Thursday, 29 December 2011

Advantages of a Whole Life Insurance Policy

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To begin, you must understand that life insurance falls into two very broad categories: Whole and term. The basic difference between life insurance and everything is as follows: A life insurance policy is unique.
In life insurance, as long as you continue to pay premiums, the policy does not for a lifetime is made. As the term applies, whole life insurance provides protection for life or until the person reaches the age of 100 years.
Whole life insurance accumulates a cash value (usually beginning after the first year). With whole life, you pay a fixed premium for life instead of the increasing premiums found in life insurance term. In addition, the life insurance has a cash value of the function, which is guaranteed. In temporary and all life, all of the premium must be paid to keep the insurance.

With level premiums and the accumulation of cash value life insurance is a good option for long-term goals. In addition to the protection of permanent life insurance is a life insurance savings element that allows you to create deferred tax money. The policyholder can cancel or abandon the whole life insurance policy at any time and receive the cash surrender value. Some life insurance companies may produce higher values ​​redemption guaranteed amount, depending on the loan interest rates and how the market works. Surrender values ​​of life insurance policies may be affected by the future of a life insurance company performance. In contrast to life insurance policies, which have guaranteed cash values, not guaranteed surrender values ​​of life insurance companies with variable capital. You have the right to borrow against the cash value of your life insurance policy on the loan. Supporters of the life insurance say the cash value of life insurance policy should compete well with other fixed income investments. 
Unlike term life insurance, life insurance provides a minimum guaranteed benefit at a premium that never changes.
One of the most valuable benefits of a life insurance policy is the opportunity to participate earn dividends. The insurance on the overall performance of its investment company based benefit of a whole life insurance policy. In addition, while interest rates for universal life insurance often set the interest paid on a monthly life insurance is adjusted annually. How many insurance companies, life insurance has many policy options. 

Monday, 26 December 2011

Survivorship Life Insurance

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Mr. and Mrs. X have an important heritage considering leaving a legacy to their children. As part of the process of planning, your financial advisor recommends they purchase a life insurance policy for survival.

Mr. and Mrs. Y have a son with special needs. They are worried about their financial security after they leave. His lawyer brought the idea of ​​a life insurance policy for survival.

The two couples decide to share more information about life insurance or life insurance, survival survival, and that is what they have learned to get.

Survivors' insurance life insurance joint survival or life insurance is a policy that insures the lives of two people, usually a wedding, but as a person.

Death benefits of a life insurance policy for survival are not paid to the beneficiary before the surviving spouse also dies. For this reason, life insurance of survival is known as the second die life insurance.

One of the main reasons couples buy the insurance for survival is to impose property taxes and other estate settlement costs. The policy uses marital deduction that allows you to defer payment on all federal estate taxes and death of the surviving spouse.

At this time all the taxes that have made on this important day to pay due to the appreciation of the property value.

This is where the insurance of the common survival stage. The proceeds of the policy will be used by the beneficiaries pay no property taxes, and meet other costs, eliminating the need to liquidate a portion of the estate.

The only drawback is that neither the few secure property rights can have on politics. The beneficiary of the policy must be a third party, as the couple's children insured or a trust.

About life insurance is purchased by couples who have children with special needs to ensure their financial well being. The product of the second to die life insurance to ensure that sufficient funds are available in the event of death of both parents are left for the child.

Sunday, 25 December 2011

Life Insurance - What is Universal Life Insurance?

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Many people are between the benefits and life insurance, whole life insurance provides intelligent. Enjoy the accessibility of imprisonment. They also love its flexibility. Temporary be canceled without significant penalty life insurance, and news began several different death benefits and higher amounts.

On the other hand, life offers something for protection against the risks non-life to death. The policy does not expire after a number of years, because the concept of life, so that consumers do not have to new reports. As a result, the cover can not be denied that in the future due to age or illness. Premiums will not increase. Because of these guarantees, but life is not flexible. The death benefit and the premium is determined at the time of signing the contract.

The solution for many people is a universal life insurance. Universal life has been described as a hybrid between the life and words of life, but this is a misnomer. Universal life insurance is a type of insurance for life. This allows greater flexibility and lower costs for traditional life, but shares characteristics of life: continuous coverage, premiums do not change for reasons of age or health, and the accumulation of value redemption.

The main difference between the life and words of life is the life of the hedge. With Standard Life insurance coverage is limited at a certain period of the term. At some point, either the coverage expires or insured. If the insured dies during the term, the death benefit paid to the beneficiary. If the insured survives the term coverage will cease at the end date of the policy. Some term life be renewed without physical examination, but premiums increase with age of the insured at the time of renewal. With a lifetime to continue indefinitely until the insured dies coverage. Universal life insurance shares this property with life insurance. Both are permanent life insurance forms.

A person can cover a number of life insurance policies for eighty or ninety. If an individual term life insurance is renewed or a new request, but the cost of insurance increases, due to increased mortality in the elderly. For example, for a 30-year term insurance for one 20 $ 500 000 years to life for only $ 245 per year, assuming he is healthy, do not smoke, do not participate in sports or extreme activities leisure and travel in dangerous areas of the world. However, serve a 60-year-old health and in similar circumstances, other criteria must always be at least U.S. $ 2,525 per year for the same 20 years $ 500,000 policies. At age 70, $ 10.680 per year will pay for the same policy. If a person develops health problems during the time that the expression of the life insurance premiums do not change. If the person does not have a term life insurance "renewable", then when the time and the person who made the request for term life insurance coverage, increase premiums significantly. If the person has developed or has suffered serious health problems such as cancer or a heart attack, he or she may not be insurable at all.

Not to increase the cost of the permanent life insurance policy over time or changes in health care. Coverage can not be completed, no matter what health problems have insured. Guaranteed insurability is the highest cost of permanent life insurance.

Another important difference between term life insurance and whole life insurance is that life offers saving features, while life is not the end. Term life insurance is "pure". It insured against death, and that's all. Life also insured against death, but also provides a mechanism for the accumulation of cash value or savings. Universal Life also offers saving features.

Early in the life of a whole life or universal life insurance, the cost of insurance against premature death is much less than the amount of the premium. Fewer benefits and rights of society - in a tax-advantaged savings account, the insurance company to file the excess. This amount is known as "cash value." These funds are invested by the insurance company. Investment income is credited to the account, which increases the current value. These funds are available to the insured in the form of a loan or withdrawal. If the insured cancels the contract, you will get the value of the money that the policy of "cash value."

Universal through the difference in the degree of flexibility of the life insurance policy should make adjustments. With whole life, the death benefit is determined premium and the value of the accumulation of cash at the outset. With universal life, the insured has the option to increase or decrease the amount of the premium (within certain limits) and increase or decrease the death benefit. For example, the policyholder can reduce premiums if the starting price priceless. If the insured wishes to accumulate or increase the death benefit plus the cash value, he or she may pay a higher premium.

Saturday, 24 December 2011

Term Life Insurance - Save Money the Smart Way

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Term life insurance is the simplest way to understand life insurance. In short, the insured person pays a minimal premium per thousand dollars of coverage on an annual, semi-annual, quarterly or monthly. If he or she dies within the term of the policy, the insurance company will pay the beneficiary the face value of the policy.

Features of life insurance

To better understand some of the features of term life insurance consider the following points:First, the term life insurance "pure insurance" because when you buy a term insurance that buying a "death benefit." Unlike other types of "permanent insurance" such as whole life, universal life and variable universal life energy capital, there is no additional set monetary value with this type of policy. Term insurance only gives you a certain death benefit.Second, the coverage is for a defined period (the "Term"), such as 1 year, 5 years, 10 years, 15 years, and so on. Once the contract is in force, it is in force, remain until the end of the period - assuming you pay the premiums, of course.Third, most term insurance policies are renewable at the end of the term. With what is known as "Level Life Insurance", the death benefit remains the same throughout the term of the policy, but as the insured gets older, the premium will increase gradually. Over time, the cost of a level term care insurance may be more than you are willing to pay for a single death. An alternative is the policy of "reducing term life insurance" in which the premium remains the same, but the death benefit decreases as time passes.Fourth, long-term strategies will be converted to permanent policies within a specific number of years. If you choose, it is important to obtain insurance coverage, converting may be something that should be expected. You can expect the accelerating cost of insurance premiums in the long run and convert your policy before the premiums become unaffordable. It is true that in the short term, the premium is usually higher than if you are with the long-term policy. But in the long run, this difference decreases due to the rapid acceleration of the term insurance premium as you get older. A permanent policy also accumulates cash value of the death benefit paid to your beneficiaries increased.

Popular applications of life insurance

Term life insurance is best suited if you want to protect your beneficiaries from a sudden financial burden as a result of his death. Some of the most common uses of term life insurance.Personal expenses, due to the death - If a family member dies or spouse's be direct costs. Many people buy a small political life care insurance, to cover these costs.Mortgage Insurance - Banks and financial institutions often insist that mortgage holders to maintain adequate life insurance to pay his mortgage. Such policies make the bank the beneficiary of the contract. If the mortgage holder dies before the mortgage is paid, the policy will pay. It is also a great benefit for the spouse whose purchasing power is expected to be reduced by the death of his partner.Business Insurance partner - will buy long term care insurance by employers, outstanding loans with their bank or shares used in the death of a deceased partner, if they had an agreement to do that. Most partnerships have an agreement of this kind, and insurance premiums are paid by the company.Key Person Insurance - When a company loses key individuals due to death difficulties for the company, which can often cause. Key person insurance is purchased by the company to a person as a "key." The company itself is made the beneficiary of the policy. So if a person is "key" dies, the company receives a cash injection to deal with problems related to the exchange of this person.

Get a term life insurance quote

Here are some things to consider when getting a life insurance quote:1 The cheapest rate is the lowest fare today not tomorrow. For instance, the cheapest premium today will likely be for a renewable annual policy. This policy is renewed every year and in that time the establishment of the premium. That's fine if you want to convert to a long-term solution (permanent insurance) in a year or two, or if you want a short-term insurance. But if you think you will need this insurance for a longer period, it would be better to commit to something like a political than a decade. This blocks the premium and death benefit in ten years. Not raise their prices until you renew.

Thursday, 22 December 2011

What Type of Life Insurance Policy Should You Get

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The main purpose of obtaining a life insurance policy is always to protect the people you love, in case something should happen. How much capital to pay debts, to support their families, or take care of all his affairs?

After understanding what the priorities should be protected from a life insurance policy is fairly easy to determine the right amount of coverage.

What type of life insurance

The next question is, what kind of coverage best suits your needs. To get the right amount of coverage also ensure that the premiums to fit comfortably within your budget.

Term disability insurance
Term life insurance is less expensive than life insurance because you hire an insurance policy. Your coverage is considered pure insurance, in this case, because they do not grow the cash value or participate in dividends from the company.

Instead, you can get the right amount of protection for lower premiums available. Term life insurance has also developed over the years to provide more comprehensive options. You can have a return policy premiums you pay over the term of the policy, but the insurance of all refunds of premiums at the end of the period.

There are also long-term strategies that you can provide to your age and health for the rest of your life, so you may have locked up the coverage and premiums for the rest of his life. This is an excellent and inexpensive way to get a permanent insurance.

How long should lock your premiums
The more you can lock your premium will be cheaper in the long run. The insurance company takes into account the risk of death during the term level. If you are 35 and get 20 political level and long-term fixed interest rate of up to 55 years. And because it is in the process of premiums at a younger age, the average risk and the prices will be lower than if you set the premiums on 55th

Most people need insurance that will last for the rest of their lives. If you can not permanently block a portion of your insurance at a younger age, it can greatly save on premiums. It happens very often that people need to seek new coverage after the fixed rate expires on your current policy, and because they are older now and have to pay much more in premiums.

Your health is also blocked in the first time you take the policy out. Many people are looking for insurance in the fifties and sixties that there is a kind of disease that makes the cost of the double or triple the cost of life insurance. The same logic applies to lock in your age is also good to keep in mind when you close your health. We do not know what will happen to us, and if we have locked in our secure and our insurability and premiums will not be affected by a medical event.


I always recommend always begin a long-term policy instead of a level to lower premiums and increase each year. Long-term policies, you can block his age and level of health for the rest of the time, while more expensive policy premiums increase each year based on their new era.

As term insurance is less expensive to get the right amount of protection means, I think this is the best choice for a large majority of people, life insurance.

Surrender value of life insurance policies: considering

First, a word of warning on the Functioning of the life insurance

An agent that suppresses a company on the other doing their clients a disservice. Each company has its strengths and weaknesses, and each company focused on certain demographic to try to create a competitive advantage. There are 17 life insurance companies in the Fortune 500 only. These companies have similar investment portfolios and business in a way that is more common than not. Eight of these are mutual companies, nine are companies and they operate to make a profit. The most important thing anyone can do is a means to help the market purchases of the company that will meet your needs can make. Someone who is a smoker with high blood pressure have better options outside company that. Onto non-smokers without health problems Find the cheapest airline market for his age and health can save you thousands of dollars.

I used for an insurance agency which sells a triple-A-rated insurance worked. When I worked for this agency, my comrades and I taught mainly the benefits of life insurance companies. This situation is not unique.

The agencies Administrators friend captured agents to grow a business, you earn commissions when their agents sell these products. Do not assume that life insurance agent experts about the benefits of different types of companies and insurance companies, because many of them are not aware of the benefits-about their own business. Instead of consulting with their customers and make purchases on the market are pushing a product that is not always coincide. Too many people were agents tips for life insurance, as they are trained to look at supply these products to every customer.

When considering an insurance company, it is always beneficial for some and difficult for others

When you sit down with an agent who is on a list of benefits for a single insurance company, keep in mind that most of the benefits of compromise are real. For example, if an insurance company is to be noted that a triple-A companies are likely to be conservative, to put with them. A triple-A rating is great, but it is really necessary if you plan to dividends from corporations, or in other words, part of the purchase of life insurance. No need to pay more for the privilege of paying with a triple-A credit rating company, as many agents to exist. AM Best part as a company with an A-regarded in excellent financial health and there are many qualified companies with the best deals of insurance if you have no intention in life.

Whole life insurance is a good idea

For some people, life insurance can be a great addition to your financial security. I sold a life insurance policy based on the following advantages.
1) It has a guaranteed return that is constantly creating the cash value of the policy.
2) There are permanent insurance during their lives are insured.
3) You may pay more premiums for a number of years, because the company's dividend will be sufficient to keep the policy in force.
4) It allows policyholders to take money from the policy in the form of a loan, if you select another option if you need money.
5) the development of policy on deferred taxes and tax-free as long as the policy remains in force.

The problem may be that many of these benefits are state life insurance as an asset or investment. Life insurance should always be taken into consideration for the provision of the first death. If you have both your IRA and Roth 401 (k), at least three months expenses in savings available and are already maxed out for something else to accumulate savings, life insurance search can be a good option. The fact is that life insurance is a good option if you maximize the possibility of their retirement funds and qualified in terms of their savings with a conservative tie to complement your life insurance.

Lifetime can be a mistake for two reasons

There are risks, put your money into life insurance. The risks are not clearly explained, because the agents increase focus on the present value of the guaranteed dividend each year. However, buying a significant risk of all life insurance premium payments for a number of years, and then not be able to cope with future premiums. Bank insurance on what happens to a certain percentage of the insured.
When this happens, you are accumulating in danger of losing thousands of dollars in premiums without profit to a present value. If an expiration or can not keep up with the premiums of the life insurance is to keep your premiums without accumulated cash value or without insurance in force.
These global life insurance policies are structured so that substantial costs have before and it takes at least two years before their premiums begin collecting cash value. It will take a decade before the premiums that you will be accommodated in the policy equal to the present value of the contract.

What jobs joint life insurance cash value
The other risk in life is to understand how the surrender value of the policy and too much of it. The residual value of the contract is liquid, but the insurance company will allow you to make 97% of it to protect itself from the expiration of the policy. The money removed from politics politics lends interest.

Suppose you are in the first 20 years of his life and politics take a loan from the cash value of the contract. The interest rate is 8.0%, the interest rate paid no dividend is 6.85% and the interest paid dividend yield is 7.9%. Note intensified that the insurance the interest rate on the amount borrowed or lent amount of its cash value. This reduces the cost of credit, but the credit an obligation to continue to pay interest. For example, the cost of borrowing in this case 6.95%.

(The interest rate on loans (8.0%) + (dividends interest (6.85%) - when lending interest rate of dividend (7.9%)) = cost loans (6.95%).

The surrender value of the policy is a double-edged sword, in fact, because it means that you will not be able to keep up with a significant risk premium. It is for people who practice, determined to repay the loan quickly, so grows the policy on dividends rather than the obligation to pay interest. It is ideal for people who are always trying to borrow from the policy because dividends are amplified and eventually be able to cover the costs of annual premiums. When this occurs, the risk of loss is negligible. However, it takes a long time to make, and it really depends on how disciplined you can afford to be with the additional cost of these premiums. If you want to have control of your money up front, is not an argument that you can buy term and invest the rest in place to take advantage of the general fund of the insurance.

Your personality profile and the budget should be consistent

I suggest you take a look at your budget and the amount of the order that you want your money for at least the next ten years, if you are considering a lifetime. Since long-term care can now permanently on the age and health in the same way that the whole of life insurance, the most important question is whether you want to control which block invest premium difference. Many people prefer life insurance because they do not have to think about investing the difference, the insurance for them. You can also make your death benefit by the amount of growth of the cash value and as his own creditor, if you ever want to borrow money from the policy.

A few other points about life insurance
The component of the cash surrender value of a life insurance policy must be addressed. The first is that the present value is based on the capitalization of dividends. So the more you continue to pay premiums is the cheapest. The second is that if you go with a reliable insurance pay dividends usually unsecured on the results of the investments of insurance companies base. This is where notes is important to note, as they are now involved in such dividends. Also, if you have activated the cash value growth and modest debt ratio policy in the future will probably be enough to keep pace dividends beyond the requirement of continuing interest. However, if you leave the political gains will be taxed as capital gains, and you have to pay a redemption fee also. If the policy is and die while it's still excellent in force, the death benefit to cover the cost of borrowing has to be paid off politics.


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