Great Article about Life Insurance in General!

By | June 18, 2009

This is an awesome article about Life Insurance in general, how much you need the different types of life insurance and why people buy this product.  Please do yourself a favor and if considering purchasing a life insurance product read this article!  It is written in a very simple and easy to understand manner but packed with useful information…

Is Whole Life Really Whole Life?

Most people don’t wake up in the morning with the thoughts of implementing a life insurance policy. It might take the motivation from a spouse, possibly an insurance agent or an attorney.

Normally, it’s suggested to have six to eight times your income, plus your bills, as a starting point in figuring out what death benefit you need.

What type of coverage you implement depends in a large part on what you feel like budgeting toward your life insurance program.

Term insurance is pretty simple. You buy a death benefit for a period of time. The longer the period of time the premium is level, the more you pay.

Permanent insurance is much more complicated. There are three kinds of permanent insurance.

Universal life gained popularity in the late ’70s and early ’80s. This was a time of high inflation and double-digit interest rates. Universal life was based on these interest rates and unfortunately, some representatives used this high interest rate in their projections, low-balled the premium and represented this as a permanent life insurance plan.  Similarly, variable life, which is contingent on stock market performance, if projected at a high rate of return, will look better than if projected at a lower rate of return.

All three kinds of insurance will work as long as they’re properly funded. A lot depends on how you want the cash value invested, how many guarantees you want, how much premium you pay and how long you want it to last. It’s always a good idea to make sure the death benefit you have doesn’t lapse before you do.

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