Affordable Life Insurance Articles

Understanding the terms of life insurance

It is an unfortunate reality that everyone dies. Unfortunately, for the most part, we do not know exactly when we will pass away. In some cases, a family will be left behind after a death. Providing for the financial well being of the ones we leave behind can be difficult. When you take into consideration general living expenses, housing, clothing, education, child care and the standard of living your family is accustomed to, it can be overwhelming. Leaving behind loved ones struggling with grief over your death can be made easier if you provide them with the means to be financially stable. A Term Life Insurance policy will provide your loved ones with the money they need to continue living in the manner to which they are accustomed. In the UK, there are two main types of life insurance available; however, Term Life Insurance is by far the most common and, in most cases, the best life insurance available. Term Life Insurance can be a confusing topic. Learning the purpose and the language of these policies will help you to make the best life insurance decision for you and your family.

Level Term Life Insurance allows you to make a fixed monthly payment for the entire length, or term, of the policy. Level Term Life Insurance policies can be taken out in varying lengths. This type of insurance is quickly losing popularity because it is considered to be inflexible. In fact, unless you add riders to the policy, it is really only good for short-term expenses. It will not provide for your family in the long run.

Decreasing Term Life Insurance is an excellent insurance option. This option allows you to pay lower monthly payments the longer the policy is in effect. Decreasing Term Life Insurance policies are typically used to cover outstanding debts upon your death. Car payments, mortgages and credit card debt will be covered under this type of life insurance. Providing a way to pay these debts off is an excellent way to protect the financial stability of your family.

Both of the above types of insurance have monthly premiums. These amounts are typically based on the amount of coverage you select. Simply put, the bigger the death benefit is, the higher your premiums will be. Coverage is simply the amount of money you insure your life for. This is the amount that will be paid out as a death benefit in the event of your death.

When you apply for a Term Life Insurance policy, your insurance company will carry out a risk profile on your and your lifestyle. This profile will allow them to determine how likely it is that you will pass away during the term of the policy. This profile takes into consideration several factors. These include your sex, age, medical history and lifestyle. Additionally, you may be required to submit to a physical examination in order to adequately access your risk.

By understanding the information presented above, you should be able to determine which type of life insurance will work best for you and your particular situation.

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