Getting Life Insurance

22 Jul 2009 @ 2:04 PM

There are two major forms of life insurance that you should know about before making your decision to obtain it. They serve the same purpose, but they offer the purchaser of the policy some different features.

Term Life

Term life insurance offer the purchaser a low monthly life insurance rate, or premium, in exchange for a limited term for the policy’s existence. Term life insurance policies can be purchased for 5, 10, 15, 20, and 30 year terms, depending on the needs of the purchaser and the beneficiaries. Many people purchase this type of life insurance to protect their family while children are growing up or before they have reached retirement. Getting a quote for a life insurance policy will help you learn the type of coverage available and what different providers will charge.

Talk to Multiple Companies

It’s smart to talk to at least three life insurance companies before making a decision. The same insurance company may also provide auto insurance coverage. Many people buy Term life insurance because it seems the easiest to understand, although it may not always be the best type for them. Term is simply life insurance that pays a death benefit if you die within the time limit of the policy, usually 20 years.

Life Insurance Benefit

The premium and the death benefit stay the same for the initial term after which the premium increases sharply. The policy has no cash value; it simply provides coverage, meaning that if you let it lapse, you have no refund or surrender value coming to you. You want something that will last your entire life, providing a way to pay final expenses, leave a legacy to your heirs, or pay taxes on an estate.

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