4 Must Know Facts About Life Insurance

Are you up to date on what’s what in the life insurance market? Contrary to popular belief, there have been quite a few changes recently, even though some of the basic facts remain the same. For instance, every working adult should know the key differences between permanent and term coverage. Additionally, it can be beneficial to understand how to sell a policy for cash, should you ever decide that you don’t want the coverage any longer or need the money for a more pressing circumstance. Then, there’s the question of what kind of protection you should buy.

For many people, a simple term contract is sufficient, while others opt for various kinds of permanent policies, like whole or universal. Finally, if you’ve been wondering how guaranteed issue coverage works, now is the time to find out. For those in poor health who want to leave their families enough to cover final expenses and a modest death benefit, the guaranteed issues can be an ideal choice. Understanding the ins and outs of life insurance can help you navigate financial trial and error and mitigate costly errors in judgment. Here are the central facts everyone should know about the different options.

Term or Permanent?

Term coverage lasts for a specific amount of time, typically 10 years and multiples thereof, and comes with a fixed death benefit. If you outlive the term, the policy ceases to exist. Permanent insurance lasts for as long as you pay the premiums and can include adjustable death benefits and premiums. In most cases, term policies cost much less than permanent ones.

Selling a Policy for Cash

It’s often possible to sell your life policy for cash. There are ways of achieving this goal, which is relatively simple and fast. Plus, you can do the entire sale online. First, you can review a guide about the process that tells you all you need to know about getting cash out of your policy, and doing it the right way.

Whole and Universal Life Basics

There are dozens of differences between these two forms of life policies. In general, the whole is the costliest, builds cash value, and comes with fixed premiums and death payouts. Universal has two variations. The first, guaranteed universal, has no cash value but lasts as long as you live, or until a specific age you choose. The second is called indexed and does carry a cash value, which is tied to the stock market. It can be complicated to follow the market and figure out the policy’s value at any given time, but you can borrow against the cash value and do well when the stock market is up.

Guaranteed Issue Policies

If your health prevents you from getting a standard term or permanent policy, a guaranteed issue might be your only choice. Prices are high because there is no medical exam or medical questions. You pay the premiums, and you get the coverage. Why do people opt for this relatively pricey alternative? The guaranteed issue can be a good way to make sure your loved ones have enough money to cover final expenses, like funerals or cremation, and still have some money left over for other expenses. Note that you usually have to wait two years after the first premium for the coverage to go into effect.

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