Life insurance is a topic that many people would like to avoid, yet it could be one of the most important forms of insurance to have. Planning for life insurance is not always easy. You have to keep an eye out for scams, understand which insurance policies are right for you, and choose an insurance provider, among other things. This guide will help you cut through some of these obstacles, by using the Web to teach you about life insurance basics.
Life insurance is a way for you to provide for your loved ones in the event of your death. There are many different life insurance options, and many ways for you to designate how, when, and to whom, your life insurance benefits will be paid. This section will give you a better understanding of what life insurance is and how it works.
- When looking for definitions or explanations you can always try online dictionaries or encyclopedias. We recommend that you use reference tools specific to your topic as they'll often provide more than basic definitions and may be able to explain terms that more generic resources leave out. Try Investopedia for insurance-related terms such as "life insurance".
The Motley Fool
has a "Life Insurance Center" that provides a balanced look at the issues surrounding life insurance. Here you'll find introductory information dealing with what life insurance is, and why it's important, along with more sophisticated articles describing how to compare, contrast, and ultimately select plans.
has a chapter all about life insurance. Here you'll find short, informative descriptions of the different types of life insurance, factors to consider when buying life insurance, and even how your health might affect the cost of your life insurance.
provides a "Net Worth Calculator" in its "Estate Planning" section. You'll also find articles about estate planning issues such as "The Grandparent Tax," as well as information about life insurance, charitable giving, and even a worksheet to help you figure out how your estate will be taxed.
There are no one-size-fits-all life insurance plans; each consumer has different needs, and each should thoroughly evaluate his or her options to ensure a policy fits. The resources below will help you decide if life insurance is right for you, and if so, what type of plan will meet your needs.
- An insurance salesman is not necessarily looking out for your best interest; he's looking for your dollar, so look critically at each policy, research arguments against specific plans, and be the one with the final say before buying a policy. A good example of salespeople pitching unnecessary products is the common practice of selling young workers, freshly out of college with no dependents, life insurance policies.
- Life insurance fraud on the part of the agent is always something to be conscious of. Use these tips provided by InsWeb.com to know what mistakes to avoid, and what signs to be cautious of.
- Life insurance is a sticky issue, and it can be hard to know how to reconcile what you need with what you get. Ken and Daria Dolan, hosts of a nationally syndicated financial radio show, and creators of Dolans.com, have an article entitled, "Straight Talk on Life Insurance: Here's the Truth About What You Need", that attempts to cut through the issue in plain language.
To help you decide if you need life insurance coverage ...
The Simple Dollar
is a blog written by an average Joe who's overcome a "financial Armageddon," and in the process learned a lot of practical lessons about personal finance. In this post he recounts a conversation with a friend working as an actuary for a life insurance company, who offers interesting pieces of advice about how much life insurance one actually needs (or doesn't need).
To help you choose the right kind of life insurance ...
abounds with information about life insurance. For those in the early stages of research, refer to CCH's tables
comparing different plans. There is also a great breakdown of the term versus cash value life insurance debate (a debate you'll see recurring in your research).
has a life insurance section with plenty of articles comparing different types of life insurance and explaining how they work. Here you'll also find calculators
to help you compare life insurance returns by type of policy.
has an article, "Which Life Insurance is Best?", that could help give you an idea of which life insurance will suit your lifestyle and financial situation.
To determine much coverage you need ...
at MSN.com has a "Life Insurance Needs Estimator" that will help you figure out exactly how much life insurance coverage you'll need. This step-by-step calculator will help you consider expenses such as your funeral, college funds for your dependents, possible years that your family may be without income (if you are the sole breadwinner), any life insurance policy you may currently have, and so on.
has a worksheet for helping you estimate the size of the policy you'll need. To the right of the worksheet you'll find links to other life insurance articles from the magazine that can help you choose a policy and maybe even save some money. Also worth a look for beginners is the life insurance glossary
For tax information ...
The Internal Revenue Service
provides this answer to a frequently asked question that explains how proceeds from life insurance benefits affect taxes.
So you know you want life insurance and you know what kind you want to buy—but who should you buy it from? These Web sites will help you decide which insurance provider offers coverage you need and has the services you require.
- If you are looking for life insurance, most insurance providers have Web sites where you can research policies and even compare quotes. A simple search using your favorite search engine will yield the provider's Web site.
- If you already buy another kind of insurance (homeowner's, health, etc.) you may save money getting life insurance through the same provider. Take a look at the Web site of your current provider for more information.
- Checking an insurance company's credit rating can give you a good idea of how strong the company is perceived to be. A provider with low credit ratings may offer a less expensive policy, but also may not be successful enough to last until someone actually needs your insurance policy to be there. Try Moodys, Standard and Poor's and Fitch Ratings for life insurance provider credit ratings.
For the basics ...
's "Life Insurance Made Simple" has a section "How Do You Get the Best Policy at the Best Price?" with tips on what to ask your agent.
has an insurance company finder that allows you to search for insurance companies in your area by financial strength ratings, or issuer credit ratings. You can narrow your search by selecting as many or as few options as you'd like (search only by state or country if you want a huge list of insurers). To view the ratings you will have to subscribe to the site (for free). To better understand the ratings, click on one of the menu options on the left toolbar (for example, "Ratings Definitions").
To report a complaint or an instance of insurance fraud ...
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