What You Need to Know Before Getting Life Insurance Quotes Understanding the basics about life insurance will ultimately benefit you and your family. While talking about life insurance can be intimidating and confusing, having some general knowledge about the terminology can go a long way. Prior to getting life insurance quotes, it’s helpful to know a few key concepts and how they may affect you and your decisions. Doing some research on the front end can save you time and money and can make all the difference in how smoothly the process goes when it’s time for the payout. What is Life Insurance? While it seems almost crude to ask this question, the answer helps to provide a fundamental understanding. Life insurance is a contract between …show more content…
The inexpensive premiums are essentially offered in exchange for a limited term. When the term ends, the premium raises significantly or the policy may be canceled. As such, term life insurance is considered a temporary form of insurance until an individual can purchase another type of life insurance. On the other hand, there are permanent types of life insurance including whole and universal. Whole life insurance offers policies that provide coverage across an entire lifetime. It guarantees death benefits across the full length of the policy. Whole life insurance premiums are typically much higher than term insurance policies, however, you do not have to worry about the policy ending or premiums going up increasing to unaffordable amount because whole life insurance offers fixed premiums. Whole life insurance policies have a tax deferred cash value which means that they can be used for savings. Many people who are interested in tax deferments prefer whole life insurance policies. The disadvantage of whole life insurance is that it is much more expensive and if coverage lapses, there could be significant increases in premiums. Additionally, whole life insurance is more complicated and the terms are more …show more content…
For example, the needs of a young professional and an older individual may be quite different. One way to determine needs is to consider the beneficiaries and how your death would impact them. If you have young children who rely on your income, your needs may differ from someone without children or a family at all. While it is a question most do not like to think about, identifying who would be impacted by your death and how their lives would change financially is essential in helping you choose a life insurance