Life Insurance Shopping Tips in North Carolina

Posted on September 21, 2012 by Chris Huntley

Want to find a good deal on your life insurance in North Carolina?

The 2 questions you want answered are:

1. How do I buy affordable life insurance? and

2. Where can I find it?

You will find the answers to most of your questions in the following paragraphs..

Types of North Carolina Life Insurance Policies

You might be wondering what kind of life insurance is available in North Carolina if you live here or just moved to this state.

The good news is that the types of life insurance policies you find in North Carolina are just like you will find in any other state.

North Carolina offers 2 different basic varieties of life insurance. These 2 varieties are Term Life Insurance, and Permanent Life Insurance.

Term Life Insurance

The first type of life insurance you will come across is known as ‘Term’ life insurance. This is the most inexpensive type of life insurance that can be found.

They call it term insurance is because it will cover you for life, but insurance companies sell it in specific periods or batches of time such as for 10, 20. 25 years. These periods of time are called terms.

As you approach the end of the term, you have the option of renewing the policy, or switching to another form of life insurance known as ‘permanent insurance, which I’ll discuss shortly.

Term life insurance is your most basic form of life insurance because it covers you for death benefits only. The death benefits go to your named beneficiary, and they are non-taxable, so your loved ones can use the benefits as they deem fit.

Term life insurance is the easiest life insurance to buy because in some instances, you may even not require a medical exam, or at the very least only have to answer some medical questions over the phone or online.

The one thing to know about term life insurance is that the premiums become more expensive as you get older. That’s why it’s a good idea to buy it for a longer period of time or term, than a shorter term, because the monthly premiums get much more expensive if you renew.

You can use term life insurance in a variety of ways. Term life insurance makes a substantially cheaper option than buying mortgage insurance through a bank to cover a mortgage. Banks don’t tell this though – big surprise, hey?

Term life insurance is also a good buy if you own a business and need funds to cover your business expenses if you die prematurely so your loved ones don’t have to be burdened with the leftover business costs. It’s also good if you have a business partner.

Call me and I can explain more about how term life is a good buy for these and a variety of other reasons. 877-996-9383

Permanent Life Insurance – (Whole Life and Universal Life)

The other type of life insurance you can buy in North Carolina is called ‘Permanent’ life insurance. You have 3 choices when buying permanent insurance.

Your choices are whole life, universal life, and variable life. Whole life insurance and universal life are generally the most common of the 3 policy choices that people buy.

Permanent life policies are more expensive than term life insurance policies. They not only include the death benefits, but also have a cash value accumulation feature that builds up over the life of the policy.

To qualify for a permanent life insurance policy you will likely have to take a medical exam. You should be prepared to answer some very detailed questions about the state of your health. The insurance company will also very possibly get a medical report from your doctor if you have a serious medical condition.

It’s a bit complicated to go into too much detail about these policies because they also vary slightly from company to company. The thing to remember is that it pays to use an independent insurance agent to shop around and find you the best deal that suits your individual needs.

How Much Will You Pay for North Carolina Life Insurance?

The good news is that you won’t have to pay anymore to purchase life insurance in North Carolina than you would in any other state.

To learn more about the cost of buy life insurance in North Carolina, I suggest you use our online quote menu on this site.

Or, you could also give me a call at 1-877-996-9383 and I would be happy to take you through the process and discuss your options.

How to Buy Life Insurance in North Carolina

Life insurance in North Carolina can be purchased in several different ways. You could research it online such as at my site and compare quotes, and see how much different companies charge.

Your other option is to talk to a service representative at a company. I don’t suggest this because you are only going to get their quote and no others, so you won’t get the best deal

Your other option is to talk to an insurance agent. Be careful though because there are 2 types of insurance agents and you want to get the best one.

Some insurance agents only represent a single company, while others may only represent several companies. This limits your choices and options.

The best type of insurance agent to talk to is an ‘independent’ agent like myself. An independent agent in North Carolina has access to a whole range of companies. They can shop around and find the best deal to save you money.

Tips on Buying Life Insurance in North Carolina

The best advice I can tell you about buying life insurance in North Carolina is to always tell the truth about your health. Never lie because life insurance companies have been doing this for a long time and they know all the tricks.

You can end up getting your policy cancelled or having your claim denied if they find out you lied about your health.

The second biggest piece of advice I can offer is to get at least a number of quotes from 2 or more agents.

We are one of these independent agencies, licensed with over 30 life insurance companies, so when you come to us for help, you’ll know the quotes we provide you are the absolute lowest prices available. For more information or to get started with an application for North Carolina life insurance, sign up for some quotes using our instant quote form on the right or call us at 877-996-9383.

How to Buy Life Insurance

Posted on May 1, 2012 by Chris Huntley

There are a few ways to explain how to buy life insurance. Some people prefer using their local insurance agent from State Farm, Farmers, AAA, etc. Others needing life insurance might see an advertisement from an insurance carrier such as Met Life, and call the company directly.

How to Buy Life Insurance

The best way to buy life insurance, in my opinion, is to get multiple online life insurance quotes from a company that offers quotes from several different carriers. For example, a company such as Select Quote or Accuquote will be able to provide quotes from multiple companies.

Selecting the Amount You Need

The two questions you need to know before purchasing life insurance are “how much do I need?” and “what type of insurance is right for me?” We’ll first address the amount of death benefit needed.

Most people purchase life insurance to cover a specific financial need. One of the most common is when an income producing spouse and/or parent wants to protect against his or her loss of income due to an unexpected death. This is a wonderful reason to have life insurance in place on your life.

Say you make $60,000 per year and you’re a 38 year old male. You might be working for another 20 to 30 years before you’re able to retire. Just imagine how much future income is lost if something happens to you before reaching retirement age!

Since income replacement is a very common reason to purchase life insurance, we provide an income replacement life insurance calculator on our site for free. Just go to: How Much Life Insurance Do I Need?

If the life insurance calculator is too complex for your needs, a good rule of thumb is to carry 5 to 10 times your annual income on your life. Of course you’ll need to take your current assets and debts into account. The individual who has $500,000 in a personal IRA may have a decreased life insurance need in comparison to an individual with nothing in the bank and $100,000 in credit card debt, all things equal.

Other valid insurance needs are to cover debts, a mortgage, a business loan, to cover a key employee (known as key man insurance), to pay for estate taxes or death taxes, and to pay for death and funeral expenses.

Which Type of Life Insurance is Right for Me?

Please read the section above before this section. If you’re need is for income replacement, you almost certainly need term insurance and nothing more. Term life insurance covers you for a specific period of time, and is typically much less expensive than whole life or universal life insurance.

On the other hand, if your need life insurance protection for the rest of your life, or if you are interested in the ability to grow cash value (from which you can borrow or withdraw funds), then you will need to consider a whole life insurance or universal life insurance quote.

If you’ve read the sections on selecting the amount you need and what type of insurance to buy and are still confused, call us at 877-966-9383 to tell us your situation and we’ll help you.

How Much Will I Pay?

This question depends on several factors. Life insurance companies charge different rates to males and females of the same age and health status, so sex is the first variable. They take mortality risks into account such as health problems (heart disease, cancer, diabetes, high blood pressure, etc) or other risks not related to your health such as occupational risks, hobbies and activities, and family health history.(continued on page 2)

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Term Life Insurance for Men Over Age 50

Posted on April 10, 2012 by Chris Huntley

Men, if you are over the age of 50 years old and need term life insurance, that’s great. I’ve written this post just for you!

The primary reasons men purchase life insurance in their fifties are:

1. Family Protection

2. Business Protection

3. Estate Planning

Let’s cover each of these below in terms of how much protection you need, and which type of policy suits you the best. Please note if you are unfamiliar with the various options available to you, you may want to visit our article about Types of Life Insurance, and you can also use our handy calculator to help determine How Much Life Insurance You Need.

Term Life Insurance for Family Protection

Most of our clients over 50 years old who need coverage are purchasing it because they are still working, and need to protect their wife or children from financial ruin in the event of their demise. If we take the example of a 51 year old man who makes $70,000 per year and has a $500,000 mortgage, here’s what I would recommend.

This man will probably work another 15 to 20 years before retiring. That’s over 1 Million dollars his wife would miss out on if he were to die unexpectedly. In his case, I don’t normally add in the balance of the mortgage, but recommend replacing his income for at least 15 years. This way, his wife will be able to continue paying the mortgage and other bills if he dies.

If we assume a 3% inflation, and 6% earnings on the funds, our handy life insurance calculator shows he needs approximately $865,000 to provide an annual income to his wife of $70,000 for 15 years. So in his case, we would probably look at quotes in the $750,000 to $1 Million range.

Business Life Insurance Over 50 years Old

Another popular reason men purchase life insurance in their fifties is for business insurance needs. The most common business insurance policies are sold for:

Key Man Insurance – If you own a business with a key executive, board member, or salesperson who your business just could not survive without, your business should consider taking out a policy on that individual.
Buy-Sell Agreement – Many partnership agreements mandate life insurance be taken out on each partner for a quick and easy buyout in the case of one of the partner’s passing.
Non Qualified Deferred Compensation – Many owners set up cash value policies for themselves (executive bonus plans) and for their employees, since they are so simple to administer and to comply with ERISA. Plus the plans can discriminate between which employees will receive the benefits.

You won’t use the life insurance calculator to determine the amount of coverage needed in the above situations. For partnerships, the amount is typically already pre-determined in the buy-sell agreement. In the case of key man insurance, the value of the employee or executive may be measurable, in which case 5-10X annual production is appropriate. But in the case of a founder, director, key board member, etc., their value may be more intangible, and will depend if your company has planned for an unexpected death, has a succession plan in place, etc.

For company deferred comp plans, the level of death benefit is usually irrelevant. Instead, a policy is usually chosen for its cash accumulation features and outlook.

If you own a business and have any of the needs above, call us at 877-996-9383 or you can get started by filling out the quote form to the right.

Estate Planning

When I refer to estate planning, I’m speaking specifically of advanced planning you may do with your attorney to provide for liquidity upon death, as well as putting a life insurance policy in place in preparation for estate taxes.

We don’t typically deal with this level of planning for individuals who are in their 30’s or 40’s, as under current estate tax law, and estate is not taxable at the federal level until it is valued at over $5 million dollars, and you can imagine that very few individuals in their 30’s and 40’s have accumulated that sort of money. But we do get quite a lot of estate planning type cases from people over 50 years old, many of whom have done well in business or real estate.

Let’s take an example of a wealthy, 55 year old single man, who will enjoy a estate tax exclusion amount of $5 million dollars upon his death, per C. Tucker Cheadle, a renowned California trust attorney, and how life insurance can help him. If we assume he has a net worth of $6 Million dollars, the excess $1 million above the estate exclusion amount would be taxed at a federal rate of 35%, according to Cheadle, if this man were to die. That sort of estate would generate a $350,000 tax bill.

So our 55 year old gentleman has two choices now. Will he allow his estate to be reduced by $350,000 upon his death? That’s his first choice. Or alternatively, if he is a healthy non smoker, he could purchase a guaranteed universal life insurance policy with a $350,000 death benefit for as little as $3,708 per year, which would generate an tax free, cash benefit of $350,000 upon his death. (Please note most people use some sort of permanent policy for estate planning needs, rather than term life insurance).

With proper planning, even the $350,000 death benefit would be separate from his estate, effectively solving his estate tax problem. Even if our 55 year old lives to age 85, he will have only paid $111,240 in premiums (thereby reducing his estate value by the same amount), and paying his estate tax bill for pennies on the dollar.

Questions for Men Age 50 and Older

Please feel free to contact us with your questions at 877-996-9383. You might also see C. Tucker Cheadle’s article on gifting, trusts, and avoiding estate taxes here.

Indexed Universal Life

Posted on April 2, 2012 by Chris Huntley

Before reading this article about indexed universal life, you’ll want to read and understand the basics of my previous article titled Universal Life Insurance Premiums, which offers an explanation of how universal life works and some sample quotes.

When you read about indexed universal life, what you’re dealing with is a particular method that the interest is credited to your cash value, which may offer a greater opportunity for interest earnings. When you’re dealing with universal life, the higher your cash value grows the better, since that ultimately means you can pay less premiums down the line, or pull more cash out of the policy, whichever you want.

What is Indexed Universal Life?
Many universal life contracts now offer an interest crediting strategy that’s tied to a major equity index, like the S&P 500. For example, rather than earning a non-guaranteed 4% per year, which is set by the insurance carrier, you might elect to try your odds in an indexed strategy, where you could earn as much as 8% or 10% in a given year, depending on the performance of the stock market.

One Year Point to Point Strategy with Cap
The most common indexed strategy is a one year point to point with a cap or participation rate. Say you pay $500 into your policy this year, and only $200 is needed for policy costs, and you’ve elected the one year point to point indexed strategy with a 8% cap, tied to the S&P 500.

In this case, your company would mark the current index value of the S&P. Say it’s at 1300 today. Then a year from now, one year after the $300 was allocated to the indexed strategy, the S&P’s level is marked again. Say it went up to 1360. That’s a gain of 4.6%. Your $300 would be credited with 4.6%.

But what if the S&P went up to 1500, a gain of 15.3%. Here your cap of 8% would come into play, and your $300 would be credited with 8%.

What if the Index goes down?

In most cases, the money allocated to a strategy tracking an index that stays flat or decreases during a segment, will make 0 gains for the year (or however long the segment is). In some cases, a minimum guaranteed interest rate, such as 1%-2%, is available for index strategies over a 5 or 6 year segment. This is the way Aviva Life Insurance’s 1 and 2 year point to point strategies work, which currently offer a 2% guaranteed minimum during the 5 or 6 year segment, respectively. (As of the time of this writing, 3/1/12)

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Whole Life vs Universal Life: Which is Right for Me?

Posted on March 19, 2012 by Chris Huntley

Do you need to know the difference between whole life insurance and universal life insurance?

In this primer, I will explain the differences between the two policies and outline some of the pros and cons of these 2 types of permanent life insurance policy options.

What whole life and universal life insurance share in common is that they both offer death benefits along with a cash value accumulation feature which grows on a tax deferred basis.

Whole Life vs. Universal Life Breakdown

However there are some fundamental and significant differences between the 2 types of policies. Let’s look at them in more detail.

Whole Life Insurance

Whole life insurance could be said to be an ideal product for someone who can pay a set premium for a good deal many years, but who lacks the know all or is not investment savvy. You could also describe the cash accumulation feature as a fixed form of a savings plan.

For this reason whole life is generally is viewed as a less flexible form of permanent insurance than universal life.

Whole life plans vary considerably between life insurance companies. These plans come with a variety of options and sub options to choose from so it is best to sit down with a knowledgeable independent insurance broker like myself to gain a better understanding of your needs to find the policy most suitable for your situation.

Basic Types of Whole Life Policies

With a whole life policy you have 2 essential options to choose from, and some insurance companies only offer one type of whole life policy, so be clear you understand your choices and what type the company is offering. This includes:

Participating Policy – A participating whole life policy generally costs more but allows you to participate and receive the payment of dividends. You participate in receiving the profits made by the insurance company. When the investments made by the company perform well, then your cash value accumulation feature performs well.
Non-Participating Whole Life Policy – Is considered a very inflexible form of whole life policy. You cannot make any alterations to the death benefits, the premiums and the cash surrender feature which are all predetermined.

Here are the basics:

Your premium is used towards 3 separate components of the policy. The first goes towards the death benefits or mortality charge. A second portion goes to the administration costs, and the final portion goes towards the cash accumulation or investment portion.

The premiums you pay are fixed and are for a pre-determined period of time such as 25 years for example.

The monthly, semi-annual or the annual amounts of the premiums you pay are mostly fixed and rarely flexible.

In the early years of your policy, the majority the premium is paid towards the death benefits and very little is paid toward the cash value accumulation feature.

The cash value accumulation, which could also be referred to as the investment return is directly dependent and affected by interest rates so when they are low, you earnings or dividends are significantly lower as well.

The manner in how the cash value accumulation feature is invested is determined strictly by the insurance company. You have no say in the matter.

Pros of a Whole Life Policy

Suitable for a long term insurance policy.
Takes the worry out of your hands.
Premiums, death benefits and cash value accumulation are relatively fixed.

Cons of a Whole Policy

Options are few and policy standards are inflexible.
Insurance company does not disclose how it allots the amount of premium you pay.
No choice offered for cash value accumulation feature.
No premium options.

Universal Life

Universal Life Insurance is considered as a newer, but more flexible version of Whole Life insurance. This type of policy is considered very suitable for individuals who have larger amounts of money to invest and are looking for a combination of life insurance features such as death benefits which can be combined with a tax shelter investment vehicle.

Universal life is also referred to as unbundled insurance. The policy delineates or separates how the administration, the death benefits and cash accumulation features are to be handled. This type of policy has more direct involvement and participation of the policy holder who has a variety of options and choices to make.

Universal Life Insurance Basics

Provides disclosure on how your premiums are divided between death benefits, administration costs and cash value accumulation feature.

Premiums you pay are more flexible. You can opt to pay lower premiums in your earlier years and pay higher premiums later on, or visa versa. You can even opt to take a premium holiday.

Allows you to alter your Cost of Insurance (COI). You can choose between either level or an increasing cost of insurance.

Can vary your death benefit options so that they are fixed, increasing or decreasing over the life of the policy.

Allows you to choose your cash value accumulation investment options which can also be changed to suit the investment climate more suitably. You can choose from a savings account option, indexed based investments such as a GCI, or growth oriented equity funds.

Pros of Universal Life Insurance

Provides more disclosure on how your premiums are used.
Allows for more flexibility in how you pay your premiums.
Permits you to more actively participate in how your cash value premium investment is to be invested.

Cons of Universal Life

Have high surrender charges in early years of the policy.
Too many options for the uninitiated.
Can have a negative impact on your cash surrender value if you make a bad investment or neglect to keep track your investment options.

Bottom Line

Both types of these permanent life insurance policies have their good points and bad points depending on your particular circumstances. It is always best to have discuss both types of policies with an independent insurance agent like myself to get the best detailed information available

3 Essential Tips for Buying Life Insurance on Your Parents

Posted on February 16, 2012 by Chris Huntley

In most cases, you can purchase life insurance policies for your parents with their knowledge and approval.

But how do you go about doing this, and what is the appropriate amount and type of coverage?

We will cover these questions and more in this article.

The most popular types of policies for parents are term life insurance, whole life insurance, and second-to-die policies. See below to determine the best type of coverage for your parents.

Essentials for Buying Life Insurance on Your Parents

1. Is Buying Life Insurance on My Parents a Good Deal?

Prior to age 85, it seems life insurance can still be purchased for a relatively affordable premium. As you can see, the older your parents get, the higher the cost for the same coverage.

Here are a few quotes for $100,000 of coverage:

60 years old	$72 per month
65 years old	$132 per month
70 years old	$229 per month
75 years old	$395 per month
80 years old	$767 per month

Please note the quotes above are for a 10 year term policy for a healthy male, who can qualify for non tobacco rates, and are accurate as of 6/10/2013. Actual rates will depend on your parents’ health.

…Ok, back to question #1 – “Is it a good deal?”

Obviously, life insurance can still be quite affordable if your parents are in their 60’s or 70’s, and they’re only getting $100,000 of coverage, as in the example above.

But let’s say you need more coverage than that, and they are over age 80… Is it still worth the cost?

For example, you would pay $14,560 per year for an 83 year old mother in good health for a $250,000 policy guaranteed for life with North American Co for Life and Health.

If we assume our 83 year old has a life expectancy of 10 years, you will have paid $145,600 into the policy after 10 years. If she were to pass away at any point before that, it seems to be a great rate of return on your premium. You certainly wouldn’t be able to match that kind of return in any alternative investment.

If your parents are younger than 80 and in good health, life insurance is an incredible leveraging tool, and makes even more sense than in the example above.

Honestly, life insurance loses leveraging power after age 85 and is pretty expensive. See the quote form on the right for an instant quote.

Quick “Life Insurance for My Parents” Video Tips

Ownership of Policy: One of the first things I ask the child when he/she calls me is who would be the owner and payor of the policy. In some cases, children are simply calling on behalf of their parents who are not internet savvy, and are doing nothing more than helping their parents, who don’t know how to buy life insurance, with the quoting and application process, but that the parents will be paying for the policy.

In other cases, you have children who will be the owner of the policy, pay the premiums, and also be the beneficiary of the death proceeds. Usually this is okay as long as the child can prove an insurable interest. This is 100% legal, but will require approval by the insurance company.

An insurable interest means that the child would be somehow financially affected by the death of his or her parents. So if your parents have a big mortgage on their home, and you don’t want to inherit their debt, life insurance may be in order. Or if you are responsible for your parents funeral and burial arrangements, life insurance may be used for this…(continue to part 2)

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What’s the Best Type of Policy for You?

Posted on January 10, 2012 by Chris Huntley

The factors I always recommend my clients consider when trying to determine which life insurance company to pick are the company ratings and the premium.

How to Choose a Life Insurance Company

It is of utmost importance that the company you choose is a financially viable and stable organization.

A couple ways I use to measure this are by seeing how long a company has been in business. You have some companies like Genworth Life Insurance or Ohio National, that have been in business over 100 years.

They’ve been through recessions and depressions and are still going strong. That’s a good sign.

Also, be sure to ask your agent what ratings the insurance carrier has earned from a 3^rd party financial rating company, such as A.M. Best. You should aim for one that boasts an “A” rating, such as A++, A+, A, or A-.

Insurance Company Reviews

You can do a google search for just about any company you want to do business with, or agency for that matter. You might try googling something like what I wrote about recently, State Farm Life Insurance Review.

Life Insurance Quotes

Then, as I said, pricing must obviously be a consideration. What’s really interesting here is that finding the best price for life insurance is not as simple as putting your date of birth and amount desired into a quote form, and then picking the company who comes up at the top of the list as having the lowest life insurance quotes.

Instead, you should really discuss your case with an agent before determining which company to apply to. If you have any history of medical impairments such as diabetes, cancer, or heart issues, you will want to apply to the company who will approve you at their best rating classification.

Types of Life Insurance

Another factor affecting your life insurance quote will be the type of insurance you apply for. We represent companies with the full spectrum of term and permanent products. For a general explanation of your choices, please see our post about the types of life insurance, or for a more specific explanation on a particular type, you can go directly to the articles below.

10 Year Term Life Insurance

20 Year Term Life Insurance

30 Year Term Life Insurance

Universal Life Insurance

Whole Life Insurance

How Much Life Insurance Do I Need?

A general rule of thumb is at least 10X your income. However, this answer has many variables. If you have a lot of debt, such as a large mortgage or credit card debt, you may want to add the balances into your policy benefit. If you have cash and investments that could be liquidating in the case of your passing, then be sure to take that into consideration as well.

If you’re buying life insurance for income replacement purposes, you may want a lot more than just 10X your earnings if you are in your 30’s or 40’s, since you still have at least 20 years more to work before you retire. For help calculating how much you need based on your income and how many years you have left to work, please use our life insurance calculator.

Where to Start

As I explained above, every life insurance company has its sweet spot, where it may be more forgiving of a certain heath condition than others. It’s really best to speak to a knowledgeable agent who can sort through all the options and recommend the best fit for you.

Call us for a free life insurance quote or for assistance choosing a life insurance company at 877-996-9383. And if you found this article helpful, please “Like” us on Facebook or “Google Plus 1” us. Thank you.

What Everyone Should Know Before Buying Life Insurance

Posted on September 4, 2011 by Chris Huntley

Thinking about life insurance and don’t know where to begin?

Learn all about the basics of life insurance so you can make an informed decision.

I will show how life insurance works and what you need to know to get you started.

Many people buy life insurance for a variety of reasons, but it always boils down to one central and vital concern – you want to see that your family is financially protected and well looked after if you were to suddenly die.

Buying life insurance takes a bit of planning and some careful thought. After all, the life insurance policy you buy will be a long term investment. You want to get the right amount to cover you for a lot years into your future.

Reasons Why You Want Life Insurance

The first step is to decide on the reasons you will want to buy life insurance. Your objective to buy life insurance could be a single reason or include several of the reasons listed below. These reasons include:

Income Replacement
Pay for death and funeral expenses
Pay off your debts such as the mortgage, credit cards and personal loans
Cover medical expenses not covered by other plans if you are faced with a terminal illness
Pay for children’s college tuition
Retirement and savings plan
Leave a financial legacy to your survivors
Business reasons such as if you’re self-employed or in a partnership
You want to set up an estate

These are just a few of the reasons why you might need to get life insurance if you have a family of four. You need to give thought not for your current reasons for buying life insurance, but reasons which may come up down the road in your future.

Decide How Much Life Insurance You Need

Once you are comfortable with the reason you want to buy life insurance, you need a rough ballpark of how much you might require to cover these reasons. As a rule of thumb, the basic minimum amount recommended by many experts is that you should have about ten times your annual wages.

It also depends on how much you can afford to budget yourself for, and what is reasonable for you.

Next, you have to decide what type of life insurance policy to buy. So, let’s start with the basics.

Types of Life Insurance

There are 2 types of life insurance to select from and they include:

Term Life Insurance
Permanent Life Insurance

Let’s look at each in a bit more detail so you will have a basic idea of the differences.

Term Life Insurance

Term life insurance is the most popular to buy because it’s so basic and easily the most affordable type of life insurance which is available.

Term life insurance is pretty straightforward. You buy term life insurance for periods of time such as 5 years, 10, 20 or 30 years for example. The main features of term life insurance include:

Pays out death benefits only
Death benefits are not taxable and are paid as a lump sum
Premiums are guaranteed for the term you buy
Is renewable
Can often be switched over to a permanent life insurance policy

All you have to do is decide on the amount of death benefits you want and the length of time or term you want.

You should know that term life insurance is cheapest when you are younger and becomes progressively more expensive to buy as you age.

If you are a family of four and relatively young, then you should buy a policy now rather than later. If you are younger I would also suggest you buy a longer term policy, because it will become a lot more expensive to buy when you go to renew.continue page 2……

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