A life insurance policy is simply coverage on a person's life so that the insurance company pays out a benefit upon the death of the insured. This is a financial product meant to offer financial assistance and stability to those who are left behind. There are a myriad of different life insurance policies available. It is important to understand them before taking out a policy.
Term Life Insurance Explained
Term life insurance is simply a life insurance policy that is taken out for a specific amount of time. If the person dies within the period the policy pays a death benefit. Term life policies range in length from 1 year to 30 years. 20 years is the most popular.
A significant advantage to term life is that it is relatively inexpensive, especially when compared with the monthly amounts for others. However, such policies offer no cash value, loan provisions or other aspects like permanent life insurance.
Term life insurance is an excellent product for people who have a young family, especially if they want to save money. Individuals can get more coverage for the period of their life when they need it most for the best possible price. You can make sure a child's education will be paid or a home paid off with the proceeds.
Level Premium Term Life Insurance
Level premium term life insurance guarantees the rates quoted. This will mean that premiums will be stable for the whole policy. It is completely underwritten and can be purchased in amounts from $50,000 to $20 million, depending on the insurer. It is the most popular kind of life insurance plan.
Return of Premium Term Life Insurance
Return of premium (ROP) is a newer life insurance product combining the perks of term life with the return of premium feature. When the policy terminates the insured receives his or her premiums back. This is a more costly policy than normal term life policies. The insurer invests your money during the time he had it and earns money on it. If you choose to quit your policy early there is typically a penalty and you will have lost money instead of breaking even.
Instant Issue Term Life Insurance
This type of coverage gives you the simplicity and advantages of the term life policy, with the convenience of the Internet. Your policy can be set up within minutes with no underwriting and no medical exam. If you are qualified you can get a policy ranging from $25,000 to $150,000 for periods of 10, 15 or 20 years. Everything is done electronically from the quote to the application to the payment.