Life Insurance: Term or Universal?
Deciding on the wrong life insurance plan might leave a family without financial resources at the worst possible time. Choosing between term and universal life insurance plans can be confusing. Only with some research and planning can a responsible choice be made. Do You Even Need Life Insurance?Before deciding between term and universal coverage, consumers need to determine whether or not life insurance is actually needed. When you come right down to it, it’s a matter of money — if death would cause a financial burden for the family, then life insurance is critical. Financial matters to be considered include funeral costs, college tuition, and all outstanding and upcoming debts. For single people without children or dependents, life insurance is really optional. Once you’ve made the decision to buy life insurance, then it’s time to determine which kind of policy is right. This is when you need a reputable insurance agent, referred to you by someone you trust. The agent can help you deal with the details of the various benefits and costs of multiple policy types.Term Life Term life insurance policies are among the most flexible and economical types of life insurance coverage available. These policies are designed for those who want basic coverage for a set time period without a savings account built in. This means that there will be no return on the money paid into the policy over the years. Premium rates for a term life policy vary with the policy. Policies are usually purchased for 10, 15, 20, 25 or 30-year periods, and they may be renewable. Apart from low rates, the variety of term periods is one of the most appealing features.For instance, a couple with a child entering college who want to ensure that tuition will be paid for in the event of their death, can purchase a term life policy for just those years. There is no reason to purchase a lifetime policy for a short-term need. Term policies with increasing or decreasing coverage are also available.A disadvantage of term life policies is the inconsistency of their rates. While premium rates start out very low, they usually rise as policyholders age. Also, policyholders who want to renew after the initial term has ended, may find the renewal fees prohibitive.Universal Life InsuranceUniversal life insurance policies will pay any necessary death benefits, but also provide policyholders with an additional tax-deferred savings account advantage. Generally these policies must be held for a minimum of 15 years before resulting in any return from the savings account. They provide policyholders with a stable long-term investment that can be borrowed against or cashed out. Online Life Insurance QuotesThe premium rates and coverage provided by universal life policies remain constant throughout the years. Premium rates tend to be higher than with other policies, largely due to agent commissions, but under some plans the rates drop as the policyholder ages and may even disappear altogether. Unless the policy lapses, there are no renewal fees to contend with.While some financial experts argue that there are better investment options available for educated consumers, many recognize universal life policies as having sound investment benefits.
Related:
Are you considering of getting yourself a life insurance? If so, then you’re probably doing some shopping already for your life insurance is. There arevarious choices available from different insurance providers. Life insurance quotes are obtainable for all types of insurance policies such as level term life insurance and group...
Are you planning to buy life insurance but are currently experiencing financial difficulties? Why don’t you buy term life insurance? This type of life insurance is not only the simplest, but also the cheapest. This is the main reason why many people are opting to buy this insurance. You might...
Term life insurance quotes are available for free online. There are two basic types of life insurance that you can choose from – term and whole or permanent life coverage. Term life insurance, as the name implies is coverage for a specified term or period. It is more affordable initially...