Whole Life Insurance Or Term Life Insurance-What Is Your Choice?
You must have some basic idea about what life insurance is all about before starting to look for the right options to meet your needs. You have to look for the right amount of coverage for your policy to ensure a positive outcome of it. However, it also depends on the credibility of the insurer. You must not have any settlement issues with the insurer at the last minute. You must also check the market ratings of your insurer. If the market ratings are poor, you should not choose the firm.
Having good market ratings of your insurer is not sufficient to buy insurance from the firm. You may not get proper outcome from the firm if it is not upto it. You can find out if there have been any settlement issues with the firm in past then it is likely to happen again. It is better to avoid such a firm. For low cost life insurance one must not lose sight of the credibility of the insurer.
The market ratings of your insurer depends on its market performance and capital worth. If the company had a consistent track record in the past decade or so, there are more chances of it providing proper benefits in the longer term. Another factor you need to consider is your underwriting profile. You can optimize your underwriting profile to match the underwriting guidelines. You can hire an insurance advisor to help you work on your underwriting profile.
Make a comparison between whole life and term life insurance that will let you make an intelligent decision. Each insurance type has its own pros and cons. You can look for whole life vs term insurance analysis by insurance experts to find out more about what is involved in different life insurance options. Unless you do it, you would not be able to make a intelligent choice of policy.
Term life insurance is a cheaper option in general as compared to whole life insurance and offers limited cover for any insurance buyer. Whole life insurance offers lifetime coverage with higher insurance rates. It also offers additional cash value which is an incentive for those buying whole life insurance. However, experts contend that the amount paid in the form of premiums in whole life insurance can be invested in term life insurance and a separate savings account can also be maintained to benefit from it.
In case of additional cash value, you can benefit from accumulated value on the maturity of policy by surrendering the policy or borrowing against it. In whole life insurance, your insurance rates do not increase but in term life insurance, insurance rates keep on increasing at regular intervals. Insurance rates may be increased annually or at the end of term duration but it is important to choose term duration properly to avoid higher term life insurance cost.
All of these factors must be kept in mind while looking for life insurance quote on line. Term duration depends on your life expectancy and you need to calculate life expectancy to choose term duration. If you do not know life expectancy, you may not be able to choose term duration properly. If you choose very short term duration, it may force you to renew the term again and again. This would increase your insurance rates higher than usual.
You also have to appear for a medical exam to determine your life expectancy. Your health factors can affect your life expectancy. If you have a medical condition, it can also make it difficult to get competitive life insurance. In such case, you can opt for no medical exam term life insurance. However, no exam option comes with higher insurance rates as compared with conventional insurance options. You can instead look for special insurance options which offer competitive insurance rates to those with a medical condition.