Life insurance policies come in two forms: term policies and whole life policies. Term policies last for a specified term, while whole life policies provide coverage indefinitely. Term policies are cheaper than whole life policies due to the fact that premiums are paid only while the policy is in force. As an example of a term policy, a coverage period of one year to thirty years may be purchased at a discount rate of five percent per year. This means that premiums will be lower over the course of a year.
The Internet is a great resource when buying life insurance quotes. Most insurance companies have web sites that provide potential buyers with many different life insurance quotes. These websites are often easy to navigate and provide the buyer with all the information they need to make an informed buying decision. Many of these web sites will allow the individual to compare the prices and benefits of different policies side by side. This is important, as different life insurance policies often provide similar services and features. Knowing what is included in a policy as well as the amount of coverage can help buyers decide which policy is best.
Guaranteed Universal Life (GUL) and final expense life insurance policies are two different types of policies. Guaranteed universal life policies pay a fixed amount for a specific duration. For example, if a person dies during the coverage period, the Guaranteed Universal Life policy will pay the final expense or benefit of the deceased. On the other hand, a Guaranteed Universal Life policy pays no benefit if the insured does not die during the coverage period. Final expense policies pay upon the death of the policyholder. This type of policy is more expensive than the former.
Both types of policies use a financial strain rating to determine the final cost of the policy. The financial strain rating is based on the current and future economic circumstances, including the state of the debt of the policyholder and the expected income of the policyholder. Policyholders who have high debt but low wages will see their premiums rise as their debt increases. Likewise, policyholders who have low wages but high debts will see their premiums increase as their debt increases. Therefore, these policies will generally have higher premiums.
Standard Term Life policies last for an allotted period, usually from ten to thirty years. Policyholders pay regular premiums, which gradually increase with each renewal. After the allotted time period, the policy expires and the premium payments drop off completely. In many ways, this type of coverage is almost like a savings plan, wherein the premium payments stay high for the duration of the coverage.
Mortgage Life Insurance Companies offers guaranteed interest rates and do not assess a credit score. Premiums and death benefits are based solely on a person’s financial situation at the time of application. Many people prefer this type of coverage because it does not require a medical exam. Also, because there is no age limit, policies can be applied to a large number of people regardless of their ages. However, because mortgage life policies do not offer any cash value, they do not accrue any interest or benefit on a tax-deferred basis.
Fully Underwritten policies are often used for senior citizens who have a variety of chronic health problems and little to no income. Fully underwritten policies have several restrictions, such as: there is no age limit; there is a waiting period for full medical evaluation; the applicant must be in good mental and physical condition; and the applicant must not have filed bankruptcy within the past two years. There is also no filing of claims and most policies have no cash value and are considered non-taxable. In order to qualify, the applicant must pass the exam provided by the Life Insurance Company. Most fully underwritten policies also require that the applicant agree to a deductible and co-payment plan.
Simplified issue final expense insurance is another popular insurance type that offers a number of options and features. Unlike fully underwritten policies, simplified issue final expense insurance does not need the consumer to undergo a medical exam. Instead, the consumer needs to have a co-payment and agree to a deductible before beginning the application process. There is no income limit and most policies do not carry any death coverage. This type of policy is perfect for individuals who are young, healthy, and do not smoke.