Life Insurance That Suits Your Life
By Ivon T. Hughes
By understanding the basics of life coverage, you are able to determine what type of policy works best for you and your family.
Who Needs Life Insurance?
Life provides money to your beneficiaries in the event of your untimely death so they can maintain their standard of living. If you don't have children, you can designate another family member such as a niece or nephew as the beneficiary, or you can donate the money to charity. A policy can even be taken out just to cover burial expenses.
Different Types of Life Insurance
Term Life Insurance: Covers a designated period of time. Once that period is over, the lapses. As you age, the cost of renewal rises. If you want the longest period of coverage, you need a term life policy to age 100.
Whole Life Insurance: Covers your entire lifetime and has a cash value. Premiums never increase. You can borrow against the cash value of the policy. If you stop making payments midway through the policy, the cash value pays the premiums until exhaustion.
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This is up to 5 times more expensive than a term life policy.
Universal Life Insurance: Premiums can be adjusted by the owner, which may change the face value of the policy. You can borrow against the cash value. Basically, it is a term life policy with an investment portion such as a whole life policy. In a whole life policy, you do not choose an investment, that is done by the company. With a Universal Life policy however, you may, if you wish, choose the investments for the investment portion of your premium.
Two different reasons for Life Insurance: If you don't have a lot of money to buy a good pension, a good term life policy may be able to help. If your partner dies, these funds can form a capital amount to buy a pension.
Alternatively, you can insure the life of a healthy parent. In the normal course of events, your parent will predecease you, thus providing you with the necessary pension funds.
Thus you have solved a problem in which your parent has gladly helped.
Ivon T. Hughes of The Hughes Trustco Group is the author of the Life Insurance Handbook: How To Get The Best & Cheapest Life Insurance available FREE to all new subscribers at
www.hughestrustco.com
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