Whenever a nagging insurance agent, over telephone or in person,tries to impress upon you the many benefits of life insurance policies, the poor guy is invariably met with cool indignation. But, if you pay heed to his words, you will come to learn about its many benefits. Instead of viewing it as another financial burden that you have to shoulder throughout your working life, start to explore the aspects that help you to meet many of your different needs at different stages of your life.
People often view life insurance policies as a vehicle to provide for the dependents after the death of the policy holder. Life insurances policies have the unique ability to produce liquidity with a huge amount of leverage in the times of needs. But beyond providing a means to the dependents in the unfortunate events of death, life insurance policies can be used for many more important purposes. Did you know that you can use the life insurance to pay death taxes and estate settlement costs?
Then life insurance can be a great means for leaving an inheritance for your next generation. They can also be used for the charitable purposes. Above all, there are many insurance policies that come with some good investment features. These are the policies to accumulate funds which may be used to make further investments in the future. If you an entrepreneur, life insurance policies can come to your help by funding your business too; they can be held as securities in your business deals.
Life insurance policies are mainly of two types: term insurance and permanent insurance. All the products in the insurance industry are based on the principles of these two major types.
Term insurance is a policy which will pay a death benefit only if the policy holder dies during the term of the policy. It is devoid of any cash value feature.
The permanent life insurance policy is an expensive alternative of the term life insurance, as this whole life insurance is intended to provide protection throughout the life of the policy holder. One important feature of this policy is a cash surrender value. The premium you pay through out the early years of policy exceed the real cost of the insurance and this excess is saved in a separately maintained account. This money makes for a kind of investment for the insured. Even if the whole life insurance policy is canceled, even then the insured is entitled to get back the cash value.
What kind of life insurance policy you will buy depends on your unique financial needs and responsibilities. Among the things to consider at the time of selecting life insurance products, the first and foremost consideration relates to the question as to what amount of insurance is actually needed.
Your life insurance need will be greater if you have dependents in your family in the form of stay at home spouse and young children. Your insurance need will be greater also when you lack an adequate savings to fall back to in your absence. In the event of the death of the sole bread earner of the family, many issues have to be taken care of: the rearing of the children, the funding of their education and providing a living to the surviving members of the family. The best way for saving money when buying life insurance policy is to choose a policy that meets your best needs. Lower premiums may not be of any profit if the policy entails wrong benefits not suitable for your position.