Choosing the Right Life Insurance

life-insuranceA quick lesson in what you need to know about life insurance, including the types of policies available and determining how much coverage you need.

There are two types of policies.

You will find term policies, sometimes referred to as pure insurance coverage, and whole life policies which have many different variants. Whole life policies combine an investment vehicle with pure term insurance and build a cash value.

Most insurance policies are sold, not bought.

Insurance agents sell the overwhelming majority of whole life insurance in the United States. The life insurance industry has a vested interest in pushing high-commission, high-profit whole life policies.

Whole life policies are more expensive.

Insurance policies that include an investment component cost much more than term policies do. Many consumers get talked into buying a whole life policy, but because of the added cost, cannot afford a policy with adequate coverage, leaving them underinsured.

Whole life policies are largely sold on exaggerations and assumptions.

The returns quoted by agents selling whole life policies are nothing more than a guess, not the real return. Some companies suggest they are using conservative numbers, but in reality their numbers are on the high side to attract more buyers.

Separation between insurance and investment.

There are less expensive places to invest your money that do not feature the high commissions and high costs of whole-life policies. Keep your investments separate from your insurance policies.

Make sure you purchase adequate amounts of term coverage to satisfy your needs.

When it comes to the future well-being and financial security of your family and loved ones, this is no place to go cutback. Term insurance rates are generally pretty low. Make sure you buy enough to cover their needs.

Match financial needs with the term of your policy.

You want the policy to last at least past the time when your dependents will move out of the house and be on their own, or until a time when your retirement income would kick in and take care of them.

Take advantage of your health.

The best time to buy health insurance is when you are healthy. Older people and those with health problems will pay steeply higher rates for the same life insurance policy.  High risk life insurance quotes will always be more expensive.  There is no need to purchase life insurance before you have dependents, unless there are plans in the very near future to bring some into the world, however you must think about your future insurability.

Be honest.

If there is a large claim to be paid out, and insurance company will investigate before making the payment. Being dishonest or misleading the insurance carrier on your application can result in the claim not being paid. That is a large price to pay just to try to save a few bucks on premiums.

Make use of the power of the internet to shop around.

Thanks to the internet, there has never been an easier time to shop for life insurance. You can get plenty of free quotes in just a few minutes at sites like No need to deal with pushy salespeople. You can find everything you need right from your desktop.

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