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Why should anybody invest in life insurance?

It's rather depressing thinking death. But unfortunately, it is about the most certain event in everyone's lives. Life insurance adds value to the policy holder's financial holdings while taking care of loved ones after death. This is like creating a safety net for them when the bread winner is no longer there. Youth feels permanent but the fact is that life is unpredictable and purchasing life insurance reduces that unpredictability. Insurance protects against the unexpected with the assumption that the unexpected will happen sometimes. This 'sometimes' is much more often than we think. Friends or family may be around for assistance for some time after an unexpected death but eventually this assistance will dry up as people have their own lives to live. Life insurance quotes provides a safe and comfortable buffer zone for the bereaved family. Investing in life insurance therefore is an act of responsibility and caring towards loved ones.

What exactly is life insurance?

Essentially, life insurance is a contract between you as the policy holder and the insurance firm where you pay a certain amount of money each month which is invested towards a much larger sum which will be paid to the family upon death. The life insurance firm you choose needs to be a trustworthy one as you're going to have to trust them to take of your family when you are no longer around to do it yourself. This makes sense. If you cared for your family while you lived, why should you leave them in the lurch when you are dead?

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Understanding term and whole life insurance

• Term insurance refers to life insurance policies taken out for a specific period of time. This could be a decade or two decades depending on the discretion and affordability of the applicant.
• Term insurance policies are typically easier to manage and invest in than whole life insurance. Whole life insurance as the name suggests is coverage for the whole life time. This costs more but is comprehensive coverage where benefits are paid out on death to the dependants named in the policy.
• Apart from financial protection at the time of death, whole life insurance allows borrowing against the cash investment. So this behaves as a sound investment option as well as an insurance scheme.
• Premiums to be paid out for whole life policies are fixed while deductibles for term insurance may vary as the term of insurance varies.

Either way these are two broad types of insurance that are popular with the public.
How life insurance rates are determined

The value of the insurance policy that you purchase will depend on various factors.

• For example; the premium that you choose to pay will determine the final policy amount. It is better to opt for as high a premium as you can afford to ensure a decent amount at the end of it all. Opting for policies because they offer low premiums is short-sighted thinking. You want a final amount that covers your family for health or funeral expenses, taxes and childcare if necessary - apart from rent, fees and food. These are just the basic expenses. There will be several others.
• The other factor that comes into play for calculating life insurance quotes insurance is the age of the applicant. The younger you are, the lower the premium. This is based on the fact that you are likely to live longer and can also pay the premiums for a longer period of time.
• Lifestyle issues also play their role in determining insurance premiums. Pilots or fire fighters might have higher premium rates than say a teacher or doctor. Most insurance companies insist on health checks before offering you a rate and the results of these medical examinations will dictate the rate. A sick person or an applicant with serious heath issues may find it difficult to get low rates. This is because he is unlikely to survive for long (depending on the nature of his illness).
• Lastly, the type of insurance policy that you opt for is of vital importance. With scores of insurance policies offered by various companies, the policy you choose will reflect how much your family will get. Policies should be chosen after careful consideration of the costs towards the policy and the benefits from it.

The best way to get your facts straight is to sit down with an insurance agent - either personally or online and clarify your doubts. Getting familiar with what life insurance means and what is the best way to go about it is a tricky issue and only communication with a customer service professional will help dispel any doubts.

A wide choice of policies to choose from

There are several policies offered by various insurance companies. The policies not only differ from one company to another but also within the same company. Policies differ on the basis of the number and amount of payments; on the basis of the term of the policy. Then there are policies based on the profile of the applicant like student insurance or retired insurance policies. Investment ability of the policy also account for the variety of policies.

The common types are the universal life, variable life, single premium whole life among many others. Payments for policies can be made in one lump sum or in installments. Paying in installments is more common as most people would not be able to afford to afford the lump sum format of payment. But if you can, paying a lump sum is great, as you get the full coverage and no more premiums per month to deal with.

How do you go about purchasing life insurance?

There are two main ways to go about this. One is to walk into a reputed life insurance firm's lobby and ask to speak with customer service rep or else shop online for insurance rates and services covered. Of the two, the online option is simpler and certainly quicker.