Life Insurance - The Better Investment Plan

Everyone is aware that death is real and will definitely occur on some unknown future date. But despite this awareness, people strangely do not have the right life insurance policy so critically needed. Americans finding it tough to meet their essential expenses in today's downtrodden economy may think they can skip on life insurance. But families – that too with children - not having a life insurance policy are exposing their kids to a terrible risk if the inevitable happens. Investment in life insurance when you are single or a lately married person is a wise financial decision. The premiums will be low and the possibility of getting a 30-year term is feasible. As regards the quantum of life insurance you need to invest in, there are differing opinions. Some financial experts suggest you should insure for five to seven times your salary, while others insist it should be more. You can obtain life cover, education cover and post retirement benefits when you invest in insurance. Additionally, you can enjoy tax exemptions to reduce your current tax liabilities. For instance, you can invest in the insurance plans which offer not only life insurance, but also riders for investment of the premium amount - so that you get handsome returns when you retire. Life insurance policies are of three different types. Term insurance offers basic protection at a low cost. There is whole life policy that has an attractive savings component. The third type, the return of premium, may be defined as a hybrid of the first two. Finance professionals mostly recommend term life policies as they allow consumers enjoy maximum coverage at little cost. They can thereafter invest on their own the savings they obtain by avoiding costlier options. Term life is indeed the most affordable variety of life insurance. You can buy policies with larger face values than you could otherwise afford. Investing in whole life insurance policies has a host of advantages. The policy is permanent and there is no expiry provided you regularly pay your premiums - year in and year out. Death is simply inescapable and with a whole life policy, you know you are leaving behind something for your dependents. But, whole life policies are not cheap in view of the fact they build up a savings account ("cash value") that swells tax-deferred, and this can be tapped during retirement. Please remember that your death benefit will stand reduced by the amount you withdraw. Robert Miller, president of the National Association of Insurance and Financial Advisors, opines that term insurance is usually the best option. "I've always believed in insuring up to the point that you need insurance," he says. "You can do that with term insurance and it comes out to be far cheaper." There are however a few exceptional circumstances where whole life insurance is preferable. If you have children who are handicapped and will need financially dependence for their whole lives, you can consider the permanent coverage. Lately, there is a new type of life insurance that protects you with living benefits riders. The riders allow you to avail a part of the death benefit while you are still alive. It is designed to offer you financial protection if you are stricken with a covered critical ailment like heart attack, stroke, cancer, etc. Imagine a life insurance investment that combines the benefits of life insurance, disability, and long term care into one single policy. In a lighter vein, this is life insurance investment that you do not have to die to avail.