Best Life Insurance

Selecting the RIGHT LIFE INSURANCE

Two quotes from Smart Money magazine: #1: Before you head to an insurance broker's office, you should be familiar with the pros and cons of each policy type. Insurance agents are notorious for their heavy-handed sales tactics (emphasis by editor at BestInsurance.com). Arming yourself with some knowledge ahead of time is the best way to make sure you wind up with the policy that's right for you... and #2: Shop around a bit to find a competitive rate. A broker could help you out, of course, but you also can do quick searches on the Web..

There are two basic types of life insurance:

• Term Life Insurance or Term provides life insurance coverage for a specified number of years (the term) for a specified premium (regular payments). The policy does not accumulate any cash value and may be cancelled (stopped) by the insured at any time.

  Term Life Insurance is generally considered pure insurance, where you buy protection for your heirs, dependents, or other beneficiaries in the event of your death but nothing else. After the term expires your payments stop, and all coverage ceases as well. Repeat, the policy does not accumulate any cash savings.

• Whole Life Insurance is life insurance that remains in effect until the policy matures (or pays out). The policy cannot be canceled by the insurer for any reason except fraud in the application, and that cancellation must occur within a period of time defined by law (usually two years).

  Whole Life builds a cash value or savings that over time reduces the expense, or risk, to the insurer. This means that a whole life policy can be very expensive compared with Term Life Insurance (see above). However you can access the money in the cash value of a whole life policy by: a) borrowing cash; or b) withdrawing cash; or c) surrendering the policy and receiving the surrender value.