It's important to know that in the event of one's death, his or her family will be taken care of financially. Life insurance policies which provide coverage for funeral expenses and secure their dependents with an ongoing benefit to cover living expenses. Not every policy is the same however, so when shopping for life insurance Chicago customers need to carefully choose the one which best matches their needs.
Some people have life coverage through their employers, these policies can be useful but offer less flexibility than individual plans, cease to be in effect upon termination of employment, and may provide less coverage. When assessing one's needs, it's important to find out the particulars of any group coverage and take this into consideration.
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.
A whole life insurance policy generally attracts a higher premium, and commissions paid to one's agent. It has no expiry and instead of providing a death benefit alone, it also builds a savings fund that will gradually accumulate interest and is only taxable when withdrawn. This is a good option for those who plan on keeping it permanently or for a long time, otherwise they may end up losing money.
Universal policies involve the premium being placed into an investment fund which covers both the administrative costs and death benefits. The monies in this fund gain interest according to the current market trends, which can either increase or decrease its total value. The insured has a considerable degree of flexibility in terms of how much and how often premiums are paid, but there is some risk involved.
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 Tax-free death benefits will be withdrawn from these holdings, but the amount received depends entirely on how well these investments have performed over the years.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.
Although there are several avenues one can take for purchasing life coverage, most people prefer to do so through a reliable agent who represents a company with a strong reputation. A professional agent must possess a state license to sell insurance, and he or she should always be happy to answer the customer's question, never pressure them into anything, and will clearly explain how the policy works to them.
The application process usually involves filling out a questionnaire and sometimes taking a physical exam as well. It is important to be truthful and fully disclose all pertinent health information. Based on this application, the company will decide if they will insure the applicant and if so for which premium.
Some people have life coverage through their employers, these policies can be useful but offer less flexibility than individual plans, cease to be in effect upon termination of employment, and may provide less coverage. When assessing one's needs, it's important to find out the particulars of any group coverage and take this into consideration.
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.
A whole life insurance policy generally attracts a higher premium, and commissions paid to one's agent. It has no expiry and instead of providing a death benefit alone, it also builds a savings fund that will gradually accumulate interest and is only taxable when withdrawn. This is a good option for those who plan on keeping it permanently or for a long time, otherwise they may end up losing money.
Universal policies involve the premium being placed into an investment fund which covers both the administrative costs and death benefits. The monies in this fund gain interest according to the current market trends, which can either increase or decrease its total value. The insured has a considerable degree of flexibility in terms of how much and how often premiums are paid, but there is some risk involved.
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.
Although there are several avenues one can take for purchasing life coverage, most people prefer to do so through a reliable agent who represents a company with a strong reputation. A professional agent must possess a state license to sell insurance, and he or she should always be happy to answer the customer's question, never pressure them into anything, and will clearly explain how the policy works to them.
The application process usually involves filling out a questionnaire and sometimes taking a physical exam as well. It is important to be truthful and fully disclose all pertinent health information. Based on this application, the company will decide if they will insure the applicant and if so for which premium.
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