If you haven’t purchased life insurance in a while, it’s important to know about the different types of policies, to understand a few basic facts about how insurance works, and to hear the real story about a few myths that never seem to go away.
Types of Coverage
You’ll often hear people say that there are 10, or 12, or 20 different kinds of life insurance. It’s true that there are numerous variations on the way coverage is offered, with multiple combinations and offerings from carriers who want to make it convenient for applicants to get the exact kind of policy they want. However, it’s also true that there are basically two kinds of insurance, temporary and permanent. Temporary, or term policies come with a fixed expiration date, past which they offer zero protection to the policyholder. These kinds of contracts typically are issued in ten-year increments, beginning with 10-year or 20-year offerings.
Viatical settlements are designed for the terminally or chronically illpeople who know they don’t have long to live but who need to get the cash value out of their policies to cover immediate expenses. You can gain a fundamental understanding about how viatical settlements work by reviewing a simple online guide to see if this kind of resource is right for you. In most cases, when a seriously ill person sells a policy, they receive an amount greater than the cash value but less than the death benefit amount. There are more details to it than that, but the key point is that these kinds of settlements help many ill adults deal with the unexpected financial burdens of their final years of life.
Myths About Cost
Life insurance is often said to be an expensive product, but upon closer examination, that is simply not true. Not only do most adults pay reasonable, affordable rates on the coverage they choose, but companies have an extremely good record of paying off when the holder passes away. For a great many families, benefit payments are the only thing that they have to rely on in their time of need, grief, and financial stress. Dollar for dollar, life insurance is one of the best bargains in the financial services market.
Myths About Who Needs Life Insurance
Have you ever heard someone say, “I don’t have any children, so I don’t need life insurance.” This myth is a persistent one. In fact, many single people have other family members for whom they wish to provide, want to leave a legacy to a favorite charitable organization, or simply have to buy coverage to meet the legal requirements of a mortgage agreement. Young adults often believe that they don’t need to buy coverage until they’re middle-aged or older. However, purchasing a policy in your youth can be the least expensive way to obtain high-quality life insurance at very low rates.
Some people assume that they can’t get a policy because of a health issue or because of their age. This myth is a common one, but the fact is that there are many insurers who specialize in underwriting people in high-risk groups or who are past their middle-age years.