Monday, August 20, 2012

Choose the Right Type of Life Insurance Product for Your Situation

Making the decision to purchase permanent insurance such as life insurance and variable life insurance is both useful and has a challenge. Term insurance is not like that you can change every year as long as you are healthy, with no financial consequences, changing the permanent insurance is expensive. Choose not only the right company, but also the right type of product for your situation is important. There is a big difference between variable life and whole life policies, and there are different types of each policy.

1.    Compare the cost of the policy. Some of the insurance policy cost more for the same amount of insurance and do not guarantee cash value. Others are less up-front fee, but after several years of premium increases.
2.    Variable insurance policies are not all equal. Variable universal policy, in which investments are paying a premium in the term of the policy, does not guarantee that you'll never pay more premiums.
3.    Decide whether you want to participate in investment returns. Not everyone wants to monitor or direct his own money. If you like the idea of the potential to increase profits through smart investment, choose a variable policy.
4.    Check the number of investment options in variable policy. Make sure that it has a fixed account, similar to a savings account. Most of the variable life insurance policy offers a large number of investments from which to choose. Look for a policy that has several investment funds from different fund families.
5.    Some whole life insurance policy allows you to pay the full policy in a certain number of years. Although you may pay an additional amount on the product variable universal life, there is no guarantee that the investment will produce enough to allow you this option.
6.    See if the whole life policies offer a dividend. Policy costs are often higher, but if the company makes a profit on the policy, you get money from the tax-free dividends years later.
7.    Insurance companies take a look at the cost of the money you invest each month on a variable universal policy. This fee includes a monthly fee, the cost of investment and insurance costs. This determines how much money actually goes into savings.

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