Many people neglect getting their life insurance plan in order. The reasons for the procrastination vary and can include thoughts about not needing insurance at this time, fear about not qualifying due to prior health issues, and of course, the cost.

While most agents will disagree, the truth is that there are times in your life when you probably do not need it. Keep in mind that these times are few, relative to the times when it is important for the financial peace of mind for your family.

The many available choices be confusing. Not all choices are easily understandable by the average person. Don’t worry: The secrets of life insurance can be unraveled. Your life insurance agency can be a great resource. Following is basic information you need to know:

Straight life insurance, also known as whole life or permanent, is set for life when you purchase the policy as is the death benefit. In general, the younger and healthier you are when you purchase the policy, the lower your premiums for the remainder of your life.

As long as you pay the premium, your beneficiary will receive the proceeds when you die. Straight life policies build up cash values that you can borrow or withdraw if needed, but this will reduce the amount that will be paid to your heirs, if it is not paid back.

Annuities are a type of coverage that not only has a death benefit, but also a life benefit. It can create a stream of income for you while you are still alive. There are several types of annuities, but there are two basic types; fixed and variable.

A fixed annuity pays a fixed yield and has pre-determined payout to you while still alive depending on the date that you annuitize the policy and how many years the insurance company estimates you will live to collect those payments. You also can elect to pay a fixed payment monthly in exchange for a fixed monthly benefit for a specified period of time.

A variable annuity performs in a similar way, but can potentially pay much better benefits because your premiums are invested in the stock market. You have the potential to earn or lose money just like a regular investment. Your actual monthly payout, should you decide to annuitize depends on your success with your investments. There are also other choices available with annuities, but you should talk with an agent for more explanation and discussion about whether or not this is a good route for you.

Perhaps the most popular is term life which is the easiest to understand. It is also the most economical. Term life is for a specific period of time (example 10 years) and will pay to your heirs only if you die during the term of the coverage.

Young families can purchase a high amount of coverage relatively inexpensively to ensure that young children will be taken care of in the case of the death of one of the parents. Term life insurance does not build cash value.

Burial coverage is self explanatory. It is meant to pay funeral costs.

Mortgage life insurance is like term coverage but usually more expensive. The purpose is to pay off the mortgage in case of the death of one of the borrowers on the mortgage. The value declines at about the same rate as the mortgage balance declines. Inexpensive term insurance, which retains a consistent life amount through the term of the policy, is a better value.

For more detailed information about what type of policy would be best for your situation, it is always advised that you do your own research, and of course, check with an agent who can address your concerns.

In the San Francisco Bay area, call on Stoneridge Financial for advice and assistance with life insurance and other insurance related investment products. Powered by SEO 2.0 Services