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Life Insurance Plan: What Is Included in Life Insurance?

Updated: September 17, 2018

Life insurance is something that is known by most, but often misunderstood by many people as well.

A typical life insurance policy will include a substantial lump-sum benefit for the policyholder’s beneficiaries when they pass away.

The purpose of life insurance is to provide policyholders with the chance to leave a substantial nest egg for their loved ones when they pass.

Both whole life and term life insurance policies are maintained and funded by premium payments made by the policyholder.

A life insurance policy will usually have premium payments that are made on a monthly, bi-monthly or annual basis.

What is Life Insurance?

Life insurance is a type of policy where an insurance company agrees to pay a lump sum amount of money to a policyholder’s dependents when the policyholder passes away. The insurance company agrees to this arrangement if the policyholder continues to make scheduled premium payments.

Life insurance is one way to ensure your family will not face these problems after you pass, especially if you are the main income-earner.

Life insurance is the best way for people to leave substantial amounts of money behind for their loved ones. Not only can this money pay for funeral-related expenses, but it can cover other costs of living.

In many families, individuals are dependent on one or two people to provide the income for the family to live on. If one of these income-providers passes away, it becomes a challenge for the family to function as they did before.

Life insurance is one way to ensure your family will not face these problems after you pass, especially if you are the main income-earner.

It is a lot better than worrying how your spouse or children will make ends meet when you are no longer around, and it allows them the time and space to grieve your loss.

Advantages of a Life Insurance Policy

There are many advantages to life insurance, with the lump sum benefit being the most important advantage. But life insurance policies offer other advantages too, such as the ability to borrow money against the policy.

When you add money to your life insurance policy through premium payments, this money becomes part of the policy’s cash value.

If you require a significant amount of money for an unexpected expense, or to pay retirement-related expenses, you can borrow money against your whole life insurance policy at a discounted rate.

When you add money to your life insurance policy through premium payments, this money becomes part of the policy’s cash value. This cash value can increase through interest-driven investments made by the insurance company.

But insurance companies also give a guarantee that you will get a minimum level of lump-sum payment at the policyholder’s passing, regardless of whether those investments are successful or not.

This guarantee is crucial to any life insurance policy, because you do not want a situation where you made 30 years’ worth of premium payments, only to find the policy has a minimal value because the insurance company made bad investments.

Different Types of Affordable Life Insurance

There are multiple types of affordable life insurance available for people to buy. The two major kinds of insurance are term life insurance and whole life insurance.

Whole life insurance may start off more expensive than term life insurance, but it often becomes cheaper as you reach an older age.

What is the difference between term and whole life insurance? Term life insurance is a policy that will expire after a certain time period, which is typically ten years. In contrast, whole life insurance policies only expire if the policyholder dies or if they stop making their mandatory premium payments.

Whole life insurance may start off more expensive than term life insurance, but it often becomes cheaper as you reach an older age. Whole life insurance has fixed premiums, which means the insurance company cannot charge you more when you are older and less healthy.

Term life insurance is still a good option for people who may not have the money to afford whole life insurance premiums when they are younger. It is also a good choice if you are 55 to 65 years old and have never had a life insurance policy before.

Term life insurance is renewable at the end of the term, but the insurance company is allowed to adjust the premium payments as they see fit.

Finding Whole Life Quotes Online

The best way to find whole life quotes online is to conduct proper research into the different companies offering life insurance. There are so many insurance providers out there, which makes it tough to decide whether one is reliable or not.

While the policy may not cost you a lot of money, it is almost worthless if you cannot rely on the company that provides it.

In order to analyze reliability, it is important to look up the record of these insurance companies. How many years have they been active? Are there a lot of complaints about this company online? What type of rating is their business given?

These questions are important, because you do not want to get a life insurance policy from a company with a bad reputation.

While the policy may not cost you a lot of money, it is almost worthless if you cannot rely on the company that provides it.

Make a list of the reputable companies that serve your state and request whole life quotes from each of these companies. This will give you a list of all your options, and it will allow you to narrow down the list to the one company offering you the best and most affordable whole life policy.

Getting Low Cost Life Insurance Plans

Getting low cost life insurance plans is all about doing your research and planning ahead. While we have already discussed the research portion, it is time to consider the benefits of planning ahead.

The policies you are offered at a young age are much more affordable and comprehensive than the ones you will get in your 50s and 60s.

Life insurance is all about getting in the game as early as possible. If you want life insurance throughout your adult life, you should get a whole life policy as soon as possible. Even if you are only 25 or 30 years old, it is never too early to get life insurance.

The policies you are offered at a young age are much more affordable and comprehensive than the ones you will get in your 50s and 60s.

Not only will you have much lower monthly premiums for great coverage, but you will have plenty of years to build up the cash value for your policy.

This gives you a sizeable sum of money you can use for emergency expenditures or as a means to borrow money.