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How To Choose Your Life Insurance Policy

All major life insurance companies sell two types of life insurance: term life

insurance policies and whole life insurance policies. The whole insurance

policy is sometimes called permanent life insurance and it implies several

types of policies. In the following article we are going to discuss what each

type of life insurance means and the advantages of every one of them.

Term life insurance is the simplest form of life insurance. If death occurs,

the money is paid to the remaining family. There are two types of term

insurance policies: level term and decreasing term. Level term life

insurance policy means that the death benefit is unchanged throughout the

policy duration.

A decreasing term life insurance policy will help your remaining family

receive less and less money as time passes. Statistics say that back in 2003

more than 90% of the life insurance policies that were sold were term life

insurance policies.

Whole life insurance policy is paid whenever the beneficiary dies, even if he

lives a very long life. There are here three types of whole life insurance

policies: traditional whole life, universal life and variable universal life.

When someone buys traditional whole life insurance the death benefit will

remain the same regardless of the age of the person who has bought the

policy.

Under normal conditions, since the risk of dying grows as the person ages,

the premium should increase as time goes by; nevertheless, the insurance

company will recoup its additional costs by computing a slightly larger

premium right from the start.

How can someone know exactly what type of life insurance he or she needs?

Specialists recommend buying term life insurance when you need life

insurance for a specific period of time. For example, if you have young

children you might want to get term life insured so that in case you lose

your life, your kids will be financially secured.

Or, if you want to make sure there will be money for their college tuition,

you can sign a 20 year term life insurance so that the money will be

gathered the moment your kids will reach college years. People also buy

term life insurance when they want a large amount of life insurance but

they do not have a lot of money available. This policy gives the money only

if you dir during the term policy. If you do not die until the end of the term,

coverage ends unless you renew the policy.

There is also the possibility of getting convertible term policies which allow

you to switch form term life insurance policy to permanent insurance

policy. It is good to know that the premium is the smallest when you are

young and with every renewal it increases. It may be necessary for you to

pass a medical examination in order to be able to sign a life insurance

policy.

Why should a person choose to get a permanent life insurance policy? One

reason is that you need life insurance for as long as you live. The money is

paid no matter if you die tomorrow or live to be over one hundred. Another

reason might be that you want to gather money for a variety of purposes.

We are talking here about the possibility of borrowing from the insurance

company. it is good to know that premium for permanent life insurance

policies are higher than the premiums for term life insurance. The premium

in a permanent life insurance policy remains the same while term life

insurance premium can increase with every renewal of the contract.

Now that you definitely know more about the types of life insurance policies

another question that may come up is related to the choice of the best

suited life insurance company. There are hundreds selling life insurance

policies on the market and choosing one of them may be a challenge to the

majority of people.

The main thing you need to bear in mind is that you must get the policy

from a company that is licensed in your state. You need to know you can

rely on the state insurance department if there are any problems that need

authorities’ attention. In the event a life insurance company becomes

insolvent, your state’s life insurance guarantee fund will assist only people

that posses policies form a licensed insurer. There are official sites on the

net where people can see which life insurance companies are licensed in the

region they live.

But there are still other important things to consider when you want to

choose your life insurer. First, you will have to choose the insurer that is

able to offer exactly what you are looking for. In order to understand

exactly what your needs are, you might consider useful to work with a life

insurance broker.

Then there is the aspect of financial stability and solidity. Getting life

insurance from a company like asigurare de viata in Bucharest, Romania

means getting involved in a long process and for this reason it is very

important to choose a solid, reliable, trustworthy company, present on the

market for many years. In order to find out about this aspect, you may

consult the information published on specific sites.

If you are not working in this domain, the terms and words used by the

insurers might sound unfamiliar to you. Some of the companies are aware

of this aspect and are training the staff to be friendly and patient with all

the possible questions people may have concerning their offers. So, it is

important to know that you can call the life insurance company and talk to

a representative any time you may have a question or need more

explanations.

Obviously, the premium value is one of the reasons choose for one company

or the other. In this domain as in many others, people get tempted to

choose the company that sells the cheapest life insurance policies but this

should not be the main reason. The company should be characterized by

other aspects in order to convince you choose it and not its competitors.