Becoming Who You Want To Be

When looking for life insurance, it’s important to find the best policy for your own unique needs. There are so many web sites offering online discount life insurance, so it’s a common mistake made by many, to end up with a policy that’s not suitable.

One of the questions that arise time and again is whether a term life policy or a whole of life policy is best, and what’s the difference between them.

Term Life Insurance Benefits:

Term life policies cover you a predefined term.

Term life insurance only offers protection for the duration of the mortgage, and is normally of no value when your mortgage is paid off.

Term insurance is also cheap, and can even become cheaper over time. There are also a number of different types of term life insurance to choose from as follows:

* The first is known as level term cover, and it’s the most common type. With this form of policy the premium costs are locked in for as long as you hold the policy. In other words, you will pay the same amount throughout the entire term of the policy.Unfortunately, it means that as time goes by you could end up paying more for your life cover. However, the nice thing is that you get the benefit of paying at today’s rates. However, bear in mind that over time these rates could fall instead of rise.

* The second type of term life cover is known as escalating term insurance. This type of scheme means that you pay an increasing amount each year, so the payout at death also increases. They are generally low cost policies, and are more suited to first time buyers and the young. However, they can become more expensive as you get older.

* The third type is known as decreasing term insurance. In this case your monthly payments will stay the same, although the amount of cover you receive will reduce each year.

* The forth type of term life policy is known as increasing term insurance. With this type of term life insurance the benefit on death increases. However, in order to make up for this increase you will need to increase your premiums at certain times, for example on the birth of a child, or as your financial circumstances improve.

* The fifth and final type is known as convertible term insurance. It is a type of term life insurance that you can convert at a later stage into an investment vehicle. The value of the investment is normally based on your health when you originally took out the policy.

Whole of Life Insurance Policies:

A whole of life policy can be more complicated and more expensive than term life insurance. However, a whole of life insurance policy covers you up until the time of your death, providing that you keep paying your premiums!. The advantage of these types of policy is that your family could receive a considerable lump sum when you die.

The amount generally increases in value over the years. Also, the contributions you make to your policy normally earn interest each year. When this happens, your premiums may reduce over time, to the point where you no longer have any more premiums to pay.

However, understand that it is possible that the final value of a whole of life insurance policy may not be the same as the amount of money invested in it over the years.

Summary:

Buying a term life policy, or whole of life insurance is an important decision and one that needs to be made carefully. Before you take the plunge, you need to examine your needs, and exactly what you wish to achieve.

The simplest form is a level term policy with a renewable option. This will allow you to get life insurance for as long as you may need it.

However, you may prefer a policy that offers a growing nest egg, that pays out while you are still around to enjoy it!

Both types have their advantages and disadvantages, and careful consideration and advice from a competent insurance adviser is vitally important.

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