It is fairly common knowledge that everyone should have some form of life insurance, at least enough to cover the cost of their burial. In most instances, a person can find low cost life insurance that will pay most of the funeral expenses while not putting an extra burden on their finances during the final days of their life. However, before agreeing to pay monthly premiums for low cost life insurance, the individual needs to make sure their survivors will receive what they pay for.
While most insurance products are regulated by state and federal laws, there may be some providers of low cost life insurance that do not always explain the policies they sell to their insured customers. On the surface, it may seem direct that if the insured party dies, the company will pay the face amount of the policy to the beneficiaries. In reality, some of the low cost life insurance policies will include disclaimers requiring the policy to have been in force for a set amount of time before any pay out will be made.
People interested in low cost life insurance should also only deal with reputable companies. There have been a few companies that perpetrated a scam by selling policies and then disappearing and when the policyholders sought pay out learned the company was no longer in existence. Unlike universal life insurance policies, low cost life insurance generally is term insurance and builds no cash value for the future.
Add Savings Into Insurance Plans
Many financial advisors suggest people take a hard look at the return on their investment when looking into life insurance. The cash value of a low cost life insurance policy is typically limited to the face value, payable only upon death of the insured. Other types of policies may make money available for those who become disabled or simply want to cash in their policy, but most low cost life insurance policies do not include those options.
Despite some analysts suggestions that people buy low cost life insurance for specific terms and put money into a savings account, a larger percentage of insured people continue to use whole life insurance plans. Options are available however, as many companies that offer the whole life policies also offer a low cost life insurance plan to meet the needs of all of their customers. Some even suggest that once enough money has been saved to take care of expenses and survivors, even low cost life insurance may be too expensive.