Life insurance is purchased to provide financial support for your loved ones after you are gone. The two basic types of life insurance are permanent and term. Permanent life insurance is more expensive and will pay a death benefit when you die, whether you die at 35 or 95 years old. As long as you make sure you pay the required premiums, the policy stay in force. Term life insurance is a policy that lasts for a set amount of years, such as a 10 year, 20 year or 30 year term. Term life insurance costs significantly less money per month than a permanent policy. A 30 year term life insurance policy will cost more than a 10 year policy as there is a better chance you will pass away in 30 years than in 10 years. There are many hybrid types of life policies that will make your purchasing process very confusing. Be sure to visit with an agent you trust. He or she can explain the basics and then take you into the details of the hybrid policies and you will be able to decide which policy is right for you.
Be prepared to take a “paramed”, which is the term the insurance companies use to gather information regarding the state of your health. If already know you have cancer or any significant disease that will shorten your life, then it is too late to buy life insurance. You need to purchase life insurance when you are healthy, so this purchase takes some forethought. Don’t wait until it is too late! Back to the “paramed”, a nurse will usually come to your house and measure your height and weight, as well as collect blood and urine specimens. The insurance company will pay for this process as they want to make sure you are healthy before the promise to pay your family $500,000 if you die. The insurance company will also want to see your doctor records if the death benefit (amount your loved ones receive when you die) you choose is $500,000 or higher, or if you are currently treating for some type of illness. It can be a bit of a pain to buy a life insurance policy, but if you truly love your family, it is well worth the effort.