Whole Life Insurance Tips That Will Save You Tons

If you want to get the best deal for your money, understand as much as you can about the type of insurance policy you decide to purchase. Educate yourself so that you can optimize the return on your investment. Read these whole life insurance tips so that you can ask the right questions before spending your money.

First, educate yourself. Learn about the different types of insurance and the vocabulary associated with each. Understand the difference between term life, universal life, and whole life policies.

Next, determine how much life insurance you need. You can do this by estimating your family's dependence on your income, or by using an insurance calculator. A calculator offers you an excellent estimate concerning the amount of insurance coverage you need.

Consider the quality of the insurance company offering you the premium quote. Typically, insurance companies with stronger financial ratings that have been in business for many years offer a better investment prospect than newer companies with poorer performance reviews. A number of financial services, including the Standard and Poor Index, offer ratings reviews for the better-known life insurance companies.

Be aware that smokers rarely receive the best insurance premium rates. If you are serious about lowering the cost of your insurance premium, determine what length of time you need to be tobacco-free before applying for coverage. Some companies require as little as 12 or 13 months; others, however, require you to be smoke-free for at least two years before applying.

If your job is hazardous, or if you enjoy dangerous pastimes such as bungee jumping or skydiving, reconsider continuing these activities. Pursuing these risky pastimes will increase your insurance premiums. Additionally, some insurance companies demand higher premiums from military personnel, so consider purchasing your insurance before enlisting.

Younger people typically receive significantly lower premium quotes than older individuals do. If you are interested in purchasing whole life insurance, do it while you are still young enough to lock in lower premium rates. Most companies will offer you a guarantee against rate increases throughout the entire length of time that you hold the insurance policy.

After reading these whole life insurance tips, review your investment strategy carefully. If this is the best option for you, shop around and get quotes from several reputable agencies. Then, find out what factors might decrease your premiums, and take advantage of this knowledge to maximize your investment.

Types of insurance

Term life is the simplest and least expensive type of policy. It's pure insurance with no cash value account. A term life policy has only one function: to pay a specific lump sum to whoever you've designated, upon a specific event - - your death. The death benefit and the policy limit are the same - - a $200,000 policy pays a $200,000 death benefit. The policy protects your family by providing money they can invest to replace your salary, as well as to cover final expenses incurred by your death.

Other types of life insurance provide both a death benefit and a cash value account. Their premiums are larger than term life premiums, because they fund the savings account in addition to buying insurance. These policies are often referred to as cash value policies. They include:

Whole Life
Variable Life
Universal Life
Universal Variable Life