Compare Life Insurance Policies
Posted by Lenny Robbins on Thu, Feb 02, 2012 @ 03:40 AM
The names of different life insurance policies can be confusing. What is Term insurance? Whole life? Permanent Universal life? More importantly, with all these different types of life insurance, how can you choose which one is right for you?
What is Term Life Insurance?
Term life insurance policies are frequently the best buy for people under 50 since they offer a guaranteed income replacement at the cheapest possible cost. Term life insurance:
- Covers you for a particular period of time such as 5, 10, 20 or 30 years.
- Offers only a death benefit and no cash build up.
- Least expensive to purchase.
- Good for income replacement.
- Recently became available to be purchased up to age 65 for 30 year terms, or beyond average life expectancy.
What is Whole Life Insurance?
Whole life insurance policies used to be more popular when there were fewer life insurance options. Now many companies don't offer them anymore. Whole life:
- Covers you for your whole life.
- Does accumulate cash build up.
- Death benefit will be reduced by outstanding loans on the policy.
- Most expensive to purchase and premiums sometimes increase.
- Good for income replacement and financial accumulation of cash as well as possible cash dividends.
What is Universal Life?
Universal life insurance policies are permanent insurance policies and can be a better option for people over 50. These policies are offered by many companies, so there is competition which gives you more options. Universal Life Insurance:
- Covers you for your whole life.
- Can be have cash build up or not have cash build up.
- Cost may be lower than whole life.
- Different policies have many different riders to meet individual needs.
- Great flexibility available when structuring universal life policies.
How can an Independent Agent Help you Choose?
Life insurance can be complicated, but an independent insurance agent can help you sort through the options which are best for your situation. Whether you need income replacement, pension maximization, or estate tax provision, an independent agent can help you. Moreover, an independent agent can help you determine if you have a universal or whole life policy which can be used in a 1035 exchange to get a better Universal life insurance.
The Bottom Line
If you are in your fifties, you probably need a life insurance tune-up, and an independent insurance agent can help you look over your options and choose the life insurance policies which will fulfill your financial goals.
