Buy Low Cost Life Insurance Policies
There are really two ways to look at low cost life insurance.
When we think of low cost life insurance we normally think about the low premiums we lay out.
Surely that makes sense but there is another way to approach the matter of cost.
We will discuss both approaches on this page.
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- Term Life Insurance
The policies with the lowest premium costs are term life insurance plans.
You have the option of selecting 5 year term, 10 year term, 15 year term, 20 year term, 25 year term and 30 year term. Two other low cost term policies are the yearly renewable term and the decreasing term life policies.
You buy these policies just in case you should die within the period the policies remain in force. Upon your death the face amount is paid to your loved ones.
When the policies expire, after the selected periods, there is no more coverage and there is nothing to get back. You have to die for your family to get anything.
This is really the best way to start a life insurance portfolio as there is little that you need to put out to guarantee your families protection.
- Permanent Life Insurance
Another alternative is to buy permanent life insurance. These policies include whole life, universal life, variable life and variable universal life insurance.
Although universal life is term based, it does have a cash value, for this discussion we will categorize it as permanent insurance.
When you buy permanent life insurance, the best known is whole life, the cash value plus the dividend equals the amount you put out at some point in the future.
Many get there by the time the policy gets to 20 years others get there years before. With non par whole life policies the cash value equal the amount you pay out at age 100 or whatever year the policies mature.
Now, if you consider the fact that at the point the premium equals the cash value your life insurance policy really costs nothing.
If your cash value is less in 20 years than you have put out take the time to divide the difference by the number of years you enjoyed the coverage you will find that the actual cost is less than term insurance costs.
You can therefore consider permanent life insurance as low cost life insurance coverage if you choose to look at it in the way described.
You can argue that you could buy term and invest the difference. You could and make a fortune with your investment but on the other hand you may lose your investment. In a whole life policy the cash value is guaranteed.
The dividends are not guaranteed. The larger more established carriers usually pay a dividend though.
Think About Your Family – Buy Life Insurance To Protect Them