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What type of insurance might fit you the best? Whole life insurance or term life insurance? Let us do a life insurance comparison between the two according to a few general criteria.
What is the difference between whole and term life coverage?
Whole life cover consists of life cover plus an investment on which you can earn interest. Term insurance covers the policyholder for the length of the policy and has no investment attached to it. Both will pay out a certain amount of money in the event of your death to your family members.
How much can you pay?
You should look at your financial budget, calculate how much you are able or willing to pay for a policy and then do a life insurance comparison. A whole life policy is much more expensive than term life coverage. This is because it combines a term cover with an investment component. You therefore pay part of your premium for coverage and the other part for the investment that earns interest. Term life cover costs less than whole life assurance since the premium you pay is for life assurance only. You are able to choose between two types of term cover premiums which can influence the initial costs: annual renewable or level term. A Level term premium stays the same for the duration of the policy. Annual renewable premiums might increase every year for the policy's duration.
What is your age?
Your age is might influence your policy choices. A person older than 50 will generally have to pay greater premiums for a term life policy. Also, if you are 65 and older, you may struggle to find an insurance company that is willing to sell you term assurance. Therefore, you may have no alternative but to buy whole life assurance. If you live longer than the duration of the term assurance policy, no money will be paid out to you. If this happens with your whole life insurance policy, you will still have the investment portion left. You may then borrow money against the investment or take the cash value amount.
How long do you want to keep the policy?
The cash value of a policy is the amount of money you could be paid should you decide to cancel your policy. If you think that you may have to cancel your policy sometime in the future before it's duration is completed, this might have an effect on the type of assurance you could buy. You could consider a whole life insurance policy if you are determined to pay the premiums for at least 20 to 30 years. This will usually ensure that you receive a worthwhile return. A Term life cover policy may be a better option if you are going to keep it for shorter than 20 years. The answer to your life cover needs is a personal and financial one that should be considered carefully before making a decision. That concludes this short life insurance comparison.
Thanks To : Insurance, Auto Insurance Gamesthes Remortgage specialist new york personal injury lawyer
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