Life insurance is essentially a contract between an insurer and an individual insurance holder or insurer, in which the insurer promises to cover a designated beneficiary at an agreed amount of money upon the demise of an insured individual. Depending on the agreement, death may also trigger immediate payment. Life insurance was first introduced in the United States during the Great Depression. The reason for the introduction of this particular insurance policy was to provide financial protection for the survivors of the deceased. Initially, life insurance was quite expensive; however with the continuous advancements in technology and research, the cost of life insurance has become much more affordable. Today, people can purchase such policies online with just a few clicks of the mouse.
Individuals can purchase term life insurance coverage by visiting their local insurance broker or agent. A term life insurance quote can be obtained from these agents. Another option is to purchase the policy online. This option allows people to compare the rates and benefits provided by different companies. Some insurance companies offer a number of quotes, while others only offer the most basic information.
People should make sure that they understand all the details and rules associated with a permanent life insurance policy before they purchase one. One factor to consider is whether the policy will cover dependents, such as children or grandchildren. Also important is whether the policy will cover those who will start a new family if the insured dies beforehand. It may also cover any outstanding debts, such as credit cards. As with any other insurance, it may be helpful to consult an expert and obtain as much information on different types of life insurance before making a final decision.
There are two different types of whole life policies: level premium and universal life insurance. A level premium whole life policy will pay out the same death benefit to all beneficiaries, regardless of how much they contribute to the policy. A universal life insurance policy will pay a death benefit to all beneficiaries at the time of the insured’s death, regardless of how much money is contributed. The premiums for both types of policies are usually affordable for most individuals.
A person can receive income replacement and additional coverage. Income replacement is provided to spouses or former partners who remain married. Additional coverage can be provided to the surviving children or dependents of the insured. Most life insurance quotes that include income replacement only give a maximum amount of cash to be received. Additional coverage may be required by law, so it is vital to read the fine print carefully.
Life insurers use medical exams to determine the risk factor of a potential policy holder. Insurers use the results of this medical exam as a basis for the amount they charge a policy holder for coverage. If you meet the minimum requirements established by the insurer, you will qualify for the policy type. If you do not meet the minimum requirements, you will be charged a higher premium.