is Life Insurance?
insurance protects your family against debt when you
are gone and rates vary according to the type of
policy you select. Since there are so many levels of
life insurance with different kinds of cover, be
sure to go over you options carefully, select what
is right for you and your family. It is also
important to know that you can change your policy at
any time if your life circumstances change.
Here are some
of the different types of life cover available in
1. Level Life Insurance is the most uncomplicated
method to give your family financial help. Level
life ensures a certain amount of cover that stays
the same throughout the life of the plan. If you
die, your family receives that guaranteed amount in
a lump sum. The level of the cover you require and
how long you want the cover to last is related to
your personal situation. The level of cover you
purchase determines the cost. Note that level life
insurance has no cash-in value if you should choose
to stop the cover.
2. Decreasing Life Insurance is meant to cover loans
like your mortgage and other large loan payments
that decrease over time. Since the amount you owe on
the loan or mortgage reduces over time, so does the
premium on your decreasing life insurance policy.
Decreasing life plans are generally lower cost than
other styles of life insurance. If you die during
the term of the insurance, it pays out a lump sum to
your family but never offers any cash value.
3. A whole life insurance plan provides your family
with a guaranteed amount of money upon your death.
The difference between this and level life is that
you can choose to have your cover increase by 5%
every year to help guard against rising costs in the
4. Guaranteed whole life provides cover for the rest
of your life and not just for a predetermined fixed
term as in the other types of insurance described. A
cash sum is paid to beneficiaries when you die. You
can choose the amount of coverage and also opt for
the 5% yearly increase. These plans can also be put
in a trust so that your family does not have to pay
5) Term life
insurance runs for a fixed term, and pays out if the
policy holder dies with that term. Term Life
Insurance is generally regarded as more expensive
than Decreasing Life Insurance when used to cover
items such as mortgages.
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