A Financial Asset You Should Have --- Life Insurance

by Joan Edstrom

If you answer yes to any of the following questions, then Life Insurance is a financial asset you should have. Are you married? Do you have debt? Do you own a business? Do you have dependents? A quality life insurance policy would relieve financial burdens left to your family by paying them a benefit directly, unlike other investments. There are several kinds of life insurance to consider, including Term, Whole Life, Variable Life, Universal Life, Universal Variable Life, and Life insurance for children. In addition, there are certain criteria that can help a consumer narrow his search. The following definitions in summary were taken from http://www.InsuranceFinder.com
Term Life is a simple death benefit policy. There is no cash value account. The premiums are less than that of those with cash accumulations.

Whole life insurance builds a cash benefit, tax deferred. It has a fixed premium and gives you the option to receive dividends. The insurance company manages the cash value account.

Variable life insurance provides low-risk, tax-free cash accumulation. It does not, however, offer the same flexibility as Whole Life. The death benefit varies with the account returns. Variable insurance does not guarantee the cash value amount.

Universal Life is more flexible than whole or variable life. You have the right to borrow or withdraw and you are allowed premium and face amount flexibility. With low risk cash value and tax deferred accumulation, you also can earn market rates of interest. This type of insurance does not offer other investments such as money markets as an option with your cash account.

Universal Variable life insurance allows you the most control of your cash value account. With this insurance, you can invest in stocks, bonds, and money markets. The policyholder is the manager of the accounts.

Life Insurance for children is important, because it is an asset they can acquire while they are young when there aren’t any preclusions such as unfavorable health conditions, unfavorable job occupations or age. A whole life policy will accrue cash as well as maintain a low premium.

Some tips for buying Life Insurance are available at the National Association of Insurance Commissioners website http://www.naic.org/pressroom/consumer_alerts/index.htm. They suggest that you consider your insurance needs such as dependents and debt. Also determine if you can afford a premium whose policy stipulates increases. You should comparison shop. Evaluate the insurance company through a state insurance department or library. Ask about surrender penalties. Look at the guarantees.

Life insurance is an important purchase for most adults. It is prudent, and wise to protect your family from financial hardship. With several different types of policies to choose from there is certain to be one to fit your needs.

References:

http://www.insurancefinder.com/lifeinsurance/typeslifeinsurance2.html http://www.naic.org/pressroom/consumer_alerts/index.htm

Joan Edstrom may be contacted at http://www.planetfun.freeservers.com homestaker@yahoo.com.
Joan Edstrom is foremost a mother of two. She writes research articles that are inspired by the needs of her family. Her website, Planet Fun, offers child safety and educational items such as phonics, baby proofing, pool alarms, and car seats. There are also free classifieds, chat boards and free phonics lessons.

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