Term Life Insurance Explained: Term life insurance policies are popular because of their low cost and relatively long term of life insurance coverage. This type of Life Insurance Policy
provides a cost-effective way of getting maximum life insurance protection
for a set period of time at a fixed cost. The life insurance premium rate you pay for
term life insurance is guaranteed to remain the same low life insurance premium amount
for the duration of the term of coverage selected. Many life insurance
companies offer term life insurance policies for periods of 5, 10, 15, 20
and now up to 30 years.
It is important to understand the terms of any life insurance policy that you are considering before making a life insurance purchase. Term Life Insurance Policies
build no cash value. They pay a benefit only if you die during the term
of the life insurance policy coverage. If death occurs, the beneficiary collects the
face amount (death benefit) of the life insurance policy, free of income taxation.
Premium life insurance rates for renewals of these life insurance policies will normally increase at
the end of the guaranteed life insurance policy period. Term Life Insurance policies require that you furnish evidence of insurability at time of renewal to qualify for these life insurance rates.
Universal Life Insurance Policy Explained:
If low dollar outlay is your main concern, and your life insurance need is
for a period of 30 years or less, term life insurance may have an advantage. If your
need for life insurance coverage will last beyond 30 years, a Universal Life or Whole
Life policy may be more effective. Should your life insurance needs
change, many term life insurance policies carry a conversion privilege that will allow
you to convert your term life insurance coverage to permanent Universal Life or a
Whole Life policy without a medical examination. It is important to
check the conversion privileges of the term life insurance policy before you make your
purchase.
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Pros and Cons of Term Life Insurance:
Pros of Term Life Insurance:
- Life Insurance Premiums are generally lower than those for permanent life insurance.
- You can afford higher life insurance coverage when the need for protection often is greatest within a Term Life Insurance policy.
- Term Life Insurance is good for covering specific needs that will disappear in time, such as mortgages or family income needs for children.
- Term life insurance is an effective way to get the most coverage at the lowest cost for up to 30 year.
Cons of Term Life Insurance:
- Life Insurance Premiums are generally lower than those for permanent life insurance.
- You can afford higher life insurance coverage when the need for protection often is greatest within a Term Life Insurance policy.
- Term Life Insurance is good for covering specific needs that will disappear in time, such as mortgages or family income needs for children.
- Term life insurance is an effective way to get the most coverage at the lowest cost for up to 30 years.
- On most Term Life Insurance policies, the life insurance premium may increase after the guarantee life insurance period expires.Life Insurance Coverage may terminate at the end of the policy term or may become too expensive to continue.
- Generally, a Term Life Insurance Policy doesn't offer cash value or paid-up insurance.
Whole Life Insurance Explained: Whole life insurance policies provide lifelong protection and are known by a variety of names such as…
As long as you pay the necessary life insurance premiums, the death benefits will
always be there. Whole Life Insurance Policies are designed and priced
for you to keep over a long period of time.
Note: If you don't intend to keep your life insurance policy for the
long term, usually fifteen years or longer, whole life insurance may be
the wrong type of insurance for you.
Most permanent life insurance policies have a feature known as "cash value" or "cash
surrender value." This is a feature, which is not found in term
life insurance policies. The cash values of many life insurance policies may
be affected by your future experience, including mortality rate,
expenses and investment earnings. Keep in mind that with all types of
whole life insurance policies, the cash value of a life insurance policy is different
from the policy face amount. Cash value is the amount available when
you surrender a life insurance policy before its maturity or your death. Provided, the
cash value is sufficient, the face amount is the money that will be
paid at death or at policy maturity.>> Get
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Pros & Cons of Whole Life Insurance:
Pros of Whole Life Insurance:
- The Whole Life Insurance policy's cash value can be converted into cash or an annuity.
- A provision or "rider" can be added to a Whole Life Insurance
policy that gives you the option to purchase additional insurance
without taking a medical exam or having to furnish evidence of
insurability.
Cons of Whole Life Insurance:
- Required premium levels may make it hard to buy enough protection in a Whole Life Insurance policy.Premiums are generally higher than those for term insurance in a Whole Life Insurance Policy. Coverage
may cost more during the early years of coverage when the need for
protection is often greatest in a Whole Life Insurance policy.
- Generally costs more to cover needs that will disappear in time, such as mortgages or family income needs for children within a Whole Life Insurance Policy.
Various Types of Whole Life Insurance Explained:
Whole Life Insurance or Ordinary Life Insurance
provides a lifetime guaranteed death benefit; a guaranteed fixed
premium, and guaranteed cash values. These policies have the excess
earnings (if any) of the insurance company credited to your cash value
either as dividends or as excess interest. Similar to Universal Life
plans, your cash values can be used to pay future premiums, fund
retirement and college education, and provide emergency cash reserves.
Whole life typically provides the best investment rate of return per
dollar of premium. In summary, whole life is for the person who wants
guaranteed permanent coverage with a guaranteed premium for the rest of
their life.
Universal Life Insurance or Adjustable Life Insurance Explained:
Universal Life Insurance or Adjustable Life Insurance
is a flexible permanent product that allows a policyholder to design
his own plan. You can adjust your premiums from year to year, increase
or decrease your death benefit, and still accumulate savings with tax
advantages. Universal life is a popular first time permanent policy for
budget minded young families with changing needs. This plan is often
used as a low cost, level premium alternative to term insurance when
coverage is needed for many years. Since term insurance will eventually
have increasing premiums and often requires re-qualification by passing
a new medical exam, your term costs will ultimately become very
expensive. On the other hand, universal life will give you the security
of a guaranteed death benefit with a low, level premium.
Survivor Life Insurance (Second-to-Die) Explained:
Survivor Life Insurance
is a special plan covering two lives, typically a husband and a wife,
or business partners. These plans are designed to provide cash to cover
estate taxes or business liability, which have to be paid after both
people, have died. The survivor plan premium is often much less than if
individual coverage was purchased on each life. These plans can be
based on either whole life or universal life. We suggest that if you
are considering survivorship life you should speak to an Insurance
Advisor, and Get a Free Life Insurance Quote Today to secure a plan that is highly customized to fit your personal needs.
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