Salmon Agency - Oviedo Insurance - Florida Auto, Home, Life

Life Insurance

Your Easy Guide to Life Insurance

Thursday, August 5, 2010

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Life insurance provides security to families in the event that a spouse and/or parent dies. However, making the decision to obtain life insurance requires serious consideration as the wrong kind of insurance can quickly become a financial nightmare for loved ones when it comes time to use the policy. Salmon Agency offers three forms of life insurance policies: term, and whole life and universal which are both permanent insurance. Here’s a brief description of each:

Term Insurance

This is the simplest type of insurance and it provides coverage for a specified number of years for a specific premium. In the event of sudden death, the beneficiary will receive the value of the policy. This type of life insurance has no savings or investment component to it; if the term ends and there is no death, you won’t receive any money back.

Whole Life Insurance

This is similar to term life insurance, but you purchase the policy to cover your whole life not just a set period. Premiums remain level throughout the life of the policy, and at least a portion of your premiums is invested into bonds, money markets or stocks. Some firms share investment proceeds with policyholders in the form of a dividend. Many companies will offer a relatively low guaranteed rate of return, but in reality pay at a rate in excess of the guarantee.

Universal Insurance

This insurance is intended to provide permanent coverage with greater flexibility in premium payment and the potential for a higher internal rate of return. The investment and the returns go into a cash value account, which you can use against premiums or allow it to build over time. With some policies, sometimes called Type I or Type A, the cash account goes toward the face value of the policy upon death of the policyholder. With a second variety, sometimes called Type II or Type B, the beneficiary receives the face value of the policy plus all or most of the cash account. While Type II is meant to provide a partial hedge against inflation, it demands higher premiums as you get older than Type I.

Guidelines for buying

The key to deciding which policy is right for you is to consider how long you would need it for. If you need it for less than 10 years, term might be the right choice for you. If you need it for more than 20 years, whole life or universal would be better options. The gray area in between is where our experts at Salmon Agency can help to determine which policy best suits your needs. A simple analysis can determine which life insurance policy is right for you and ensure that your family will be taken care of in the event of your sudden death. , Please visit our website and our team of trained professionals at Salmon Agency will assist you with obtaining the coverage you need.


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