What Is the Best Life Insurance Company?
Life insurance is basically a contract between a insured individual and an insurance company or insurer, in which the insurer guarantees to pay out a specified beneficiary an amount of money after the insured individual’s death. Depending on the contract itself, other circumstances including critical illness or terminal illness may also trigger automatic payment to the beneficiary. This payment is known as benefit dispersion. If the beneficiary takes advantage of this aspect of life insurance, the insurance provider has to pay the insurance provider a fee known as “service charges”. In order to avoid paying this, many insurance providers have made amendments to the policy in order to avoid paying for service charges.
The concept of Life Insurance is not new; however, its use has become increasingly popular over the years. Before discussing the different types of Life Insurance, it is important to understand what Life Insurance is not. A Life Insurance is not a loan; it is not designed to provide for economic security during one’s lifetime. Life Insurance is not a security system and is not intended to help plan for one’s estate or to provide for the potential replacement of the insured after his death. To put it simply, Life Insurance is not insurance!
Many people are familiar with the term Life Insurance. Some people are even aware that there are two different types of life insurance: the Term Life Insurance, also known as the permanent life insurance, and the Whole Life Insurance, also known as the cash surrender life insurance. There are several distinct differences between these two types of insurance. Among other things, permanent life insurance includes beneficiaries, while whole life insurance does not.
As you can see, from the very beginning term life insurance provides coverage only to named beneficiaries. The policyholder’s death benefits are paid directly to the designated beneficiaries, who are usually family members. The benefit amount is based on a predetermined percentage of the insured’s entire life expectancy. Most people choose term life insurance because the premiums are affordable and the policy allows flexibility.
Whole Life Insurance, also known as the cash surrender permanent life insurance policy, has many similarities to the term policy. Although the policy does not allow for flexibility, it is by far the most popular form. In addition to beneficiaries, a whole life policy pays dividends. Unlike term policies, however, the dividends are not tax-free. Because of this, the premiums in a whole life policy are often high.
The most reliable, reputable life insurance companies include Allstate, Farmers, Nationwide, and GEICO. These insurers will charge premiums based on your age and your health. In general, the younger you are, the higher your premiums will be. However, most life insurance companies offer a discount for good driving records, so if you do have a bad driving record, you should definitely shop around.