What you need to know about Life Insurance

by Bob Buckham

It's an unfortunate fact of life, but each of us is going to die someday. In the back of people's minds is that if they buy life insurance, it will somehow hasten their demise. Not smart. And not true. Remember the Boy Scout's motto "Always be Prepared". With that in mind, you can calmly surf the internet and look for the life insurance policy that best suits your needs, and your budget. There are four types of life insurance you can get. There are three types of permanent life insurance and a term life insurance. Of the three permanent life insurance polices, the one with the most guarantees is traditional whole life insurance, but most have guaranteed and non-guaranteed portions. There are different riders that you can include but be sure to include the waiver of premiums rider in your life insurance quote. This rider suspends your premium payments and keeps your policy active should you be unable to work. Here is a basic overview of the 4 types of Insurance. Whole Life Insurance Policy If you're not a risk taker, then whole life insurance is for you. But what do you ask for when you want a whole life insurance quote? You should ask if the annual premium is guaranteed and there is guaranteed minimum cash value and death benefits. Almost all whole life insurance policies are "participating". This means they earn dividends and the dividends can be applied to reduce the premium, increase death benefits, and can be refunded or to increase the cash value. Universal Life Insurance Universal life insurance is the most flexible of all. Premiums can vary year to year and can even be skipped. It has maximum guaranteed benefits and minimum cash values and death benefits. Variable Life Insurance Variable life insurance has fewer guarantees so it has the greatest potential for cash value increases. There are required guaranteed annual premiums and minimum guaranteed death benefit. There isn't a guaranteed cash value and you have your choice of investments such as mutual funds. Term Life Insurance Term Life insurance is the easiest to understand. Terms can be 5,10 or 20 years. Premiums can increase yearly and even decrease for a period. If you die, you collect, it's that simple. If you stop making premium payments, you become uninsured. Choose the path that makes the most sense for you, your family and your budget. About the author: Bob Buckham is webmaster of http://www.canadalifeco.com and has been contributing insurance and mortgage articles to the finance industry for years.

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