What Life Insurance Can Mean For You And Your Loved Ones

Written By: Graham McKenzie on November 4, 2009 No Comment

Nobody is certain what will happen tomorrow, therefore protecting your family should anything happen to you is very important to anyone with dependants. Taking a life insurance policy is one good way to do this especially if you are married and have children.

Life insurance falls into different categories to suit everyone’s needs. Finding the most appropriate insurance policy can be a daunting task but with proper guidance, you will identify what is best for you. These categories include;

Term life insurance is the cheapest form of insurance available. It is given on a temporary basis providing you with protection for a period ranging from 1 to 30 years. Beneficiaries receive the value of the insurance incase the insured die before the maturity date. However if the insured does not die he is not entitled to anything. Term life insurance can be renewed at maturity or converted to a permanent insurance policy. With renewal of the life insurance policy, the premiums payable usually go up. Term life insurance is said to give the most value for money.

Another type of insurance is whole life insurance. It is almost similar to term life insurance but includes an investment component which allows the policy grow cash value which you can borrow against. The investment component can be in the money markets, bonds or even stocks. Compared to term life insurance, whole life insurance is more expensive. This is due to the commissions and fees charged for the investment. Another down side is that there is no guarantee that your investment will make money. The premiums remain the same over the whole period of the insurance policy. Whole life insurance can be divided into three groups, universal life, traditional and variable life.

Another type of insurance is whole life, which also goes by the name “permanent life insurance.” It is similar to term life in some ways, but does have a major difference: It includes an investment component, which could be in a number of areas such as money markets, bonds, stocks, or more. This kind of policy can build up a cash value, and if desired, you can borrow against its value. However, there are drawbacks. For one, your investment might not make money, meaning the policy could have little or no value against which to borrow. Also, you’ll have to pay various fees and commissions on your investments, which can be very pricey. Traditional, variable life, and universal life are a few common varieties of whole life insurance.

This type of insurance allows enough time generate substantial savings and is therefore beneficial for people who need insurance into their 70s or 80s. With the long periods of accumulating considerable value, this type of insurance is a form of long term saving. For people who feel they cannot wait up to their 70s you need to take term life insurance and then find a different form of saving for your retirement.

Overall, it is important to research the different kind of life insurance policies available to you, and then you can make an educated decision on which one will best benefit you and your family. There are many factors you will need to consider, such as your age, your needs, and the number of beneficiaries you have. Ultimately, when you select the right policy, you can live without the stress of wondering how your family will survive once you are gone.

Graham McKenzie is the content syndication coordinator a leading South African Life Insurance and Life Cover portal. For more information on the different types of life insurance visit our website.