Understanding Your Term Life Insurance Policy – Vital Facts You Need to Know to Protect Your Money

It is true that life insurance can be a little confusing the first time you deal with it. But let’s see if we can’t clear up some confusion and get you on the road to understanding your term life insurance policy.

Term insurance, like renting, gives you the use of an asset – the company’s promise to pay a benefit – for a period of time until the coverage terminates.

In other words, term life coverage lasts for a specified period of time (the “term”), usually one, five, 10 or 20 years.

During this term the insurance company will pay a death benefit only if the insured dies during the specified coverage term of the policy.

Term Insurance Is Pure Insurance

Simply stated, term insurance is “pure insurance.” No benefits are paid if the insured lives beyond the term of the policy and there is no investment, or earn dividends or cash value feature inherent in this type of policy like there is in a whole life policy, universal life insurance or variable life insurance policy.

When To Choose Term Life Insurance

Generally term insurance is the least expensive form of life insurance for people under age 50 because of the short period of time the person will be insured. Premiums for term insurance policies are lower and often have a higher death benefit than other permanent life insurance products.

A good rule of thumb is to choose a term policy when you need coverage for 30 years or less, and when the cost of permanent insurance is more than your budget allows.

This is also a good product to use as a supplement to your employer’s life insurance if their coverage isn’t enough.

The Rest Of The Story On Understanding Your Term Life Insurance Policy

Life Insurance Settlement Scams

Families opt for a life insurance policy to provide security against calamities such as death, fire, or accidents. Such deals prove to be a safe way of protecting individuals by agreeing upon a certain amount prefixed by the insurer that would be paid in case of such unfortunate events. Insurance companies assist bereaved families by providing moral, financial, and emotional support. Life insurance is purchased by working employees, and by senior citizens too.

It is possible that a policyholder may not be able to pay the premium fixed due to financial constraints. In this case he would be forced to sell his policies to companies for cash back at a fixed percentage. Some companies may not offer the amount expected by a policyholder. Other companies may agree to pay face value of the policy. An application form has to be filled that includes the medical and policy information to dissolve such a policy and claim compensation.

At times, major companies that invest in buying policies at a lower rate than the purchase value may acquire large sums offered by insurance companies at the time of maturity. Various lenders or brokers, who bid for higher rates, may pay the customers only half the value acquired.

Companies that buy such life insurance settlement policies are major investors who fund many transactions every year for a considerable amount of profit. These policies are held as portfolio assets rather than selling them to outside investors. Such policies are purchased from holders who are in desperate need of money. People may tend to sell their policies to companies without knowing if the company is legally recognized or not.

A policyholder has to consider all such drawbacks and avoid selling them to fraudulent companies who may reap profits over such deals and disappear.

Hence, before selling a policy, individuals are advised to consult lawyers who guide these people. It may prevent them from scams. Selling a life insurance settlement involves a lot of trust in the company. Hence, people need to read the prospect of the companies before taking such a major decision.

Affordable Life Insurance Quotes

There is a remarkable growth in the number of life insurance companies. The help received from the search engines and many websites enables a person to be able to get the best rates and policies, to suit his need. In fact, the net is credited with the availability of realistic life insurance quotes.

There is more specialization in the life insurance industry, today. People are generally eager to reap the benefits with lower life insurance premiums. The net is an effective vehicle for them to acquire information on the affordable life insurance quotes.

Various flexible, reliable and affordable life insurance products are available in the market that helps the customers to protect the future of their families. The Globe Life And Accident Insurance Company offers an affordable life insurance solution for individuals and families across the United States. In a broad sense, the options available are Term Life Insurance, Universal Life Insurance, and Whole Life Insurance.

Term Life Insurance is a temporary low cost solution that provides insurance, without a cash value. Whole Life Insurance offers permanent security, including a cash value you can borrow against. Universal Life insurance combines stable insurance protection like Whole Life, with flexible premium payments.

It is recommended to consider economic stability and longevity of the company providing life insurance quotes.

It is better to evaluate the company?s renewal rates and check if the medical examination is necessary for those rates. Nevertheless, security and confidentiality of personal information is of top priority. It should be noted that no guarantee can be given that insurance carrier will at all times issue a policy. It mostly depends on the current medical condition of the person. Some occupations are more at risk than others and persons working in hazardous environments should reconsider and analyze their specific insurance needs.

Getting the Full Picture on Annuities and Insurance

LIFE insurance and annuities are supposed to accomplish straightforward goals: life insurance provides for your family if you die unexpectedly and annuities guarantee a steady stream of income in retirement. But right now, both are being promoted for their tax benefits.

Money put into these products grows on a tax-deferred basis just as it does in retirement accounts. In the case of annuities, the money is eventually taxed as ordinary income when it is taken out. With permanent life insurance, the death benefit goes to the beneficiaries free of income tax, but if it is a permanent policy, as opposed to a term policy, the owner of the policy could also borrow against its cash value and never pay income tax on it. (The insurance company charges interest on the borrowed money, though, and that loan reduces the value of the death benefit if it is not paid back.)

And while insurance companies are using the tax issue as a selling point, that is by no means the full picture. I have written recent columns on how this year’s tax increases have influenced behavior around estate planning and investments. As in those two cases, the decision to buy various life insurance policies or annuities can be unduly influenced by the tax advantages inherent in insurance. Many policies carry high upfront and management fees, have limited investment options and penalize people for withdrawing their money within a few years of buying the policy or annuity.

With these downsides, insurance companies are regularly looking for reasons to sell their products beyond the death benefits of insurance and the steady income stream of annuities.

“Oftentimes these products are sold based on the moment in time,” said Richard Coppa, managing director of Wealth Health, a financial advisory firm. “A couple of years ago, they were sold on guaranteed returns of 6 or 7 percent because people were so fearful. Today, it’s uncertainty about taxes because many of the favorable tax treatments out there are subject to negotiation.”

He said there were certainly people who were afraid of running out of money in retirement who could benefit from an annuity. He pointed to people with $250,000 to $500,000 in assets who could calculate how much money on top of Social Security they would need and buy an annuity that would cover that.

“I think you really need to run the numbers and understand the charges and compare those to an investment portfolio where you’ll get an expected rate of return,” he said.

Given the lure of tax-deferred savings, how should people weigh that against the risks and downsides of insurance and annuities?

Thomas Pauloski, national managing director at Bernstein Global Wealth Management and a former insurance company executive, said people could go wrong when they did not fully consider how long they wanted to keep their money in an insurance policy and how much the company was charging them in fees.

If they are going to pull out the money out in a few years, insurance makes little sense since fees will cancel out any gains. What’s trickier is knowing what those fees are going to be, even over the long haul.

Mr. Pauloski said among permanent insurance options — as opposed to term insurance, which has no cash value — only so-called private placement life insurance policies were clear about their fees, but that was because these policies were custom-made for someone paying a premium often in excess of $1 million. With more common forms of permanent insurance, like universal and whole life, finding the fees becomes more difficult, he said, because of how they get embedded in the policies.

More confusing still is how the returns on the cash value of the policy are presented, since they can mask the high fees. “Any insurance illustration is going to have a lot of assumptions built into it,” he said. “It assumes, for one, that today’s pretax dividend is going to continue forever. That is simply not going to happen.”

When presented with a proposal for a client, he said he often went back to the insurance company and asked it to redo the calculations with lower, more realistic assumptions. Even that, he said, is not perfect because it assumes a consistency that is unlikely.

With annuities, the fees start to pile up when people elect additional features, like a guaranteed, minimum payout. Those fees reduce the return and the value of the tax deferral.

Since the annuity company paid a commission to the broker who sold the annuity, there are also so-called surrender fees for taking your money out in the first five to 10 years of the annuity.

Mortgage Life Insurance – The Best Approach

Insurance is risk management. So, for each type, you need to identify the risk to cover and the best way to do it. Mortgage life insurance, like other insurance types, could be expensive, so you need to understand that the inherent risk is the same as for normal life insurance. Besides, there are different ways to get it.

Financial institutions sell mortgage life insurance to protect them from potential loss on the death of mortgagees. Financial institutions, instead of family members or others you choose, benefit from these policies.

Let’s look more closely at how mortgage life insurance might arise. If you borrowed $100,000 from a bank to buy a house, the bank would write its name on the property’s title, and so, become a co-owner up to the loan’s value. This is the typical mortgage.

If you died before you repaid the mortgage, the bank would have two choices. It might sell the house and give your beneficiary the difference between the amount they got on sale and the outstanding loan. Alternatively, it could allow your beneficiary to take over the mortgage loan and repay it. To do the second, the bank would need to be comfortable with the beneficiary’s finances after your death. The bank might accept the alternative if your life insurance and other assets provided enough income to pay the mortgage and give your dependents an acceptable income to live on.

Another way to deal with mortgage insurance when you get a mortgage is for you to insure your life for the mortgage’s full value. This would supplement existing regular life insurance coverage. However, this does not look holistically at your finances, so I do not think it is the way to go. You might not need more insurance.

Mortgage life insurance sold by a financial institution can be expensive and has disadvantages. First, the insured amount falls as the mortgage balance drops over the mortgage’s life, but the premium does not fall. Second, unlike a term life policy, the bank has the right to hike premiums. Third, it is not portable. So, if you switch your mortgage, you need to reapply for life insurance with your new bank.

You would be better off to review your financial affairs and if needed, buy extra term insurance from an insurance company. You would own the policy. The financial institution wouldn’t. Your spouse or others you choose, would be the beneficiary, not the bank. And your spouse or dependent would have the choice to take over the mortgage, if that alternative was best for them.

Like all financial decisions, listen, hear, and understand your alternatives, and let the Lord guide your decision.

(C) 2011, Michel A. Bell.

Cheap Mortgage Life Insurance

Mortgage life insurance is a type of insurance that ensures the remaining balance on a mortgage is paid in case of death of the borrower. Cheap mortgage life insurance is available which the borrower can obtain with a little research of the market. Cheap mortgage life insurance refers to a policy with low rates. However, the rates depend on the type of mortgage and amount.

Mortgage life insurance is necessary for all borrowers who are opting for a mortgage. This is done to offer protection to the homeowners and their families against losing their income in case of unexpected death of the earner. The borrowers are required to fulfill their end of the bargain by making periodic fixed payments to the insurance company. These payments are known as the insurance premium and are determined on the basis of several factors. The insurance company in turn promises to compensate the beneficiaries named in the policy in the unfortunate event of the client?s death. This premium is usually included with the monthly mortgage payment. The borrowers do not have to worry about making another monthly payment towards the insurance policy.

Mortgage life insurance provides peace of mind to the borrowers, as they do not have to worry about their families or other dependents losing the house in case of a premature death. Further, getting a life insurance policy for protecting the mortgage is usually not very expensive. As the amount of the coverage goes on decreasing with the mortgage amount, the insurance also gets cheaper. To find out the best and the cheapest mortgage life insurance, borrowers must compare the life insurance prices of as many carriers as they can. This task has become quite easy as it is now possible to request multiple quotes over the Internet by filling out a single form.

How to Compare Low Cost Life Insurance in Missouri

Most people fail to see the need for life insurance until they begin to raise a family – and by that time the cost of such a policy is difficult to justify against all the other costs associated with a new family. Yet providing for your family’s needs must be one of your primary concerns.

Let’s start by discussing the choices you have when it comes to buying life insurance. There are two distinctly different types of life insurance that you can buy. There’s Term Insurance and there’s Whole Life Insurance.

Many people are immediately attracted to term insurance because of its low cost – at least initially. But there is a catch. Term insurance is only good for a certain number of years – say, 10 years. At the end of 10 years – the end of the policy’s term – your insurance runs out and if you want more life insurance you must buy another policy – at a higher premium cost. At the end of another ten years you could be forced to buy yet another policy at an even higher price. So over time, term insurance can end up costing you a great deal more than you originally bargained for.

Whole life insurance, on the other hand, appears more expensive when you first purchase it, but the difference is a whole life policy lasts for your entire lifetime and so whatever premium you pay on day one you pay for your entire life. A whole life policy also builds a cash value over time which many people find convenient to borrow against for the down payment for a house or for a special family vacation or for emergencies.

Whichever choice you make, whether to pay a level premium for your lifetime and buy a whole life policy or to pay a lesser premium to begin with and buy a term policy, there are a few simple things you can do to reduce the cost of your life insurance so that you can provide for your new family the way you’d like to.

Start by living a healthy life-style. Not only is this good for both you and your family simply from a health point of view, but staying tobacco-free and losing weight will also reduce the cost of your life insurance dramatically.

As odd as it may sound, keeping your credit rating excellent will also reduce your cost of life insurance since most insurance companies take your credit rating into account when setting your premium cost.

Do not let another birthday pass before you get your policy. Each time you celebrate a birthday, the cost for any life insurance you may purchase gets a little higher.

Combine all of your insurance policies under one insurance company. If you have policies spread around different companies, life insurance at one company and homeowner’s at another for instance, consider moving all of your policies to just one insurance company. Most insurance companies here in Missouri will give you a nice multi-policy price break if you do.

Now that you’re armed with all of these tips it’s time for you to go online and visit at least 3 different websites that allow you to quickly and easily compare low cost life insurance policies. By making comparisons on a minimum of 3 different websites you will do a thorough job of comparing prices and you will stand the best chance of finding the lowest cost life insurance here in Missouri, allowing you to save money and provide for your family all at the same time.

Life Insurance, Auto Insurance, and More in Alaska

I have divided this article into four different sections, each detailing its heading. I hope this makes it easier for you to get the information you require.

Auto Insurance in Alaska

The state of Alaska requires that every single motor vehicle registered there needs to have at least liability auto insurance. Under this State law; all owners of motor vehicles and/or drivers of the same must have the minimum amounts of liability auto insurance, which are:

– $50,000 for death or injury to any one person per accident

– $100,000 for death per accident or total injuries

– $25,000 for property damage per accident

In the event of an auto accident that resulted in property damage, personal injury or death amounting to more than $500; all drivers involved in the accident must show their auto insurance proof. Aside from auto accidents with damage greater than $500, the driver must also present proof of auto insurance any time they are requested to do so by an officer of the law and when comes the time to renew registration. If the driver fails to show proof of auto insurance for accidents with $500 dollars or more worth of damage, the drivers license will automatically be suspended for a period of 90 days to one year. The length of the suspension depends on the drivers driving record. Also, in case of an auto accident here, the guilty drivers auto insurance shall cover the expenses that were caused because of the accident.

Home Insurance in Alaska

You probably would not know this, but compared with to other states, Alaska pays more for home insurance. The reason for this is that they are always at a risk of floods and sub-zero temperatures. Though they have experienced a high increase in home insurance coverage in the past year, there are several ways to save on home insurance. The first is to compare the different insurance companies and see what each of them have to offer. This will enable you to get the right insurance at the price that fits your budget. Second is asking around about the different types discounts. You can ask your insurance company for the discounts you qualify for. And last is that increasing the deductible can save you a decent sum of money. By increasing the deductible, you are basically telling your Alaska Home Owners Insurance Agent that you are going to do everything you can to avoid any claims.

The most common home owners insurance coverages are:

HO-1 – This is for lighting, fire, vandalism, theft and smoke.

HO-2 – This is the same as the HO-1 only with additional perils, such as building collapse, water damage and falling objects.

HO-3 – This is “all perils”. Depending on your budget, you can choose between basic and all perils. But what is ultimately important is that you have home insurance which will protect you in case of disaster.

Health Insurance in Alaska

Alaska health insurance enables most residents to be able to afford the increasing cost of health care. Those who have health care are able to escape medical debt, which occurs in two out of five locals. Considering the statistics, it is important, and certainly more cost effective, to have health insurance. Although health insurance varies; most policies pay for hospitalization, surgery, medical tests, pediatric care, doctor visits, and maternity care. Generally the exceptions are cosmetic surgery, hearing aids, dental care, eyeglasses, preventive care and experimental treatments.

Those who are denied by private insurance companies because of medical conditions, the Alaska Comprehensive Health Insurance Association will offer them health insurance. Under the program of the association, those with medical conditions can get insurance on different terms.

Life Insurance in Alaska

When it comes to life insurance, the two most common life insurances in the State of Alaska are term and permanent life insurance.

Term life insurance protects the holder for short periods of time. This is usually over a period of one to several years. This means that the insurance pays only if the person dies during the covered period. Also, since the period covered is only of short duration, the premium is significantly cheaper than permanent life insurance.

Permanent life insurance protects the holder for the rest of their life by a guaranteed death benefit. This means that the coverage is for the entire life of the person. The premium for this type of insurance is of course higher than term life insurance.

In the unstable economy today, it is important to have life insurance for the family. This will enable those who are left behind to get on with their lives without financial difficulties. You might want to consider getting life insurance especially if your family depends on your financial contribution. Compare life insurance now and you might be surprised at how affordable it is and how easily you can squeeze it in to your monthly budget.

If this article or a part of this article was beneficial to you, be sure to visit my website(s) as listed in the resource box below.

California Health and Life Insurance – What You Can Do To Get Lower Rates

For those who live in California, health and life insurance policies could cost a lot less if you do some things. Your insurance rates are not like the weather. You can do more than discuss them. You can change them for the better. Here are some tips to help you get lower rates for your health and life policies…

There are several factors that shape your health and life insurance rates. These factors help insurers calculate the risk associated with an insured. The first three things I list in this article, increase your risk. But, good a thing, you can do something about them.

1) Smoking and the use of tobacco in general increases the risk associated with insuring you. As we all know, smokers and users of tobacco are more victims of certain health conditions. You can quit smoking if you work hard at it. There are groups out there that will help you. Commit to it and you’ll succeed. Apart from the fact that you’ll get lower rates, you’ll live a healthier life.

2) There are dangerous sports. If you participate in such sports your life insurance rate will hit the roof. If you really want to lower your rate you’d have to consider changing to other non-risky sports and games. You can get satisfaction in sports that do not endanger your life. Furthermore, I don’t really see anything cool about cutting your life short in the name of a game.

3) There are occupations and professions that expose you to greater risks. With such occupations, your rates will be very high compared to someone who has a safer job. You can change jobs and career if you want. I know it can be tough but, then, it’s your life.

4) Take out some time to visit at least three quotes sites that provide quotes on California health and life insurance policies. It will take you not more than 15 minutes. While you visit each site, make sure you input the same information. Doing otherwise will give you misleading results. When you’ve obtained your quotes, compare them to determine which serves your interest best both in price and value.

What is Mortgage Life Insurance?

Mortgage is generally defined as a type of loan that is taken to purchase a property. The term ‘mortgage’ can also be applied to the practice of keeping the property as collateral against the payment of any debt. Home buyers who borrow more than seventy five percent of the value of the property are required to have a life insurance policy for themselves. If the homeowner dies unexpectedly with an unpaid mortgage, then the family has to cope with the additional burden of repayment. Mortgage life insurance guards the borrowers against this possibility.

There are two types of mortgage life insurance coverage available for the borrowers. These policies are known as decreasing term insurance and level term insurance. Borrowers can decide on the kind of cover they want and opt for the one best suited to the mortgage. Decreasing term insurance is essentially offered to the borrowers who have taken a repayment mortgage. In this type of coverage, as the balance on the mortgage keeps decreasing, the sum of coverage also decreases. This ensures that there are sufficient funds to pay off the balance amount due in case the borrower dies. Level term insurance is suitable for those borrowers who have an interest only mortgage. The sum of the coverage remains the same throughout the mortgage term, as the principal never reduces.

Terminal illness benefit is added with both the decreasing term and the term mortgage life insurance. It guards the borrower against the threat of non-repayment if they become terminally ill. Critical illness cover can be taken in addition as it ensures a payout in case the borrower loses his income due to a critical illness. Mortgage life insurance puts the minds of the borrowers as well as the lenders at ease with regards to the repayment of the loan.