“I am 35 years old. My friends and relatives keep telling me to invest in a life insurance policy. What is life insurance anyway and why do I need one?”
A life insurance policy is nothing but a contract between the insurer and the policy holder whereby the insurer promises to pay a specific sum to the beneficiary of the policy on the occurrence of the insured event provided the policyholder keeps it running by regular payment of premium.
There can be quite a few types of life insurance policy. Among them a pure life insurance policy such as a term insurance provides the coverage at a very affordable rate. Indeed, the primary usage of such a policy is to replace the income lost due the premature death of the insured and therefore, if you have dependents to take care of you should get one immediately. You need it more if you are the sole breadwinner of your family.
“I do not yet have a family. Do I still need a policy?”
If you do not have a family, you indeed can do without the life insurance coverage for the time being. However, remember that policy prices increase with age and so if you plan to marry later on and then buy the policy, you may find the rates a little too unviable. It is always better to buy the policy while you are still young and healthy.
However, it is not necessary that life insurance policies should only cover the family of the insured; you can choose anybody as your designated beneficiary. Indeed, many people cover their aged parents or disabled siblings with such policies. Then again, your business firm or some charitable institutions too can also be the beneficiary of your policy. Some again go to the extent of covering their pets with such policies, but that is very rare.
“What are the different types of life insurance policies I can choose from?”
There are indeed as many types of policies as the underwriters can conceive. However, all of them fall under two broad categories – the temporary policies sold for stipulated years and permanent policies valid for the life of the insured. The term insurance falls under the first category. Generally it is sold for 1/5/10/15/20/25/30. The problem with such policy is that, although thirty years is long enough time, it can still expire before you have been able to settle all your liabilities.
Among the permanent policies, the universal life insurance is the most popular type. The advantage of such policies is that it insures one for life and so whenever the insured dies, the beneficiaries are sure to get the benefit. What is more, these policies use part of the premium you pay to accrue cash value and so in a way it also help you to build your asset.
The purchase procedure of any life insurance policy always opens with receiving quotes. Earlier you had to visit broker’s office for that, but today you can get life insurance quote on line. Indeed, you just need to fill up a quote form and quotes from different carriers will automatically appear on your screen. The next step is to choose one and apply. The application process involves filling up a detailed form; you are required to provide information on your age, gender, body mass index, present and past health condition, family medical history, lifestyle, habits etc. Under traditional plans you are also required to undertake a paramedical test; but if you are willing to pay more you can bypass that.
Indeed, for those who are unwilling to appear for these tests, there is the term life insurance no medical exam. Under these policies, you are required to answer some health related questions and the coverage is based on that. The carriers too check on you by running you through Medical Bank and other agency reports. Therefore, the coverage is not guaranteed. Although these policies cost a little more, many choose them for their instant and hassle free purchase procedure.
Nowadays, you can forego the medical examination by choosing a term life insurance no medical exam policy which you can obtain by using the internet. You can now easily purchase an instant term life insurance policy by visiting an insurance company’s website and choosing a life insurance quote on line that will be given by the website. The amount of premiums that you will have to pay will depend on the type of policy, the length of term, and your age.
It is normal for a person to have questions about life insurance policies. It is better to have these questions answered so that people will have a better understanding of what life insurance policies are all about and why they need them.
Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on life assurance and instant term life insurance quotes, visit his site today.