Basic Life Insurance

Choosing the right insurance is a critical undertaking. We’re talking about money that you’re going to have to shell out regularly, in the hopes that your loved ones would be taken care of if something happens to you. With all the different kinds out there, what should you choose? There are two basic types of insurance, whole life and endowment policies. Whole life policies are life insurance contracts that will pay you a lump sum only after your death. While endowment policies are life insurance contracts that are designed to pay a lump sum after a specified term. Generally, premiums are higher for endowment policies than for whole life.
Normally, I always suggest getting an endowment policy, since I like the idea of getting my money back. I also like to look at endowments as forced savings or long-term investments. Also, with endowments, you get insurance during the critical period of your kids’ growing up years. Once they’re all grown-up and well-established, then it would be your turn to need the money for your retirement.

Life insurance pertains to a contract agreement between two parties namely the policy owner and the insurer. The policy owner commits to pay a certain amount of money on a regular basis to the insurer. In turn, the insurer agrees to pay the policy owner, also known as the insured, an amount of money in the event of a critical illness or an accident. If in case, the insured died, the money will be given to the beneficiary/beneficiaries specified in the contract.

Several companies offer life insurance. These companies differ in terms of coverage and payment schemes. Choose the one that matches your needs and your budget.

Insurance fraud is real. There are criminals who will cheat you and take your money, after having made you believe that you are sufficiently covered in the event of disaster. Insurance frauds range from fake policies sold by unlicensed companies; premium fraud where the broker keeps the money paid by the policy holder instead of passing it on to the insurance company; unlicensed agents who will urge you to buy more coverage than you need, thus, adding to the cost of your premiums; lastly, there are the insurance scams perpetuated by criminals who stage accidents in order to weasel money out of unsuspecting policy holders. Always check an agent or company’s credentials before you do business with them. Be wary of any insurance scheme which you feel may be targeting you; a smart costumer is a safe costumer.

In buying life insurance, it pays to be inquisitive. Don’t be shy about asking questions, wanting to know as much as possible about your policy is a mark of a smart customer. Here are some questions you may need to ask your insurance agent or company:
• When would my first premium payment be?
• How would being a smoker affect my premiums?
• How would changes in health affect my policy?
• Do the premiums or benefits change annually?
• Will my policy change or be cancelled in the event of disability?
• What are the things I should know if I want to change policies?

Before your application for life insurance is approved, insurance companies will require you to undergo a medical exam, mainly to determine which health class you belong to and in turn, this will be an important factor on what your premiums will cost. Below are some tips on how to ace that medical exam:

* Sleep well before the exam.
* Refrain from caffeine intake for at least an hour before you undergo the medical exam.
* Avoid heavy exercise a full day before the exam.
* Lessen your consumption of cholesterol-loaded and salty foods 24 hours before you take the exam.
* If you can, do not eat anything for at least 8 hours for more accurate results.
* DO NOT drink alcoholic beverages and smoke for about 8hours before the medical exam.
* Reschedule the exam if you have even the slightest hint of illness, as this will adversely affect the results.

Here are other ways with which you can save when shopping around for the right life insurance policy for you:

* For those in good health, avoid guaranteed issue policies, which do not require a medical exam. If you are in a good state of health, policies which require you to take medical exams are the way to go, as they will usually give you lower premiums based on your health.
* Buy only the insurance you need. Don’t skimp on your premiums as they will ultimately leave you hanging; don’t overspend on your policy either; you will eventually end up paying more than you have to.
* Purchase life insurance when you’re younger, as the premiums generally increase relative to your age.
* Watch your payment schedules, as insurance companies tend to lower your premiums depending on how you schedule your payments.

Yes, that’s true; there are actually a number of ways to save money when you buy your life insurance. The trick is to know the market and to familiarize yourself with what you’re buying. Here are some tips for the cash-savvy customer:

* If your reason in purchasing life insurance is for short-term goals only, then you might look into buying term life insurance. This type gives you the good coverage for the least amount of premiums.
* Keep an eye out for no-load policies on variable life insurance. These policies typically have less additional fees, which means that most of your payments will be transferred directly to your premium.

Life insurance companies look at a number of factors before they decide what kind of policy give you. One of the most important deciding factors is the overall health of an applicant. People in good health are certain to be given lower premiums because they are in the lower risk categories. People with pre-existing medical conditions, though, end up in the higher premium range because of their lifestyles. Smokers, people involved in dangerous activities such as racing and related sports are typically the ones included in the high risk category. All’s not in vain, though. A change in lifestyle such as quitting smoking can have your premiums lowered, because companies also take these factors into account.

I have some tips that can serve as a guide for you in securing you life insurance:

• Review your needs and life circumstances, so that you may choose a life insurance policy which meets your necessities. Do not go overboard and buy more coverage than you need to.
• Don’t settle for one. Consult with a variety of agents and insurance companies in order for you to have more options.
• Don’t be a victim of fraud. Check out your chosen company’s background and license to operate.
• Read over the policy so that you are aware of everything in your insurance.
• Demand to have a copy of all written communication regarding your insurance policy; always ask for receipts for any payment you make.
• Go over your policy with your agent and review it every few years to adapt to any change in your income, lifestyle and needs.

Many people keep delaying purchasing their life insurance, because frankly, they don’t want to pay the premiums long before they think they would actually need it. In reality, though, availing of life insurance when you’re younger is a very wise choice, because premiums—and the monthly payments you make to your life insurance provider—are generally lower the younger you are. Also, you must take into account that negative events have a way of coming when we are least prepared, and being protected in these situations will prove to be a smart decision for both you and your loved ones.