Most financial plans are incomplete, until family salary earners have life insurance coverage. Families need to know that they will have financial support, to pay their mortgage, or to put their children through college, in the event of a salary earner's death. Anyone who supports a family with a salary, or who has dependents living at home, should obtain insurance. Obtaining a policy is easy for most people, who complete a medical exam, and obtain an
online life insurance quote.
Policy holders will choose between term or permanent insurance. For a contracted period of time, customers who purchase a term policy are assured that they will pay a set premium, and will receive a set death benefit, if needed. If the policy is never paid out, it simply terminates, after the contracted period ends.
Permanent policies have no contracted end date. Premiums do not change, through the duration of the policy, and the policy remains valid even after every premium has been paid. Permanent insurance allows customers to build up a cash reserve, which the insurer may invest. Customers should be aware that large fees, and commissions, will eat into the cash value, during the early part of the policy's duration.
Permanent policies are either whole life, variable, or universal. Whole life insurance is the most basic policy, with benefits that stay in effect until the policy holder's death. Variable policies provide the policy holder with choices for investing their cash reserve, and tend to have slightly more risk. Universal policies have a variable premium and death benefit, which policy holders may change, depending on their individual needs at different times. Cash in a universal policy earns interest, not dividends, which makes the product more stable, but less likely to earn big returns.
All customers must undergo a medical exam. Customers should expect to give a urine specimen and a blood sample, along with undergoing a blood pressure reading, and answering a health questionnaire. Licensed medical professionals must conduct the exam, although it may take place at any location.
The medical exam determines the rating class of the customer. "Rating class" is synonymous with "risk category", and the guidelines are based on policy underwriting. The rating class determines a customer's premiums; the higher the rating class, the lower the premium. For instance, a customer ranked "Preferred Plus" will have a lower premium than a customer rated "Standard".
Several factors determine the amount of coverage. Generally, financial professionals advise customers to purchase a policy worth five to ten times their annual salary. The exact amount will depend on lifestyle, debts, number of dependents, and other sources of income. Future needs, like college education for children, should also be taken into consideration.
Life insurance provides income for family that is left behind, when an important salary earner unexpectedly dies. An online life insurance quote is available twenty-four hours per day, seven days per week. Getting a quote helps families to get an idea of how much their policy may cost, and also gives them the chance to analyze the different rates charged by multiple companies.
