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Life insurance provides monetary protection for your family in the event of your death. If you have dependents, it is essential to get life insurance. However, people rarely know where to start when it comes to buying life insurance. If this decision has you overwhelmed and confused, don’t despair. The key is to research your options, consider them carefully and choose the policy that is best for you. Here are a few considerations to keep in mind when getting life insurance for the first time:
Types of Life Insurance Policies
Before you can choose the right policy, you have to understand the types of policies available. Some, such as variable life policies and universal life policies, allow you to invest a portion of your premiums in various securities. If you make wise investment choices, your policy may earn a profit, which you can use to cover your premiums or take on more investments. Other policies, such as term life insurance and whole life insurance, do not involve any investment decisions. However, some whole life insurance companies pay a portion of their own returns to policyholders in the form of dividends.
Length of Life Insurance Policies
Some policies, such as term life insurance policies, cover you only for a specified time. If you live past the policy’s expiration, you must forfeit the premiums or renew the policy at a different rate. Other policies, such as whole life insurance, cover you for the duration of your life, no matter how long you live. However, these policies are usually more expensive. Choosing the right policy length usually comes down to what you can afford and what you want the policy for.
Life Insurance Policy Riders
A policy rider is an additional stipulation that you purchase along with your basic policy. Some riders waive your premiums if you become disabled, while others allow you to collect a portion of your death benefit to cover your medical bills if you become terminally ill. Rider options differ by insurance company, and the cost of each rider varies as well. When you purchase The Whole Life Plan from Gerber Life, you have the option to also purchase a Waiver of Premium Rider, depending on the state and country you live in. When choosing riders, consider which options you are most likely to need based on your occupation and lifestyle.
Source:
http://www.foxbusiness.com/personal-finance/2011/05/25/useful-life-insurance-riders/
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