Life insurance has been providing a tool designated for risk management which is about dealing with the possible risks of losing of life. It handles the uncertainties of a party by means of transferring a certain risk (death) into the other party (insurer). This offers restoration of a great economic loss by an insured individual including the dependents.
Life insurance has been derived from some basic principles applicable to all kinds of insurance. Most Americans reported that they did not buy life insurance due to the reason that they got other financial concerns at the moment.
In today’s era, it has become very important to purchase life insurance in order to guarantee your family’s survival after your death. It greatly helps your dependents financially; for example, with the basic things like paying off mortgage, education fees etc. after you are gone.
Life insurance can be used in the following situations:
- Creating an estate
- Securing a credit line
- Providing a death benefit
- Paying estate taxes
- Funding a buy-sell agreement
- Giving to charity
- Equalizing an inheritance
- Providing income to the survivors
- Guaranteeing future insurability
- Providing benefits to employees
- Protecting the business from financial loss
- Paying funeral as well as last expenses
- Supplementing retirement, college and even other expenses
- Paying debts and mortgages
There are actually four major types of US life insurance and here they are:
Term Life – This life insurance does not have cash value and with coverage need of temporary period of time of 10 to 30 years.
Whole Life – its coverage needs is lifetime with guaranteed cash value and fixed premium flexibility.
Guarantee Universal Life – In this type of insurance, the interest crediting is set by the insurance company and it has an up to lifetime coverage needs and flexible premium flexibility. It has a guaranteed death benefit of lifetime coverage or it is “dialled down” to all coverage lengths.
Index Universal Life – It has also flexible premium and up to lifetime coverage needs. The interest crediting rate may be linked into the index percentage change.
Depending upon your financial condition and needs, you may decide to avail one of the aforementioned life insurances. Once you have finalized the type of life insurance you want to go with you can search and compare the best life insurance quotes here.
Generally, following are the steps involved in availing the life insurance of your choice:
1> Decide upon the type of life insurance you want avail
2> Search for the life insurance providers who offer the best life insurance ratefor your situation.
3> Schedule the medical tests with the provider; this generally involves checking your blood pressure and cholesterol apart from the other things. Try to schedule it early in the morning to get the best results.
By simply understanding the basics of US life insurance, the process of availing one is smooth and efficient.