s best to purchase whole life insurance if you intend on taking it out while you are young.
To calculate an estimated cost then you should use a term life insurance calculator in the case of term life insurance whereas it’s probably more effective to visit an insurance broker if you are younger as it’s almost impossible to predict everything which is required at a young age.
Use the term life insurance calculator at lifeinsurancegroup.com and decide which type of policy you need to requites quotes for.
Processing your request, Please wait....
