How to Compare Whole Life Insurance Quotes to Save Money
How does one compare whole life insurance quotes? Great question, and the answer is not always as easy as finding the lowest price.
Saving money is key, especially in these times. However, having coverage is just as important as having dinner. See, if you don't have life insurance, you put your family at a risk that is unimaginable. Lets say something was to happen, this is just hypothetical, to you and you did not have insurance. Your family may have to move out from the home you have worked so hard to have. Lose valuables to pay for funeral costs as the average funeral is $10,000 and have to pay for any outstanding debt you may have.
That sucks. So that is why you should take the time to get some sort of coverage. That brings us to the next step. Having good coverage does not always mean you have to pay a hefty premium. You should always compare whole life insurance quotes against other insurance companies. The internet is a great place to do this. That is because insurance carriers want your business. Many of these companies can offer premiums and quotes that your local insurance agent cant touch.
Saving on life insurance is not only smart but practical. For most policies will pay out a set amount of money. Depending on what you set up with your agent or company. If Joe Smith is paying $30.00 a month and his neighbor Frank is paying $13.00 a month you can see that after a while, Joe will have paid more for the same coverage. That is why it is important to compare your quotes and research the companies you are getting these quotes from
Some of the whole life insurance policy are as follows:
Uniform premium rates In a whole life insurance policy the premium rates are usually constant. It is advisable to invest in these policies in the early stages of one's life for two reasons. Firstly the financial strain will be minimal for a person of that age. Secondly when a person invests early he won't find it difficult to pay the same amount even after he gets old because of two factors namely the rise in his income and the uniform rate of premium. On the contrary if a person invests in this policy at a later period he will still have additional income but pay a higher amount of premium when compared with the person who started investment in the younger age. The simple logic behind this is the insurance premiums increase with a rise in cost of living. Hence whole Life insurance rates are regarded affordable.
Refund of policy amount The insured does not run into the risk of losing the money invested if in case he does not die or the period expires. This type of policy allows the insured to claim a refund. However the amount of refund varies from policy to policy and many factors like age, the number of years for which the policy is taken influences them. In short the criterion chosen to evaluate whole life insurance quotes will be considered.
Other benefits The insurer can also raise loans from the insurance company. The amount of such loans will be decided on the basis of his policy amount and premiums. However it should be understood that this will decline the amount of refund that they receive after the expiry of the policy. Besides this will also reduce the extent of life protection that they are entitled to.
With the term name of insurance policies available in the market, it can be quite confusing for a normal person to differentiate between various types of insurance plans. From amongst various types of plans, two of the most popular ones are: unit link insurance plan and whole life insurance. Here we give you a low down between these two types of policies.
Whole life insurance: A whole life insurance policy is an insurance policy that provides you with insurance cover for as long as you live or upto 100 years, whichever is earlier. This means when buying a whole life insurance you have to keep on paying premiums till the upto end. Due to this drawback, this plan lost out to ULIP. To combat this Tata AIG has introduced the Mahalife Gold where you need to pay premiums just for 12 years while the life cover continues till your death. In addition, you start getting 5% of sum assured from sixth year onwards along with bonuses accrued. Once 12 years are over, you can use the money as pension for old age. However unlike ULIP, a whole life insurance plan does not give you flexibility of investing as per your risk profile. Also their charges are not transparent.You can choose a policy with or without bonus. With bonus policies carry higher premiums. Once the policy expires, you or your family members are eligible to get the sum insured along with bonuses accrued. For bonuses, Max New York’s policy is the best. The charges for a whole life insurance policy are not declared.
Unit link insurance plan:Unit link insurance plan is also called as ULIP, unit link insurance plan is the new product offering from insurance companies. A unit link insurance plan has the flexibility of investing its corpus amongst various asset classes viz, debt, equity or a mix of two. This gives you the option of choosing the investment option as per your own risk appetite. So if you are young and have high risk appetite, go for the growth option that invests predominantly in equities or mutual funds. For a middle-aged person having a moderate risk appetite, balanced option that is a combination of debt and equities is advisable. Those who don’t want to take the risk, debt option is the best choice. Like a mutual fund, net asset value of a Unit link insurance plan is declared by the insurance company. But the major drawback is that this plan carries very high charges. Also some agents have misled people by telling them that they have to pay premium only for the first three years.
Whole life insurance plan or unit link insurance plan: Which is better?: which cannot be decided soon. While both the plans offer tax benefits, unit link insurance plan is better if you want to enjoy the flexibility of investing across various asset classes or if you want higher returns. On the other hand, whole life insurance plans are good if you want a life cover for the entire life, without having to pay higher premium till end of your life. They are also good if you require periodic payouts. However it is better to consult a financial advisor before buying any insurance policy, since insurance is a lifetime commitment. This will ensure you are adequately protected and in case of your death, your family is quite well protected and safe for your complete family. |
