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Term Life Insurance Explained

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October 15, 2010 at 1:23 pm

Term life insurance does not build any kind of cash value, which makes it an original type of life insurance and considered pure insurance protection. Unlike whole life insurance, term life insurance is only temporary and only covers a specific term, or a specific period of time in a person’s life. Benefits will go to a beneficiary only if the insured person dies during that specific window of time.

life_insuranceTerm life insurance is usually the cheapest way for people to purchase a death benefit package on a per pound basis. The reason for this is because the term will expire and the insurer will not have to pay out.

It is recommended that people should purchase term life insurance with the Theory of Decreasing responsibility in mind. The Decreasing responsibility theory is provided that the insured person or persons realizes and understands that any and all financial responsibilities are only temporary and that they should purchase insurance to compensate for these responsibilities.

The easiest and simplest way to purchase term life insurance is on an annual basis. The premium to be paid is only the expected probability of the person dying within that period plus a few extra fees, such as a cost and profit component. Because insurers are able to choose whom they decide to ensure, the probability of someone they choose to insure dying within the next year is extremely low, most people opt not to purchase one-year terms. An annual policy is not very cost-effective either. Many people choose to go with annual renewable terms (ART). In ART, a premium is paid for the coverage of one year and then is guaranteed to be continued each for so an X number of years, which could be anywhere from ten to fifteen to twenty years or more, whatever the insured person decides on. Even though this direction will cause the insured to pay a higher premium, they are more likely to have the benefits paid.

A level term is a very popular form of term life insurance that is a renewable annual term with a constant premium for an X number of years. The years in a term are usually 10, 15, 20, and 30 years. A level term charges a higher premium for a longer amount of time simply because as people get older they are more expensive to ensure, and their age is averaged into the equation for the premium.

Even though they are more likely to be paid the benefits in the end, many people are uncomfortable with regular life insurance for one reason or another. For those types of people, term life insurance is an excellent choice. It gives people the option of having life insurance for a certain period and can be renewed annually or in larger periods.


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Term Life Insuranceeconomic Sense?

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October 8, 2010 at 1:23 pm

Purpose of Life Insurance

If you die, life insurance is designed to provide financially for those you have left behind and have listed as your beneficiaries. In buying life insurance you, the insured, enter into a legal contract with the insurance company, also known as the insurer. Basically, the contract states that if you make your monthly insurance payments in a timely manner, your family or other beneficiaries will receive a specific amount of money when you pass on.

life-insuranceAlthough some may find the idea of life insurance distasteful, it is considered to be essential in protecting the fiscal health of your spouse and children should they find themselves fiscally taxed due to your death.

Types of Life Insurance

There are two primary types of insurance: permanent life and term life insurance. Each provides specific types of protection for your loved ones.

Term life insurance, the simplest form of life insurance, is designed to protect your family for a specified length of time or term. Term policies, which range from 1 to thirty years, provide a one-time death benefit but no cash savings. This means term policies only provide benefits as long as the insured has paid the premium, which is the cost of the insurance. Premiums are divided into equal monthly payments that are assessed for the entire period of coverage. If you bought a policy that covered you for a three-year term, then you would make 36 equal premium payments on that policy.

Permanent insurance is designed to offer both a death benefit and an investment return after a length of time. Because this type of insurance offers a long-term savings plan, premiums are higher than those for term life insurance. Common types of permanent insurance are whole life, universal life, and variable universal life.

Term vs. Permanent

Term life insurance is especially appropriate for those who desire coverage for a specific length of time and who have limited funds. Because it is less expensive than permanent insurance, term can offer more coverage for less money. This is useful to people who have children, mortgages, and various types of loans. The right amount of term can cover these expenses and more. However, if you still desire coverage after a term policys period ends, factors such as poor health and age will result in higher premiums when you buy a new policy.

Permanent insurance, although more expensive, allows policyholders various benefits, including a premium that will not change as you age or if your health deteriorates. Also, permanent insurance will usually accrue monetary value, offering the policyholder a return on their investment that they can access as worth builds.

Whole or ordinary life is the most common form of permanent insurance. With whole life your premiums and the face amount of the policy are fixed over the life of the policy. Your premiums must be paid regularly. A more flexible policy, where you can pay premiums at any time in just about any amount, is universal life. With this kind of coverage, youre allowed to modify the death benefit amount according to your needs.

A variable life policy carries both a death benefit and monetary value. The value of this policy is dependent upon the performance of investments. You select the investments for your portfolio and the better they perform the higher the death benefit and cash value of the policy. Some policies offer a minimum death benefit regardless of how your portfolio functions.

Variable-universal life carries elements found in both variable and universal life. You get the risks and possible rewards of a variable policy and the flexibility of universal coverage.

Choosing a Life Insurance Company and Policy

There are some important things to consider when buying a policy. Be sure to shop around before buying life insurance. Consumers can buy insurance directly from an insurance company via the Internet or over the phone. Buying this way is usually cheaper than going through an insurance agent because the agent receives a commission, called a load, when they sell a policy.

The life insurance industry is very competitive with hundreds of companies offering policies. This is a benefit for the consumer, because competition tends to aid the buyer; however, this can also be seen as a detriment because the range of choices can make finding the right policy from the best company daunting. Your search will be easier if you consider four basic criteria in making your selectionrates, budget, service, and stability.

Rates: Because it is such a competitive business, life insurance rates vary greatly from company to company. Find three to five policies with attractive rates for the amount of coverage you desire.
Budget: Once youve found these policies, be sure the premiums are within your budget. It doesnt make any sense to go forward with any of these contracts if you arent going to be able to afford them.

Service: In determining the quality of each companys service, you can do two things. If you are going through an agent, youll be determining the quality of that persons service when you talk to them about the benefits of buying specific policies. The same is true if you buy directly from an insurance company without going through an agent. Do they answer your questions clearly? Do they seem to know what they are talking about? Do they leave out important information?

By considering at least three companies andor agents, youll be able to compare their ability to answer questions and to give you their undivided attention. Along with interviewing potential agents and companies, you can check with your state insurance department to see how many complaints, if any, they have received concerning the company andor agent.

Stability: An insurance companys economic stability is directly connected to their ability to meet their future financial obligations. In other words, you want to make sure an insurance company will be able to pay your death benefit. The following companies rate insurance providers fiscal soundness.

A.M. Best
Oldwick, New Jersey 08858
908-439-2200
www.ambest.com

Moodys Investors Services
99 Church Street
New York, New York 10007
212-553-0300
www.moodys.com

Standard & Poors Insurance Ratings Service
55 Water Street
New York, New York 10041
212-438-2000
www.standardandpoor.com

Weiss Research
4176 Burns Road
Palm Beach Gardens, Florida 33410
800-289-9222
www.weissratings.com

After going through these four steps you should be able to compare each company, agent, and policy and make an informed choice.

One more important place to check for affordable life insurance is your employer. Many businesses offer very competitive group rates, usually for term life policies.

How Much Life Insurance is Enough?

Some people will say that you can never have enough life insurance. However a common rule of thumb is to buy at least five times your yearly income. Many policies include a double indemnity clause, which means your beneficiaries receive double the value of your death benefit if you should die suddenly in an accident or due to some violent event.

In asking yourself how much is enough, youll want to make a list that includes yearly expenses, large debts (such as a mortgage), and long-term or future expenses (such as college tuition). Youll know youre adequately covered if your death benefit provides for large debts, with enough left over for at least one year of living expenses and for investing or sheltering for long-term or future expenses.

Finally, you need to decide what you want to get out of your life insurance. Is it simply a specific period of coverage with a large death benefit or do you want your life insurance to be part of your long range fiscal planning? Considering and answering all of these questions will help you find the policy thats right for you.


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Term Life Insurance Definition

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October 1, 2010 at 1:23 pm

Term Life insurance has been with us for a long time. It is the least expensive of all the life insurance policies. Term life insurance is life insurance that provides protection for the named insured over a stated period of time. That is what differentiates it from other forms of life insurance. Term insurance has no equity or cash value accumulation and so it is primarily purchased for the security provided by the death benefit. There are three basic forms of term life insurance.

life_insurance1.Decreasing Term This policy is most commonly associated with mortgage protection insurance. The face amount decreases over a stated period of time. A thirty year mortgage for a homeowner is appropriately insured by a thirty year decreasing term policy for the same mortgage amount. The mortgage balance and the term policy decrease at about the same rate and so the homeowner can be assured that his home will be paid for whether he or she lives or dies.

2.Level Term Level term insurance also provides protection for a specific time period. The face amount remains level throughout the stated period. This policy is often purchased for short term debt or intermediate term debt. You can purchase 5, 10, 15 and 20 year term policies from most insurance companies.

3.Annual Renewable This form of term insurance is the least recognized of all term policies. It provides a level amount of insurance but the premium increases each year at the policy renewal date. The premiums can be very low at first but can escalate into very high premiums as the insured gets older.

All of these term life insurance policies have there advantages but the common denominators that give term life insurance its definition remains the same. The policy is always for a stated period of time and there is no equity or cash value accumulations. Those two features define term life insurance.


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Term Life Insurance – Most Times It’s All You Need

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September 17, 2010 at 1:23 pm

Term Life Insurance – Most Times It’s All You Need

Term life insurance is a temporary life insurance covering specific period of time. In this type of policy the insured or the owner pays a premium for a period. The insurance company provides monetary benefit to the beneficiary in case of death of the insured during that period. It is the cheapest type of life insurance available to the general public. Usually the benefit received on death of the insured is income tax free.

life_insuranceThere are four parties in term life insurance. The owner is the one who pays the premium. The Insured is the one on whose death, a death benefit(face value) will go to the beneficiary. The beneficiary is one who will receive the proceeds of insurance on death of the insured. The insurer is the company providing the insurance. Premium is the monthly or periodic payment made by the owner to the insurance company.

For instance, Amanda pays monthly 50 pounds to ABC Company for insuring the life of Bill (her husband) for a period of 10 years. In case Bill dies during the 10 years, ABC company will pay 6000 to Jack (son of Bill and Amanda). Here the insured is Bill, the owner of the policy is Amanda, the beneficiary is Jack and the insurer is ABC Company. The premium is 50 and the face value of the insurance is 6000. In case Bill does not die during the 10 years, ABC Company will not be liable to pay any money to any of the parties involved. Often the owner and the insured are same. That is a person buys a policy to cover his own death and nominates a beneficiary.

Term life insurance is a legal contract with terms and conditions and assumed risks. Sometimes there are special provisions like suicide terms wherein on suicide of the insured there is no benefit accrued to the beneficiary. Term life insurance is based on two concepts, theory of diminishing responsibility and Buy Term and Invest the Difference (BTID). In Term life insurance the responsibility or liability of the insuring company reduces as the policy reaches its maturity. Term life insurance is the cheapest type of insurance policy available because there is no cash value at the end of the period. Studies have shown that the mortality rate in term life insurance policies is as low as 1%. Hence the concept of BTID. Rather than going for permanent life insurance (where on the expiry of period the owner will accrue some cash benefit and there is a savings component in it) it is considered cheaper to buy term life insurance and take care of the savings components by investing in other areas. With the present market giving good returns on investment, buying a term life insurance is a more attractive option than permanent life insurance. Term life insurance is available for a period of 5, 10, 20 years etc. As the age of the insured increases the premium increases. The premium is calculated based on mortality rate which is usually dependent on age, sex and whether the person uses tobacco. Most companies provide annual renewable term where in the term can renewed annually however the premium increases annually.


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Selling Your Life Insurance (Viaticals and Life Settlements)

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July 23, 2010 at 1:23 pm

Selling your life insurance is an option you might consider if you’re in a difficult financial situation for which you don’t see a close end. A terminal illness or old age could cause you to think twice about paying those hefty premiums at this stage of your life. Selling your life insurance carries with it complex implications and substantial risks, so it is important that you educate yourself regarding the big picture. If you’re interested in selling your life insurance, this is a good starting point to obtain some basic information.

Basics: Vocabulary

If you’ve already done any research on selling your life insurance, chances are good that you’ve come across two main terms: viaticals and life settlements. Both refer to the selling of your life insurance to a third party. So what’s the difference? “Viatical” is typically used to refer to the transaction involving a chronically or terminally ill insured, while a “life settlement” is a transaction involving a senior (generally over the age of 65) who is not terminally ill.

Even though you now know the difference, it does not mean that your state does. These terms might be used interchangeably, or your state might use one of them to refer to both transactions. For example, your state could use “Viatical Settlement” to refer to any type of transaction regarding selling your insurance. Be aware that this kind of ambiguity may exist in relation to the vocabulary used in the sale of your life insurance.

How it Works

The owner of the life insurance policy will sell it for a percentage of the death benefit a lump sum to a third party and, in exchange, receives an often substantial lump sum payment. The third party then becomes the new owner andor beneficiary of the policy and pays all of the future premiums and eventually collects the death benefit when the insured passes away.

Those considering selling their life insurance may either directly approach a viatical company or settlement firm, or they may choose to work with a broker. The broker will act as an intermediary and present the information to several different companiesfirms in an effort to find the highest price for the sale.

The settlement firms buy the insurance on behalf of investors. In this situation, the investors become the owners and beneficiaries, and the settlement firm pays the premium until the insured dies. The firm then collects the death benefit and either pays its investors a percentage of the annual return or repackages the policy for sale to another party.

Take comfort in know that the process of selling one’s life insurance is typically very confidential. Most viatical companies and settlement firms understand the discretion necessary to make the process run smoothly and easily. However, a company may act disrespectfully and become borderline intrusive by trying to keep track of the insured’s condition. For this reason, it is important to work with a respectful, experienced organization.

Who Considers Selling

Those with serious, life-threatening illnesses are most likely to consider selling their life insurance to provide cash for various expenses, such as mounting medical bills. For those who are not terminally ill, selling the life insurance might be a good idea for a number of reasons. If the owner’s beneficiary has died or if the owner can’t afford to keep paying the premiums, it would appear that they no longer have sufficient use for the life insurance. Seniors around retirement age may also consider selling their life insurance, even if they are free of debt, in order to receive a lump sum of money with which they may do whatever they please.

Keep in mind that different companies may have different eligibility requirements to be able to sell your life insurance policy.

Advantages to Selling Your Life Insurance

It might be easy to see some of these benefits, but others are a little less obvious.

  • You’ll receive a lump sum cash payment right now. As mentioned above, this is especially useful to the terminally ill who have mounting medical bills.
  • You will receive more by selling your life insurance than you would if you simply surrendered it to the insurance company. It is possible for an insured person who is 65 or older or who is terminally ill to sell a policy with little or no cash value for a 100,000.00 or much more.
  • You won’t have to pay any more insurance premiums. If your financial situation is becoming strained with no end in sight, eliminating premiums is a way to alleviate the burden.
  • You don’t have to repay the money, like you do when you borrow against your insurance policy.
  • Even though your life insurance benefits won’t be available once you die, you can still leave money to a certain person or organization it will just come from the money that is leftover after using the funds from selling your policy. So, selling your life insurance does not
    mean that you’re definitely robbing your beneficiaries of their gift.
  • In some cases, the money you receive is tax-free.
  • There are no regulations or restrictions on how you make use of the money you receive. You may spend as much of it or as little of it as you wish, however you please.
    • Risks of Selling Your Life Insurance

      Understanding the risks associated with selling your life insurance will help you make an informed decision. Be sure to consult a financial advisor or tax attorney to make sure you understand the implications of the sale.

    • You might lose your eligibility for some public assistance benefits, especially those based on your income and assets (such as food stamps, welfare, Medicaid and some Social Security benefits).
    • There could be tax issues. Selling the policy will
      result in a tax bill if the settlement amount exceeds your cost basis.
    • With improved medical care, the ill person may live longer than expected.
    • You might face unhappy heirs. This might not be a problem for you, but it could lead to a long road of (possibly legal) complications and battles. Some settlement actually companies require the beneficiaries to also sign off on any sale, which could be good or bad, depending on whether or not you’re dealing with a cooperative beneficiary.

      • Other Options

        If you come to the conclusion that selling your life insurance policy is not for you, there are other options (though none that would provide you with such a large lump sum). An insurance agent should be able to help give you more information on some of these ideas.

      • Borrow against your insurance policy
      • Cash out the policy if it has surrender value
      • Look into accelerated benefits or living benefits
      • life insurance
      • Borrow money (from family or friends perhaps) and use the life insurance policy as collateral
        • If you believe that selling your life insurance policy is the right decision for you, make sure you deal with a dependable, experienced broker or settlement company to ensure that you get the best service and results from your transaction.

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    Second to Die Life Insurance Policies

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    July 16, 2010 at 1:23 pm

    life insuranceUsually, the death benefit from a second-to-die life insurance policy is intended to go to the children , a charity or pay taxes owed after both spouses pass away.

    In the U.S. there is a marital deduction permitting you to leave an unlimited amount of assets to your surviving spouse with no taxes payable at your death. Those assets then become part of the estate of the spouse and if it includes a second to die life insurance polciy it could help pay any taxes. In Canada, there is more lenient tax treatment.

    There are also tax ramifications for small businesses, which is why business partners also purchase second-to-die policies.

    THE REASON TO BUY SECOND TO DIE LIFE INSURANCE POLICIES

    With a second-to-die life insurance policy your beneficiaries can pay debts with the proceeds of your policy, so they won’t be forced to sell your house or liquidate assets to pay the bill.

    A second-to-die life insurance policy can help to construct a financial plan reducing the tax burden of wealthy individuals by creating trusts and using second-to-die life insurance as part of the estate-planning process.

    ADVANTAGES TO SECOND TO DIE LIFE INSURANCE POLICIES

    1.Less expensive. Second-to-die life insurance is usually less expensive than life insurance but depends on the blend of the ages. The premium is based upon the joint life expectancy.

    2.Estate Preservation. A second-to-die policy appeals to individuals who feel strongly about preserving their estates with the life insurance paying the taxes.

    3.Easier to buy. It’s easier to qualify for a second-to-die policy than for individual life insurance. Since both insureds must die before the benefit is payable, the insurance company is less concerned that one of them might not be in good health.

    * Builds your estate. In some cases, second-to-die life insurance is marketed as a way to build an estate, not just insulate it from taxes. Much like individual life insurance, the death benefit of a second-to-die policy can ensure that certain people receive money, even if you spend every nickel.

    4.Second-to-die life insurance might make sense for people who don’t have a lot of money but want to leave an estate for their children.


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    Second to DIe Life Insurance

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    July 9, 2010 at 1:23 pm

    Usually, the death benefit from a second-to-die life insurance policy is intended to go to the children , a charity or pay taxes owed after both spouses pass away.

    In the U.S. there is a marital deduction permitting you to leave an unlimited amount of assets to your surviving spouse with no taxes payable at your death. Those assets then become part of the estate of the spouse and if it includes a second to die life insurance policy it could help pay any taxes. In Canada, there is more lenient tax treatment.life insurance

    There are also tax ramifications for small businesses, which is why business partners also purchase second-to-die policies.

    THE REASON TO BUY SECOND TO DIE LIFE INSURANCE POLICIES

    With a second-to-die life insurance policy your beneficiaries can pay debts with the proceeds of your policy, so they won’t be forced to sell your house or liquidate assets to pay the bill.

    A second-to-die life insurance policy can help to construct a financial plan reducing the tax burden of wealthy individuals by creating trusts and using second-to-die life insurance as part of the estate-planning process.

    ADVANTAGES TO SECOND TO DIE LIFE INSURANCE POLICIES

    1.Less expensive. Second-to-die life insurance is usually less expensive than life insurance but depends on the blend of the ages. The premium is based upon the joint life expectancy.

    2.Estate Preservation. A second-to-die policy appeals to individuals who feel strongly about preserving their estates with the life insurance paying the taxes.

    3.Easier to buy. It’s easier to qualify for a second-to-die policy than for individual life insurance. Since both insures must die before the benefit is payable, the insurance company is less concerned that one of them might not be in good health.

    * Builds your estate. In some cases, second-to-die life insurance is marketed as a way to build an estate, not just insulate it from taxes. Much like individual life insurance, the death benefit of a second-to-die policy can ensure that certain people receive money, even if you spend every nickel.

    4.Second-to-die life insurance might make sense for people who don’t have a lot of money but want to leave an estate for their children.



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    Life Settlements: A Viable Option for Todays Seniors

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    April 9, 2010 at 1:23 pm

    Life settlements can be a viable option for seniors willing to exchange their life insurance policy for immediate cash. A life settlement is the sale of an existing life insurance policy for a lump sum of money. It allows policyholders to access the fair market value of their life insurance by selling their policies and receiving payments greater than the cash surrender value.

    life insuranceTechnically, a life settlement contract allows you to sell your insurance policy to a third party in exchange for a reduced amount of the face value. This is possible because a life insurance policy is actually property, like a car, house, stocks and bonds that can be legally sold. A life settlement essentially lets you extract value today from an asset that is generally thought to only have a benefit when you die. Typically, life settlement transactions involve life insurance policies of a large face amount; key-person coverage or corporate-owned life insurance; or policies representing excess coverage that is no longer needed.

    Heres how a life settlement works: When a life settlement company buys your life insurance policy, it pays you a percentage of the policy’s face value. Then the life settlement company becomes the new beneficiary of the policy at maturation. As such, it is responsible for all paying all future premiums and collects the entire death benefit when the insured dies.

    A Growing Industry
    With a life settlement, you can receive a large sum of cash in exchange for your insurance policy while youre still alive. This eliminates premium payments, accommodates the changing needs of your dependents and provides greater financial flexibility.

    Life settlements can also be used for charitable giving. Complex estate and tax planning strategies can apply when using life settlements in a planned giving program. But heres how this works in simplest terms: You donate your life insurance policy to a charitable organization, which immediately sells the policy for a lump sum of cash via a life settlement.

    These and other benefits are making life settlements an attractive option for seniors with unwantedunneeded insurance policies. Consequently, the life settlement industry has seen significant growth in recent years. A study by Conning & Co. Research found that senior citizens owned approximately 500 billion worth of life insurance in 2003, of which 100 billion was owned by seniors eligible for life settlements. Since 2003, more and more of these eligible senior clients have sold their policies and helped the market increase.

    Separate research by the University of Pennsylvania’s business school found that life settlement providers paid approximately 340 million to consumers for their underperforming life insurance policies, an opportunity that was not available to them just a few years before. “We estimate that life settlements, alone, generate surplus benefits in excess of 240 million annually for life insurance policyholders who have exercised their option to sell their policies at a competitive rate,” according to the research.

    Selling Your Policy
    You could be a prime candidate if you are of retirement age, have paid off your mortgage and other debts, and no longer require the financial protection of life insurance. The amount you receive will depend on your age, health, death benefit, and the number of years your policy has been in force.

    Seniors with the greatest chance of selling their policies are those that are older than 65 years of age, have a calculated life expectancy of more than two years (but less than 10 years) and may have experienced a health change that has led to their insurance premiums increasing. Depending on the policy holders life expectancy, just about any type of policy can be sold, including universal life, whole life and convertible term contracts. However, policies generally must be valued at least 100,000.

    Determining whether to sell your life insurance policy is a purely personal decision. You might consider a life settlement under the following circumstances:

    Your employment status has changed.

    You need additional funds to pay medicallong-term care expenses.

    Your insurance premiums are too expensive and you can no longer afford them.

    You would like to implement a charitable or family gifting plan.

    You are facing bankruptcy.

    Consulting with an Advisor
    Before you decide to sell your insurance policy, you should examine all the available options, advises the American Council of Life Insurers, a Washington D.C.- based trade group. And instead of going it alone, consult with a financial advisor who is familiar with life settlements. This could include accountCPA, lawyer (especially elder law attorney), financialestate planner, certified senior advisor or charitable trust officers.

    Additionally, you might consider working with a brokeralthough your financial advisor can submit your case to the life settlement company directly. However, in an industry where market value for life insurance policies may be unfamiliar, brokers typically do the best job of getting fair market value for policies. They submit life settlement cases and bids to multiple companies, which can facilitate negotiations between high bidders.

    Keep in mind that life settlement companies are essentially investors that fund many transactions each year. They hold purchased policies as portfolio assets, rather than making them available to outside investors. They also have in-house compliance departments to carefully review transactions, and they are backed by institutional funds from a major bank.

    Steps to Life Settlement Transactions
    Wondering what happens during life settlement transactions? Here are the steps involved in the typical transaction:

    Step 1: You consult with an advisor and decide to sell your policy.

    Step 2: You and your advisor select a broker.

    Step 3: The broker submits your case (and you provide a release for your medical information) to various companies.

    Step 4: If your policy is eligible for a life settlement, providers send offers to the broker.

    Step 5: You accept an offer and then complete the companys closing package.

    Step 6: The life settlement company places a cash payment in escrow and submits change of ownership forms to the insurance carrier.

    Step 7: Once the paperwork is verified, the funds are transferred to you.


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    Life Insurance Online

    Comments (1)
    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.


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