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Affordable Life Insurance Basics: Know What Your Policy Covers?

Before you plan to invest in any insurance policy, whether it’s a car, health, or life insurance, you will be informed that your policy will cover the respective things. But that’s not true. It’s said that car insurance covers your complete car.  In reality, it only pays for some repairs that fall under the coverage terms. Likewise, a health insurance policy doesn’t pay for every sort of treatment. Now, coming to life insurance- it applies for life insurance policies as well. Therefore, one must look for an affordable life insurance policy that suits best according to your needs and budget limits. 

Life insurance, as the name suggests, it covers your life. It’s one of those common answers that you’ll hear from insurance agents who suggest you buy the best life insurance policy. Does it cover all aspects of an individual’s life? It’s a good question, and if you are planning to get life insurance policy at affordable price in USA , you must be aware of things that your policy covers to get the maximum benefits.

What This Article Covers?

  • What an affordable life insurance covers and what doesn’t
  • How to get life insurance quotes that suit best with your needs

So, let’s get started!

Before knowing what your policy covers, let’s have an idea of life insurance cover!

In simple terms, life insurance is like an agreement between a policyholder and an insurance agency where the policyholder agrees to pay the premiums, and if the policyholder dies, then the agency will give some cash value called death benefits to the beneficiaries.  

Well, it’s more than that. Different policies work differently. If you had taken term life insurance coverage, your beneficiaries will get protection only for a limited duration, depending on how much time was selected while taking the policy. On the other hand, if you had invested in permanent life insurance coverage, there are no time limits as the name suggests it lasts for a lifetime. 

What an affordable life insurance policy cover?

Your policy will cover death benefits – it doesn’t matter which coverage you have, but different policies cover different things. So, one needs to be very careful to select an affordable policy to covers their needs.

  • Some policies such as universal or whole life insurance policy offer cash value that helps the policyholder build their finances.
  • Disability Insurance, it’s one of the other types of protection that a life insurance policy covers. It covers a small portion of one’s income to offer assistance if the policyholder is not in the condition to work in the future. 
  • Many of the best life insurance policies  allow the policyholder to have ‘riders’ or ‘provision’ options to claim coverage benefits before death. 
  • You must be aware of the fact that the death benefit payout falls under the income-tax-free category. Therefore, a policyholder can use their policies to transfer some of their amounts to the beneficiaries with fewer tax liabilities.  

The best life insurance policy allows beneficiaries to have death benefits for death caused due to accident, illness, or natural causes. 

If one talks about a health insurance company, it may not cover all types of medical treatments and doesn’t offer benefits against some caveats, which are listed below. But, it’s hardly possible that a good life insurance company will deny paying death benefits claimed against an active and paid-up term or permanent life insurance coverage, no matter what’s the reason behind the policyholder’s death. 

Illness and Natural Causes:

If you have paid all your premiums on time and your coverage is active, your beneficiaries will receive all death benefit payouts covered in the policy, if you die. It will not matter what’s the reason behind the death – it can be anything, a disease, cancer, heart attack, or even old age. 

Caveat: If the policyholder has gone through any life-risking health issue before buying the policy, then that particular case will exclude from the list of case covers the claims for death benefits. However, the policyholder will get prior information about this condition before he/she chooses to buy life insurance policy at affordable price.

Accidental Death: Your beneficiaries can claim death benefits if the accident is the reason for your death. It may be anywhere at the home, office, or on roads. Even some good life insurance policies also cover accidental drug overdose cases under the coverage policies. 

Caveat: This case is applicable only for a limited type of insurance coverage. Health insurance companies will pay death benefits only if it’s covered under accidental death cases and dismemberment. Other than this, beneficiaries will not be eligible to claim death benefits if the policyholder dies due to a natural cause or disease.

Suicide: All suicide death cases are eligible for death claims. 

Caveat: All the best life insurance policies states that they are not liable to pay any claim against death due to suicide for at least the first two years. Therefore, if you know someone from your family with a life insurance policy who struggles with depression or suicidal thoughts, you must contact National Suicide Prevention Lifeline. 

How to get life insurance quotes that suit best with your needs?

Once you are aware of your needs, the next task is to start thinking about getting affordable life insurance quotes. In this support, you can refer to any of the following rules to estimate your coverage amount. It will help you get affordable life insurance quotes.  

Multiply Your Income By 10

It’s the oldest rule that you use for calculation ideas. This method will help you and your family get an idea of the approximate amount. But, it doesn’t include your family’s expenses and needs. Therefore, it’s recommended to try the formula given below for an exact idea.  

Multiply Your Income by 10, and Add Expenses for Your Child’s Education 

This approach is as simple as the point mentioned above. But, it will help you get an approximate idea of the expenses to require for your child’s education. You can choose a policy that allows your child to have the education they want without worrying about the expenses. 

Try DIME Formula For More Accurate Calculation

This formula covers four significant factors that one should consider to have a detailed estimation of your life insurance perquisites, can ask for life insurance rates accordingly. Now, let’s understand what DIME stands for. It’s Debit, Income, Mortgage, and Education. Now, for calculation, sum up your debts, mortgage, and your child’s college expense, plus your total annual income for the number of years you want protection- the result gives you an approximate idea of the coverage amount. 

Conclusion:

We hope that now, you must be aware of affordable life insurance’s basics, policy coverage aspects, and some tips to get life insurance quotes accordingly. Consider these factors to get life insurance policy at affordable price in USA in no time. However, if you wish to get free quotes from one of the best life insurance companies of 2021, then contact Insurtika now. Our experts will suggest the best policy and competitive quotes for free. 

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