As a result of rising funeral costs and as a hedge for replacing any lost income in the event of the death of a loved one, most families will have life insurance coverage for each member.
Choosing the best policy for you and your family provides comfort not only because it provides benefits in the event of a death, but other helpful benefits also.
You will find that there are many different types of products available from life insurers.
You are best served by an expert to sort out the many choices available.
There are licensed insurance professionals who are experienced and educated about the products available and they will help you to find the right fit for your needs and budget.
My goal today is to explain to you the differences between "Term Life"and "Universal Life".
When looking at a term life quote versus a universal life quote, you will notice instantly that the premiums for the universal policy are higher than the term policy.
The reason for this primarily is due to the fact that term life benefits are only payable upon death of the insured.
Whereas universal polices can come coupled with death benefits and cash-value because it is a more permanent type of insurance.
Unlike term life policies, universal policies combine the death benefits with a savings component that is invested for you, and is considered tax-deferred income.
The most valuable part of the savings component for these policies comes with the option to cash out some of tax deferred income at the maturity date, making it an investment vehicle to save for major life events.
One could also opt to leave the added income untouched with the stipulation that it be paid to a beneficiary as part of the death benefit.
Term life insurance is a pure insurance and any amount is paid only if the insured person dies due to certain circumstances.
So term life does not have any applicable cash value and cash is paid only if the insured person passes away.
Term Insurance is live and applicable as long as the premium is paid on time.
If the premium is stopped, the coverage is stopped as well and no insurance benefits are extended even after the death.
Young people are less inclined to get a term life quote.
A lot of financial advisors will usually pick the universal life option for their client.
This is because they have the ability to have a tax shelter given and built when the account is opened.
There are a number of choices in which one can invest when provided with that type of IRS protection, thereby doubling the appeal of this plan.
Your financial adviser will help guide you to finding the best option for you and your family.