Buying The Right Life Insurance Plan
Life Insurance is an important investment and irrespective of the income level, it is imperative to buy at least a basic Life Insurance plan. This helps to secure emotional and financial stability. It is very important to know and understand which plan would be ideal for an individual’s specific needs. The details that have to be considered are the financial status, assets, affordability, debts and credits, including child support expenses and any other related expenditure. The present insurance market offers a host of varying policies and it is quite difficult to make a choice.
Permanent and Term Life Insurance are the two regular Life Insurance plans. They have their own advantages and disadvantages. They should be opted for keeping in mind optimum benefits and minimum expenditure. A permanent insurance guarantees forced saving, tax-free income, paid-up additions to the benefits, provisions of extended term periods and the provision of borrowing. However, a high rate of premium is applied, to avail of these features. It covers the monetary loss incurred by the investor?s death.
Term Insurance, on the other hand, covers the beneficiary only if the investor dies during the insured period. The premium charged for such insurance is much less than a permanent insurance and it has no saving feature. According to experts, a term insurance can be the best deal if the investor saves the difference and puts that money to good use. The interest received can become an additional income in that case, maintaining a low cost insurance at the same time. Surveys reveal that twenty percent of the investors lose their policies within two years and fifty percent of them in five years, after buying permanent policies.
Investors can go through all the necessary details associated with a particular policy and then decide if it meets their requirement.