Life Insurance Policy – The What, Why and How Of A Life Insurance Policy

A life insurance policy could help you to provide your family with financial security when you die and can no longer look after them. In this article I will discuss the what, why, how, when and where of a life insurance policy. If you are wondering about getting life insurance, then you may want to read this.

What is a life insurance policy?

A Life insurance policy is a contract between an insurance company and the insured which promises to pay out a certain amount to your beneficiaries in the event of your death.

It also sets out the provisions of the life insurance coverage. These provisions include premiums, loan procedures, face amounts, and the designation of beneficiaries, among many other clauses.

Policies may be for term or permanent cash value types of coverage.

Why is a life insurance policy essential?

The benefit from a life insurance policy is not for you. It is to provide for your loved ones, but after you have gone.

After your death, the life insurance money is paid to those who rely on you to give them a secure standard of living, which they might lose if you should die. This is money when they need it the most, with no income tax or publicity.

How does a life insurance policy work?

Term life insurance is only for a certain period of time, and if the policyholder dies during the term of insurance he/she receives the death benefit. In the case of the insured person dying after the policy expires, however, no benefit is paid.

At the end of the term period, the policy expires with no accumulated cash value, and no benefits are payable. Term is the cheapest, but it’s unlikely the death benefit will be paid since the life insurance policy will probably lapse before you actually die.

When a person has family and becomes ill, not only does the sick person need support, but also the family often requires relief. Short-term income protection is an added coverage to life insurance and provides extra cash to cover the family’s needs when one spouse is ill.

You will need to decide on the amount of term life insurance before you start to shop around. Most companies have effective savings rates at $250,000, $500,000 and $1 million.

When can you take out a life insurance policy?

You may be able to get a lower premium for your insurance if you have lowered your cholesterol, lost weight or quit smoking.

A 35 year old nonsmoking male in excellent health can buy a $500,000 term life insurance policy for about $700 per year.

Keep in mind your age determines the length of time the term policy will have a guaranteed level premium. You may not be able to get more than a 10 year guarantee if you are over 50 years of age, so start while you are still young.

Where can you find a life insurance policy?

Finding a life insurance policy is something that you should not rush into.

If you are planning to apply directly for life insurance, then you may find it easier to apply online. All this information will enable you to make the right decision about the best company to get your most suitable life insurance policy from.

Getting online term life insurance quotes can be a very effective and convenient way to save you both time and money when shopping for term life insurance. The quotes are free and you’re never under any obligation to accept any quote that is offered to you.

How to Compare Cheap Car Insurance Quotes

The best advice for getting a cheap car insurance quote is to shop around, and the best advice for shopping around is to compare the car insurance quotes of each company.

There are several ways to compare cheap car insurance quotes from several car insurance companies:

Make a list. Ask your family members, friends, and even co-workers with whom you’re close about the car insurance companies they use. Chances are they’re not all doing business with the same car insurance company, so you’ll be able to get truthful reviews of several different car insurance companies. Take note of those that interest you, and forget about those that don’t.

Ask about discounts. Once you have your list of possible car insurance companies, call each one and ask about discounts. Many car insurance companies offer discounts for classes taken, good driving records, vehicle safety features, and multi-car policies. Some insurance companies sell more than just car insurance, and will offer discounts if you buy or already have other insurance policies from them. Compare the discounts offered by each as those discounts will help determine your cheap car insurance quote. Take note of the car insurance companies that offer discounts relevant to you.

Pay attention. Ideally, you’re looking for a car insurance company with which you can do business for a long time. So, the customer service must be stellar, right? As you talk to an agent from each car insurance company you call, really listen to the rapport. Are they friendly? Do they have immediate answers to your questions? Do they sound as if they’re in a hurry to end the conversation?

Price vs. Options. When you compare cheap car insurance quotes, you shouldn’t only be interested in the price – you want to get a car insurance policy that offers options you need. What’s the point in paying a cheap car insurance payment if you’re sacrificing crucial car insurance coverage and protection?

Important Tips on Buying a Life Insurance Policy

Introduction

Life Insurance comes with many benefits. Nowadays, life insurance isn’t just a contract between the insurer and insured, which provides protection against risk of life by paying a premium. For sustainability in the market, every company and product need to adopt the current demand and circumstances and same goes with the life insurance products too. In these years of change in the market, regulator and life insurance companies have taken major steps to meet the changing demands which have provided customers with following options and benefits:-

  • Wide range of product portfolio
  • Options of saving and investment
  • Added benefits with life insurance
  • Different ways of getting low premium and high coverage
  • Additions in list of key features of life insurance polices
  • Transparency and hassle free procedure

With a pool of different companies, products and benefits to choose from, you need to pick out the best one for you. There are many things which you need to keep in mind before buying insurance and there is no specific guideline for choosing the best one, it all depends on your need and situation. But there are some important points related to every policy which can help you to filter the best insurance policies. Based on those important points, we have outlined following important tips for buying a life insurance policy.

Tips

  • Start early

Buying a Life insurance when you are young, gives you a lot of benefit. You will be able to get high coverage at a very low rate of premium because age has a direct effect the premium rate (younger the buyer, lower the premium is). In addition, with low premium, you will get better financial planning, long duration of coverage and your premium will be locked at a very low rate for your entire policy term.

  • Choose the right coverage amount

Don’t decide your policy coverage on your feelings or on calculations based on single factors (like 10 times of your salary). While deciding upon the coverage amount, always consider your current lifestyle, debts, assets, future obligation (college education of children, settlement of your family to different locations, etc.), and rate of inflation. Choosing low coverage will give you zero benefit while choosing a high coverage will be a costly deal for you.

  • Comparison is the key

Comparison is very much necessary before buying an insurance policy. It helps you to choose the best policy at the best rate. There will be many polices which will not offer benefits which you are looking and may be available at different rates. There are many IRDAI certified comparison portals which provide a comparison of different policies on their websites which is unbiased and easy.

  • Choose the right policy

Different policies have different benefits, eligibility criteria, terms and conditions, exclusions and inclusions. You can choose the right policy for yourself only if you know about it well. So the key in choosing the right product is better understanding about it. Know about the riders available, add on benefits, what is not covered under your policy, premium rates and all other aspects related to your policy. Know your needs well and then find policies accordingly.

  • Choose the right company

There are more than 20 companies in India and it very much necessary to choose a trustworthy company. There are some companies which provide best insurance policies and are trustworthy also. You need to check the claim settlement ratio, review (by customer and experts), claim settlement process, product portfolio, price, etc. of different companies to choose the right one.

  • Understand the brochure

There is a brochure available with every Life Insurance product which is available on the company’s website. It contains all the key benefits, features, eligibility, inclusions, exclusion, term and condition related to the policy. Go through every fine line of the brochure to understand your policy well. It will help you to use the available benefits and avoid any bad surprises in future.

  • Disclose your information correctly in the proposal form

Some people hide facts about themselves while filling the proposal form and giving personal details to the company. For example, some people tick themselves as a non-smoker while giving details to get low rate of premiums. But later, at the claims stage, it could result in zero benefit as the claim will be rejected due to misleading information provided by the insured. You can’t fool the company by giving wrong information. So to avoid any hassle during the policy or at the time of making claims, it is always necessary to provide the right information about yourself to the company.

Never buy a Life Insurance policy in a hurry because it’s a decision which will have an effect on your whole life. Give some time for research and understanding your needs well because a policy bought with precision gives you exactly what you want.

Where to Seek Financial Advice

Many times people find themselves looking for financial advice. The problem is the sources they are using when it comes to all of the personal finance topics available. People will ask their friends, family, co-workers, etc. only to be left with disappointment when they are given poor information. Well today I am going to discuss the places that you should seek your personal finance advice from including paying a professional, to finding free information.

Now, if you are the type of person that is not very resourceful and find yourself trusting people that always let you down, your best option is to find a professional financial adviser. If you don’t even know where to start looking for an adviser then you are probably in desperate need of help. Almost any large financial institution will have financial advisers available to you. Walk into your bank, or call your brokerage account and ask what they offer and what the costs involved will be.

Those of you that are a bit more resourceful and have a good foundation for understanding your personal finance goals can probably fine the information from quality sources on the internet for free. Now I would caution you to take anything you find on the web at face value as there are a lot of dot com websites setup that post content and don’t care if it is quality to the point of helping you, but rather a means of drawing in traffic to sell you something through on of their advertisements.

Any website that is publicly traded or well known in the financial world is probably going to be a good start. Many people have heard of BankRate and others like it to find the information they are looking for. Finding a site that publishes content on financial advice is going to be the hard part, but once you have found it be sure to bookmark that site or subscribe to the RSS feed to have updates automatically sent to you.

Once you have found a site that is offering quality information, now is the time to speak to family and friends. asking them if they have ever been to RPP Financial, or Bankrate is going to get you a yes or no answer, rather than their personal opinions on the topic. It is really up to you where you seek financial advice.