You need a fair amount of research to determine the best life insurance policy for you. First of all, you need to know the basic categories of life insurance. The basic categories are term life insurance and whole life insurance, a type of permanent life insurance. If term life insurance is decided to be suitable for you to go ahead, you can then evaluate the different insurance companies that provide this type of life insurance. If you find permanent policy to be the right choice for you, you should review the different types of permanent life insurance policies that are available and them move to research on the companies.
To help you in your investigation, Quickhealthinsurance provides with the following comparison of permanent life insurance and term life insurance. The chart is a compilation from comparison information as provided by the State Farm Insurance web site:
- Coverage - Specific “term” or period of time (for Term life insurance) | As long as you are alive (for whole life insurance).
- Best suited for - Short-term goals (for Term life insurance) | Long-term goals (for whole life insurance).
- Financially best for - People with limited budget (for Term life insurance) | People with better financial means (for whole life insurance).
- Premium - Cost is low, but increases on Renewal (for Term life insurance) | Higher cost, but remains steady for entire policy (for whole life insurance).
- Money that can be Borrowed - Does not earn cash value (for Term life insurance) | Tax-free cash value can be borrowed; decreases the death value (for whole life insurance).
- Death benefit - Death benefit for specified time Period (for Term life insurance) | Death benefit for the whole life (for whole life insurance).
- Cash Value - No accumulation of cash value (for Term life insurance) | Accumulation of cash Values on tax-deferred basis (for whole life insurance).
Other points regarding life insurance
There may be some instances where a combination of both term and permanent insurance policies gives the best result for you. Again, it also needs to be noted that term life insurance which many prefer due to their financial situation and needs may later be converted to a permanent life insurance policy at any later time till the age of 75. Hence, if you like to get permanent life insurance, but your financial situation stops you from affording it, you can go ahead with term life insurance now and later converting it to a permanent life insurance policy.