Nobody likes to think about dying, but worse is the idea that one's family will be placed in a position of financial hardship if this were to happen. The best way to ensure that loved ones are protected financially is to purchase a life insurance policy. Not all policies are the same however, so in order to select the most suitable type of life insurance Chicago customers need to first do a careful assessment of their needs.
Benefits packages provided by many employers often include some life coverage, although the insured generally has little control over the amount of benefits and other details of these policies, and if the employment ends, so does the insurance. One must still take this into account when determining how much and which type of plan to purchase.
The four main types of life policies are term, whole, universal, and variable. Term coverage has a specified period within which the recipients will receive benefits if the insured dies. Upon expiration, it can be renewed, but usually for a higher premium because the policy-holder will be older. This is the most popular type of policy, because it has a choice of terms, is tax-free, and provides good coverage for the price paid.
Whole life coverage works in such a way that the premium paid is partially reserved for death benefits and the rest is used for a hedge fund, as a result the premium is somewhat higher, as is the agent's commission. Unlike term policies there is no expiration on this plan. Interest accumulates on the savings, but at a relatively slow rate, so it's best for those who wish to retain the policy permanently, or they might lose money on it.
With a universal policy, the insured pays a premium into an investment fund from which the death benefits and administrative costs are withdrawn. The policy-holder is granted a fair amount of flexibility when it comes to the frequency and amount of premium payments, and amount of the death benefit. Interest is earned on deposits according to current market rates, which may increase the value of the policy, resulting in lower premiums, but it can also decrease in value.
With a variable policy, the insured is given a choice of stocks and bonds which he or she can invest the premium into. Tax-free death benefits will be withdrawn from these holdings, but the amount received depends entirely on how well these investments have performed over the years. There is no minimum cash value for this policy if the customer wishes to cash it in early, and it can reduce to zero.
Customers usually prefer to deal in person with a dependable agent who works for a company with a solid reputation for providing hassle-free coverage. An agent must be licensed to sell insurance in the state, and furthermore, always clearly answer any questions clients have, explain all terms of the policy, and never make them feel pressured to sign anything.
Applicants will need to fill out a questionnaire and may be required to get a physical as well. They must be truthful in their answers and disclose all relevant information pertaining to their health. The company will review the application and decide if they will offer coverage to the applicant, and if yes, what premium amount will be paid.
Benefits packages provided by many employers often include some life coverage, although the insured generally has little control over the amount of benefits and other details of these policies, and if the employment ends, so does the insurance. One must still take this into account when determining how much and which type of plan to purchase.
The four main types of life policies are term, whole, universal, and variable. Term coverage has a specified period within which the recipients will receive benefits if the insured dies. Upon expiration, it can be renewed, but usually for a higher premium because the policy-holder will be older. This is the most popular type of policy, because it has a choice of terms, is tax-free, and provides good coverage for the price paid.
Whole life coverage works in such a way that the premium paid is partially reserved for death benefits and the rest is used for a hedge fund, as a result the premium is somewhat higher, as is the agent's commission. Unlike term policies there is no expiration on this plan. Interest accumulates on the savings, but at a relatively slow rate, so it's best for those who wish to retain the policy permanently, or they might lose money on it.
With a universal policy, the insured pays a premium into an investment fund from which the death benefits and administrative costs are withdrawn. The policy-holder is granted a fair amount of flexibility when it comes to the frequency and amount of premium payments, and amount of the death benefit. Interest is earned on deposits according to current market rates, which may increase the value of the policy, resulting in lower premiums, but it can also decrease in value.
With a variable policy, the insured is given a choice of stocks and bonds which he or she can invest the premium into. Tax-free death benefits will be withdrawn from these holdings, but the amount received depends entirely on how well these investments have performed over the years. There is no minimum cash value for this policy if the customer wishes to cash it in early, and it can reduce to zero.
Customers usually prefer to deal in person with a dependable agent who works for a company with a solid reputation for providing hassle-free coverage. An agent must be licensed to sell insurance in the state, and furthermore, always clearly answer any questions clients have, explain all terms of the policy, and never make them feel pressured to sign anything.
Applicants will need to fill out a questionnaire and may be required to get a physical as well. They must be truthful in their answers and disclose all relevant information pertaining to their health. The company will review the application and decide if they will offer coverage to the applicant, and if yes, what premium amount will be paid.
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