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This is not exactly what you call FAQ, but the most frequently asked question put forward by the perspective policyholders is whether they should buy a permanent life insurance policy or a temporary term life. Very few insurance clients however, want to know what should be face value of the policy. They prefer to concentrate more on the life insurance rates. If they find the rates within their budget, only then they will buy the life insurance policy. However, cheap life insurance rates do not always offer the best bargain. It is very difficult to answer the last question. One needs to understand the financial condition and the aspirations of the person concerned before deciding which type of insurance will suit him. One should ideally go through needs analysis for this. However, most of them do not want to disclose too many personal details and so whatever life insurance policy they buy is either recommended by or purchased by somebody they know. Ideally, you should buy permanent life insurance if your idea is to accumulate cash value. Buy it if you think that you will not require that amount within next twenty years. Buy a term life insurance policy if your aim is to leave a death benefit for your heirs at an affordable rate. However, if you think that you are going to need the coverage for more than thirty years you can try permanent life instead. Actually, hundreds of factors have to be taken into account before one can say what kind of life insurance is suitable for a particular person. Most people get totally confused when they have to decide on the exact amount of the life insurance. In you are a very young parent and you have three to four kids, you will need lots of life insurance coverage and be prepared to give out a huge sum in terms of premiums. As a parent, you will want to give maximum coverage so that your family does not suffer when you are gone and at the same time, you will want to get the cheap life insurance rates. These needs-calculators are software applications, which use various inputs like your yearly income before tax, percentage of income needed by your family along with various other factors like your age and the coverage term, annual inflation and annual interest rates etc. You can also use the rule of thumb, which says that you must multiply your monthly income before tax by 200 or your yearly income before tax by 15 to reach the magic figure. Although there is no savings benefits with term life insurance, you can expect cheap life insurance rates for this kind of life insurance. The younger you are; the lower are the life insurance rates. For example, a 40 year old male will have to pay approximately 10 to 20 times more term life insurance rates as compared with a 20 year old male. So, it makes more sense to buy the term life insurance policy when you are just in your early twenties. If you are working parents, then each of the spouses can have a life insurance. As I said, the younger you are the better. If you want affordable term life insurance rates, buy life insurance policy early in life, at least before you cross 35. Apart from that: 1. Quit smoking; smokers have to pay premiums at a very high rate. 2. Reduce your weight. Higher body mass ratio means higher rate. 3. Take care of your general health. Healthier you are, less likely you are to die within the term and so the term life rates are less. 4. Calculate the coverage period and the face value accurately to keep the rates low. Another way of reducing the life insurance rates is to apply for joint life insurance policy. This of course falls under the gambit of permanent life insurance policies. However, if you really want to buy the maximum coverage at minimum rate lead a healthy life, stop smoking and be health conscious. Other than that, fill up the quote form accurately and honestly. Read the fine prints and if you have any doubt, get it cleared. Once you receive the hard copy of the policy read it carefully. Note down the life insurance number, mentioned on the document separately and then put it away safely. Do not forget to let your beneficiaries know about it. They must put in the claim to receive the benefit.
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