Some facts about insurance

1. Insurance policies usually cover one of two situations. Policies are divided into term ones and policies of complete insurance. The whole life policies have many variations covering different life situations and they can also be combined with term policies in some cases.


2. There’s more interest in selling life insurance than in buying it. Agents in U.S. thy their best when selling life insurance policies as this sphere of business has extremely high commission paid to agents from each life policy sold.


3. Whole life policies cost too much. Policies for the whole life are times more expensive than term policies. So, many people purchasing these policies can’t afford paying so much - as a result they become underinsured.

   

   
   



4. Policies for the whole life are based on suppositions. The incomes promised by insurance agents are built on conjectures, not real facts. Some insurance companies specify the most attractive amounts to get more clients.


5. Insurance and investments should be kept separately. Life insurance policies are not the best option for investments as they have large interests and many additional fees.


6. Pay for proper medical coverage. Health insurance is not for those who love to save money on everything.


7. Make the terms of insurance policy cooperate with your needs. You can purchase the policy for the period till your children grow up and leave the nest, or till your profit grows enough.


8. Don’t wait for illness to get the policy. Older people and those with chronic diseases pay much more for life insurance policies - you should try to get the policy as early as possible but not when your children are too young.


9. Truth is gold. Don’t change the facts to get more payment - be sure that insurance companies obviously investigate all facts before repaying you.


10. Buy on the Internet. Internet makes the process of choosing and purchasing much easier and relieves you from annoying agents.
    Our life is actually a combination of different insurance policies piecing together term insurance and market relations of investments. Both these policies don’t guarantee a stable profit so that insurance and investment companies could get more returns.

Miscellaneous life and variable general life are stable policies being funded by investments connected to mutual investment funds. Profit is not guaranteed here.

Another type of life insurance is term insurance having no investment elements. You purchase life insurance for some period of time and pay the premium every month during this period. The term of this policy is given from-year-to-year and you don’t have to prove your health every year.
For young people premiums paid every year are extremely low - for instance, annually you pay a few hundred of dollars for a $250,000 life insurance policy. For older people premiums get higher gradually.
Policies with fixed premiums usually have higher premiums and are purchased for longer terms - for 5-30 years.

Awhile ago it was impossible to get term policies with insurance charges for terms longer than ten-fifteen years. Nowadays it’s easy to get term policies for 20 and 30 years.

Insurance agents can tell their clients that policies with such long terms are rather profitable as they are kept for life and enable their owners to store money without any taxes and even borrow them. These are the facts but agents usually drop details about high payments and fees for the rest of the life as well as huge surrender charges (for those who refuse the policy) that can easily leave the customer without money after five, ten or fifteen years he has got the policy.

An idea of cash storage free of taxes isn’t unique anymore, because such organizations as IRAs, 401(k)s and others offer storage with tax advantages and small commission payments, greater profits and complete mobility.

The question of the amount of coverage is not a simple one. According to some experts’ opinion the amount of insurance should be equal to customer’s salary for 5-7 years. Those who have young children or significant debt should increase their coverage to ten years of their salary. For example, a person earning $50,000 per year should have the coverage of $250,000 - $500,000.

Consumers should know that life insurance has only one aim - to allocate revenue in case of one's death - and enable the relatives to keep living the same way.

Life insurance factors influencing the amount of coverage take into account the situation when the other partner has to raise children when the second one dies. Does the customer have other resources on which to draw? Are customer’s children going to leave the family soon? These factors as well as many other are considered to make a decision on the amount of coverage for the consumer.