How To Choose The Right Life Insurance Plan

Post By: Admin / USA Frugal Club

While some people might consider life insurance as simply another expense, it is one of the most essential financial decisions to make! Life insurance doesn't only help offer protection to your home and family in the unfortunate event of your demise but also prevents your loved ones from experiencing financial hardships.

When it comes to learning how to pick the right life insurance policy that suits your needs, there are multiple factors that you need to take into account. Here, we have prepared a mini-guide to help you make an informed decision. So, let's get started. 

How To Choose The Best Life Insurance Company For You

When selecting a life insurance provider, you may be tempted to solely focus on policy cost. However, the best companies offer benefits to customers that offer maximum flexibility at the most reasonable costs. Here are some important questions to ask:
·        Is the coverage amount adjustable?
·        Can you have your term policy converted to a permanent policy?
·        Does the company guarantee policy renewal rights?
·        Does it offer living benefits? 

Types Of Life Insurance To Choose From

Buying a life insurance policy comes with major financial benefits, but navigating the wide range of implications and terms can be tricky. Here are four types of life insurance types that will help you get familiar with the jargon involved in the financial services industry. 

Whole Life Insurance
As the name suggests, this life insurance type, also known as ordinary life or straight life, remains in force for the entire lifetime of the insured individual. However, the payment of premiums is mandatory. When the insured person dies, their beneficiaries receive a death benefit from the insurance provider. 

Term Life Insurance

Term assurance of term life insurance provides coverage to policyholders at a fixed rate of payments. This coverage is provided only for a specific time period. Once the period expires, there is no guarantee that the policyholder will receive coverage at the previous premium rate. In the case of the policyholder's death, the death benefit is paid to the appointed beneficiary.  

Universal Life Insurance

Universal life insurance is sold primarily in the U.S. If the premium payments under this policy go over the current insurance cost, then the excess amount is credited to the policy's cash value.
Variable Universal Life Insurance
Variable universal life insurance builds cash value that can be invested in various separate accounts. The contract owner decides which separate account to use. This policy offers flexibility to the owner in terms of making premium payments. If the policy holder dies and the cash value is sufficient to pay the insurance costs, a death benefit is paid to the beneficiaries in question. 

Bottom line

We hope that with all the information above on life insurance policies, you found something worth your while! When learning how to pick the right life insurance, it is important to first understand the lifestyle that you desire for yourself and your loved ones. Use our guide to make this important life decision today and remain prepared in case a tragedy strikes in the future.