Choosing a life insurance policy can be very confusing, since there are so many different options to look into. But we can help break down what you need to consider when searching for a policy! First, you’ll need to decide between the two main types of policies: whole life insurance and term life insurance. And while term life is excellent for people on a budget, there are situations when whole life is simply a better deal. So what’s the difference between the two, and is whole life right for you?
Difference Between Term & Whole Life
Both term life and whole life require you to pay a monthly premium. In return, your family will get an agreed-upon amount of money (your death benefit) when you pass away. The major difference between these types of policies lies in the length of the policy.
When you purchase term life insurance, you will be asked to choose the amount of time that your coverage will last, typically anywhere from ten to thirty years. After that amount of time, your policy will expire. If you outlive the policy, your family will not get your death benefit. And you will then have to decide whether to buy a new policy or extend your term. In both cases, your policy will likely be more expensive because you will be older and might have developed health conditions.
The possibility that your policy will end, and you will have to extend or repurchase is a major drawback of term life. With whole life insurance, though, you might pay higher premiums. But the policy will cover you for the rest of your life. Not only that, but many whole life policies have a cash value – like a savings account – attached to the policy that accrues money over time.
As we mentioned above, whole life can be more expensive than term life. But the difference in price is often not actually all that much. And again, with a whole life insurance policy, you will build a cash value account that grows over time. And the account is tax-deferred. So you can essentially use your policy as a type of bank account.
You should also consider whole life insurance over term life if:
You’re close to 50– You might think that if you’re heading towards 50, or a little older, term life is the way to go. But if you’re only around 50, you have a good chance of outliving a term life insurance policy. And then you’d have to pay an extremely high premium to get a new policy (that might have a smaller death benefit), since you will be buying/renewing your policy at a much older age.
You have children in college– If you have a child or children in college, a whole life insurance policy with added cash value is a great option. With one of these policies, you can save that money and then give it to your child for tuition.
You’ve been diagnosed with a medical condition– If you missed the opportunity to purchase a term life insurance policy when you were young and healthy, odds are that one will be very expensive if your health is no longer what it once was. In this case, it would probably be smarter to get a guaranteed issue whole life insurance policy. Rather than run the risk of not qualifying for a standard life insurance policy later on.
You have a child with special needs– Whole life is a great choice if you are a parent who has a child with special needs and an existing special needs trust. You can consider survivorship whole life insurance. Which covers both parents but only pays the death benefit after the remaining parent passes away. This is an excellent type of permanent coverage that is a great deal more affordable than coverage for both parents.
You own a business- There are a variety of types of life insurance options available to business owners. For example, you can take out a permanent cash-value life insurance policy such as an indexed universal life policy. With which you can access funds should you need liquidity in case of an emergency. Or if the key employee leaves the company.
Whole life insurance is a great choice for a lot of people. But if you’re not sure which policy is best for you, your best bet is to compare policies from different companies. There are many great affordable life insurance options to choose from that will provide enough money for your family. The best way to find the right life insurance policy is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.
If you’ve watched any amount of television or movies, the thought has probably crossed your mind: can someone take out a life insurance policy on me without my knowledge? Fact or fiction, the concern is real. No one wants their death to be the reason someone benefits if it’s not something you were made aware of.
Life insurance companies have safeguards in place to avoid insurance fraud.
Luckily life insurance companies are well-versed in fraud detection so the chance that you’d have a policy taken out on you without your knowledge is low. However, if you suspect a life insurance policy has been taken out on you without your permission, there are ways to find out.
We’ll provide some information throughout this article to ease your fears, explain the life insurance application process, and how you can apply for your own today if you don’t have coverage already.
Checks and Balances
The chances of someone being able to take out a life insurance policy on you are extremely low because there are so many checks and balances throughout the application process that would throw up red flags to an insurance company and to you as a consumer.
The first and most basic obstacle to get through is signing an application. If someone wants to forge a signature that would get them to the next step but beyond that it would be difficult because the underwriting departments of life insurance companies would perform identity checks and cross reference all information provided in an application.
Another hurdle to get through would be getting a medical examination. Most life insurance policies require a medical exam and at the very least a copy of your medical records for an underwriter to review. With HIPAA laws and office practices, you would get a notification from your doctor alerting you that a copy of your records was requested.
Finally, when applying for a life insurance policy, insurable interest must be proven. Insurable interest means that the policyholder would suffer financial hardship if the insured died. Without one or more of these things it’d be virtually impossible to get a life insurance policy without your knowledge but there’d still be a chance.
Contact the Medical Insurance Bureau to make sure you’re not named as an insured person on a life insurance policy.
How Can You Check If You Have A Policy Taken Out On You?
Let’s say somehow you still suspect a life insurance policy was taken out on you. It’s not likely, but it’s not out of the question. Family members may have had a policy on you since you were young and you simply may not have known. Or maybe you’re helping a friend or someone you know figure it out. No matter what, it’s important to know if you have a life insurance policy with your name on it as the insured person. As the insured, your death would trigger a death payout to beneficiaries.
What if your ex-spouse has a policy on you? You want to fix that as soon as possible so in the event you die, they don’t benefit from it. If an older, wealthy neighbor has a family member that you suspect doesn’t have the best of intentions, you would want to help them find out if they are named as an insured person on a life insurance policy.
No matter what your reason is, there are ways you can (and should) find out this information. You can contact the Medical Insurance Bureau and run a search to see if a policy was secretly bought under your name. Chances are you will come up with nothing but if you do, you will have the information you need to get to the bottom of how a policy was taken out on your without your knowledge.
Protect Your Family
Find a life insurance policy to protect your family by contacting EZ today.
What’s been laid out for you is most certainly an exception to the rule. There are rarely secret life insurance policies taken out on people so it’s usually nothing to worry about. Most life insurance policies are very cut and dry, making it a fairly simple process once you sift through them all and find one.
Because there are so many options out there, it’s easy to get confused and overwhelmed. Luckily EZ has agents specializing in life insurance. They work with the top insurance companies in the nation to help find the plan that’s right for you.
We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company.
