Life insurance is a very important matter to consider but also one that most people do not like to think about. A recent study showed that nearly 1/3 of all U.S. households had no life insurance whatsoever. To make matters worse, the ones that did have life insurance, didn’t have nearly enough. Do you fall in that category? Don’t be a statistic.
No one likes to be reminded of their mortality but any responsible adult should consider how our loved ones will be taken care of in case of a fatal or even just a debilitating accident.
Common Type of Insurance
The most common form of life insurance is term life insurance. You will see thousands of companies offering this form of insurance online. For example if you live in Chicago, you can compare Life Insurance quotes in llinois and you will be able to find local companies who offer this type of insurance. Guaranteed life insurance is slightly harder to find but is available to people who cannot pass the health screening that is required for normal term life insurance.
Guaranteed life insurance is available to anyone who is not already living in a hospital or long term care facility. Insurance rates are based on your age and sex instead of health records. Because of the increased risk of these types of insurance, guaranteed life insurance is more expensive than normal term life insurance. The benefit of having this type of insurance is that anyone can apply and be accepted.
The process is also significantly shorter than for regular insurance process. Since there are no background checks for guaranteed life insurance, insurance can be purchased in matter of minutes rather than the normal 4-6 weeks.
The biggest downside guaranteed insurance is cost. Since it can be processed so much sooner, you can expect to pay more – a considerable amount more.
Guaranteed Vs. Permanent Life Insurance
Guaranteed life insurance is not the same thing as permanent life insurance. Permanent life insurance covers the lifetime of the subscriber as long as the premiums are paid. This takes away the worries of developing some serious illness which would then prevent the policy holder from renewing their plan.
Permanent life insurance can be cheaper in some situations then guaranteed life insurance because you still have to pass the screening when you first start your policy. Guaranteed life insurance is generally only a last resort for people who cannot qualify for any other forms of life insurance. This is most common in individuals that just need life insurance and can afford the premiums.
Purchasing the right type of life insurance in an amount that is suitable for your family’s needs is an important element in financial planning. You may want to consult a Certified Financial Planner (I might have a good one in mind) who can help you implement the details.
Jeff Rose is a financial planner and author of the blog Good Financial Cents. He is also an advocate for insurance offering easy term life insurance quotes on his site LifeInsurancebyJeff.com.