QA: What type of life insurance is the most affordable? e-wisdom.com
14.08.11
What type of life insurance is the most affordable? I can’t afford an expensive policy but want coverage for my family.
Saving money is always an important consideration, and it is certainly an important consideration when it comes to life insurance . It is important to shop around as much as possible in order to get the best possible life insurance coverage at the lowest possible rates.
All else being equal, term life insurance coverage should provide the highest level of coverage at the lowest possible premiums. That is because term life provides a death benefit – and only a death benefit. There is no cash value, no investment component and no other complications.
Those who are looking for only protection for their families should definitely consider a term life policy. The premiums for this type of coverage can be extremely low, especially for the young and the healthy.
Term life insurance derives its name from the fact that the insurance is in effect for a specified term, and the length of that term can vary from policy to policy.
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Affordable life insurance without any medical examination sounds an interesting offer. But do not just go by the name of the policy. Take your time to enquire about the details of the policy. Do not forget the fact that the main motive of the insurance company is to make profit so why shall they provide a financial security to a person whose health conditions are not consistent.
The business model of any life insurance company can be simply put in the following way:- Profit = earned premium + investment income ‘ incurred loss ‘ underwriting expenses.
The process of underwriting is followed by the insurer to decide upon premium that should be charged in the return of the coverage of the risk. Without the involvement of a medical examination it is difficult for the insurer to know about the risk that he will be insuring for. Without knowing this how can he decide about the premium amount that should be charged? Be sure that in such cases there are clauses that either you did not understand or you did not look for them because you did not expect them to be there.
One can’t say that there is nothing like a affordable life insurance and buying a policy is just like buying anything else. All that you need to do is to select a best option. But to select one policy you need to know about the different type of policies that are available in the market. The two most important one are:
1) Term life insurance policy always covers the insured for a fixed years as per agreed by the insured and the insurer. The span could be from 5 years to 30 years, it depends upon your need for the coverage. You also have the option to renew the policy by paying a higher premium. The beneficiaries shall receive the death benefit only if the death happens within the period of the plan.
2) if you are looking for a life option throughout you life...
