Recommendations About How To Choose Your Life Insurance Policy Type
Post on 09-Mar-2016
DESCRIPTIONRecommendations A bout H ow T o C hoose Y our L ife I nsurance P olic y All major life insurance companies sell two types of life insurance: term life insurance policies and whole life insurance policies.
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
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
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
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
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 states 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
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
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.