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How Should I Go About Buying Life Insurance?

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Buying life insurance is an important step because it is the vehicle through which you can guarantee the financial future of your family if you are not able to be there. But there are decisions that need to be made about the kind and type of policy to purchase, such as whether to buy whole or term life, and how much coverage you need to get. What to get and how of it to buy are questions that can only be answered by someone who understands your financial situation and the purpose of buying the policy at all. If you are not clear on the types and uses of insurance, research term and whole life coverage before you make an investment into a policy.

Whole life insurance carries higher premiums, but it will remain with you for the rest of your life. Term life, on the other hand, has a specific expiration date after which it will either expire or have to be renewed or converted. Term life is less expensive, but converting or extending a policy after the term is reached will almost always result in higher overall premiums than if you had purchased whole life to begin with.

There are also several types of term and whole life insurance, each one intended for different circumstances and uses. Term insurance comes in different terms, and can be either have level, increasing or decreasing payments, according to your needs and financial situation. Whole life insurance can be for funeral expenses alone, or it can be used as an inheritance or other things. Many types of whole life insurance include a cash value that increases over time and can borrowed from tax-free.

Shop around. Get quotes from several different companies, and then check the financial status of your best choices to find out what a company such as A.M. Best indicates. The rating from this type of company reflects how the insurance company is doing financially, and that can be especially for a whole life insurance policy that is dependent on the insurer remaining in business for an indefinite number of years.

answered Oct 20, 2011 by anonymous
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