What Type of Life Insurance Gives the Greatest Amount of Coverage For a Beneficiary? There are many different types of life insurance available to consumers today. With the recent economic crisis, more consumers are turning to different types of insurance to protect their families. Finding the right type of life insurance can be difficult, but knowing what type of life insurance that you need can help make your search easier. This article will answer a basic question that many consumers who are looking for life insurance have: what type of life insurance is best for me? By answering this question you will be able to find the coverage that is best suited for you. One of the most common types of insurance is an investment product known as loan-to-value. Loan-to-value basically means that the amount of coverage provided by the policy is based on the amount of money that you owe on your home. Loan-to-value coverage limits the amount of coverage that the policy will provide. For example, if you owe ten thousand dollars on your home and your mortgage is at fifteen percent interest, your policy will only cover you for ten thousand dollars. If you owe five thousand dollars but your mortgage rate is only eight percent, your coverage will be limited to fifty thousand dollars. Another type of insurance policy that is commonly sold is cash value. Cash value policies allow you to add the cash value of the policy to your death benefits in order to increase the amount of death benefits that you receive upon your death. Cash value policies are usually cheaper to purchase than other types of policies due to the fact that they do not require you to take out a loan in order to pay the death benefit. Cash value policies also tend to have less strict guidelines as to the kinds of investments that are allowed under the policy than most life insurance policies do. Cash value policies give the insurance company more leeway in raising the benefit amount to better match the investment returns that you desire. The third most popular type of policy is called conversion. Conversion policies convert one type of policy into another, such as from term life insurance to whole life insurance or from renewable term life policies to universal life policies. They usually offer higher premium than other forms of policies because they require that you convert them rather than purchasing them anew. A single premium policy allows you to accumulate a cash value that converts into death benefits on a tax-deferred basis. Your death benefits remain constant for the life of the policy. Because premiums are lower for these types of policies, they tend to be more expensive. Another option that you have with what type of life insurance policy you choose is to purchase insurance coverage that pays out a benefit that is available to the surviving family members once you die. This type of policy often has a very low premium because the death benefits are not something you will be paying out until you cash your policy out. This option is usually only used as a last resort for a beneficiary and does not usually cover funeral expenses and taxes. It is recommended that you discuss this with your agent. Another question to ask yourself before asking the question of what type of life insurance you should purchase is whether or not you will need to change insurance companies at some point in time. Most people have both life insurance and annuities through their employer, which provides coverage for a term. However, if you have to change jobs or move, you may need additional coverage. You may want to consider having your home appraised so that you know what your payments will be based on your new dwelling when you start your new job. Getting this type of pre-settlement quote will help you determine what you really need for your policy. It may take some time for you to find the answer to the question, what type of life insurance? but short term car insurance 18 year olds is important that you find the answers before you make any decisions. Insurance is a complicated business. Not every company is as good as they claim to be. Getting a quote is just the first step in making sure that you get the right kind of coverage for your needs.
