Understanding Life Insurance

Understanding Life Insurance
The classic question about Life Insurance is "why do I need insurance if I'm dead?" The answer, of course, is that as a responsible person, you want to protect your family financially after you're gone. With that in mind, there are a variety of factors to consider when purchasing a Life Insurance policy including age, health and lifestyle as well as a variety of insurance types.

There are basically two types of Life Insurance – Term Life and several variations on Whole Life. There are a wide variety of options under these umbrellas including:

•20 year level term
•30 year level term
•High risk life insurance
•Low cost life insurance
•Annual renewable term
•Universal Life
•Guaranteed Universal Life
Your New Jersey Life Insurance agent will be able to provide a clear and understandable life insurance comparison of term vs. whole life insurance so you can find the most afforable life insurance for you.

Term Life
Term Life is among the most basic types of insurance and offers some of the most reasonable Term Life rates. A term policy is one you purchase for a price that pays out a specific amount to whomever you designate at a specific date or event, your death. This type of policy protects your family by providing a single payout to cover the expense of your funeral and possibly replace income after you've gone. Typically, a term insurance policy expires after a specific amount of time.

Whole Life
A Whole Life policy builds a savings account over time that you are allowed access to over the course of your life. As long as you keep paying your premiums on time, your rate will never change and your policy will not expire. Designed to be a stable and reliable investment, a Whole Life policy usually pays dividends you can use to lower your payments and offers tax-deferred accumulation.

Variable Life
A Variable Life policy follows a more aggressive strategy. Like Whole Life, it grows a savings account as you pay your premiums. It is designed to provide your beneficiaries a payout upon your death, but the final value of the account may vary based on the returns of the account.

Universal Life
Like Whole and Variable Life policies, a Universal Life Insurance policy allows you to grow a low-risk savings account with every premium you pay, but unlike the previous types, it also allows you flexibility in terms of the things that account is invested in. This provides the comfort of flexibility, but also a certain amount of unpredictability some buyers are not willing to take on.