Things to Consider While Buying Life Insurance Policy
There are different kinds of life insurance plans and each of these plans provide different kinds of coverage. For instance, if you buy term life, you will get coverage for certain time and your family will not be included in your coverage. However, if you get a whole life insurance, you will be covered for your entire life and if anything happens to you your family get the financial benefits. If you have a family and want to protect your family, you need to buy whole life insurance.
Unlike banks that can change their interest rate at any time, the conditions mentioned on your policy remain the same. If the insurance company goes through the policy changes, it will affect only the new insurance policies, the existing policies will be governed by the same rules as stated in the original document. However, sometimes insurance companies find loopholes in their policy. That's when the insured person does not read the terms and conditions properly and fails to understand the important clauses within the policy they have bought
If you are buying your life insurance policy from the main company, your policy will be approved in a day or two, sometimes it might even be approved on the same day. However, if you are insuring yourself through a branch office or the insurance agent, your documents are subject to approval from the insurance companies and it might takes days, even weeks. The approval time for an insurance policy also depends on the company's policy. Some companies have fast approval whereas some companies take time to approve, especially when they have a lengthy process of analyzing the information you have provided.
Closing Your Life Insurance Policy Early
Well, one of the common clauses in life insurance policy is you can close it out whenever you want and get back what ever you have paid. However, insurance companies do not provide you the entire amount, they can cut up to 40 percent from your premiums as a commission, therefore., closing out early is not a financially good decision. If you have bought term life insurance, you can always get full amount once the term ends. If you need money immediately you can also get a loan
What is the best term for premium payment?
I have life insurance policy and I pay my premium annually. My insurance company sends me a text message alert on my phone 30 days before the due date. This sets as a reminder for me to arrange payment for the premiums. Since I pay annual premium, I have to arrange a lot of money. Well, I can switch to quarterly or even monthly payment but quarterly and monthly premium plan are quite expensive. What do you think is the best term for premium payment? Do you think I should continue to pay annual payment or do you think I should try monthly or quarterly as my premium will be lowered.
When you are buying a term life insurance, you get the liberty of choosing your own tenure, depending on company's policy term life insurance tenure could be 5, 10, 15, 20 or even 25 years. How long should your term life insurance be depends on your priorities. But you need to understand this, longer your term, lower is your premium, the longer the term higher the benefits. Shorter the tenure lesser are the benefits and higher the premium to be paid to the company.
The lower your age, the smaller will be the premium. Therefore, you will have to buy a life insurance policy in young ago because by doing so you will be able to save money on life insurance premiums. If you pay the premium monthly or quarterly, you will be paying more money as premiums compared to your yearly premiums, therefore, in order to save money on your premiums, you will have to pay premiums annually instead of monthly or quarterly. You can also save money on premiums by comparing the policies offered by different companies and choosing the company that has lower premiums.
Is Whole Life Insurance Good For Everyone
Whole life insurance policy is usually regarded as the best insurance product in life insurance category. Does this mean whole life insurance is good for every one? Should everyone buy whole life insurance policy? Well, whole life insurance policy is a policy that normally compensates the surviving family of the insured person after his death. For instance, if you buy whole life insurance, and if you die, your kids and spouse will get financial benefits. This policy is good only for those who have families to look after. If you are a single person, whole life insurance is useless for you.
Benefits of Term Life Insurance Policy
People who do not work for large corporations or the government do not have any retirement benefits because small businesses and companies cannot afford to give their employees retirement benefits. That's where a term life insurance policy comes in handy. In my country, some insurance companies are even selling pension plans.
Is Endowment Insurance Really Good?
There are various products for life insurance and endowment life insurance is one of them. Endowment insurance is a type of term life insurance where you will be insured for the fixed term. However, unlike whole life insurance where the insurance benefits are reserved for your surviving family upon your death, you can benefit from endowment insurance in your life time once your policy matures. Endowment insurance offers limited life coverage all the while giving back your insured amount along with bonus. This is for those who want to save money for big purchases like a house, saving for child’s education, saving for your future business, etc.
If you are a parent and if you buy endowment life insurance for your kid, the insurance policy you bought will certainly help you fund your child's education. Let's say you bought endowment life insurance policy for your kid when we was born, with a term of 16 years. By the time the policy matures, your child will be ready to start college and you can use the insured amount to pay for your child's education. This is one of the best policies to fund education.
Important Questions to Ask While Buying Life Insurance
Life insurance is one of the most common insurance products that people buy. A lot of people realize that there are uncertainties in life and most of the uncertainties are related to finance, therefore you need to get life insurance so that you can get covered financially. However, what not many people realize that before buying life insurance, there are a lot of things they should know. Here are some important questions you should ask your agent.
What are the different kinds of life insurance products?
You need to be aware of various insurance products and know benefit and drawbacks of each of these products.
What are the benefits of term life insurance?
Term life insurance is one of the common insurance product, and you should know what kind of coverage you get and what kind of financial protection come with term life.
How does whole life insurance differ from term life insurance?
You should know the difference so that you can make the right choice. Whole life insurance covers your entire life, and the benefits will be available for your beneficiaries when you die. Is this one for you? Term life insurance is for a fixed period and you can get the benefit, do you need this one?