Get the Facts on Life Insurance Policies

Isn't it time to buy life insurance?

Isn't it time to buy life insurance?

With cash value insurance policies,  your premium goes toward a death benefit, a cash value account and management fees. Therefore,  you can expect to pay substantially higher premiums.

By: Natasha Morgan

The decision whether to buy a life insurance policy depends on your circumstances. If you have a spouse, children or other dependents, you would want your financial responsibilities to be covered by a life insurance policy and lessen the burden on your family upon your death. The type of insurance and the value of the policy is a decision you make depending on your needs and how much you can afford.

Here is some basic information on the types of policies available. For a better understanding of each policy, a qualified Insurance Agent is always ready to help you.

Term life Insurance
This is the least expensive type of policy and covers the insured for a specific term. It pays your beneficiary the amount of your policy upon your death. Its purpose is to cover expenses incurred by your death and provide income to replace your salary.

The following life insurance policies provide both a death benefit and a cash value account. Because part of your premium goes toward a cash value account and management fees, the premiums are substantially higher. These policies are tax-deferred, meaning that you pay federal income taxes when you take money out of the account rather than during the time the money is invested.

Whole Life Insurance

  • It will pay you a death benefit and the cash in your cash value account.
  • Premiums are fixed during the life of your policy.
  • You can receive dividends from your policy.
  • You can withdraw funds from the policy.

Variable Life Insurance

  • It will pay you a death benefit and the cash in your cash value account.
  • The death benefit can vary in relation to the fund returns but will not drop below a certain minimum.
  • You can use it as collateral for a loan.

Universal Life Insurance

  • It will pay you a death benefit and the cash in your cash value account.
  • You can earn market rates of interest on your cash value account.
  • Your premiums are flexible.
  • The face amount of your policy is flexible.
  • You can withdraw funds from your policy.
  • You can use it as collateral for a loan.

Universal Variable Life Insurance

  • It will pay you a death benefit and the cash in your cash value account.
  • You can invest in money market, stock, and bond funds. Therefore, the rate of return on your investment is variable.
  • You are responsible for making investment decisions that affect the value of your accounts.
  • Your premiums are flexible.
  • You can withdraw funds from your policy.
  • You can use it as collateral for a loan.

It’s probably a wise decision to buy life insurance to keep your family protected, even if it’s only during the time you have dependants. The market for Term Life insurance is so competitive that companies are keeping their prices low. By comparison shopping, you will get the best available price.

Note: This article was written specifically for notjustthekitchen.com. It is meant as a guide only. Not Just the Kitchen or its partners will not be held responsible for any action taken as a result of reading this article.

The article can be copied provided the content is in no way altered and the following link remains active:  Read more articles geared toward women.