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If You Are Worried About Life Insurance Coverage

Jul 31, 2008
Do you find all the different kinds of life insurance policies that are available confusing? Why can there not be just one that answers to all your life insurance needs? Unfortunately, you have do to do some research and make a few decisions concerning this.

Unit link insurance policy: The unit link insurance policy is the most popular choice. Your insurance premium is divided between insurance coverage and an investment fund. This type of policy is unfortunately expensive when compared to other types of policies.

Whole life insurance: This policy provides you with life insurance coverage for your entire life, or for a maximum of 100 years of age. Your insurance premium is also divided between pure coverage and an investment fund. This fund builds up a cash value over time. This is the sum of money that is paid by the insurer to insured if you should cancel the policy before your death.

Term life insurance: This type is cheaper than straight life insurance policies. Your premium is not divided between life coverage and a investment fund. Therefore it gathers no cash surrender value and only provides coverage. Term does however give you a bigger face value amount than other types of life insurance.

Universal life insurance: This policy offers you the cheaper coverage of term policies while also combining it with an investment fund. Therefore this policy can build up a cash surrender value. A universal policy also allows you to use the interest from your investment to help you pay your premiums. You are also allowed to shift funds between the coverage and investment sections of a universal policy. This may grant you more flexibility in managing your life insurance.

Child life insurance: These are a group of policies that target the coverage needs of children and their caregivers. These may include term life as well as ordinary life policies. Generally this gives your child guaranteed future insurance. There are of course many different opinions about the true value of child life insurance. Some insurers advocate it while others question its validity.

A common mistake some people make is to have too much life insurance. You need a substantial amount of coverage during the years when your household is growing in order to protect your spouse and children from the possible loss of income that may occur as a result of your death. However, your insurance needs will decrease as you age and as your children leaves the household and after you have paid off your mortgage. Then you can think about decreasing your amount of life insurance coverage.

Another lesser mistake is to borrow money against the policy in the form of a policy loan. This may sound reasonable at first, but keep in mind that you have to repay the loan and that the loan actually decreases the amount of coverage available for your household. You do not buy a life insurance plan in order to borrow money from it.

If you are worried about your life insurance coverage, you may or may not want to contact a life insurance coverage lawyer. He may be able to help you safely navigate the confusing twists and turns of the insurance world.
About the Author
Copyright 2008 - Daniel Theron. It can be more affordable to ask a life insurance coverage lawyer to handle your life insurance.
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