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Learn about Life Insurance and the Different Types of Coverage

Learn about Life Insurance and the Different Types of Coverage

Why should you learn about life insurance? Life insurance is made to give your family financial support upon your death. A basic policy pays a death benefit to the beneficiaries you name. Your policy will stay active as long as you pay premiums. The provider charges premiums based on your risk factor. For example, if you are under 35 years old, your premiums will be less than someone who is 50. Smokers also pay extra premiums because smoking increases chances of health conditions. You can buy several types of policies.

One kind of policy is whole life insurance. Whole life insurance means you are covered for the duration of your life. You could pay more premiums, but the cost does not increase. Another benefit of whole life coverage is it builds a cash value. The cash value is saved from a portion of your premiums which is tax-exempt. The money can be used for estate planning, final expenses, education, or retirement.

Term life insurance is among the policies with the lowest cost. Term life is only for a specific time frame so no benefits will be paid if you are still living at the end of the term. The cost is lower because it is less of a risk to the provider since the insured can still be alive. These policies needs renewing which means the cost increases with each renewal.

Universal life insurance works in a similar way to whole life. The difference is you don’t have to renew the policy, but the premiums do not increase. You can also add a savings plan and you have the option of surrendering the policy in exchange for the money saved. Withdrawals are usually limited to so may times annually and some providers may restrict what you can withdraw. Withdrawing the savings will reduce the funds available for filing claims.

When you learn about life insurance, it can help you save money while providing you a safety net. You should buy a policy that suits your budget and needs the most. Contact Olsommer Clarke Insurance Group Inc today for more information. We offer a variety of policies.

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