Life insurance is basically a contract between an insurer and an insurance policyholder, in which the insurer promises to cover a named insured person a specific amount of money in the event of his/her death. Depending on the agreement, other financial events like critical illness or terminal illness can also trigger payments to the beneficiary. This contract exists between the insurer and the policyholder and it serves as an agreement between them. However, many people do not fully understand this contract and hence end up paying higher life insurance premium than they should. This article seeks to explain how one can negotiate life insurance premium discounts with his/her insurer.
Premiums increase in case one grows sick or suffers a serious illness, thereby leading to increase in the total cost of insurance over time. It is due to this reason that life insurance companies charge high premiums. One way to reduce the effect of these premiums is to make sure that the insured does not pass away before the maturity of his/her policy, as life insurance companies do not issue policy to anyone who does not remain around to take care of the policies interests.
Insured person is the one who pays the premium and benefits are paid to the beneficiaries in the event of the insured person’s death. One has two options to choose from when it comes to these two benefits. They are called death benefit and additional benefit. In the case of the former, the premium amount is paid directly to the beneficiaries in the event of the insured person’s death. In the latter option, the insurer pays the amount to the named beneficiaries only if the insured dies within a particular time frame.
You can make substantial savings if you invest in tax-deferred life insurance policies. These policies pay benefits to the named beneficiary in the event of the insured person’s death within a specified period after purchase. The term ‘tax-deferred’ refers to the period during which premiums are paid to the beneficiary and dividends are received by the insurance company. These policies also offer tax-free death benefit income protection. Tax-free death benefit income protection means that the lump sum amount received by the insurer does not have to be taxable. This is one of the best ways to save money on your life insurance premiums.
Universal Life Insurance provides you with the flexibility of investing in both types of policies. The difference between the two types is that the premium for the premium of universal policies remains constant, while the premiums for variable universal life policies are adjusted monthly or annually. The reason for this is to provide the customers with the stability they are looking for. Another feature offered by the universal policy is the possibility of investment at risk funds. These funds are specially designed for investments which have a higher risk factor than more traditional investments.
In terms of getting the best rate, it is always better to get quotes from as many different life insurance company as possible. The company you choose should be able to offer you a good rate, regardless of whether you are looking for term life insurance term coverage or whole term life coverage. It should also be easy for you to make the monthly premium payment. Once you have chosen a company that you feel comfortable with, all you need to do is to make regular monthly premium payments so that you can enjoy the financial benefits offered by your policy.