General Life Insurance: A Beginner’s Guide

By Rafael Onak, InsuranceAgents.com Staff Writer

While it is important for a policyholder to possess extensive knowledge of their coverage, familiarizing yourself with general life insurance facts is the first step in deciding on the most convenient policy for you. Choosing what type of life insurance coverage and company is right for you might seem like a daunting task at first, but as the saying goes, don’t judge a book by its cover. By spending an insignificant time of your day to learn general life insurance facts and comparing life insurance quotes by using our quick online forms you can drastically increase your chances of deciding on a policy that you won’t regret in the future.

Two General Life Insurance Policies

First and foremost, it is essential to understand the two general life insurance policies: whole life and term insurance:

1. Whole life. A type of permanent insurance, whole life insurance is a combination of life coverage and an investment fund. Typically, your premium and death benefit will remain the same while your whole life insurance builds cash value over time. The cash value is tax-deferred until you decide to withdraw it.
2. Term. With term insurance, you’re getting general life insurance that lasts for a set period of time provided you make the payments on time. Most term insurance policies offer premiums for 5, 10, 20 and 30 year periods and are renewable.

Things to Know about General Life Insurance

Before you choose whether whole life or term life insurance is the right policy for you, here are some things you should keep in mind about general life insurance:

• Whole life is expensive. Since it includes an investment component, whole life insurance is much more expensive than term insurance, sometimes five to 10 times more.
• Buy when you’re in good shape. Policyholders who are overweight and smoke typically pay a higher premium than fit non-smokers.
• Buy enough term insurance. Make sure you buy an adequate amount of term insurance to fill your needs. If you’re not protecting yourself with enough coverage, you’re only wasting your money.
• Don’t lie. Don’t lie on your application to get lower insurance rates. Sooner or later, the insurance company will sniff out your lies and cause you more headaches than you need.
• Take advantage of the Internet. By going on-line in the convenience of your own home, you can gather a wide array of general life insurance quotes to ensure you get the most affordable rates.

Put Your General Life Insurance Knowledge to Use

After familiarizing yourself with general life insurance facts, contact your local life insurance agent to come one step closer to finding affordable coverage. Ask a life insurance agent if you have further questions. By spending an insignificant time of your day to learn general life insurance facts and using our simple forms to compare life insurance quotes, you can drastically increase your chances of deciding on a policy that you won’t regret in the future.

Published: Monday 27th July 2009