September 22, 2017

 

Understanding Permanent Life Insurance

Permanent Life insurance is in essence a broad term for life insurance policies that do not expire. And unlike term life insurance, permanent life plans also combine the death benefits with a savings portion. This savings portion involves the building up of a cash value that the policy owner can borrow funds against, or even in some cases, can be withdrawn if funds are suddenly needed. Permanent life insurance is coverage for your entire life. There is no need to renew this type of policy and as long as you pay your premiums and keep the policy in force, your policy stays in effect for your whole life. The amount for which you are insured will then be paid to your beneficiaries at the time of your death – even if you live past 100.

Permanent insurance operates differently from term life insurance. The premiums are always larger – often five to 10 times the size. The reason that premiums on a permanent policy are more than the actual cost of the policy is that a portion of that premium goes into a savings component known as the policy’s “cash value.” This is why permanent insurance is also referred to as “cash value” insurance. At the beginning, the cash value is very low because much of the early premiums go towards sales charges and agent’s commissions. But as time passes, the cash value accumulates and the insurer can pay the policyholder depending on the dividends or interest agreed upon. Permanent life insurance is therefore more like an investment than an insurance policy.

Until your policy is redeemed, this savings will continue to increase and earn money. At the point of redemption, depending on the type of policy you have taken, the cash value is either surrendered to the insurance company or included your death benefits. But the savings portion of your permanent life insurance policy is more than just a way to increase your death benefits. The main advantage is that you have access to this money at any time during your life allowing you to cover any expenses that you otherwise might not have been able to afford.

You can use the cash value component of your policy by requesting a low interest rate loan from your insurance company and use the cash-value account as a guarantee or by surrendering the cash value portion (completely or partially). Surrendering your policy in essence means that you are terminating it. A Full Surrender implies that the death benefits and any cash value accrued will be paid to you and the contract between you and the insurance company is over. A Partial Surrender means that only a portion of the death benefit and cash value will be paid to you. The remainder will be adjusted against your existing policy. Keep in mind that not all insurance companies allow you to partially surrender your policy, and if they do, it may be only under extreme circumstances.

Another perk of permanent life insurance policies is that they enjoy favorable tax treatment. You pay no taxes on any earnings in the policy as long as the policy remains active. Money can also be withdrawn from the policy without being subject to taxes as such loans are not considered taxable income.

How the cash value portion of your policy is handles is in fact the basis for the major differences in between the types of permanent life insurance available. Each type offers varying levels of freedom and flexibility in reference to premium payments and control of your investments. These include:

Whole life insurance
Whole life insurance is a type of permanent life insurance that remains in effect throughout one’s life. Generally, the premiums for this type of policy remain level throughout the life of the insured. This type of insurance plan also develops cash values that can be accessed by the policy holder through surrenders or policy loans. Cash values in whole life insurance policies typically include two components. There is a guaranteed cash value, which grows on a pre-determined schedule and which equals the death benefit upon maturity of the policy. There is also a non-guaranteed cash value element that is made up of dividends, which add to the value of the life insurance policy over time.

Universal life insurance
With universal life insurance, all three elements of the policy are differentiated. There is the protection element or the death benefits, the expense element, and the cash value component. Separating these elements offers the policy greater flexibility and allows the holder (within certain guidelines) the ability to modify the face amount or the premium in response to changing needs and circumstances.

Variable Life Insurance
A variable life policy offer the most flexibility and control. The policyholder can decide how the cash-value portion is invested. But be warned, this type of policy should only be taken by people who have the experience and understanding of the markets and the ability to closely monitor and manage their policy portfolios. The rewards may be greater but the risks are high as well. Variable life insurance is also one of the more expensive plans available today.

Types of Life Insurance to Avoid

The main reason behind buying a life insurance policy is to protect your family or dependents from financial hardships in case something happened to you unexpectedly. But, there are a lot of life insurance policies that are being sold today that duplicate the protection you would get from a normal term life insurance policy, so don’t be so quick to sign on the dotted line. Here are some types of insurance you should avoid:

Credit Life Insurance – A credit life insurance policy, or “credit life,” as it is also referred to, is used to pay off a debt for a car, electronics, appliances or any similar consumer items if you die or are disabled and cannot make the repayments. It is in effect a type of decreasing term life insurance that will help pay your credit card bill if something were to happen to you. But unlike a term life policy, it is insurance on a debtor, in favor of a lender.

You may be offered a credit life policy when you are financing a large item and the premiums are usually added into the loan contract. This type of policy is ALWAYS optional and is generally quite expensive. Credit life isn’t normally sold by itself. Salespeople typically sneak it in when you finance a purchase because it generates hefty commissions for them. You should also know that it is illegal for a lender to force you to buy such a policy when making any big ticket purchases. Credit life coverage is also severely limited as it never covers pre-existing medical conditions. If you turn 70 during the policy period, it also often becomes null and void. Finally, your family isn’t treated as the beneficiary, rather the lender is.

The basic premise of credit life is faulty as what most people don’t realize is that when you die, your dependents are not obligated to pay off your debts unless their names are on the accounts in question along with yours. If you feel that you are being forced to buy credit life insurance against your wishes, scan all agreements carefully in search of signs of credit life and ask that it be removed. If you find out that you are already paying for credit life, you can cancel it at any time and receive a pro-rated refund. You should also check with your state insurance commissioner if a salesperson is allowed to insist you buy credit life to get a loan and complain to the authorities if it is not allowed.

Therefore, if you already own a sufficient amount of life insurance to cover your financial needs, including repayment of your debts, the purchase of credit life insurance should be avoided.

Mortgage Life Insurance – The odds are that you have already been offered a mortgage life insurance if you own a house. Your lender may in fact have recommended such a policy as the premium payments are normally added to your mortgage payments.

Mortgage life insurance also works in the same manner as a decreasing term life insurance policy that will pay off your house if you die. As the amount left to pay on your home decreases and the years pass, your death benefit in turn, decreases. These policies usually have a high cost, which only adds to your premium payment and interest on your mortgage. In addition to this, your lender is the beneficiary in this type of policy and your family will receive none of these death benefits. The bottom line is that any good life insurance policy can serve as mortgage life insurance. It might seem like a good idea to protect your home and take out a mortgage life policy but an affordable term life insurance policy will accomplish the same thing and term life insurance policies are generally less expensive than those offered by mortgage companies.

Air Travel Life Insurance – Air travel life insurance covers a broad range of situations such as lost or delayed luggage, flight cancellation, or even trip delay which can in turn cause other cancellations of hotel rooms or car rentals. Such insurance will cover you if you have a medical emergency before or during your flight as well as during your travel to and from the airport in case an accident occurs at the time. Air travel insurance does not cover accidents that happen while on vacation but only during the flight itself. Air travel life insurance is basically like a short term accidental death life insurance policy. If the plane was to crash and you were killed or injured, your family and dependents would receive compensation through this type of insurance policy. This type of policy however will terminate as soon as the policy holder leaves the airplane. This kind of insurance is only available for commercial flights and is not available for private carriers and has to be purchased prior to departure. At the end of the day, though, if someone depends on you financially, then you need life insurance to cover you no matter how you die. An affordable term life insurance will protect the policy holder if he/she dies in an airplane crash or naturally and more than compensates for the loss of life without any extra expense.

How to get low cost life insurance

There is no insurance industry greater than the US insurance agencies in recent times. Their prompt service, customer satisfaction, varied policies and excellent service have rendered them as one of the best insurance service providers not only in the United States but also across the globe. One of the most common types of insurance that is most in demand across the US is the life insurance policy. Almost every US resident wants to get his or her life insured as the life insurance policy protects and secures the life of an individuals family even after his death monetarily, through the payment of premiums, this is one of the best gifts one can give his or her family for life. However not everyone can afford high value life insurance policies. For these people a number of low cost life insurance policies have been developed in the US. The life insurance quotes for these low cost life insurance policies meant for the common man are readily available with the US insurance agencies for free with their agents or on their respective websites.
Low cost life insurance policies are affordable by all Americans. Not everyone however may have the knowledge of these low cost life insurance policies. Not everyone may know how to avail these low cost life insurance quotes from the insurance agencies. However there is a solution for the same. With the advancement of the internet there are many US insurance websites which compile the low cost insurance quotes from various agencies and provide the same to the customers on the look out to purchase insurance policies. These websites gather low cost life insurance quotes from high rated insurance agencies in US and offers a comparison of the various low cost life insurance quotes available from American insurance agencies.
According to the low cost life insurance quotes, an insurance agency could give out life insurance policies at a lower rate when the policy applicant is under a serious illness, health situation age and financial situations are some of the factors that are taken into consideration by a low cost life insurance policy while granting the same. The easiest way to get hold of these low cost life insurance quotes is to find them online. One must compare the various low cost life insurance quotes available before taking a decision on the same. The insurance companies providing these cheap life insurance quotes online would taken in the details from the policy purchasers in easy to fill in life insurance quote request forms before providing them the low cost life insurance quotes for free according to their requirements. Low cost US life insurance policies would definitely have lower insurance rates which would be mentioned in their respective life insurance quotes. Before one proceeds to purchase a low cost insurance policy one must understand the actual volume of insurance required. Once one decides upon the insurance policy to take up all one has to do is fill in the life insurance quote request form and wait for the insurance company to revert back. Low life insurance policies are the best to opt for especially of you have certain health and financial issue for which you are unable to invest in a high premium life insurance investment. Apart from acquiring the low life insurance quotes from websites that provide these services of compiling these quotes from various websites so that you can compare all of them prior to taking your decision, you can also request for low life insurance quotes directly from the US insurance agencies or their agents once you have explained your situation to them.

Difference Between Life Insurance and Health Insurance

An individual having health insurance is protected against running up large an extensive medical expenses. Health insurance coverage offers folks either partial or full coverage for certain medical procedures and treatments. On the other hand, life insurance it is an insurance policy that pays what’s called the face value of the life insurance policy to a beneficiary if the person whose life is insured dies. This value or what’s called the face value of the policy is paid out to the beneficiary in one lump sum payment.
When shopping for life insurance you will find two basic types: these types are what are called whole life and term life insurance. Term life insurance is much less expensive than full life insurance because of the fact it offers nothing more than simply life insurance coverage in the event that the person who is insured dies. Term life insurance can be purchased for durations as little as one year or as long as 30 years. The beneficiary of the term life insurance policy receives the proceeds or the face value of the policy if the person that was insured dies some time during the term of this life insurance policy. This might explain why so many people decide to wait until they get a little older before making a purchase of life insurance. Not always a wise idea though.
Whole life insurance combines the life insurance protection benefit along with an investment plan. The premium or the amount of money a person pays every period (monthly, quarterly or yearly) for a whole life policy is split between the life insurance premium and the investment portion of the policy. The investment vehicle portion of the whole life policy can be invested in mutual funds, money market, on the stock market and bonds and in some cases can be chosen by the person who is insured. One of the benefits of a whole life insurance policy is that it forces the saving of money for retirement by the person who is insured. This occurs by taking a portion of the premium and investing it in one of the investment vehicles listed above. These policies are in reality though, typically loaded with commissions and fees. After taking these costs into consideration, you may decide that this is not the best use of your investment dollars.
As you may have already determined, a life insurance policy differs from that of a health insurance policy. The price a person will pay for both a life insurance policy and a health insurance policy is determined by an individual’s age and physical well-being or health. As a general rule, those folks who are healthy and young will pay less for each policy than those folks who are bit older and who may be in poorer general health.
Given the financial choice between the two, it is impossible in this article to advise folks on which is better, a health insurance policy or life insurance policy. The two are designed to address different needs in a person’s life. A lot of folks find that their employer offers health insurance as well as the option to add on term life insurance coverage for a small or nominal fee. If you find yourself in this situation by all means take advantage of it. However when it comes to life insurance, be advised that if you lose your job you lose your life insurance coverage. It may be advisable to look into carrying term life insurance outside of your workplace.
If you find yourself on a budget and need to decide which insurance policy to purchase, this becomes of course determined by how much you can afford to pay each month and of course on your personal situation. If you find yourself having to choose between a health insurance plan and a life insurance plan, you may want to be advised to choose the health insurance coverage. Understanding that the health insurance coverage will be more expensive for you each month, bear in mind that it only takes one accident or medical illness to cause you to have enormous medical bills. Also this is something else to consider. If you find yourself with large medical bills as a result of not having health insurance, you may want to consider the idea of purchasing a term life insurance policy having a face value that is large enough to pay off your bills. Your spouse can be designated as your beneficiary. This way if something were to happen to you, your spouse would not be left with the debt.
If your plan at work does not include a health insurance benefit or you are self employed or simply looking to provide health insurance coverage for yourself and your family outside the workplace environment, a great place to start your research is Blue Cross Blue Shield (www dot BCBS dot com) or Aetna (www dot aetna dot com). This is not necessarily an endorsement but is a good place to start in understanding the types of health insurance plans available out there today. These two large providers operate in most of our 50 states so your likelyhood of learning about the types of health insurance plans available in your state from different insurers is high.
As always, seek the advice of a professional financial planner before deciding on a course of action that you do not fully understand.

Five Things Everyone should know about Life Insurance

Life insurance is one of life’s major decisions, often likened to a precious and lasting gift for one’s family. Despite the importance of this heartfelt gift, there are a few things about life insurance that few are aware of. Here is a list of the most important things that you should know about life insurance.

Everyone needs life insurance
Life insurance is not just for the chief breadwinner of the family. If someone depends on you financially or otherwise, then you need life insurance. A stay at home parent, or even a parent who does not contribute significantly to the household finances needs insurance too. They provide their families with ‘free’ services like cooking, cleaning, childcare and driving the kids around. In the their absence, the family would need extra income to pay for these services.

Young, single people are the most prone to thinking that they don’t need life insurance. But they do. Age is an important criterion in deciding life insurance premium amounts, and young people usually receive the best life insurance rates. When they do feel the need for life insurance later in life, they might not be eligible for cheap life insurance. Health conditions would have set in, preventing them from qualifying for the best life insurance rates. Single people think they don’t need life insurance but there is a chance that they won’t remain single forever. When they do have dependants, they may not be able to qualify for the same life insurance premium rates as now. Also, even if they don’t have anyone to leave money to, when they die there would be a few expenses – funeral expenses, unpaid mortgage amounts, loans are a few examples. In the absence of a life insurance policy, their aging parents or other siblings would have to attend to these payments.
Purchase a policy that will provide adequate coverage for your beneficiary
Most people don’t bother about working out the correct amount of coverage. Remember, with inflation your money may not really help your family meet all their financial obligations. On the other hand too much life insurance is also unnecessary, as you would end up paying extra premium amounts that you can invest or save.
So just how much coverage is enough? For the breadwinner of a family the rule of thumb recommended by experts is 10 – 15 times your current income. If you are a stay at home parent or care-giver, you can work out the values of each service you provide for the family, and factor inflation into the calculation so that your family is left with enough to pay for these services, in the event that you die. There are also several online calculators available on life insurance websites, and they can be quite accurate as they take inflation and your other investments into consideration.
Good health is a reason to rejoice, but bad health doesn’t mean you should stop looking at life insurance options.
When people have bad health, they assume that their premiums will be exorbitant, and they can invest the same money elsewhere. However, there are life insurance carriers out there who look more favorably on certain health conditions than others. How will you find them? The easiest avenue is to go online and get quotes on a reliable life insurance website. Smokers are usually bracketed high risk and are offered policies at high premiums. But many smokers do not know that if they remain smoke free for a period from 1 year to 5 years (depending on the insurance carrier’s rules), they can qualify for non-smokers policies.
However, this does not mean that your life insurance premiums will be as cheap as that offered for individuals who are in excellent health. Many contributors to major illnesses of today are controllable with the right diet and a healthy lifestyle. Improving your health is your ticket to affordable premiums.
Review your life insurance policy periodically
Life’s situations change often and this demands that your policy is reviewed often too. Marriage, a new baby, when seniors move in and become your dependants, a promotion or crisis in the work place, buying a house and medical problems are a few instances when life insurance policies need to be reviewed. Reviewing is important because it helps you buff up or trim down the amount of life insurance you need. e.g., when you have a young family, you have more liabilities and expenses. As you age, and your kids get jobs, you can trim down your coverage amount. Sometimes you may find out that there are other companies offering better rates. Reviewing your policy often will make sure that you have adequate levels of life insurance.
Shop around for life insurance policies for the most affordable policy that provides the maximum benefits.
Just like every other major buying decision, shopping around for life insurance is a great way to get the most affordable policy. Term life insurance policies especially can be bought online at very economical premiums. Online life insurance agencies can offer you the best rates because they deal with hundreds of life insurance companies. They can run your details through the requirements of these companies and offer you quotes in seconds. They are also a great way to compare the intricacies of various life insurance policies as they offer detailed comparison charts on each policy.

The importance of life insurance can never be emphasized too much. An uncertain economic situation and hard times are all the more reason to cover your family, and make them comfortable even when you are no longer around to look after them. If you don’t have life insurance yet, the best time to get it is now. As time goes by, it may be either too late to get life insurance or just too late to obtain it an affordable rate.

Permanent Life Insurance: Worth the Money?

Buying life insurance requires a lot of thought and planning. For most people, the choice is between a permanent life policy and a term life policy. Here’s a bit of information on permanent life insurance to help you make a better-informed decision.

Permanent life explained

Permanent life insurance will remain in effect until the insured dies, after which the death benefits will be paid out to the beneficiaries. The premiums on permanent life are designed to remain equal throughout the life of the insured. Premiums are high because permanent life policies develop cash values that can be accessed by the insured through surrenders or through loans against the policy.

The cash values in permanent life insurance policies typically include two components:
A guaranteed cash value, already referred to above. The cash value grows based on a pre-set schedule, and grows to a sizeable amount upon maturity of the policy (typically at age 100).
Most permanent life insurance policies additionally have a non-guaranteed cash value element, typically made up of dividends or earnings on the cash value, which can enhance the value of the life insurance policy over time.
There are many permanent life policies in the market today with varying features and varying degrees of control over the cash value component of premiums.

Permanent life vs term life

In sharp contrast to all the cash-value possibilities that permanent life can offer, term life insurance policies only offer you the death benefit, and only cover you for a particular number of years, called the ‘term’. Because of the absence of cash values and the temporary nature of this policy, term life premiums are more affordable.

Permanent life insurance can be substantially more expensive than term life insurance, but the death benefit is guaranteed as long as premiums are paid. On the other hand term life policies can buy you the same amount of death benefit as a permanent life insurance policy, at a fraction of the premium cost.

The pros and cons of permanent life insurance

The drawbacks of permanent life insurance are:
With most permanent life insurance policies, you don’t have a say in the investment portfolio to which your cash value component is linked.
Because of its investment component, the best benefits on a permanent life policy are gained in the long term. So this is not a great life insurance policy for someone who wants a stopgap life insurance policy.
If you fall short of funds the cash value portion of permanent life policy can be borrowed against. This attracts interest, so it is advisable not to borrow against a permanent life policy unless it’s a last-resort effort to access money during a tough financial situation.
The investments of most permanent life insurance policies are by nature very conservative (variable permanent life policies are the exception) with a strong possibility that if you were to invest the same amount of money elsewhere, you would earn much more on your investments. In fact there is a school of thought that advocates that permanent life insurance may not be worth the money at all when compared to the benefits of buying term and investing the difference in premiums (between term and permanent).
Let’s move on to the advantages of permanent life.
If you have difficulty exercising discipline in money matters, permanent life is a great option because it offers you ‘forced savings’. If not for the policy, you probably would have difficulty investing money so consistently into an investment avenue.
Permanent life is a life-long insurance policy and the premiums are consistently level. Though it can be quite a pinch in the first few decades of your policy, as the years pass, it can get more affordable.
When you outlive a term life policy, you will need to buy more insurance, predictably at higher premiums. This problem does not arise in permanent life because the policy is lifelong, and premiums are consistently equal.
Is permanent life insurance right for you?

It all boils down to the life insurance needs at your current stage in life. If you are very young and have several financial obligations such as small kids, their college education to think of, mortgages, loans, etc. then permanent life policies may not be right for you just yet because of their high premium costs. Term life would be a lot better. On the other hand, if you are older, and are mostly done with your financial obligations you will need a life insurance policy to cover you for the rest of your life, and that’s where permanent life seems the more feasible choice.

How long do you plan to keep your life insurance policy? If you want to be insured for several decades, you have to think of permanent life and not term, because even though term premiums are low, they will increase each time your policy expires, and you take out a fresh policy.

However, one must also consider the fact that permanent life insurance investments grow conservatively. Therefore, those who are looking at great returns on their investments are better off buying term and investing the difference (that they save on premiums) in tax-deferred investment vehicles like IRAs, Roth IRAs and even educational accounts like the 529s. The general opinion is that if one can make sound investments elsewhere with this savings in premiums, the returns would be much greater returns than a permanent life policy could provide. If you look at it from this angle, permanent life insurance doesn’t really seem worth the money. The choice however, should totally depend on individual considerations.

Finally…

You need to spend some thought on how much your coverage should be. With permanent life especially, you don’t want to be over insured because defaulting on your premiums can cancel your policy. You don’t want to be under insured either, and put your family through tough times. So use an online life insurance needs calculator for an accurate estimate of how much life insurance you will need.

Shop around before you buy your life insurance. You can do this online in a hassle-free manner by getting quotes from a reputed online life insurance agency. Check if the website is BBB-accredited, and you can be assured of its authenticity.

Ways to Save on Life Insurance Costs

A tough economy coupled with a maxed out job market has changed the way Americans spend their money. While the good news is that more and more people are now saving money for a secure future, the not so good news is that they are even scrimping on some essential expenses in the process.

Life insurance is one such essential expense that anyone who has dependants that rely on his income needs to incur. While many people view it as a “cake” that they pay for, but never get to eat, they fail to see the bigger purpose in getting life insurance.

It provides you the comfort of knowing your family will have the same quality of life even if you are not around to provide for them. Besides, the beneficiaries of the policy or the ones who get to “eat” the cake are your own – the people you care for the most in the entire world.

If you can, at a very low cost, ensure that they remain financially secure even after you’ve passed on, wouldn’t you want to grab that chance with both your hands? Yes, it is possible to save on your life insurance cost by following some simple guidelines.

First thing you can do is consider term life insurance instead of permanent or whole life insurance. Term life insurance provides coverage for a specific term or period of time, which could be 10, 15, 20 or even 30 years.

Since term life insurance is based on the premise that a lot of policies will lapse without the company having to pay death benefits, it’s the most affordable type of life insurance. In addition to this, term life insurance does not build any cash value, which makes it possible for many young families to buy it for cheap.

Insurance agents will usually talk up whole life insurance because of its “investment component,” but you should know the ROI on life insurance products are not as high as other tax-deferred investment vehicles. So, it’s better to get term life insurance and invest the difference in other investment schemes.

Another way to reduce the cost of life insurance is to buy only as much life insurance as you need. For that, it’s important to evaluate how much coverage will be required to ensure your family can maintain the same lifestyle after you’re no longer around.

While it may be impossible to precisely calculate your insurance needs as your personal circumstances will keep changing, experts opine that you should revisit your policy every year or at least every time there is a change in your situation. An example of that would be if you’ve just bought a new home or had a baby recently.

One of the biggest cost-saving factors for any life insurance policy is to buy it when you’re young. Premiums are generally low for younger folk in their 20’s and 30’s. The older you are at the time of buying a life insurance policy, the higher will be your premium rates.

Obesity and health issues also heavily impact the life insurance rates you’re offered. If you want to save on your life insurance policy, it’s important to get into shape. If you have high blood pressure or cholesterol, make an effort to bring it under control and show your insurer some evidence of improvement in your health to get a lower quote. Those who are overweight will be quoted a higher premium and they should exercise and manage their diet to qualify for lower premium rates.

Quit smoking cigarettes and see your premium rates plummet. Using tobacco and nicotine products can have a negative influence on your premium rates and if you stop consuming these products, you can make considerable savings on your life insurance policy.

What you can also do to reduce your life insurance premium rates is limit your alcohol consumption and avoid other unhealthy habits like driving under influence. Not only can an insurance company contest claims for deaths related to alcoholism, but they can also use previous incidences DUI or DWI to increase premiums or deny coverage.

One of the biggest mistakes you can make when buying life insurance policy is not doing enough research. If you’ve decided to buy a life insurance policy, it pays to shop around and you can easily do it online from the comfort of your home. Look for policies that suit your individual requirements, hunt for best rates, compare quotes from different companies and do a through background check on the insurance companies you’ve short listed before zeroing in on any one.

Like we’ve already mentioned, it’s important to revaluate your policies every once in a while so your coverage is updated to meet your current needs. For example, if your house has been paid for, you can easily do with a lower coverage than before. Same would be the case if your children have already been through college.

Similarly, if there is a drastic improvement in a pre-existing health condition or you’ve stayed off cigarettes for over a year, you may qualify for lower rates and therefore, should ask your insurance company for a reevaluation.

You can also save on your life insurance cost by making annual payments instead of monthly or weekly installments and by allowing money to be directly debited from your account. This will lower the administrative and operational cost of the insurance company and they may be willing to pass the benefit on to you!

If both you and your spouse are considering life insurance, it may be worth your while to buy a joint term life or first-to-die insurance than two individual policies. This type of policy covers both the spouses and the benefits are paid when either one of the insured dies. Most often, the premiums are lower for such type of policies.

Last, but not the least, be truthful on your insurance application. The greatest injustice you can do to the people you leave behind is providing false information on your application. If your insurance company finds evidence of misrepresentation of truth, it can cancel your policy or worse, withhold paying out death benefits to your beneficiaries when they most need it!

Should Seniors Opt for Term or Permanent Life Insurance?

Life insurance policy needs are usually different at different stages of an individual’s life. When you’re just starting out as a young, single adult, you may see little use in getting your life insured.

As you grow older, so do your responsibilities. You may have dependents who rely on your income to subsist and you need to ensure their financial security in case you’re no longer around to care for them.

Then you reach a stage of greater financial stability where your kids have been through college, the house has been paid for, other consumer debts taken care of, and you probably have money put away for retirement.

At this time in your life, your need for life insurance could be significantly different and you could do well to revisit your policy. The question you, as a senior, must ask yourself is whether it’s term life or whole life insurance that you need now.

Term life insurance, as the name suggests, provides coverage only for a specific period of time. Term life insurance is usually recommended for young families that are starting out and have dependents, mortgages, and other financial commitments, but limited resources.

As it’s relatively inexpensive, it allows younger people to buy considerable insurance on their life at very low premiums. The purpose of term life insurance is pure coverage in the event of the insured’s premature death and it has no “investment component”. The only way term life insurance can be cashed out is if the policy holder dies.

The biggest benefit of term life insurance is its affordability. However, the premium rates keep rising as you age. Therefore, if seniors were to purchase term life, they will lose out on its cost benefit as the rates offered to them would be considerably higher especially if they are not in the best of health.

They would also need significant amount of savings to live a comfortable life post retirement and meet any unexpected medical expenses associated with old age. That’s why whole life insurance policy is recommended for older people.

Whole life or permanent life insurance, unlike term life, offers coverage for your entire life as long as the premiums are current. In addition to providing coverage, whole life policy also builds cash value.

Because it provides continual protection and has a savings feature, whole life insurance policy is more expensive than term life. Even so, whole life insurance is believed to be a better bet for the retired or nearing retirement folk for several reasons.
Term life insurance provides coverage until the age of 75, where permanent life insurance remains in force for your whole life.
You need to have reached a certain financial ability to afford whole life insurance. Older people generally have lesser financial obligations and can afford higher premiums more easily than those who are starting out.
You can cash the policy out for the accrued value in case of an unplanned medical emergency or even use it as collateral for loan. In short, whole life insurance acts like an asset that can be used at the time of need.
Unlike renewable term life insurance premiums that generally increase with age, the premiums on most whole life insurance policies remain the same over the years.
The insured can have the peace of mind that whenever their time comes, which is more of a concern as you get older, there will be guaranteed coverage for their partner.
Most whole life insurance policies offer dividends that can be added to the cash value or death benefits.
Proceeds from whole life insurance can be used to pay for the funeral and other final expenses when the insured passes on.
Seniors can also buy a whole life insurance policy as an estate or legacy for their grandchildren.
A smaller whole life insurance policy would generally not require you to go through a health examination, which works well in case of declining health.
However, whole life insurance is a long term commitment that one should consider purchasing only if they are confident of keeping up with the payments. Letting your whole life insurance policy lapse because you’re unable to pay the required premiums can spell disaster for your financial plans and should be avoided at this crucial juncture of your life!

Your Driving Record Affects your Life Insurance Rate

Most people know that a bad driving record can affect car insurance rates, but did you know that your driving history may affect your life insurance rates as well? That makes sense when you consider that life insurance companies basically gamble on how long you will live. People who are in excellent health, younger and lead healthy lifestyles are preferred by life insurance companies and this category of people pay the least premium. But what if you have traffic violations say, a ticket for speeding, or a DUI? How does this impact your life insurance?

Bad Driving Increases Your Death Risk
According to the National Highway Traffic Safety Administration, an average 40,000 Americans die from car accidents each year. Car crashes are the number one killer of teenagers, taking about 3,000 lives each year. Nearly 5 million suffer car-related injuries every year which emergency visits to the hospital. Bad driving is associated with higher risk of death. Therefore, life insurance companies take a look at your driving history and any violation of traffic rules is considered to be a risk that may shorten your life and therefore, impact your life insurance rates. Different life insurance carriers adopt different criteria for viewing traffic indiscretions. If you have a traffic violation, it would be best to shop around for life insurance carriers who look at traffic violations more favorably than others. Online life insurance quote providers are a great way to get multiple life insurance quotes from reputed life insurance companies easily and instantly.

Bad Driving May Impact Life Insurance Rates
Many companies do not ask for details of your driving history on their application forms, but this does not mean that they are not factoring your driving record in their underwriting process. Life insurance companies can access this information from the State Department of Motor Vehicles. Since this information is easily available to them, it’s best to be honest and write down any traffic violations you have had, if required. Any misinformation on the application form is considered a criminal act and may disqualify you from getting a life insurance policy.

Can You Erase Your Traffic Violations?
In general, life insurance companies are favorable to people who have had no more than 3 moving violations in the last three years and no DUI has been issued in the last 5 years. Most life insurance carriers look at recent traffic violations, and not your complete history. If you have a minor violation you should look at ways you can get this dismissed from your record. If your state has provisions for you to erase a speeding ticket from your record by enrolling in a safety course, you may want to take advantage of these before applying for a life insurance policy.

However, if you have traffic offenses which cannot be erased immediately, don’t wait to purchase a life insurance policy. Living without life insurance coverage is not the kind of risk you would want to take, especially when it would traumatically affect your loved ones.

Getting Affordable Life Insurance despite a Driving Record
The best option would be to purchase a policy that is the most affordable and gives you the best coverage. You can then review the policy at a later time when your driving record looks better and get your old policy replaced with a new one that costs less.

Having a traffic violation may impact your life insurance rates, but need not prevent you from getting the best coverage you can at reasonable and affordable premiums. Online insurance quote providers have access to hundreds of reputable companies and can offer you unbiased life insurance quotes along with company ratings. Shopping around for multiple life insurance quotes through online life insurance providers is an easy and quick process. There are no obligations to purchase and the process of getting quotes is free. You can easily access quotes from life insurance carriers whose underwriting criteria are more favorable to traffic violations, compare these quotes and choose the best life insurance coverage for your family.

About AccuQuote:
AccuQuote is a leader in providing term life insurance quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

Importance of Binding Life Insurance Coverage

Everyone who applies for permanent or term life insurance should consider the importance of binding life insurance coverage. Processing your life insurance policy can take up to 60 days. During this period you are left without coverage which is not an ideal situation. Events in life are often unforeseeable which is why you are opting for life insurance in the first place. You wouldn’t want to take the risk of being without coverage if there is an option available.

Binding life insurance coverage allows you to enjoy the peace and security that comes from knowing your life insurance coverage is active even before your life insurance policy is officially in place. How does this work? A premium must be paid along with the completed application form. The coverage begins on the date the applicant receives a conditional binding receipt. If you qualify for life insurance, you are not left without coverage during the time it takes for underwriters to process your life insurance policy. Since you are going to pay premiums anyway it makes sense to secure the life of your loved ones financially during this period.

Most life insurance companies issue a conditional binding receipt when an applicant fills out the form and submits it to the company along with the first premium. Depending on the type of insurance you are applying for, a “binding receipt” is also called a “conditional receipt”. As the underwriting procedure progresses, if you do not qualify for a life insurance policy, the life insurance company will return any premiums you have paid. Applicants who are totally uninsurable or not insurable at standard rates may not receive immediate coverage.

Everyone who is applying for life insurance should bind their coverage and get life insurance protection as soon as possible. Not only do the benefits include a sense of security, but if your health takes a turn for the worse during this period, your insurability will not be affected.

Binding life insurance coverage is an advantage to insurers and applicants. Most companies issue you binding receipts when an application form is submitted along with the first premium payment. The important issue, however, is choosing the right life insurance policy. Make sure you check out all your options before applying for a life insurance policy. What most people don’t know is that underwriters of different life insurance carriers use different criteria for insurability assessment. Many carriers also have additional advantages such as waive of premium rider, or conversion options that you can use to convert your term life insurance policy into a permanent policy. These options may be useful to you later on.

You’ll find it easier to find the best and most affordable life insurance policy when you use online life insurance quote providers. Their databases carry information from hundreds of reputable life insurance carriers and can easily and instantly find quotes that match your needs. You’ll receive multiple life insurance quotes for comparative study, free of cost and without any obligation to purchase. Look out for the Better Business Bureau (BBB) accreditation before using online life insurance quote providers.