Answer to Questions You May Have About Life Insurance
A lot of people own life insurance but don’t really know what their policy covers. Unfortunately too many people have too many questions about life insurance, and often those contracts can be like reading about rocket science, especially when you don’t even know the difference between term life insurance and whole life insurance. So to clear up some of the misconceptions let’s go over the different types and what each type of life insurance involves.
Term Life Insurance
Term life insurance is the least expensive insurance on the market today. Everyone from every walk of life can afford this type of insurance. This insurance gives you coverage in the event of death and can continue to cover you for up to thirty years. The only problem is that after the thirty year period is up and if you still want life insurance, you probably won’t qualify for term insurance, or the pay out amount will be much smaller (but then again, your family will also be much smaller). With term you pay a monthly or yearly premium and are insured for that term, when you stop paying the insurance premiums then you are no longer insured.
Term life insurance is the right option for people that are in their twenties and thirties and want some type of insurance for their family should something happen to them. The amount that term insurance covers, will vary, and the higher the payout is the higher the premium will be, yet the premiums of this kind of insurance are rarely higher than $70 - $100 a month.
Whole Life Isurance is a Little Different Than Term Life
Whole life insurance is another type of policy often refered to as a cash value life insurance policy. They call it cash value because after paying a certain number of years the policy has a certain value and some of the insurance you purchase can be returned to you after a certain amount of time. In other words, if you don’t die, then you can borrow cash that has accumulated in the policy. People who own term life insurance are unable to do this. In term life insurance you don’t get any of the premiums you pay into the policy back and so you don’t have a fund to borrow against.
Both types of insurance are similar in that you can choose coverage from as little as $10,000 to $100,000 and the amount you choose depends on your needs. To get a better understanding of the differences between whole and term life insurance you should consult with a reliable life insurance agent.
