Life Insurance

What Is Life Insurance

Life insurance is straightforward—you enroll with a company, pay premiums, and in exchange your beneficiaries collect a set amount of money when you, the policyholder, pass away. That's the simplest way to grasp what life insurance is and what it's for. Even though the basic idea is easy to follow, there are probably a few concepts and terms you haven't encountered before.

• The contract is an arrangement between you and an insurance provider stating that you'll pay them over a set stretch of time (either indefinitely or for a fixed period) and that they'll pay you a certain amount in return.
• Premiums are a monthly fee you contribute. You have to stay current on these payments or you risk losing your coverage entirely.
• The death benefit is the money handed to the beneficiary when the policyholder dies.
• The beneficiary. An insurance beneficiary is one or more people you personally name to receive the death benefit you set up with the company.

Whole, Term, and Universal Life Insurance

Life insurance comes in 3 primary forms—whole, term, and universal. Whole life is usually what comes to mind when people hear the phrase "life insurance." Frequently called "traditional" life insurance, whole life policies are bought, paid for each month, and paid out when the policyholder dies.

That said, the death benefit can grow over time. Whole life policies can build value for you—and you can tap into some of those earnings during your lifetime.

Universal life closely resembles whole life, though it isn't identical. Unlike whole life premiums, which are locked at a fixed rate you must pay every month, universal life lets you pay more or less than the standard premium, giving you added flexibility but also the chance of paying more.

Lastly, term life reshapes the permanent life insurance model entirely. Instead of lasting your whole life from the moment you buy it, you hold it for a fixed span somewhere between 10 and 30 years.

Life Insurance Costs

What you pay for life insurance will differ based on a handful of important factors:

• The type of plan you buy: Costs for whole, term, and universal life all look quite different. Whole life runs pricier than the others but keeps steady rates. Term is the cheapest, but you have to renew it each period you still need it. Universal policy costs shift often.
• Your age: The older you are, the more you'll pay. This reflects both the age at which you sign up and can rise as you grow older with the plan.
• Your Health: Any health issues will weigh heavily on your costs. If your health is too poor, you might not qualify. Non-smokers also pay less than smokers.
• Your Sex: Women outlive men on average—so men pay more.

The Best Life Insurance for Beginners—Call Quottes

This information is only the start—take your next steps toward a better, more secure future with Quottes. To begin, give us a call today.