February 21, 2018

 

Life Insurance for Children

When mentioning life insurance on a child, a parent may completely shut down. Yet, getting a life insurance on a child could be one of the greatest gift you could give that child. You see, when it comes to life insurance on children, early death is not the only factor. As a matter of fact, considering the statistics on child death today, worrying that your child will pass away at a young age is very unlikely.
Five Main Reasons to Give Your Child Life Insurance
* Insurability – Probably the number one reason parents get a life insurance policy on their child is to protect their insurability. What this means is, at a young age most children have very good health. That allows children to qualify for the best possible rates and usually guarantee the approval rating for life (select or preferred…). For the purpose guaranteeing insurability, we recommend that you get the highest amount of insurance available at a price you can afford. You will find that a $100,000 policy is not much more expensive than a $50,000 policy. We also recommend that you utilize a 30 year term life insurance plan with rates guaranteed for the full 30 years. make sure that the term life policy is convertible and and ask about which plans you can convert to (this is often overlooked and yet very important). The main advantage of term life insurance is that it is provides the lowest rates on life insurance. If you are able to afford it, a universal life with rates guaranteed for life is an even better option. Select option B or 2 when applying. This will allow your child to selectively increase premiums later (to a limit) and at the same time increase coverage without having to requalify.
* Low Rate Cost Saved – When you buy a life insurance policy on your child, you have essentially locked in the low cost for a number of years (with term life) or for life with whole life and universal life. We have yet to find an upset adult who’s parents bought him/her life insurance as a child. The fact is, cost of life insurance increases dramatically as we get over age 25. Rates can get even much worse if the applicant has health issues (even minor ones)
* Easy to get – Most children’s life insurance policies do not require an exam even at higher amounts of coverage – such as $300,000. Although it would be difficult to justify a $300,000 policy on a child, a parent should have no problem getting a $100,000 policy.
* Genetics – I think that you may guess where this one is going. According to some research, if a parent is prone to certain health problems, the child of that parent is much more likely to develop these same health issues. As of today, insurance companies do not rate people for their genetic predispositions. They may not do it, but you can. In other words, if diabetes or certain cancers or other medical issues tend to be prevalent in your family tree, it would seem even more important to secure a life insurance on your child before he or she develops any indication that they have the same medical issues – Certainly before your child gets diagnosed as such. Even for some diseases which are not likely to appear until much later in life (young adults) by securing the insurance early, very low rates can be guaranteed for life.
* Saving for future expenses – That is probably the most controversial reason to get your child life insurance. And for good reasons! I will keep this simple with a question. Do you save for your child’s college education? No! Well, you are like most people. Yes, it would probably be best to put money into mutual funds to build a college fund for your child, but, as with most people, if you are not going to do it, then a whole life or universal life is best. Besides, a child, who has reached the age of majority, is more likely to empty out a mutual fund account than a life insurance cash value account. The simple reason is that a child does not readily think of the cash value aspect of life insurance. This one is your choice. Make a wise financial as well as logical decision.
Term Life, Whole Life or Universal Life
We have written other articles on the benefits of whole life as opposed to term. For children, though, it is simpler. Get whole life or universal life at ages 0 to 16 or get term life above that age. Please go to our other articles for more details.
Reasons not to Get Life Insurance on Your Child
If there are reasons to get something then there are always reasons not to get it. In this case, the reasons are as follows
* Investment Value – Whole life and universal life are not the greatest asset builder. So if you are well organized and have the time for a master financial plan, then do not get whole life or universal life. You may want to consider term life for reasons we mentioned above.
* Health History & Health Habits – So not only do you have amazing genetics, but you also take care of your health and teach your kids to do the same. Yes, statistically there is a very high probability that your child will live many years before he/she develops any health issues. Which makes all reasons to get life insurance for a child valueless (aka: No Good).
Points to Remember
* You cannot get insurance on a child who is not a minor without their consent.
* Do not lie on your child’s life insurance application. If there are health issues or other problems, make sure to tell the insurance company. If the fraud is discovered, then you may not only damage your records but your child’s records too.
* Get life insurance on your self first. If you die, while the children depend on you, then whatever you got for them will be meaningless.
* Insure your spouse before your children
* save for retirement before you save for your children
* Take care to make sure that your other insurance policies are adequate before buying your child or grandchild a life insurance policy
* Beware of accident only insurance policies. That is not what you want!!!

Life Insurance – a protection against life’s uncertainties

Nothing in life is more scary than facing the only non-negotiable thing of our life & that is death. To date, death is a certainty. Along with this mortality comes an unpredictable existence and a fear of the unknown. It is unnerving for people to think about the thought of their own death or the death of someone they love. Thus you must be prepared at all times. In today’s life, which is filled with unpredictable & uncertain events, where we are having so many responsibilities to be fulfilled in one life and there are people who are dependent on us for their happiness and comfort, protection of one’s life becomes inevitable because there is nothing more important than your family’s security. We cannot ensure that we will be with them in their time of need, but what we can ensure is that we put together a means for them in times of worry and need.
It is a natural human tendency that beginning with the dawn of time, we use to protect our belongings. This natural instinct gave rise to the need for protection against most losses, which is how life insurance came about. Life insurance is the only answer to all such erratic & unpredictable events in humans life. Remember, it is not just your life you are insuring, but the lives of your loved ones as well. When we can ensure our homes, cars etc. then why don’t we feel the need to ensure the most important thing and that is Life. In this fast paced, fragile life style with less life span which we have today, insuring life itself has become a necessity especially if you are the sole breadwinner of your family. It is not mandatory; but you cannot afford not to have it ! Insurance helps us in getting protection against the unseen. Thus it may be wise to purchase life insurance so that if something happens, your insurance policy could serve as a protective shield to those you leave behind. An old adage, “The grace of GOD is like insurance. It will help you in your time of need without any limit” is not just a clich? and is rightly said.
What is Life Insurance?
It is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual’s death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount at regular intervals or in lump sums. Simply putting, it is a way to replace the loss of income that occurs when someone dies. It ensures that your family will receive financial support in your absence. It can be a great way to get protection for now and to plan for the future. After all, we want to make sure that our loved ones are taken care of if we die.
Insurance has turned out to be a very common term in the recent times. You can come across this word wherever you go and which ever magazine or newspaper you read. In fact whenever you hear about insurance, some means of protection & security comes into your mind. It is essentially the means to financially compensate for losses that life throws at people.
Why you need Life Insurance?
Life insurance is one thing that everybody needs to believe about. Parents think about it for their kids, and once you are a grownup, it is some thing that you simply get taught about. It is no longer for the privileged or only the elderly. It isn’t just for any one type of person. It is a universal protection for everyone. What insurance does is provides protection for your loved ones in case of your death. If you have a insurance policy in location and you pass away, that coverage may grant the cash to the beneficiary with the policy.
Life insurance isn’t for the benefit of the person who is insured, but it is for the insured’s loved ones because your family needs the guarantee of a comfortable financial future in the event that something should happen to you.
The primary purpose of life insurance is to enable your family to continue their current lifestyle when and if you’re no longer around. It is also designed to help meet specific needs that your family will have in the future.

If you have a life insurance policy in place, it could:-
1. Provide a financial security to your family
You would want the surviving members of your family to live in a safe and financially stable environment. Life insurance could allow them to do that so that your family continues to live a comfortable lifestyle as before. It will replace your lost income in the event that it goes away in the future. In other words, it creates a safety net of relief for the family that would be left behind without any other means of income.
2. Help in paying your debts
Life insurance could pay for remaining medical bills, funeral expenses, and credit card debts, and enable the surviving spouse to have some time to find a job or to retire comfortably. Just imagine if you are suddenly out of the picture, you wouldn’t want to leave your family to drown in a sea of debt. There comes the life insurance coverage that will help your loved ones to maintain their standard of living.
3. Provide finances to your loved ones to achieve life’s goals in your absence
An adequate life insurance policy will fund your unfulfilled goals like a quality education for your children, daughter’s wedding, for buying a piece of land, or just for a rainy day.
Thus it is not an insurance for you but its for your family’s peace of mind. Their future standard of living may well depend on the life insurance decisions that you make today.
Types of Life Insurance policies:-
Life insurance comes in many shapes and sizes, but the different types of policies can be broadly classified into two categories:
1.Term insurance and
2.Permanent insurance
Term insurance is the insurance policy under which the death benefit is payable only if the insured dies during a specified period & this policy does not have any investment component. It is the most affordable type of life insurance available. It is designed to meet temporary insurance needs; providing protection for a specified period of time, the term. This type of insurance makes sense if you have financial needs that will diminish over time, such as a home mortgage or a child’s tuition.
Each year, a premium is paid to cover the risk of death during that year. Term life insurance has no cash value. The only way to collect anything is to die before the term life insurance expires. If death occurs, the life insurance beneficiary generally collects the death benefit of the insurance policy, free of income tax.
Permanent insurance is the insurance policy that provides coverage throughout the insured’s lifetime and may include an element that builds cash value. This type of policy provides lifelong protection. It also provides a savings element that accumulates a cash value over a long period of time. In other words, this type of policy, combine life coverage with an investment fund. Here, you’re buying a policy that pays a stated, fixed amount on your death, and part of your premium goes toward building cash value from investments made by the insurance company.
No one type of life insurance is better than another because the type of insurance that suits your situation best depends on your personal and financial circumstances.
Final takeaway:-
You might have heard of the saying, “There are worse things in life than death. Have you ever spent an evening with an insurance salesman?”. If we go by the saying, if you haven’t yet met an insurance salesman, then speak with him today to get your & your family’s life financially stable & secured. Do not leave your family to drown in a sea of financial difficulties because we know that risks and uncertainties are part of everyone’s life & they are all waiting to happen.

Permanent or term life insurance?

Now that you are ready to purchase life insurance, the choice before you is what type of life insurance would best suit your purpose. Life insurance is not a one-size-fits-all product and each one must assess his or her own personal situation to come up with the right coverage and the number of years you would need that coverage. The two broad categories of insurance open to you are permanent or term insurance. Let’s take a look at each one.

Term life insurance

This is the simplest type of life insurance and is often considered to be insurance at its best. You pay a certain amount of premium against a death benefit amount (coverage) that your family would receive in case you die during the tenure of the term insurance policy. Term insurance is temporary. This means you can purchase a policy for a period of term, say, 5, 10, 15, 20 years or even longer. You pay premiums monthly or annually. Annual payments work out to be cheaper than paying premiums every month. There is no savings element involved. If you should outlive the policy, the money you have paid towards premiums is gone. To avoid this, life insurance companies also offer a type of term insurance called return of premium. At the end of the term period, if you are still alive, all the premiums you have paid will be refunded to you, tax free. There are several types of term life policies, such as level term life. Level term assures that your premiums remain level, or the same, during the entire term period. This avoids any unexpected hikes in premiums during your term period that you had not planned for.

Since term life is temporary it is the cheapest insurance you can purchase. For example, a 40-year old male who is in top health, living in California can get term insurance for as little as $160.00.

To summarize, here are the main features of a term insurance policy:
Term life is temporary life insurance and can be purchased for a specific term period. After the term period is over, you would need to renew the policy if you still feel you need to be insured.
Term insurance is the most affordable.
There is no savings element involved.
Term life can be renewable – look for renewable options that do not require you to prove your insurability after the term period is over.
You can purchase term insurance at a cheap rate right now and convert to a permanent life policy at a later date. You would need to look for a term life policy that offers you this conversion option.

Permanent Life Insurance

Permanent insurance (also called whole life insurance) offers lifelong protection. It is more expensive than term insurance because, along with insurance coverage, there is a savings component attached to it. For the first ten years, your permanent life policy will not accrue much interest. Much of the interest will be used to pay off administrative fees. You cash value will only kick off after that.

Another benefit to owning a permanent life policy is that you can borrow from it anytime you need cash. Interest rates are high, but should you need the money, you are able to take a loan against your whole life policy.

To summarize, here are the main features of a permanent life insurance policy:
Permanent life offers life insurance protection for your entire life provided you pay your premiums.
It is more expensive than term insurance, but offers a cash value component not found in term insurance.
You can take out a loan against a permanent life policy.
The premiums remain the same throughout your life.
Permanent or Term Insurance?

Most experts recommend that you purchase a term life policy and invest the difference (between term and permanent) in a separate investment instrument. This is more likely to fetch you more money on interest than a permanent life policy would. Others also suggest that life insurance is not something you need for a life time. Growing families, in particular, who have limited income, prefer term insurance because it is the most affordable and meets their coverage needs most satisfactorily. If you are looking for cheap life insurance from some of the most financially strong life insurance carriers in the industry, request for free insurance quotes online. Comparing multiple term life insurance quotes online is quick and convenient. Some websites also offer professional guidance to help you make an informed decision.

Term Life Insurance ? A Better Option to Mortgage Life Insurance

A mortgage life insurance is a type of insurance policy that is designed to pay off your mortgage in the event of your untimely death. The insurance company will pay off any outstanding balance left on your mortgage leaving your family debt-free. Typically, in this type of insurance, as your mortgage decreases, so does the amount of insurance.

How Mortgage Insurance Works

When mortgage insurance begins, the coverage must equal the outstanding amount on the repayment mortgage. The policy’s termination date must coincide with the date scheduled for the final payment on the repayment mortgage. The insurance company calculates the annual rate at which the insurance cover should decrease in order to reflect the value of the capital outstanding on the repayment mortgage. Some mortgage policies will include provisions for payouts if the policyholder is diagnosed with a terminal illness from which he or she is expected to die within a year of being diagnosed.

Purchasing mortgage insurance is not such a good idea. In fact, it’s hard to find any mortgage life insurance which offers good value. The main reason why purchasing this type of insurance is a bad idea is because currently, traditional mortgage life insurance rates are not as competitive, as say, most term life rates.

Reasons why mortgage life insurance is not a good idea
Mortgage life insurance policies are generally expensive to begin with. As time goes on, these policies become even more expensive. The premiums stay level throughout the term period but the amount of death benefit becomes less at the same rate as the debt does. The cost for coverage starts out high and the policy gets worse over time in terms of the amount of death benefit.
Mortgage life insurance will only re-pay your mortgage if you should happen to die with the insured period. This may leave your surviving spouse debt-free, but mortgage insurance will not address any other income needs of your family which may arise due to your sudden demise. Most families have financial needs that go beyond payment of mortgage.
Term Insurance Makes More Sense
The death benefits that come from a term life policy can address any kind of debt and other financial needs your family may face.
You can take out term life policies for a term period of 10, 20, 25 or even 30 years. If you have already finished payments on your mortgage, you may want to review your term life policy to reflect those changes. Or, you may want to use the coverage for other future expenses you may have, such as education fees of your children, or a retirement plan for your spouse. With term insurance, you have the freedom to change the objectives of your insurance policy as your life situation changes. Mortgage life insurance does not allow you this type of freedom.
Underwriting for term life policy is cheaper. If you’re in good health, taking a term life policy could work out beneficially for you. For example, if you saved $100 on annual premiums by taking up a term life policy, rather than mortgage life insurance, this will add up to a savings of $3000 at the end of 30 years. It is always best to get an insurance policy with guaranteed lower rates than a mortgage life insurance policy.
More People Choose Term Insurance over Mortgage Life Insurance

It is more common to see people purchasing term insurance with return of premiums options instead of mortgage insurance. At the end of the term, all the premiums you have paid are refunded to you, tax-free.

Another better option to mortgage life insurance is a level term life policy. A level term life policy will give you the benefit of paying level premiums throughout the term period. And unlike mortgage insurance, your death benefits will not decrease during the full term period.

Finding the Best Deal on Term Insurance

You can get the best term insurance at the most affordable price by using online life insurance providers. Many of these not only offer the best term life insurance quote but also free professional services to help you identify policies that suit your needs the best and make meaningful recommendations. Look for online insurance providers who are BBB-accredited and are affiliated with the best life insurance carriers in the industry. They will provide you with instant insurance quotes which you can use to compare prices and products. This will help you make an informed decision and land you with a policy that best suits your needs at the most affordable price.

Life Insurance 101

Life insurance is basically a contract between two parties: the insurance company and the policy owner. After the demise of the policy owner, the life insurance company agrees to pay a lump sum amount based on premiums paid by the policy owner, to a designated beneficiary. The policy owner must pay the insurance company either a lump sum or a stipulated amount at regular intervals in order to keep the policy in effect. In addition to death, a life insurance policy may also cover terminal illness or critical illness and provide the policy owner with what is known as “accelerated” death benefits to cover cost of treatment.

Types of Life Insurance

Life insurance purely for protection: This type of life insurance is designed to provide death benefits against premiums paid for a specified term period which can be anywhere between 1 to 30 years. Because it is temporary insurance offered for a particular “term”, it is called term life insurance. This type of insurance offers high death benefits at the most affordable premiums. It is most suitable for young families on a low-budget or for individuals who want temporary life insurance protection. There is no investment component in term insurance and should you outlive the policy, you forfeit all premiums paid.

Life insurance with an investment component: This type of insurance is permanent. You pay premiums throughout your life. The reason why it is so attractive is because a portion of the premiums you pay goes into an investment portfolio. Your premiums begin to accrue interest. After a certain time, you can use this interest to pay premiums or you can dip into the cash value of your life insurance policy whenever you need to. Examples of life insurance with an investment component are whole life, universal, variable whole life and many others.

Who Needs Life Insurance?

Anyone who has a dependent needs insurance.
Married couples need life insurance to cover shared expenses. If you’re planning a family, it’s better to get life insurance before you get pregnant as insurance premiums increase with health complications.
If you have a growing family to support, you would need life insurance not only to cover your debts, but also to make sure your children have the money they need to go through college and to compensate for income loss through your death.
Single parents need of insurance to ensure that their children will have the financial stability they need even after they are gone.
Stay-at-home parents provide caretaking, housekeeping, transportation and other services which need to be covered under a life insurance policy.
Small business owners need life policy to cover financial losses that would incur if a partner or key employees died.
Singles may need life insurance to cover student loans or to provide for ailing parents.
Estimating life insurance coverage needs

Calculate all your assets against your liabilities. This will give you a fair idea of where you stand financially. Ask yourself how much money your family would need to maintain the same lifestyle they are accustomed to, pay off debts, and build up an asset for future expenses such as college tuitions or a retirement fund. You could make use of an online insurance needs calculator to help you estimate the coverage you would need.

How premiums are calculated

Life insurance companies use mortality tables calculated by actuaries along with a host of other factors to derive the premium amount you need to pay. The process of investigating and evaluating the risk involved in insuring your life is called underwriting. The underwriting process may differ from company to company but a few common factors play a role such as age, gender, lifestyle, whether you are a smoker, pre-existing health conditions, family health profile, alcohol intake, etc. Premium rates are higher as you grow older simply because growing older is attached to a higher mortality rate.

Most companies divide the risk of insuring an applicant into four categories:

Preferred Best: This category of people is considered to be a low mortality risk. Typically, those who fall under this category have no adverse medical history, have no pre-existing health conditions, and there is no family history of cancer, diabetes or other common genetic diseases.

Preferred: This category of people is considered to be a slightly higher risk to insure. They may have a family history of illness, but lead healthy lifestyles.

Standard: This is the category which most people fall under. Typically, they may be under medication for an ailment; have a family medical history of illness; or may lead an unhealthy lifestyle and therefore prone to ill health.

Tobacco: If you smoke, you automatically fall under this category.

Conclusion

Because the life insurance industry is so competitive, underwriting criteria may vary. Some companies may have a competitive edge over other companies by favoring certain types of health conditions. For instance, some insurers may look into the details of your smoking, differentiating those who smoke a cigar occasionally from those who smoke a pack of cigarettes every day. In order to find such companies, however, you would need to shop around.

Make use of online life insurance quote providers certified by the Better Business Bureau. Having access to hundreds of reputable insurance carriers, they can run your personal details through their database and instantly send you the best insurance quotes for comparison. And because these are paperless transactions and you are able to shop around for competitive rates, you may be able to save on life insurance expenses by up to 70 percent!

Reasons to Convert Term Life Insurance to Permanent Life Insurance

Term life insurance may make sense now, when funds are low and insurance needs are high. But this may not be the case a few years down the road. That’s why when you purchase term insurance you should make sure there is a convertibility option within your contract. A convertibility option allows you to convert your term life policy into a whole life policy within a stipulated time frame, without having to prove insurability. When your financial position becomes more stable, you may want to opt for whole life insurance that adds a savings component to your policy. Your premiums accrue interest while providing your family with life insurance coverage.

Advantage of Whole Insurance

The first question that comes to mind when considering conversion from a term insurance policy to whole life is: Why would I trade in my inexpensive term life insurance policy for a more expensive whole life policy? You’re not! Whole life has several advantages over term life and there are good reasons why you should consider converting your term life insurance policy to whole or permanent life insurance:
Whole life has a savings component. A portion of the premiums you pay accrues interest which adds to the face value of your coverage.
As you age, life insurance companies consider you to be at higher risk of death. Therefore, premiums go up. If you suffer from any health issues, your premium rates will go up even further. If your term insurance ends when you are say, 50 years of age, and you still feel the need for life insurance (most people do, at least to cover funeral expenses, etc), life insurance at this age may become an expensive proposition.
With whole life insurance, premiums remain steady throughout life. Since you do not have to worry about your policy terminating after a certain term period, you need not worry about worsening health conditions or increasing age affecting your premium rates.
If you’re hard up on cash, you can borrow money from your whole life policy up to a certain amount, without any questions asked.
Whole life insurance offers lifetime coverage. You must pay premiums up to the age of 100, but when your whole life policy reaches a certain maturity level you can use the interest accrued to pay premiums. If you are still alive after the age of 100, you need not pay premiums but your coverage is still in effect.
The interest accrued along with the face value of the insurance policy is tax-deferred.
Term Life Insurance – Advantages of a Convertibility Option

By using your convertibility option you will be able to convert your term insurance policy to whole life without have to prove insurability. This means you do not need to go through a medical examination. However, your premiums may go up based on your age at the time of conversion or, in some cases, premiums may be calculated on the age you were when you originally purchased the policy.

You have the option to convert all or a portion of your coverage to a whole life policy. For instance if you purchased a $250,000 term insurance policy, you could convert $100,00 to a whole life policy and keep your term insurance coverage at $150,000.

Most term life insurance policies with a convertibility option stipulate a time period within which a term life insurance policy can be converted to whole life. It may be a specified time period after the policy has been issued, or before the policy owner turns a certain age. Before you decide to convert your term insurance to whole life, you should take financial stock of your life and assess your probable financial position in years to come. Ask yourself questions such as: Do you expect your insurance needs to diminish as time elapses? Do you expect to pay off all your debts before you reach retirement age? Based on your family health history, do you expect any changes in your health as you age? Will you be able to leave enough money behind to pay off your funeral expenses and estate taxes, if any? Many people like to use a life insurance policy to leave wealth behind to their children or grandchildren. Consider your needs and how converting from term insurance to whole life would benefit you and your family.

What if your term life insurance does not have a convertibility option?

If your term insurance policy does not have a convertibility option, switch to one which does. You’ll find the best rates for term insurance online. Ask for free quotes on reliable site certified by the Better Business Bureau. This will give you opportunity to evaluate prices, look for free riders, and compare company ratings. Since such sites have a huge database of reputed life insurance carriers offering competitive rates, chances are you’ll find a term insurance with a convertibility option that is cheaper than your existing policy!

Factors that can affect your life insurance premium

Taking out life insurance is only common sense in an unpredictable world, and is essential if you have loved ones dependant on you. While we all don’t like to think of the worst happening, it can and does, so taking out adequate protection on your life is essential.
Basically a life insurance policy pays out a predetermined sum of money in the case of the death of the insured.
However there are many clauses which can affect and cause the policy to become void should the cause of your death be linked to them. There are also many factors which apply to policies in general regarding premiums and cover.
This is why it is important that you understand what you are covered for and what exclusions apply to your policy. While these can vary there are some common factors:
Not mentioning an illness you already have at the time you take out the policy can have a serious affect on whether your loved ones can make a successful claim. It is essential you always give honest information at the time of taking your policy out and declare any illness you have or have had when applying.
The premium you are quoted when you consider taking out life insurance is dependant on many factors. As an example, how old you are at the time of taking out the policy is a big factor in how much the policy will cost per month as will your height and weight.
Your occupation is also is taken into consideration – the more at risk you are, the higher the premium. Whether or not you are a smoker and the general state of your overall health will also play a deciding factor.
How much you will pay will also depend on the amount of cover you wish to take out and the type of policy you have chosen. Along with this you will be asked questions regarding your lifestyle. Obviously, if your favourite weekend activity is sky diving or a similar high risk sport, then you will be classed as a higher risk and the costlier the cover will be.
Always make sure you know what you are covered for and what you aren’t covered for. Check out the exclusions which will usually be found in the small print and definitely take the time to look a policy over.

How To Use Life Insurance To Protect Your Family Finances

Most of us know just how valuable Life Insurance can be, particularly for protecting your dependents against the financial hardship caused by the unexpected death of the main family breadwinner.
When looking for plans to provide the required cover, most people tend to focus solely on the monthly cost which may not provide a true indication of the best value over the required term.
Are your life insurance premiums guaranteed?
For example term life insurance plans usually offer two types of premium, guaranteed and reviewable. As the name implies guaranteed premiums are just that. The premium is fixed at outset and cannot subsequently be changed by the insurer in the light of poor claims experiences. Reviewable premiums however are subject to a periodic review and therefore the premiums could be increased by the insurer if this class of insurance was subject to more claims than anticipated. Although guaranteed premium plans tend to cost slightly more initially than reviewable plans they are worth considering particularly for terms in excess of 10 years.
Perhaps the best way to obtain maximum value is to select the right type of plan to match the need. For example most people automatically select lump sum cover when setting up a life insurance policy for family protection. This type of plan is fine if you need to provide lump sums to pay off debts such as mortgages and loans etc. Family protection however is more about providing an income to replace that lost as a result of the death of the life assured. Having a lump sum is fine but where do you invest the lump sum to generate the required income? Will the income received be subject to tax and will the lump sum be sufficient to generate the required income for the required term?
A better protection solution
A far better solution is to select a plan which is designed to provide an income to the end of the required term. This type of plan is known as Family Income Benefit (FIB) and has several advantages over lump sum term life assurance. First of all it’s usually quite a bit cheaper than a comparative lump sum plan designed to provide the same income. This is because the risk to the insurer decreases over the term unlike level term insurance. For example, a 20 year level term plan with a sum assured of ?100,000 will cost the insurer ?100,000 if a valid claim is made up to the end of the 20 year term.
By contrast a Family Income Benefit policy providing an income of ?10,000 per annum over a 20 year term could potentially cost the insurer ?200,000 if a claim was made shortly after inception. In practice however this is unlikely and therefore the insurers risk will decrease with each claim free year throughout the term. So for example if a valid claim was made during year 10 the insurer would pay the claim to the end of the term i.e. for the next 10 years.
Another valuable feature of Family Income Benefit plans is that in the event of a claim, the income can be provided on an increasing basis. This feature must be selected at outset and most insurers will usually offer a range of increase options from flat rate percentage increases or links to various indices such as Retail Prices or Average Earnings.
Cheap and tax free!
Family Income Benefit provides an almost perfect solution to the problem of providing an income for dependents on the premature death of a family breadwinner not only because it is perhaps the cheapest form of family protection life insurance but also because the income benefit is currently totally tax-free. It therefore totally eliminates the need to search for suitable investment vehicles to provide the required income.
To Summarise:-
1.Where possible choose guaranteed premiums

2.If you require income, consider Family Income Benefit

Get A Home Insurance Comparison The Easy Way

Home Ownership is the American dream. But buying a place of your own requires financial commitment. That means saving for a down payment, getting the right loan, and finding affordable home insurance. Getting a home insurance comparison from an online referral service makes the process of finding the right insurance much faster and easier.
With some basic money saving insurance strategies and affordable quotes, you can protect your home for less.
Regardless of whether you’re buying a first home or a fifth, all homeowners need insurance to protect against the unexpected.
Learning Insurance Basics
Lenders require insurance information up front when you’re buying a new home. Mortgage lenders require that borrowers purchase a minimum amount of homeowners insurance. Typically this amount would equal the homes appraised value, however the appraised value could be less than it would actually cost to replace the home in the event it is destroyed. It’s a good idea to take a look at buying a replacement cost endorsement, that way the entire cost of replacing your home is covered. To make the process of finding the right insurance, use an online insurance referral service to get a home insurance comparison, and choose the insurance plan that best fits your budget.
Supply the lender your insurer’s name and contact information once a policy is in place. They’ll add this information to the new home contract and escrow insurance as part of your monthly payment.
Don’t stick with the same insurance company year after year if you can find better coverage and rates by comparing online.
Maximizing Home Insurance Savings
No matter which insurer you choose, use these 6 money saving tips to save a chunk of money on the right protection.
1.Shop around. Get a home insurance comparison.
2.Setting your deductibles as high as possible could cut as much as 25 percent from insurance rates.
3.Make home improvements. Update electrical or plumbing systems, or add items like deadbolt locks for a sizeable discount.
4.Installing the extra protection of security or safety devices make homes more secure and can score another 20 percent in savings.
5. Save a bundle by getting rid of extra, unneeded coverage on items no longer owned or greatly depreciated.
6.Use the same provider for your home and car insurance. This could worth savings of up to 15 percent
From one insurer to the next, home insurance can vary by thousands. So learn insurance basics, get a home insurance comparison, and take steps to shave costs from your policy. Then rest securely, knowing that you have the right coverage at the right price.

Why you should have home insurance cover

The current upheavals in finances, loss of income for various reasons and increasing risk of job loss are important reasons to have adequate insurance cover for your home and valuables, so that your are at least able to recover something in case of natural calamity or any unforeseen accident in your life.
People having mortgages on their homes are required to take out a home insurance policy and surrender with the mortgage lender as collateral.
Financial experts are cautioning homeowners to take out a home insurance policy so that they are able to rebuild it at the same location in case of a crash. A right home insurance cover will help you in recovering livelihood of your life time in case of any mishap.
A major reason why experts are emphasising people to have home insurance cover in place is a recent research report which has brought to light a serious finding that five million Brits are considering big cut back in their spending by abandoning home and car insurances due to severe cash crunch caused by economic recession and loss of jobs.
A large number of people who participated in this research survey, felt that insurance policy premium was one area where they can cut back since it was difficult to manage other daily necessities due to insufficient income. According to experts, this step of cash strapped people could cause them more harm than leading to easing of financial crunch. The findings of survey also revealed that many people want to do away with flood risk insurance in particular to cut back costs.
Experts are particularly worried about this thinking since abandoning home content insurance or flood damage insurance would bring unimaginable misery in case of an accident. They feel that even if payment of monthly or annual insurance premium may seem unnecessary for the time being, a natural disaster or accident that may destroy or damage homes severely could lead to huge rebuilding or repair costs that people may not be able to afford at all.
You should therefore opt for right home insurance that fits in your home budget. You should evaluate your insurance coverage in such a way that you don’t overspend and yet your home is fully insured against unforeseen damage.
Home insurance also provides protection from any liability and legal responsibility for damage or injury your property, you or any member of your family including pets may cause to others.
It just doesn’t suffice having a home insurance, you also need to ensure that your home insurance is always up-to-date and you are fully aware what risks and damages your policy covers. More often people forget to renew or increase their home insurance. If your insurance policy remains unpaid or without renewal at the time of accident or calamity, insurance company will flatly reject your insurance claim.
Your home insurance policy can also include cover for expensive personal belongings such as jewellery, cash, expensive electronic gadgets and appliances. You can save by searching around for the best home insurance provider and insurance rates, while still covering your home with insurance.