Life Insurance Options

by Jeff Rose on January 11, 2013 · 0 comments

Life Insurance OptionsWhen it comes to life insurance options, there are many.

The are numerous types of life insurance coverage.

There are a large number of life insurance providers.

The topic of life insurances choices is rather broad.

What if you’re just trying to get an overview of some of the forms of life insurance?

Well, some basic information about common types of life insurance can be found with a little bit of research.

The Most Common Option: Term Life Insurance

The most budget friendly type of life insurance coverage is term life insurance.  You can purchase this type of coverage for a period that is as short as a year.  You can go with a life insurance plan that covers a term of 5, 10, 15, 20 years or more.  Many of our younger clients will purchase a 30 year term policy.

One of the best features of a term life insurance plan is that your premiums will remain at the same rate during the period of coverage.  This will make your budget planning a lot more simple.  Most term life insurance providers will give you an opportunity to renew or upgrade your insurance plan toward the end of your current term of coverage.  If your health is good, you may even want to have your term life insurance medically underwritten.  This would give you even more budget friendly premiums.

Return of Premium Life Insurance

There is term life insurance that will return your premiums if you are still around to collect them at the end of the specified term of coverage.  This is known as Return of Premium Term Life Insurance.  This is one of the popular life insurance options for obvious reasons.  Except for factors like fees, riders and the like, you will receive a refund of your premium payments at the end of the policy term.

You were responsible enough to make sure that your financial obligations were covered in case of your death, yet if you are still alive at the end of the term, you can take those funds and use them for a new or upgraded policy.  You may need to use some of those funds for another purpose and reinvest some of them in a new life insurance policy.  It is up to you.

Note: to receive the full return of premium, you will need to keep the policy in force for the full term of the policy. Ex. You buy a a 30 year term return of premium life insurance policy, you’ll need to pay on it for 30 years to get the full premium back. If you stop paying on it sooner, you’ll only get a pro-rated portion of it back.

Universal = Flexible

If you need a flexible life insurance policy, then you may want to go with universal life insurance.  This type of policy can be retained throughout your lifespan.  You can make adjustments to the amount of benefits that are to be paid out as well as make some alterations to the premium payments.

This type of insurance is rather more costly than term life insurance.  It does allow you to compensate for all sorts of areas of growth in your lifetime. This is commonly purchased for individuals that want to have both insurance protection and a savings tools that they can help contribute to their retirement nest egg. This is done by having a portion of the premiums invested in a sub-account that will grow with the market. There is still the cost of insurance so it takes a while for the cash value to build up.

Many Life Insurance Options

Whatever you need to account for in case of your death, there are so many life insurance options available.  You are attempting to do the responsible thing by taking care of financial issues that will be left behind after you leave this earth.  Do not let life insurance premiums take over your life.

Go with a policy that will cover your needs, yet not empty your bank account.  Make sure to explore your options when it comes to life insurance coverage.  Do not let yourself get short changed, but make sure to put the best coverage for your life insurance concerns in your budget.

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