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A Quick Guide To Life Insurance Quotes

The death of a parent is always tragic, but for families with school-aged children, or families who depended on the salary of the deceased, the death may become a financial nightmare. Those left behind may be unable to pay their bills, unable to pay their mortgage, and, in the long-term, unable to pay for college. Parents, and others, who have dependents, should consider obtaining life insurance quotes, so that their families will receive a death benefit, in the event of a tragedy.

Term coverage is the most common, and most basic, type of policy. For a specific period of time, term insurance will pay out a death benefit, if something happens to the policy holder. If nothing happens during the specified term, the policy expires. Throughout the policy term, policy holders will pay a specific premium, and may choose between level premium, or yearly renewable, policies.

A permanent policy covers a customer through the entire lifespan. Permanent policies also build up cash reserves, which are usually invested in securities, by the insurance company. Although permanent policies cost more than term insurance, the premium does not change over the life of the policy. However, policies accumulate very little cash in the first few years, due to commissions and fees. Many people surrender their policies within the first seven years that they are covered, and miss the opportunity to accumulate cash.

Variable and universal life are categories of permanent coverage. With variable policies, policy holders invest cash reserves in securities, choosing from a list provided by insurers. With universal policies, policy holders enjoy the chance to have varied premiums and death benefits, but administrative costs are higher. Also, with universal policies, cash reserves collect interest, but are not invested in securities.

Customers should think about different factors before making a purchase. The coverage amount should depend on income, the number of dependents, and the amount of debts. In general, customers should multiply their annual salary by between five and ten times, and then take out that amount of coverage.

Medical exams are standard before policies are issued. Urine specimens, blood tests, a health questionnaire, and a blood pressure reading are common requirements. If medical history necessitates it, insurers will ask for an EKG or other tests. For the customer's convenience, the exam may be conducted in the comfort of a home or office.

A customer's ratings class determines a policy's premium. The ratings class, or risk category, is based on underwriting guidelines and health history, as well as on the results from the medical exam. Ratings classes include Preferred Plus, Preferred, Standard Plus, Standard, and Substandard.

Customers will keep costs down if they avoid suggested riders, when obtaining life insurance quotes. The only rider worth purchasing is the waiver of premium rider, which suspends premium payments, if the customer becomes disabled. Policies were never meant to become investment vehicles, and parents should cover themselves, before covering their children. All in all, choosing to purchase a life insurance policy may be one of the most important decisions that a person will make, for the good of his or her family.

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