Investing in Life Insurance Policies: Which to Choose

​Half a century ago, mutual fund companies used to offer only guaranteed life insurance policies. The provided options were limited to entire life policies, terms, or endowment. It was all simple until the 1980s where insurers started to offer attractive non-guaranteed strategies to compete in the market.

Guaranteed vs. Non-Guaranteed Policies
During recent years, businesses offered a wide range of life insurance policies, both guaranteed and non-guaranteed. Guaranteed policies are where contracts are honored, which guarantees death benefits after having made the required premium payment, despite the insurer knowing the possible risks. However, if expenses suddenly increase or investments fall, the insurer will have to be responsible for it.

In non-guaranteed policies, the owner is aware of the risks of investment, allowing the insurer to increase policy fees in exchange for a more affordable premium policy and higher chances of returns. If things fall out of order, the policy owner will have to carry the necessary costs as well as the expenses for a higher premium.

Term Life Policies
A term life insurance is a guaranteed policy. There is a set premium mentioned in the system. Every year, there is an annual renewable term policy with a premium that is slowly increasing. Level term policies typically have higher premiums at the beginning with fixed expenses for a specific period – ten to thirty years at most – which eventually becomes an annual renewable term with a bonus, depending on your age.

Permanent Policies
Permanent coverages are more complex. Variable, universal, and whole life can become extremely confusing, primarily because they can either be non-guaranteed or guaranteed. Because every permanent life insurance policy is hypothetical, they include ledgers that allow you to see what the policy’s probability would be beneath the assumptions of both non-guaranteed and guaranteed.

There are a few permanent policies that provide additional expenses for a rider to include the contract with the assurance of the plan not lapsing. Even with the cash value possibly dropping to zero, the policy is still guaranteed so long as there isn’t a delay in payment of the planned premium. Depending on the calculations used for both bonuses and plans, no-lapse guarantees can range from a couple of years to the age of 121.

Now that you are aware of the various life insurance policies, make sure to decide on one that suits your life plans. Having insurance is essential, not only for additional coverage but also for protection.

At Insurance Marketplace, Inc, we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays and we're here to help you out. Learn more about our products and services by calling our agency at (541) 779-0177. You can also request a free quote by CLICKING HERE.