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No Load Life Insurance Explained

No Load Life Insurance Explained

There are so many options for life insurance policies that it can be very confusing and tricky to choose the best one for your needs.  No load life insurance is one of the many choices you have probably heard of, but like many people you may not be entirely certain what that means. To find out if no load life insurance is a good choice for you, it’s important to take a moment to understand how life insurance policy rates are determined and what is different about a no load life insurance policy.

The rates for your life insurance policy vary depending on a wide variety of factors, but the main few are your age and your state of health.  An older person will almost always pay more for life insurance than will a younger person, because the odds that the company will have to pay out on the policy before collecting enough in premiums are higher.  No load life insurance rates are calculated in much the same way as other policies as far as the base premium goes.  Your age and health are the biggest factors; but there is a major difference in how you pay for your no load life insurance policy when it comes to the fees charged by the agent or insurance company.

Tacked on to the premium of every life insurance plan is a fee that is charged by the agent or company; this is how the agent makes money.  A no load life insurance policy does not have this fee, or rather the fee is paid differently.  Traditionally, the fee is spread out across the months so that you pay some of that fee with every premium payment.  With a no load life insurance policy however, the fee is not tacked on to your premium.  Instead, you will pay a flat fee up front when you purchase the policy.

This can mean lower monthly premiums, but more cash out of your pocket up front.  While it is called no load life insurance by most companies, the truth is that it is more of a low load type of policy as there is still a fee to be paid.  In most cases, the choice of a no load life insurance policy will save you more money overall.

No load life insurance is usually a term policy.  This means that it has an expiration date based on the number of year you have selected to keep the coverage in force.  Term policies offer lower premiums than the other type, known as whole or universal life.  This can make life insurance more affordable to people who really only need to coverage for a certain period of time, such as the length of a mortgage or until the kids are grown up.

If you are interested in a no load life insurance policy, the best thing to do is sit down with your insurance agent and talk about the possibilities.  Your agent can help you to select the policy that best suits your needs and protects your loved ones, while still being affordable.

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