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The Mysteries of Life Insurance

09/15/2006

It’s a great mystery. Is it a foreign language of terminology and acronyms? What the heck is this life insurance anyway?


Renewal, conversion, term, whole, universal – huh?


First of all remember that, just like that insurance salesperson sitting in your kitchen or your conference room. Getting life insurance is important! But sometimes it’s hard to figure out if that person in front of you is giving you the straight scoop.


Well, there are answers and it’s time to let the internet help you out. Information and life insurance quoting sites like lifeinsure.com can let you learn on your own and then search the market all between you and that trusty computer with a high speed connection. On a site like this you can check the market for the lowest life insurance quotes and learn the difference among all these types.


But let’s help you out a bit. First things first, if you have people that depend on you financially you should have life insurance and more than you expect. You can look on life insurance as a financial instrument that is used to replace the income that you no longer can make if you’re not around. That’s all – money arriving after a certain (but inevitable) event.


So, if the amount of life insurance you should have is based on income then, logically, take a multiple of your income that would replace it. Get 15 to 20 times to be really safe or get at least 10 times income at a minimum.


Ok, now what about all these kinds of life insurance? Here again, it’s not really a mystery. The life insurance companies have different kinds of life insurance and what’s really different about the different types is how long you’re insured for. For the same person, life insurance that lasts for 5 years (5year term) is less expensive than 10 year term. 15 year term costs more and 20 and 30 year term are more. When you get to whole life insurance (or its cousin universal life insurance) it’s really term life insurance with the time period being the rest of your life. Of course that costs the most! It’s guaranteed to pay no matter how long you live.


So there you have it. Get life insurance to replace your income for those you care about. Choose a life insurance policy that lasts as long as possible.

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