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:: HOME :: CREDIT CARDS :: LONG DISTANCE :: INTERNET SERVICE :: LOANS :: CELL PHONES :: INSURANCE · Main Page · Auto Insurance  Compare Quotes Search by State Tips and Advice· Health Insurance Compare Quotes Tips and Advice· Life Insurance Compare Quotes Tips and Advice Life Ins. Calculator· Home Insurance Compare Quotes Tips and Advice· Business Insurance Compare Quotes Tips and Advice· Other Insurance · Info & Resources :: ONLINE BANKING :: KNOWLEDGE :: MORE |
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Life Insurance Tips and Advice Center Topic: How to Choose Life Insurance See the subtopics menu for advice on how to choose the right life insurance plan for you and your family. For additional information about life insurance, see the topic list directly below.
 Types of Life InsuranceWhat are the types of life insurance to consider purchasing? When choosing life insurance, it's important to get the right type coverage needed for expected and reasonable expenses after the death of the insured. Term life insurance pays death benefits only if the insured dies during the term of the policy. If the insured is still alive at the end of the term, coverage expires, although it can be renewed. This is the best coverage for someone who needs insurance for a set period of time, such as purchasing a 20-year policy to ensure that dependents would be able to afford to go to college or to make sure a debt would be paid off if the insured died during the term. This type of insurance is convertible into a permanent policy, but does not built equity. Permanent, or whole, life insurance pays death benefits whenever the insured dies. This is also the best coverage for someone who wants to have a savings, as this type of insurance builds equity. Premiums for permanent insurance are higher than for term policies, but remain the same throughout the life of the insurance, while term insurance premiums can increase every time the policy is renewed. Life insurance providers sell policies individually and as group policies. Group policies are often available from an employer, union, or trade association, and sometimes offer lower rates than individual policies. Additionally there are usually no health exams to get group coverage. ^ Back to top Life Insurance CostsWhat affects the costs of life insurance? Life insurance is a critical expense for some individuals, and perhaps not necessary for everyone. Individuals without dependents and with sound finances generally do not need to purchase life insurance. Individuals who have dependents, or who wish to make a charitable contribution after their death, will need life insurance to meet these needs. Life insurance companies pay benefits upon the death of the insured. So one consideration in the cost of life insurance, and the amount of coverage needed, is how much money dependents and family will is need. It is important to buy enough insurance to replace income, pay for additional expenses, such as health insurance, that the insured was responsible for, and for extra expenses if the family may need to make changes. Additionally, many people make sure to purchase enough insurance to pay costs associated with death such as taxes, funeral expenses, and costs to administer the estate. To ensure enough coverage, some people recommend purchasing an amount equal to a multiple of the insured's current salary, although this does not always provide enough coverage. With life insurance, the most important thing is getting enough coverage to take care of dependents left behind, and this may not always be the policy with the lowest premium. Finding the right life insurance coverage at the right cost is a complex matter. It takes a bit of research to understand the risks and costs. Working with a life insurance professional is the best step to take to ensure purchasing the correct type and amount of insurance. ^ Back to top What Does Life Insurance Cover?What does life insurance cover? Life insurance is a financial investment for some. For most people, though, life insurance is primarily to provide money and benefits for those left behind after the insured dies. As a financial investment, some life insurance policies create cash value that the insured can borrow against or withdraw. Income tax is deferred until the money is withdrawn and exempt if the money is paid out as a death benefit. If money is withdrawn from the policy, that reduces any benefits paid out at the time of the insured's death. A permanent life insurance policy is the only type that can act as a savings account, as a term life insurance policy does not gain equity. Life insurance companies provide replacement income for family and dependents left behind, so that they are not in financial trouble without the insured's income. Life insurance can also pay funeral costs, as well as other costs to administer the estate of the insured. Life insurance can also provide money for heirs, even if there is no other inheritance available. Life insurance also pays for estate taxes, so any heirs or beneficiaries are not financially responsible for those costs. In addition, an insured can name a charity as the beneficiary, in order to make a contribution that is usually much larger than the cash equivalent of the premiums paid. ^ Back to top Comparing Life Insurance ProvidersWhat is the best way to find life insurance providers? The best way to find a life insurance provider is to work with someone that a friend or family member uses. Another way is to use some online services that will allow you to find insurance provider—such as InsWeb (www.insweb.com), Trusted Choice (www.trustedchoice.com), Insurance Finder (www.insurancefinder.com), or NetQuote (www.netquote.com). These services provide users with a list of agents in the area who focus on life insurance. No matter how an insurance professional or insurance company is recommended, it is important to compare life insurance providers. This means asking a lot of questions about the policy, the types of coverage available, the insurance professional, and what type of support is offered. Here are some basic questions to ask about life insurance:
Saving Money on Life InsuranceIs it possible to save money purchasing life insurance? Insurance is a necessary expense, but saving money on life insurance is possible. The first step to a life insurance comparison is to review coverage options offered by different insurers and different brokers. The first step to saving money on life insurance is to understand the proper rate class for the insured. Most insurance companies put individual life insurance policies into standard and preferred classes, further divided by whether the insured is a smoker or non-smoker. Making a lifestyle change, especially a move to the non-smoking class, can help reduce costs. Purchasing a group policy, like those offered through an employer, can help save costs over individual policies, but this may not be the right option for everyone. Considering the net cost index is another way to save money on life insurance. This is a standard way to compare insurance policies that may have varying premiums and cash values. In general, the lower this number is, the better. Also, if purchasing term insurance, a renewal guarantee can lower costs—as when it is time to renew the policy, the insured will not have to provide evidence of insurability. Working with insurance professionals, such as life insurance agents, is really the best way to save money on life insurance. These professionals understand life insurance, the net cost index numbers, how the health and lifestyle of the insured affects the premiums, as well as which insurance companies have the best policies. ^ Back to top Finding a Life Insurance CompanyWhat is the best way to find a life insurance agent? Buying life insurance is a complex process, because there are so many options and so many different types of coverage. So working with experienced life insurance agents is the best way to find the right coverage, at the right price. Insurance agents must be licensed by the state they work in. Life insurance companies also have to be licensed to sell insurance in the state the insured lives in; and not all companies are licensed in all states. When considering what life insurance company to do business with, there are many things to understand. Insurance companies are complex and often have multiple divisions, and some companies are unrelated but have similar names. When considering a company's insurance, it is important to know the full name of the company, where its headquarters office is located, and its affiliation with other insurance or financial services companies. It is also important to understand the financial fitness of a life insurance company and choose coverage with a company that is expected to be around for a long time — at least the expected lifetime of the insured. Unlike bank accounts, life insurance policies are not guaranteed by any agency. State insurance regulators can provide information on claims or complaints made against the company. It is also important to feel comfortable with and trust the insurance company, in addition to the agent who sells the insurance, as they will be working closely with dependents and relatives when the insured dies. ^ Back to top Working with a Life Insurance ProfessionalWhat is the best way to find life insurance agents? Working with life insurance agent is the best way to find the right life insurance options, at the right price. An insurance agent is a professional who works either independently or for an insurance company, and is an expert in insurance. When looking for an agent, it's important to find someone who understands the financial and personal situation of the insured, including risk tolerance, tax rates, and marital and dependent status. It's also important to find an agent who understands that purchasing life insurance can be a stressful decision for some individuals, and who can answer questions and provides some options for the insured. There are two types of insurance agents: Captive agents, who represent one insurance company and will have a deep understanding of that company's offerings and which will work best for the needs of a particular individual. Independent agents, who represent multiple insurance companies, and can offer choices among several insurance companies' policies. Insurance agents or brokers must be licensed by the state they work in, indicating a minimum level of good conduct and knowledge of insurance issues in that state. Before working with an insurance professional, it's a good idea to research their record and license status. ^ Back to top
How much life insurance do you need? Simply enter your current assets, expenses, income to get started. You can also adjust the inflation rate and your expected rate of return. Estimate how much life insurance you need quickly and easily. · Calculate how much life insurance you need
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