Introduction:
A life insurance policy is a contract between an insurer and policyholder in which the company promises to pay a designated amount in exchange for a premium, upon the death of an insured person. Buying a life insurance policy may seem bewildering for most of us. It's hard to know where you must start with the selection of plans. If you have decided to get insured, then your next step is to go through types of life insurance and make sure you buy the right one.
1) Purpose:
Often the purpose of buying life insurance depends on personal reasons. If your salary is supporting your family, paying the mortgage or other recurring bills, or sponsoring your kid’s education, you should consider life insurance as a way to ensure that these financial obligations are protected in the event of your death.
2) Types of insurance policies:
Insurance companies offer various life insurance policy plans depending on the needs of the individuals. These policies include whole life, term life, variable life, and universal life. The primary objective of having an insurance policy is protection against unforeseen activities. Ideally, experts believe one must consider term plan, as it gives you a higher sum assured for a lower premium.
3) Life insurance costs:
The factors that decide the cost of life insurance plans vary as per the chosen policy. It may depend on how much you buy, the underwriter's practices, and how much commission the company pays your agent. Life insurance policies often have hidden costs, such as fees and large commissions, that you may not find out about until after you purchase the plan.
4) How much coverage you need:
The amount of life insurance you require depends on factors such as your sources of income, the number of dependents you have, your debts, and lifestyle. However, a generally it is advisable to acquire a policy that would be worth between 5 and 10 times your annual salary during the occurrence of your death. Beyond this, you may want to consider consulting a financial planning professional to determine how much coverage to obtain.
Conclusion:
When picking life insurance, use the internet's resources to educate yourself about basics of life insurance, find a broker or officer you trust, then have the recommended policies assessed by a fee-only insurance adviser. Experts believe people often mix insurance and investment plans. Know that these are two different entities and life insurance policy plan is a must.
A life insurance policy is a contract between an insurer and policyholder in which the company promises to pay a designated amount in exchange for a premium, upon the death of an insured person. Buying a life insurance policy may seem bewildering for most of us. It's hard to know where you must start with the selection of plans. If you have decided to get insured, then your next step is to go through types of life insurance and make sure you buy the right one.
1) Purpose:
Often the purpose of buying life insurance depends on personal reasons. If your salary is supporting your family, paying the mortgage or other recurring bills, or sponsoring your kid’s education, you should consider life insurance as a way to ensure that these financial obligations are protected in the event of your death.
2) Types of insurance policies:
Insurance companies offer various life insurance policy plans depending on the needs of the individuals. These policies include whole life, term life, variable life, and universal life. The primary objective of having an insurance policy is protection against unforeseen activities. Ideally, experts believe one must consider term plan, as it gives you a higher sum assured for a lower premium.
3) Life insurance costs:
The factors that decide the cost of life insurance plans vary as per the chosen policy. It may depend on how much you buy, the underwriter's practices, and how much commission the company pays your agent. Life insurance policies often have hidden costs, such as fees and large commissions, that you may not find out about until after you purchase the plan.
4) How much coverage you need:
The amount of life insurance you require depends on factors such as your sources of income, the number of dependents you have, your debts, and lifestyle. However, a generally it is advisable to acquire a policy that would be worth between 5 and 10 times your annual salary during the occurrence of your death. Beyond this, you may want to consider consulting a financial planning professional to determine how much coverage to obtain.
Conclusion:
When picking life insurance, use the internet's resources to educate yourself about basics of life insurance, find a broker or officer you trust, then have the recommended policies assessed by a fee-only insurance adviser. Experts believe people often mix insurance and investment plans. Know that these are two different entities and life insurance policy plan is a must.
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