The purchase of life insurance is many times an act of love, or an act of obligation.
Life Ins. cannot replace a person, but it can replace a person's income and/or pay off a person's obligations.
There are two basic types of life insurance Term & Permanent.
Term life insurance is good only for the period of years purchased.
You can buy a term policy for 5-10-20 or 30 years.
Term insurance is perfect to cover a temporary financial obligation that ends in 30 or less years. It can either be the least expensive type of ins. or the most expensive type. The most expensive if the insured person dies after the policy runs out.
Term insurance is a very logical purchase
- to cover folks with young children, usually coverage till the youngest turns 25
- to cover a financial debt or other temporary obligation if something should happen to you.
- If it takes two incomes to pay a mortgage then term ins. on both incomes is a great solution.
- Auto Loans
The cost of term life ins. is based on the following at the time of purchase
- the age,
- health & habits
Typically life insurance costs less for females because they usually live longer than men. It can be very expensive if you live longer than the term of insurance, which is why people buy permenant.
Permanent life insurance is meant to be in force for your whole life.
Universal life gives you the most insurance for the lowest cost & also is the most flexible as to variations in payment. The policy can be guaranteed up to age 120. The death benefit and yearly cost are guaranteed. It can be structured to build a great deal of cash value or eventually reduce cash value to zero to give you the most insurance for the lowest cost. This type can be the lowest cost of permanent life insurance.