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Life Insurance That Suits Your Life
By Ivon T. Hughes
By understanding the basics of life insurance coverage,
you are able to determine what type of policy works
best for you and your family.
Who Needs Life Insurance?
Life insurance provides money to your beneficiaries in
the event of your untimely death so they can maintain
their standard of living. If you don't have children, you
can designate another family member such as a niece
or nephew as the beneficiary, or you can donate the
money to charity. A policy can even be taken out just
to cover burial expenses.
Different Types of Life Insurance
Term Life Insurance: Covers a designated period of
time. Once that period is over, the insurance lapses.
As you age, the cost of renewal rises. If you want the
longest period of coverage, you need a term life
insurance policy to age 100.
Whole Life Insurance: Covers your entire lifetime and
has a cash value. Premiums never increase. You can
borrow against the cash value of the policy. If you
stop making payments midway through the policy, the
cash value pays the premiums until exhaustion.
This is up to 5 times more expensive than a term life
insurance policy.
Universal Life Insurance: Premiums can be adjusted by
the owner, which may change the face value of the
policy. You can borrow against the cash value.
Basically, it is a term life insurance policy with an
investment portion such as a whole life insurance
policy. In a whole life insurance policy, you do not
choose an investment, that is done by the insurance
company. With a Universal Life insurance policy
however, you may, if you wish, choose the investments
for the investment portion of your premium.
Two different reasons for Life Insurance: If you don't
have a lot of money to buy a good pension, a good
term life insurance policy may be able to help. If your
partner dies, these funds can form a capital amount to
buy a pension.
Alternatively, you can insure the life of a healthy
parent. In the normal course of events, your parent
will predecease you, thus providing you with the
necessary pension funds.
Thus you have solved a problem in which your parent
has gladly helped.
About the Author
Ivon T. Hughes of The Hughes Trustco Group is the author of the Life Insurance Handbook: How To Get The Best & Cheapest Life Insurance available FREE to all new subscribers at http://www.hughestrustco.com.
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