| |
 |
| |
|
Life Insurance, What The Heck Is A No-load Insurance Policy?We will answer that question for you later, for now if you are shopping for life insurance, you have three options to choose from: The first option is what is termed ‘whole life insurance’, the second option is ‘universal life’ and the third is ‘term life’. While we will cover all three options, this discussion will focus on Whole Life Insurance, which is also sometimes referred to as "straight life". Even if you’ve already decided that the best choice for your, and your families needs, is to purchase a whole life policy, nevertheless there will still be additional decisions to make before finalizing on a policy. Those being the choice of the company, the face value of the policy, and how much your budget allows for the monthly premium. If we take each of these in turn and assuming you have already done, or are planning to do quote comparisons, the final choice needs to be made on the financial health and track record of a company. When doing this due diligence, check with the Better Business Bureau for any existing unresolved issues of a life insurance company. Also, any company that is under consideration should be a life insurance company with proven credibility and reliability. The last thing you want is to get involved with is a company that has solvency issues. You can easily check on the financial health of a company with a Yahoo Financials Search. As for the face value of the policy you, of course, realize that the higher the face value the higher the premium. Just as an example, or, if you will, a gauge, a $250,000 face value over a 30 year period with a $35 monthly premium payment would not be a bad deal as that would be a decent face value, a relatively low monthly payment set for a realistic period of time. Nevertheless, if you find such a policy, make sure to read the fine print. Should you be considering purchasing life insurance as an investment vehicle, sometimes referred to as “forced savings” you would have to decide if such is worth the extra price one pays for a whole life insurance policy versus other forms of insurance, and other savings and investment vehicles. Whereas, because the cash value has the potential to grow tax-deferred, whole life insurance has the potential of being a good long-term investment strategy. However, it should be kept in mind that should you decide to forgo your permanent life insurance coverage, you would be required to pay a large penalty that is mandated by law. On the other hand, you can borrow against the policy without any tax consequences or any other penalty. Lastly, although it is not readily available, look into no load life insurance, which simply means life insurance that is more cost effective due to the fact that no load life insurance is not commission based. This translates to lower first year payments; zero cash surrender charges and earlier cash value accessibility. If you can find it, get it, as we don't even want to tell you how much is usually paid in commisiions to insurance agents. |