Welcome to Life Insurance Basics!
Life Insurance Basics
This website is an information resource for life insurance. Do you have questions about how life insurance works? Do you know when the best time to get life insurance is? Do you know how life insurance premiums are calculated and what you can do to get the lowest premiums possible? Do you know how much life insurance you need to protect your family? Do you know what is the best type of policy? This site will try to answer some of those questions for you and prepare you to ask the right questions when you are ready to get life insurance. Learn the basics first.
The most important question to ask is “When is the best time to get Life Insurance?” If you ask any life insurance agent, their answer will be, “The best time to get life insurance is right now!” This is a humorous way to say it, but in truth there will never be a better time for you to get life insurance then right now. This is because life insurance is based mostly on life expectancy. The longer you are expected to live, the lower the cost of the insurance to you. Young healthy individuals will pay far less monthly payments on the same life insurance policy than an older person, a person with weight problems, or a person who smokes or has a dangerous job.
Here are some quick explanations of some of the terms of Life Insurance:
Premium: The monthly payment amount you will make. The monthly amount is based on the size of your coverage, your age and health, and the type of policy
Death Benefit: The amount of money your heirs will receive should you die. You choose this amount when you apply for the policy.
Actuarial: The agents and methods used to determine your life expectancy.
So if we know that the sooner you obtain life insurance the better, we now have to know what type of policy is the best. There are several different forms of life insurance. Now, I’m not talking about mortgage insurance, burial insurance, or sudden death insurance. These are all just a form of life insurance with a different name. What I am going to talk about on this sites the different types of policies, how they work, and their pros and cons in regards to your investment, risk, and premium amount. Click on the individual terms to get detailed explanations.
* Term Life Insurance - Term Life insurance is a very accessible form of life insurance that offers the lowest possible premium payments in exchange for defined time limit.
* Whole Life Insurance - The standard life insurance format where you pay a set premium for the rest of your life and your policy builds cash value.
* Variable Life Insurance - A life insurance policy where your policy’s cash accumulation is indexed to an investment vehicle and can result in faster cash accumulation.
* Universal Life Insurance - A combination of a whole and variable life insurance policy.
Finally, a very important basic question about Life Insurance is how to qualify for life insurance. Qualification is based on many things and will differ from company to company. If you are denied life insurance coverage from one company, it does not necessarily mean that you will not be qualified by a different company. Your health is obviously a big factor. If you are obese or if you smoke or use tobacco products you may not qualify for life insurance with some life insurance providers. Most Life Insurance Companies do have an age limit as well. The good thing about qualifying for life insurance though, is that there are many companies out there and the key to finding them is a good life insurance agent. A good Life Insurance agent can contact multiple companies to find you the best deal, they can ensure that you have the highest rated insurance company, and help you through the life insurance basics and the more advanced questions about obtaining life insurance.