Life Insurance Quotes

Buying a new life insurance policy

08/05/11

Life insurance companies use a policy's expected yearly growth, or international rate of return (IRR), to estimate how much of a payout a policy will provide down the road. When shopping for a new whole life insurance policy, FOX Business states that it's very difficult for most people to figure out how much their life policy will actually yield twenty or thirty years down the road.

FOX Business recommends making use of a professional when selecting a policy. It says that life insurance providers often won't disclose exactly how IRR is calculated. Many times, insurers will use illustrations of how a policy will perform in the future, but won't take the time to explain some of the industry jargon consumers might not understand.

Vermont's former insurance commissioner, James H. Hunt, told the source, "It's impossible to know what you're getting into without hiring an expert."

FOX Business notes that whole life insurance policies perform best as long-term investments. In most cases, life insurance policies increase in value the longer they exist, meaning that the payout of one will be considerably higher thirty years from now than the same policy would be five years from now.

According to LIMRA International, only one-third of all Americans had an individual life insurance policy in 2010, the lowest amount in 50 years.

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