We insurance experts often experience that while choosing a life insurance people gets confused in between whole life insurance and term life insurance. This is a common matter as people have lack of knowledge about these insurance policies. But people sometimes say we know about whole and term life insurance, one is permanent another one is temporary. Yes, they are right of course but it is not that simple. Before choosing the right policy for yourself you must understand your condition first. There are a lot of things that matter when it comes to choosing the right policy for you. Whole life insurance is also known as permanent life insurance.
We also have observed these, sometimes that you think the right policy for you, is not the right policy for you. This is not what you want for future or right this moment. Insurance is a two-way business. The insurance company has to be profited by this deal. Actually, it is a place where both parties have to come to a common ground of interest. The insurance policy is not only for your betterment but also for the insurance company.
We see they have lack of information and knowledge about policies and yet they apply for them without proper paper or way. A lot of insurance policyholder gets a bad policy because of these lacks of information and knowledge. Hence, now you may ask about the main factors that matter the most in an insurance policy. Every type of life insurance policy has different kinds of demands. But there are some common factors that you will find in any kind life insurance policy. Here I will discuss the main factors of permanent life insurance policy.
Age and Physical condition
Most important factor in life insurance is age. The younger you are the more you are suitable for the insurance company. Nowadays, people over 50 years of age is not considered as an old person but in the insurance world, if you are a 50 years old person then you will be considered as a senior person. You have to keep it in mind that commonly people live life for more than 80 years in the USA. So you can see how strict age in an insurance policy is. Yes, they will give you the life policy even after you are 50 years old. It’s not like that you will not be able to get any life insurance. But you have to go through a lot of medical exams and tests. Your previous medical history is also important to them. You will have to certainly go through some medical check-ups. People over 80 can get life insurance depending on their physical conditions and financial statement. It is obvious that you should go for no exam insurance if you are an old person. Especially if you have a health condition, a smoker or an alcoholic you must avoid the medical checkup.
Age and health have a very close relation.
You May Say Why is That So?
Then the answer is health has a close relation with age. With ages, there are different physical problems we face. So, it is very common for the insurance companies to put age and health as the most important factors of insurance. We try to lead a healthy life but the truth is very few of us follow the rules. A lot of us are chain smokers and it is a bad thing for an insurance policy. Non-smoker gets some benefits from the insurer. The Same condition applies for alcohol. Hence, if you are in a good health condition and not a smoker you will get benefits in insurance policies by the companies, you will get that even you are more than 50 years old. If you have a physically bad condition you must apply for granted life insurance. But health condition has a huge impact on insurance deals. It can give you a low premium or a high premium.
Your current financial statement is very important to the underwriters. Your current financial statement means not only how much you earn in year or month but also it is a total package of your financial planning.
So What They Look After in the Financial Statements
They will also see how much you earn in a year and also your financial condition as well as if you have any kind of debt or loan from any bank. Also, the payment of that loan is a fact here. Your total financial planning for future is essential for this deal. They will see how you plan yourself to see after 20 years from now and how will manage to pay the amount of premium of the insurance that you want. Most of the time client ends up buying less coverage than they need to have for their family or self. If you owned any real estate or any kind of investment, this information has to be in your financial statement. Your money saving plan and health insurance coverage is also a very important fact as it will give the benefit of financial stability and secure the expense of any kind of future medical emergency. The age of your kids and planning for their future education may do some good here. It can also matter if you will or can inherit some real estate or money from your parents or someone from your family. It can make a little impact of insurance.
There are some other factors also like do you already own one life insurance or not. Some people have multiple life policies. But this will not be a bad thing also. Some may buy an insurance policy and terminate it. They can also buy a new insurance policy.