The basic building block of financial planning is protection. By getting enough life insurance you are protecting your loved ones so that the money is there to continue their lives without disruption. It has been said that getting life insurance is an honorable and selfless act and that is so. You are taking responsibility for the financial future of people you love. Congratulations on this first step and it is our goal to help you find the most efficient and economical method in building one of the building blocks of sound financial planning – life insurance. Find the best term life insurance quotes by using our instant and anonymous online term life insurance quote system. You'll get great rates with the exact coverage you are looking for. There are many types of life insurance to fit individual needs and circumstance. The following are some of the basic types of life insurance available.
The simplest form of insurance. You purchase coverage for a specific price for a specified period. If you die during that time, your beneficiary receives the value of the policy. There is no investment component.
Whole Life Insurance
Similar to term, but you purchase the policy to cover your "whole life" not just a set period. Premiums remain level throughout the life of the policy, and the company invests at least a portion of your premiums. Some firms share investment proceeds with policyholders in the form of a dividend. Many companies will offer "a relatively low guaranteed rate of return," but in reality pay at a rate in excess of the guarantee.
You decide how much you want to put in over and above a minimum premium. The company chooses the investment vehicle, which is generally restricted to bonds and mortgages. The investment and the returns go into a cash-value account, which you can use against premiums or allow to build.
With some policies, sometimes called Type I or Type A, the cash account goes toward the face value of the policy on the death of the policyholder.
With a second variety, sometimes called Type II or Type B, the beneficiary receives the face value of the policy plus all or most of the cash account.
While Type II is meant to provide a partial hedge against inflation, it demands higher premiums as you get older than Type I.
A variation of a universal policy, often called universal variable life, allows policyholders to choose investment vehicles.
The basic building block of financial planning is protection. By getting enough life insurance you are protecting your loved ones so that the money is there to continue their lives without disruption.
An annuity is an insurance product that pays out income, and can be used as part of a retirement strategy. Annuities are a popular choice for investors who want to receive a steady income stream in retirement.