Who needs life insurance?
Whether or not a person needs life insurance depends on the personal situation. If a person does not have any dependents, he or she may not need life insurance. But even a single individual may want to have a policy that would pay off any debts he or she had and takes care of his or her final costs. Married people or people with children will definitely want a policy to protect the financial interests of their families if something were to happen to them. If a person's salary or position within the family is something that would be greatly missed in the event of his or her death, life insurance is a good idea.
How much life insurance should you buy?
There is no rule of thumb that works for every individual since each situation is different. The amount of life insurance a buyer needs depends on his or her income, the amount of people that depend on the person, any debts that he or she is responsible for paying, the general lifestyle of the family and many other factors. The easiest and most general guideline is to buy a policy that is somewhere between five and ten times more than the annual salary of the family.
Common Life insurance policy terms
Whenever a buyer wants to purchase insurance of any kind, it is a good idea to understand some of the terms involved in the policy. There are many different types of life insurance and those looking for coverage will want to make sure they get the right kind.
-Whole Life
This type of life insurance policy is the most traditional. The premiums on the policy stay the same for the entire life of the policy. The policy is good until the death of the insured person, even after all of the premiums have been paid. There is also a cash reserve built up within the policy, but the insured person has no say in how that money is invested.
-Variable Life
These policies build up cash reserves that families can invest in a number of ways through the insurance company. The value of the policy depends on how well the family chooses investments and how they do on the market.
-Universal Life
On this type of policy, the premium costs can vary because part of the earnings that are accumulated on the existing funds may cover a portion of the costs. The insured person can also choose the amount of the death benefit and change that amount over the years. This policy is the most flexible, but insured individuals will pay for that flexibility in higher fees.
Whether or not a person needs life insurance depends on the personal situation. If a person does not have any dependents, he or she may not need life insurance. But even a single individual may want to have a policy that would pay off any debts he or she had and takes care of his or her final costs. Married people or people with children will definitely want a policy to protect the financial interests of their families if something were to happen to them. If a person's salary or position within the family is something that would be greatly missed in the event of his or her death, life insurance is a good idea.
How much life insurance should you buy?
There is no rule of thumb that works for every individual since each situation is different. The amount of life insurance a buyer needs depends on his or her income, the amount of people that depend on the person, any debts that he or she is responsible for paying, the general lifestyle of the family and many other factors. The easiest and most general guideline is to buy a policy that is somewhere between five and ten times more than the annual salary of the family.
Common Life insurance policy terms
Whenever a buyer wants to purchase insurance of any kind, it is a good idea to understand some of the terms involved in the policy. There are many different types of life insurance and those looking for coverage will want to make sure they get the right kind.
-Whole Life
This type of life insurance policy is the most traditional. The premiums on the policy stay the same for the entire life of the policy. The policy is good until the death of the insured person, even after all of the premiums have been paid. There is also a cash reserve built up within the policy, but the insured person has no say in how that money is invested.
-Variable Life
These policies build up cash reserves that families can invest in a number of ways through the insurance company. The value of the policy depends on how well the family chooses investments and how they do on the market.
-Universal Life
On this type of policy, the premium costs can vary because part of the earnings that are accumulated on the existing funds may cover a portion of the costs. The insured person can also choose the amount of the death benefit and change that amount over the years. This policy is the most flexible, but insured individuals will pay for that flexibility in higher fees.
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