Life Insurance - What You Need To Know

The term life insurance can be quite confusing for many people to understand at times. With so many different types of life insurance policies and all the various life insurance terms, it's easy to see why. Here is quick look at the basics of life insurance and the various types of policies available.

Who Needs Life Insurance?

Earning an income is a neccessary part of life. Your income helps pay for your families home, car, food, clothing, and much more. But what happens if you are no longer around to provide for your family? Who will take care of their needs? If you answer yes to the following questions it may be a good time to consider buying life insurance.

What Types Of Life Insurance Are There?

In a nutshell, there are really only 3 basic types of life insurance available. Then there are several variations to each one. The key is to find the best life insurance policy to fit you and your families specific needs.

Term Life Insurance

Term life insurance is the cheapest life insurance available. As the name implies the policy covers you for a specified period of time. The policy pays your beneficiary the amount of your coverage in the event you pass away during that time. Proceeds from term life insurance, or any life insurance, is not subject to federal or state income taxes to your beneficiary. The rates for term life insurance are low for younger ages and increase as you grow older.

Whole Life Insurance

One of the best life insurance policies available is whole life insurance. Whole life costs more than term insurance, but the policies will accumulate cash value over time. In a basic life insurance terms it life insurance with a savings account attached. Premiums for whole life insurance are set at the time of purchase and remain the same for the life of the policy. A persons age and health will determine the premium amount. As your policy accumulates cash value you may take this cash out, or borrow against it.

Universal Life Insurance

Universal life insurance is considered by many to be the best life insurance on the market. It is the most flexible life insurance policy and it also gives the owner of the policy the most control over virtually every aspect of the policy. For instance, you can raise or lower the death benefit amount at any time. You can also skip premium payments if you need to, and some policies allow you to invest the cash value of your policy in other high end investments such as mutual funds, etc. in order to build your policy more rapidly. At the same time your cash value will grow in a tax deferred status. That is a huge benefit to the policyholder.

If you are needing life insurance coverage, shop around. Get life insurance quotes from at least 3 different companies before buying. You can even get a life insurance quote online. Don't let a lack of understanding keep you from getting the coverage you need for you and your family. It can be the greatest asset you could ever give your family.