The basics; an explanation of what life insurance is all about. If you
are just getting married, about to have a new baby, about to start a new
business or are new to the job market you may be interested in learning
this powerful financial product
I fondly recall when I started my first job I was met at my home by a very professional insurance agent one evening. He was asked to come there by my mother who felt it was time for me to buy some death and investment insurance in case something should happen to me. She had my interest and the interest of the family in mind.
The young man talked sports with my brothers and myself for quite a while then we proceeded to talk business.
He never really tried to sell me anything but spent some time educating me on the uses of life insurance, and why I may need a policy.
I bought the policy and the agent and I have remained friends to this day. Incidentally, he is one of the most successful insurance agents in the business to this day.
Insurance companies commit to pay a predetermined sum of money upon death to a named beneficiary in consideration of a specific sum of money paid to the company at certain intervals each year. How can these companies do this?
They depend on Mortality Tables. In addition they check out applicants through the Medical Information Bureau, M.I.B. when they complete the forms.
This powerful financial instrument is used to replace the income of the breadwinner in the event of his or her premature death. It guarantees that the family can continue their same lifestyle. It also assures that the future plans for the spouse and children are realized.
If there were no wives and children this type of insurance would not have been created. It has been described as the greatest financial instrument ever conceived by the mind of man.
Types Of Companies
There are two basic types of life companies, mutual companies and stock companies. Mutual insurance companies are owned by the policy owners and stock insurance companies are owned by shareholders, and are accountable to them.
Types Of Life Policies
There are 2 basic types of life insurance policies, term life policies and permanent policies. Term life policies offer coverage for specific periods of time; 10 years 15 years 20 years etc.
Permanent policies are intended to be kept for the rest of your life even if that is to age 100. Permanent policies include whole life, universal life, variable universal life and variable policies.
The type you buy would depend on your particular need.
By now you have some appreciation of the basics, you may want to look at how the actual life policies work.
When we think of affordable life insurance, or affordable anything for that matter, we often, mistakenly, think of a product that would require the least cash outlay.
Many life insurance buyers find the 30 year term insurance policy quite attractive. It fulfills their needs. Who, what kind of buyer, would buy the 30 year term policy.
The 20 year term insurance policy is probably the most loved and most bought term life insurance policy. The reasons for this are pretty obvious. People tend to think 20 years when planning long term.