The Top Life Insurance Product For Your Future Plans
What Is The Right Type of Life Insurance For You?
Comparing Life Insurance
Financial products are sold, not bought, and life insurance products stand first in this category. This is because we trust the recommendations of the commission- based sales force and forget to analyze our individual needs. There is not one simple answer to which is the best policy or everybody. An informed consumer and good insurance agent will try to understand your individual needs.
How can you find the right policy?
Making a life insurance decision generally involves two steps:
- The first step is to understand your requirements based on our unique situations.
- The second is to identity the right insurance product that corresponds to your needs.
The role of an insurance expert should be to aid you in the selection of the appropriate insurance product. Apart from this, getting acquainted with the basics of these insurance products complements our decision making process. Get help finding a good insurance agent!
Human needs vary according to our situations, and from individual to individual. Therefore, a careful situational analysis is indispensable. Remember, many factors like individual’s age, occupation, financial background, annual salary, family size, planned retirement age and employment benefits have to be considered in detail.
People generally adopt either the ‘Human-Life Approach Mean’ or the ‘Needs Approach Mean’ to understand their requirements. Under the human life approach, our main objective is to estimate the financial loss that a family would incur on the death of the insured person; whereas, our main goal under a needs approach is to estimate the expenses to cover funeral ,college, rent ,loans ,estate obligations and medical bills. One can adopt either one of this approach based on their unique situations.
When it comes to choosing the right insurance policy, the first step is to decide whether to opt for a pure insurance product or insurance cum investment product. Term life insurance falls under the first category, and Whole life insurance along with its variant Universal life Insurance comes under the second category.
So, many peope need to decide between term vs whole life vs universal life insurance.
Term policies are cheaper.
Term life insurance provides cover against the risk of death during a definite term, such as 10, 15, 20 or 30 years. The death benefit is nothing but the face value against which the premiums are paid over the entire term, and the beneficiary of the insured gets this benefit in the event of the policy holder’s death within the term. The policy expires at the end of the term and the beneficiary is not entitled to the death benefit after the expiry date.
Whole and universal life policies cost more, but have some added benefits.
The whole life and universal life insurance policies remain in force as long as you live and have a savings vehicle attached to it. Under a whole life insurance policy, the premium is fixed over the entire period and part of it accrues as cash value. Although you do not have the option to withdraw your cash value, one is given the option to borrow on the accumulated case value tax –free. When you have an option to adjust the premiums, cash value and death benefit as and when your needs change, it is called universal life insurance. The cash value component under a universal life insurance policy is invested in stock market and it is subject to the vagaries of the market forces.
The premiums under universal life and whole life insurance are very high when compared to term insurance. Our current income and future earning capacity play a very important role in this aspect. An apt insurance policy is always tailored to the needs that are firmly anchored to our unique situations. Therefore, always anchor your insurance decisions on your unique situations.
One easy way to start comparing products is just to find out how much various types of policies, and also various coverage amounts will cost – Online Life Insurance Quote Comparisons.
Related posts:
Reader Feedback
3 Responses to “The Top Life Insurance Product For Your Future Plans”
Leave a Reply
You must be logged in to post a comment.
Thanks – I think so many of us just shop for life insurance by price. It is important to look into the benefits/ drawbacks of different policies. When we tend to go for one type of policy for simple reasons, it is easy to see we can overlook a lot of things.
All people deserve financial freedom, and loans or financial loans can make it much better. Because freedom is grounded on money.
Life insurance can be very expensive and unpredictable, due to the current financial crisis. Safe investments in gold are currently the better choice.