Wheeling, IL (PressExposure) October 29, 2010 -- Life insurance is one of the most important components of a family’s overall financial plan. For that reason, it is important for consumers to develop a thorough understanding of how life insurance works. AccuQuote, a leader in providing term life insurance quotes to people across the United States, provides answers to consumers’ top five frequently asked questions about life insurance.

“Life insurance, in its simplest form, is income protection against the economic loss of a loved one. But there’s so much more to understand than that,” says Byron Udell, founder and CEO of AccuQuote. “When shopping for life insurance, it’s not just about the coverage, but the right type of coverage for the right length of time at a price that fits within your family’s budget.”

AccuQuote has the answers. The following frequently asked life insurance questions and answers will help consumers shopping for life insurance make educated decisions when it comes to protecting their families’ financial futures.

1. How much life insurance do I need? – Most consumers have some type of need for life insurance – the challenge is figuring out how much. Life insurance experts usually recommend having 10 to 20 times one’s annual income in life insurance coverage; however people have very different needs. For instance, two people who make the same income but have children of different ages will require different coverage amounts. The person with young children will need more life insurance while the person with older children may require less. AccuQuote’s term life insurance calculator can help consumers determine their life insurance needs quickly.
2. How long do I need the coverage? – As economic conditions change, so does a person’s need for life insurance. The length of life insurance coverage depends on a family’s overall financial plan, including their existing and future financial needs. “If the goal is to buy the life insurance to help your family pay the bills, cover the mortgage, help your kids through college or protect your income until you retire, you may only need temporary coverage for 20 or 30 years, depending on your age, kids’ ages, outstanding debts, etc.,” says Udell. “On the other hand, if you need life insurance for estate settlement purposes, you probably need lifelong coverage.”
3. What type of life insurance do I need? – After determining how long the life insurance is needed, choosing the type of policy is easy. Individuals in need of temporary coverage should consider term life insurance. Those looking for lifelong protection with a cash value element should consider permanent life insurance.
4. How much does life insurance cost? – Price is determined by several factors, including face amount, term length, type of life insurance policy and the applicant’s rate class. Permanent life insurance is the most expensive type of coverage because it offers lifelong protection with a forced savings element. Term life insurance is extremely affordable. In fact, term life insurance rates are near record lows, costing as low as $1 per day.
5. What is a life insurance rate class? – A life insurance rate class is a category determined by the life insurance company that describes certain health and lifestyle risks. There are four common rate classes; preferred plus, preferred, standard and substandard. Preferred plus encompasses individuals who are healthy and do not use tobacco. Those in the substandard rate class typically have health impairments and a higher risk of dying due to health complications at any given time.

“Keep in mind, life changes and so do your life insurance needs,” says Udell. “Be sure to conduct a life insurance policy review regularly to ensure that your life insurance reflects your current lifestyle. For instance, having more children or buying a more expensive home usually indicates a need for more life insurance protection.”

AccuQuote’s licensed life insurance agents are available to answer more questions about life insurance at 800-4422-9899.

About AccuQuote

AccuQuote helps consumers find the best values in term life insurance by combining instant life insurance quotes online with the personal service of unbiased, licensed life insurance professionals who will answer questions, identify important issues and make meaningful recommendations. The company offers consumers an extensive selection of life insurance options, including term life, whole life, universal life, long-term care, disability and selected annuities.The website has many handy life insurance tools, including a term life insurance calculator to help consumers determine their life insurance needs, a glossary that explains industry terminology, a collection of articles and press releases that cover life insurance and personal finance and a blog that provides opportunities for discussion on various insurance and financial topics. For additional information or to get free quotes for low cost life insurance, call AccuQuote at 800-442-9899.

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