The best way to find the right life insurance policy is to compare the benefits and costs of different plans. To do this, you need to understand a few key terms. These refer both to the types of life insurance available and to various details you sould pay attention to when looking at policies.

Term life insurance: Term life insurance expires after a set amount of time. This is a very popular form of insurance because it is cheaper than other types of insurance. 

How to Understand Life Insurance Options

Permanent life insurance: This is insurance that lasts until you die, as long as you keep up with the monthly payments. It is more expensive than term life insurance and includes a cash value component. 

Whole life insurance: This is a type of permanent life insurance that includes a cash value component with a fixed interest rate.

Tax-deferred: If a life insurance policy is tax deferred then you do not have to pay taxes on it until you withdraw the cash value.

Death benefit: This is the amount that is paid to your beneficiaries if you have a life insurance policy when you die.

Beneficiary: These are the people who receive your death benefit. They usually are your dependents, such as your spouse and children but they can be anyone hat you select.

Premium: This is the regular bill that you pay in order to maintain your insurance policy. Usually premium payments are due every month.

Cash Value: This is a savings account that is included in permanent life insurance policies. It functions like a savings or investment account and becomes tax-deferred over time.

Now that you can identify these key insurance terms, it will much easier to understand the best type of insurance for you.

By Admin