The decision to compare life insurance plans for purchase is one of the most important you will ever make in ensuring your family?s future financial security both in your lifetime, and in the future generation. With the variety of life insurance options available, it is difficult to compare life insurance to choose the one which is best for you. This article is intended to compare life insurance and help you choose the right insurance for your specific needs. To adequately compare life insurance, it is necessary to first have a solid understanding of the three major types of life insurance: term, whole, and universal life insurance.
Term life insurance is the most basic and inexpensive form of life insurance to know to compare life insurance thoroughly. Term insurance provides coverage for a specific period of time rather than your entire life. While 20 years is the most common term, terms can range anywhere from 1 to 30 years. A huge draw of term life insurance is its lower initial cost in comparison to permanent life insurance. Term life insurance allows the insured to buy high levels of insurance for a certain period of time when the need is greatest, such as in your family?s early years when your children are still young. However, term life insurance does not have a cash value like the permanent forms of life insurance. Take this into account as you compare life insurance options.
The next type necessary to effectively compare life insurance is whole life insurance. Whole life insurance is the most common form of permanent life insurance. This insurance provides the guaranteed death benefit as well as a rate of return on the cash values. The premium amounts you will pay are also level and guaranteed to never increase. Whole life insurance is a good option as you compare life insurance plans if you want a simple and affordable form of permanent life insurance and have a good idea of the predicted death benefit needed as the amount is set and cannot be changed.
The third type of insurance needed to compare life insurance is universal life insurance. This insurance is also known as adjustable life insurance because it allows the insured to pay premiums at almost any time and in any amount, within certain boundaries and as long as they sustain the stated death benefit. Another great aspect is that you can increase or decrease the death benefit as you see fit. Furthermore, there is typically a rate of return on the policy?s cash value unless your premium rates are otherwise insufficient. Universal life insurance has the most expensive initial cost, but provides the greatest amount of flexibility and control.
This basic information pertaining to these three major forms of life insurance is a good place to start when first deciding to compare life insurance options. Keep these features in mind as you compare life insurance.