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Choosing a life insurance policy is a complex decision, so it is important to research each option and consider your needs.

Let's go straight. When it comes to getting a life insurance policy, there are two types:

• Life insurance covers a fixed term, usually 5 to 30 years, as long as you pay the premiums. If you die during that period, your beneficiaries are paid. If you survive when the policy expires, your insurance coverage ends. You no longer pay premiums and you do not receive a refund from your insurance company. A convertible term policy allows you to switch to a life insurance policy when the insurance term expires, but your premium will increase.
•  The insurance covers life for the rest of your life, and the insurance pays the beneficiaries. A variety of whole life insurance includes direct life, whole life, change of life and change of life / all inclusive. Talk to your certified public accountant or insurance professional for more details. Contrary to the politics of life term, these policies have an investment component. Your premiums include not only the cost of insurance, but also an additional amount invested that increases tax-deferred for the life of the policy. You can borrow against this amount, and any loan will be deducted from the benefit recipients receive when you die.

3 questions to ask about life insurance

Choosing a life insurance policy is a complex decision, so it is important to research each option and consider your needs. Here are three basic questions to address.

1. How much does it cost? The monthly premiums for a life insurance policy are generally lower than the monthly premiums for a life insurance policy. However, one of the concerns is that if you want a new term life policy when the old policy expires, you may have to pay more because the life insurance premiums are based on At least in part due to your age and health . Suppose you buy a 30-year life insurance policy when you are 30 and the term expires when you turn 60. At this point, the premiums on a new policy are likely to be higher since it is higher and you may have more. health problems than when you bought the first policy. Long-term premiums should stay the same throughout the term, but may decrease with the reduced-term policy.

The monthly premiums for a lifetime policy are usually much higher, but these policies don't expire, so you won't pay more for insurance in the future. When you die, your beneficiaries receive the monetary value of the savings you have accumulated over time.

2. What are my goals? If you want to use insurance to give your heirs a certain amount at the time of your death, the most reliable option is whole life. Remember, however, that insurance is not your only investment option and that you may get better returns from another investment instrument, such as stocks, bonds, or a wide range of other investments. Research your other investment options to see which one you think will work best and provide you and your heirs with the best return over time. The main question you want answered is which option will give you the most flexibility and leave your heirs the greatest legacy, if these are your goals.

Life is often a good option to replace your income if necessary for a certain period. For example, let's say you want your family to get $ 200,000 to pay off your mortgage or send your children to college in 25 years. You know this will be difficult if you die in the meantime and lose your income, so you buy a 25-year life insurance policy worth $ 200,000. When the policy expires, you may no longer need life insurance, because it will pay for your mortgage and college costs and there will be other investments for retirement or other necessities over time.

3. How do I choose an insurance company? Companies like A.M. Best, Fitch Ratings, Moody's Investors Service, and Standard & Poor's Ratings Services rate insurers based on their financial stability. These classifications can be found on the Internet. You can also check with your state insurance company for information on complaints filed against various insurance companies. Make sure the company has a good variety of options for the type of insurance you need and that its prices compare favorably with other options.