Most people are looking for inexpensive life insurance that covers their income earning ability and gives them peace of mind. Life insurance was originally created to protect a man’s family when his death left them without income. This was during a time when women did not usually work outside of the home and still needed income to raise the family. Over time, this has developed into a variety of policy plans available online.
Whole Life Insurance
With a “whole life” policy, fixed premiums are paid throughout the insured’s lifetime. The amount accumulated, increased over time by compound interest, can be borrowed against by the insured while living. The face value of the policy is payable to one or more beneficiaries as a lump sum upon the death of the insured. Some like the savings aspect of whole life because they earn a small interest rate on the savings portion. However, in today’s markets, most people would do better to take the extra cost of whole life and invest it independently in a 401k.
Universal / Variable
A “universal life,” policy is much like whole life. If the policy builds enough cash value, those funds can be used to cover the continued premium payments, sort of like “set it and forget it” insurance. Another type of insurance is “variable life,” where the fixed premiums are invested in a portfolio and the earnings are reinvested. The death amount of the benefit is based on the performance of the investment.
Term Life Insurance
In “term life,” coverage is for a specified period, such as for 5 or 10 years. While these plans do not build a cash value, they are much cheaper than whole or universal life. Many people choose term life insurance and then take the savings to invest in their 401ks.
Selling a Life Insurance Policy
Life insurance companies began allowing early payouts to terminally ill patients, who could sell the policy to a third party. Upon the insured’s death, the third party collected the policy benefit. This began in the 1990’s as a response to the AIDS/HIV epidemic. The change allowed ill patients to acquire money to pay for medical treatment. The payouts are taxed as income and may be significantly less than the policy value.
How this Site Can Help
We’ve searched all over the web and have located a few quality companies that we believe are financially sound and offer competitive term life insurance rates. You can gather all the information you need online without ever needing to meet with an agent. By applying online you can compare several policies and choose the right policy for you and your loved ones.