February 26, 2010 at 1:23 pm
There are many types of life insurance policies. Before you venture out for one, learn about them and see which one is applicable to your needs best. The following are the most common ones:
1.Term life insurance: This type of insurance is the most basic of all. Its one and only function is to cover your life with an amount of cash which on even of your death will be given to your nominee. Here the death benefit is equal to the policy limit. This is a good way to have mental peace in the conviction that you will provide for your family even in the event of death. This is good thing to have as a stand by any day.
2.Whole life insurance: This type of policy besides providing a fixed amount to your nominee on your death, it also gives you a financial gain over time as an investment would. The benefits you get out of this type of insurance is:
a.pays a fixed policy amount in event of death
b.gives you an investment amount that is free of tax
c.protects you from rising prices the premium is fixed for the life despite market fluctuations
d.pays dividends as any good investment plan
e.offers you freedom to sell the policy back at any given time you choose
3.Variable life insurance: This type of insurance is much more flexible than the whole life insurance. The best benefit here is the fact that it allows the policy owner to borrow against the policy maturity amount. In this way not only you are insured but you also have a very decent source of borrowing at a lower rate than the market price interest rates. The variable life insurance too offers the benefit of tax-free ash accumulation that is a great incentive for investing in insurance the world over. There is another benefit that accrues from this type of insurance, i.e. the amount that is to be paid as a benefit to the nominee of the policyholder can be varied according to the need of the beneficiary (in relation to the funds available in the account).
4.Universal life insurance: This insurance one of the most flexible of all types of insurances. It not only covers the death, but also allows you a host of other benefits:
a.As all insurance policies, it pays the beneficiary a pre-arranged amount of cash in the event of your death
b.It provides a tax-free cash investment which can accrue interest at market value
c.It allows complete flexibility on the premium making it easy for you to keep up with your payments even in lean times
d.At the same time this type of insurance allows amount flexibility
5.Universal variable life insurance: This is the ultimate among all the insurance policies. It allows you complete freedom on the way you invest and recover your investment. You have full control upon your cash at all times:
a.it pays the beneficiary a pre-arranged amount of cash in the event of your death
b.It provides a tax-free cash investment which can accrue interest at market value
c.It give you total premium flexibility
d.It allows to withdraw cash from your policy at any given time throughout your life time
e.It allows you to borrow against the maturity amount at subsidized rates of interest
f.It allows you to terminate the policy at any time, however, in that event your maturity amount will be reduced according to the time in question
Life insurance first and foremost role is to protect the near and dear ones in even of ones death by providing an alternative source of income. Today, however there are a number of benefits added to the main role. Check out the latest developments and choose well. Get value for your money.
February 19, 2010 at 1:23 pm
In the world today money is the most essential necessity of an individuals life. It is almost impossible to dwell without money. This is why a person tries to earn maximum possible during his lifetime to provide a decent living to himself and his family. But what if the sole earning member in a family dies? Who will provide financial aid to his family and how? Though there are quite a few answers to it such as will, leaving a legacy behind etc. But the best and foremost option meant for the high as well as the low is a life insurance policy. A life insurance policy as the name suggests not just insures your life but is also the smartest and the most far-sighted way to secure life of those whom you love.
Any individual can take a life insurance policy. In case of children, their parents are supposed to pay the premium. There are policies for different amount. The premium also varies accordingly. A life insurance policy for 50,000 will be charged higher than one for worth 25,000. But besides these the premium also depends on many other factors. The topmost is the age of the individual. A 70 year old man will be charge with a higher premium than a 30 year old individual. Also lesser quantity of risks will be covered in case of the former in comparison to the latter. Alongwith age the occupation and lifestyle of the policy taker also matters a lot. A person who throws his life into danger daily (for example one who is a sky-diver) will have to pay more premium than one leading a simple life. Moreover an alcoholic, heart patient etc. will find his life insurance policy to be more expensive than a strong and healthy individual of the same age.
It is always the choice of the individual which insurance policy to take and from where. This depends on the needs and aspirations of the individual. for instance a person who is supposed to be survived by 5-6 successors or beneficiaries, usually opts for a policy with a good sum of money.
Broadly there are 3 different forms of life insurance policies.
1.Whole life policy- this policy is one where the amount of premium the policy taker requires to pay does not alter with time. The amount of the premium id decided once at the time of taking the policy. This type of insurance enables the policy taker to have some cash-build up during his lifetime that can be either used during the course of the policy or after his death to increase the benefit.
2.Term life insurance begins with low premiums initially. the premium amount increases with the age of the person. since there is no cash build up in this policy, there are no chances of an increment in death benefit.
3.Variable life policy is akin to the whole life policy i.e. the premium is fixed once and for all. The only difference here is that in this policy there should be cash build up as long as the various mutual funds the policy taker has opted for, do well.
February 12, 2010 at 1:23 pm
The subject of life insurance can be a confusing one and we spend a lot of time discussing various ways to buy life insurance. How much do I need? How much will it cost? Will my beneficiaries have enogh to live comfortably? What is the difference between cash-value and term life insurance? Which is the cheapest to buy?
CASH VALUE LIFE INSURANCE POLICIES
Cash value life insurance, such as universal and whole life, combine a death benefit and a tax deferred saving element. Occasionally referred to as permanent life insurance, these types of policies are intended to cover you for your lifetime.
Annual premiums for cash value policies generally are higher than those of term life policies as part of each premium pays for insurance and the remainder is invested. Cash value is what you can borrow from the policy or receive by surrendering it. These funds are ideal for retirement planning and college funding, among other goals, because they accumulate tax deferred until you withdraw them and then may be partially taxable. Loans and withdrawals will reduce the policies cash value and death benefit.
LIFE INSURANCE MADE EASY
Term life insurance is the most fundamental type of life insurance. You purchase coverage for a designated period, from one to many years and the policy will provide a death benefit if you die during that period. Many polices let you renew your coverage for repeated terms until age 65 or even 100.
Term life insurance is popular with younger people because it provides the maximum amount of coverage for the lowest cost. Early premiums are low and increase as you become older. For example, a 250,000 death benefit will cost less in your 30s than it will in your 50s. For this reason, term life insurance is usually a better value for shorter term or finite life insurance needs.
February 5, 2010 at 1:23 pm
Whole life insurance also known as permanent or straight life insurance is one of the most applied forms of insurance. This life insurance policy covers ones entire life. This is much in demand because of its ability to provide financial protection and accrue cash value and pay dividends to the insured. In other terms, you can say it as an investment, that you make to secure your future build up finance that helps you in your indigence.
Taking a whole life insurance policy leads to a number of benefits and advantages. Few of them are listed below.
1.The first advantage is The Death Benefit.
The whole life insurance policy guarantees you the death benefit that never decreases. Moreover no federal income taxes are charged upon death. And if you desire, death benefit can be taken as a monthly income instead of a lump sum.
2.Consistency of premium level.
Unlike term life insurances premiums, which increase at the time of renewal, the premium you pay in whole life insurance remains consistent. Theres no increase. However, use of dividends can minimize the premiums that you pay and contracted for.
3.Cash value is another beneficial feature of whole life insurance.
Unlike other life insurance policies, whole life insurance policy accumulates the useable cash reserves. This increase as one pays premiums and also accumulates tax deferred. And if you decide to surrender the policy, you receive your cash values.
4.Participation in whole life insurance policy earns you the dividends.
You are eligible to earn dividends if you own a participating whole life insurance policy. You receive this dividends in cash, which you can further use to either purchase a paid up additions, to minimize premiums or you can keep it within the policy to generate interest.
These advantages of whole life insurance policy are really worthwhile. If you are not confident you should consult an expert before taking up any policy.