by wallyg
A permanent life insurance policy is actually an investment policy that also provides life coverage and remains in force through out the life of the policyholder unless he fails to pay the premiums when it is due. There are different types of permanent life insurance policies. Following are some salient features that are common to all of them:
• The policy remains in-line until the payout, unless it lapse due to non-payment of premiums.
• The insurer cannot cancel the policy for any reason other than fraud in application.
• The policy builds a cash value
• That age of the policyholder at the time of purchasing the policy is one of the variables that determine the insurance rates.
This is one reason why permanent life insurance is more expensive—because they pay death claims. Most people buy term life insurance for temporary needs and some buy permanent life insurance for permanent needs. There are some people who feel like converting their term life insurance policies to permanent life insurance policies. For these needs, the people who have the term life insurance policies, need to check if they have a conversion option attached to their term life insurance policy. If they have it, they can easily convert their term life insurance policy into a permanent life insurance policy.
The permanent life insurance, on the other hand is later addition. It was introduced because people started resenting the idea of paying premiums for long and then getting nothing out of it. Such policies have a cash value that generally increases with time and is not confined to a particular term. The beneficiaries receive the death benefit, whenever the policyholder dies.
It is to be noted that this division is not exclusive but are easily convertible. A term life insurance can be converted into a permanent life and a permanent life into a term life. Also note that the permanent life insurance can be divided into a few subcategories, the whole life, universal life are few of them. Term life insurance rates are generally lower than permanent life insurance rates, but if it has the conversion option attached to it, it will be slightly higher, yet much lower than the whole life or universal life.
Now, why should one want to have such options attached to it in the first place? To understand it you must realize why one buys a term life. As you already know, a term life does not have cash value and is limited to a fixed term. It means that the beneficiaries get the death benefit only if the policyholder dies within the set term. Neither he nor his beneficiaries get anything if he outlives the policy even for a day. In other words, he looses all his money if he does not die within the term. This happens in 99% of the cases. People buy it only if they are short of cash and cannot afford the higher rates of the permanent life. Therefore, it is natural for them to want to convert their policy into more fruitful permanent life whenever they gain the means to pay the higher rate.
How does the conversion factor help you? Why not buy a new permanent policy instead? Well, if you have the conversion option you will not be buying a new policy, but will just be converting it. Therefore, you will not have to prove your insurability and will automatically belong to the same health class that you were in when you first purchased your term life insurance. This will give you a mileage over new policy. Of course, you will have to pay at higher rates, but the rates will not be as high as it would have been if you bought a new policy.
If you are wondering if there is a medical examination required, then you can breathe a sigh of relief because there is no medical examination needed at the time of conversion from the term life insurance policy to the permanent life insurance policy. In addition, you will not be asked any medical questions when you are converting the term life insurance policy to the permanent life insurance policy.
Few of us are lucky to come across such dedicated life insurance agents. We should try to gather as much knowledge as possible on our own. Learn about life insurance in general, about the particular policy you are going buy predominantly. Do not hesitate to ask questions. If you agent cannot answer your queries, get a new one. Alternately, contact some life insurance consultants, whose job is to advice, not to sell policies.
When you are searching for cheap term life insurance quotes on the Internet, make sure to keep all the above tips in mind. For more tips on how to select the best cheap term life insurance quotes, you can log on to some good life insurance websites. On the good life insurance websites, you can:
o Learn the basics of life insurance
o Get cheap term life insurance quotes
o Ask questions to experts
o Share your experiences
Cheap Term Life Insurance | Life Insurance | Critical Insurance | Non medical or medical Insurance everything is available under one roof. With lowest rates in Canada. Punjab Insurance guides you to have one as everyone needs to plan future.
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