September 7th, 2010 — life insurance
Term Life insurance is the most common type of life insurance policy written today. It is very unlike most of the other types of life insurance policies that are available. There are many reasons to purchase term insurance over any other life insurance policy. There are also many reasons, depending on circumstance, why term insurance may not be the right type of life insurance to buy.
Term Life Insurance is The Least Expensive Policy
One of the reasons why term insurance is so popular is because it is the least expensive type of life insurance policy. The difference in price can be extreme. Many whole life insurance policies can be as high as 10 – 20 times the cost of a term policy.
Term Life Insurance is Good For One Thing: Death Benefit
A term policy is unlike other life policies and more closely resembles other types of insurance, like health and auto insurance. A health insurance policy provides one benefit; supplies the insured with medical benefits if he gets injured. Term insurance is very similar to this. It will provide compensation to the beneficiary (the person who will receive the money) in the event that the policyholder dies. This is unlike other life insurance policies. Most life insurance policies come with some sort of investment vehicle or cash value option. Many life insurance policies are also great for estate planning. A term policy has none of the above-mentioned benefits. If the insured does not die within the agreed upon term, the policy ends. The insured does not get that money back or have any access to it.
Term Life Insurance Has An Expiration Date
The term can be defined as the amount of time until the insurance policy expires. Terms can range from as little as 5 years to as many as 20 years and even more. After the term is completed, the insurance policy is rendered null and void. This is the main reason why term policies are much less expensive. A non-term insurance policy can stay with a person until death, as long as he or she continues to pay premiums. A term policy, however, has an expiration date, and thus the likelihood of the policyholder dying within the specified time frame is much smaller.
July 27th, 2010 — life insurance
Life insurance protects your loved ones financially in the event of your death. There are various types of life insurance policies. An important part of purchasing a policy or any product would be first finding out the difference between them and buying the one that suits you best.
A few types of life insurance policies are as follows.
1. Term insurance: As its name suggests it is only good for a certain period of time. It is the simplest form of insurance, and is usually the most inexpensive form of life insurance. Here you get coverage for a particular period of time which is your term. This term could be 10, 20 or 30 years and can be renewed after the term expires. This type of policy does not have any cash value; the only way your family will get anything is if you die within the term. Every year a premium has to be paid, this covers the risk of death in that year. In the event of your death your beneficiary gets the money without any income tax.
2. Whole life: This type of life insurance is similar to term insurance but comes with a slight variation. In this case the policy covers your whole life and not just a particular period. The premiums that you have to pay will remain same through out the life of the policy. Some part of the premium gives cash value. You can borrow up to 90% of your policy’s cash value that too free of tax.
3. Universal life: This insurance policy comes with the advantage of higher earnings on savings. It is similar to whole life insurance, with only slight differences. It is very flexible in terms of premium; they can be increased or decreased as and when required. These policies offer a guaranteed return on cash back value. This policy has a drawback, the fees is usually very high.
4. Variable life: This policy is generally characterized by fixed premium. It also provides control over your policy’s cash value. Your cash value is invested as per your desires. If your investment choices are good then your cash values and death benefits will rise and vice versa. You must also keep in mind that fees for such policies may be even greater than the fees for universal life policies.
