Know More About Life Insurance

There are two types of life insurances, Term life insurance and Whole life insurance. People normally prefer term life insurance. You must give a careful thought before going in for insurance because it should specifically cater for your unique needs and your financial capability.

Term Life Insurance- The Economic Insurance Option
Term life insurance is cheaper than other type of insurance plans. It can be purchased for a certain number of years, which is usually 7 to 10 years. The premiums of such insurance plans can be low if you are young, you are a non smoker and in good health for which the insurance company will make you undertake a medical examination. This type of insurance is also useful in case you are suffering from an illness for a certain period of time. It can be renewed and is best suited for people who have temporary/short term needs; people who are just beginning their career and do not have enough finances with and for those people who are likely to have changes in their insurance needs in the future. The other advantages are that term life insurance is non taxable and has the option of being converted into whole life insurance thus giving you the option to choose the policy based upon your changing needs.

Besides the given advantages, term life insurance has some pitfalls which you must guard yourself against when you purchase the insurance. Term life insurance does not build any cash value, the premiums you pay go directly to keep your insurance effective and nothing else. The policy can expire without maturity and the insured amount is payable only if the insurance has been kept effective by regular payment of premiums. The policy lapses at the end of the term unless renewed. Every time the policy is renewed there is an increase in the premium amount and the amount of premium to be paid depends at what age the insurance is being renewed.

Since there are number insurance policies available, there is always a possibility of missing out the correct type of policy which suits your requirements and can be purchased at low rates. Though term life insurance is cheap at the beginning but it becomes costlier as the insurer ages. The best way out is to have the insurance for a longer period of time though you may be paying a slightly higher premium in the long run. Most people look at term life insurance from a safety point of view and would like to see their money going towards the needs of their spouse and children.

Comments

Insure against stock market crash

How can I insure against losses? The best “insurance” strategy is to (1) buy and hold while (2) diversifying your assets. This means to buy a wide range of assets representative of the whole range of the economy, both foreign and domestic, and to not buy and sell as individual stocks do well but to avoid fees by just holding the stocks for the long haul. This helps to insure against the risk that a particular company, country, or asset class does badly. However, it has limits: what happens if the entire economy does badly, like during a recession? One option is to buy a “put option”. Buying a put means you are entering a contract with another investor or firm that says that you have the right to sell them a particular asset on a particular future date at a pre-set price. So if you buy an Apple share at $700, you can buy a put at $600 for a particular future date and this means that, if Apple drops to $400 that you can still recover most of your money by reselling it at $600. Quite ...

How To Protect Your Investment Capital?

What do you expect when you buy a stock? We expect the stock price to go up so that we can sell at higher price than we originally bought them and take the profits. But many times things turn out not as we planned. What happens if the stock price does not go up but instead go down? It goes down 5%, 10%, 15%...50%.... If you don't cut you losses, you will lose your hard-earned money. You may face financial difficulty if you buy stocks on margin. This is the actual situation during the last few years when NASDAQ plunged from the peak of 5000+ points to 1000+ points. Imagine if you put your stop losses in place, normally about 10%, you are out of the wood and just lost 10% of your money. Nobody wants to sell a stock at a loss; it is a loser feeling. I have the same feeling many years back. I bought the stock at $18.00 and you ask me to sell at $16.20, no way! Yes, this is exactly what most investor would respond. When stock market crashes and if you don't stop loss ...

Stock and ETF Insurance

Can You Buy Insurance To Protect Your Investment? There are several ways you can protect yourself against market declines with “insurance”. The question is should you buy this kind of coverage and if so what is the best method to do so? As I hinted above, you can protect yourself from nasty stock market spills in any number of ways. Of course one option is to keep your money in cash. If you do that, you never have to worry about the market. You may have other problems that are far worse of course, like never being able to retire. But at least stock market declines won’t keep you up at night. Other than parking your money in cash, there are two popular alternatives that some investors use to protect themselves against the downside of investing in the stock market. The Federal Deposit Insurance Corporation (FCIC), which sums up its main job: to insure your deposits. It does this not by charging you premiums like with your other insurance policies, but by charging the banks that...

COVER BY INSURANCE

Search This Blog