| |
| |
|
|
Insurance Information |
|
The Life Insurance Policy and What You Need to Know Before You Buy
Are you looking to buy a life insurance policy? Well, be careful. Life insurance can be difficult to understand and it's easy to be conned into buying something under false pretenses. Recently a prominent life insurance company together with several of its agents paid a huge fine because it permitted the sale of a life insurance policy disguised as a retirement plan. There was little attention given to what a life insurance policy is truly designed to provide. Life insurance is not an investment for your benefit. It's guaranteed income tax-free cash paid to someone you designate in the event of your death. If you love someone and want to protect them, then buying a life insurance policy makes sense. As primary bread winner in your family, your lost income could jeopardize the ability of those you love to continue to enjoy their standard of living. The only way to guarantee an immediate replacement of this money is with the intelligent purchase of a life insurance policy. Notice I didn't say term life insurance, low cost life insurance, or whole life insurance. To your loved ones ... this doesn't really matter. Over the years I've delivered millions of dollars of life insurance benefit to the families of deceased bread winners. And you know what? No one ever asked me what type of life insurance policy it was. They were just extremely grateful to get the money. Term is the cheapest, but it's unlikely the death benefit will be paid since the life insurance policy will probably lapse before you actually die. Right now the premium may seem cheap compared with other types. But what happens when you're older? Term life insurance premiums can be level for a specific number of years, but when that number of years is up the price will skyrocket to the point you won't be able or willing to pay. Whole life insurance provides a lifetime level premium until the policy is paid-up. This can be 10 years, 20 years ... or when you reach age 65, 85 or 100. One big advantage is you don't have to worry about your policy expiring before you do. One type of life insurance policy is not necessarily better than another. But it's critical you understand what you are buying, how it works and your net cost. After all, if the policy isn't in force when you die you have thrown your premium dollars right down a rat hole. By the way, don't fall for that line about buy term and invest the difference. Anyone who cons you with this bunch of malarkey has absolutely no idea how to intelligently evaluate the purchase of life insurance. An excellent life insurance policy to consider is universal life. This guarantees the death benefit up to age 115 regardless of the performance of the underlying investment. Although more expensive then term life insurance, universal life is far less costly than a typical whole life insurance policy. But be careful because some universal life policies are sold by focusing on projected interest rates rather than contractual guarantees. If you are considering the purchase of a whole life insurance policy from a mutual company that declares annual dividends, ask the agent for a hypothetical illustration using a dividend forecast at least one percent less than the current rate. In the past, when long-term interest rates were higher, mutual companies credited very handsome dividends to their policies. But today with long-term rates still depressed, it's unlikely a life insurance policy will perform as illustrated. In summary, pay close attention to the guarantees of whatever life insurance policy you decide to buy. Also, make sure you know the credit rating of the life insurance company. There is nothing wrong with term life insurance, but understand your options about converting to a permanent plan. This could be critical if you become uninsurable before the policy expires. Don Adams is a 24 year veteran financial consultant who provides easy to understand personal finance advice on a wide variety of money matters.
MORE RESOURCES:
Insurance - Google News |
|
|
|
RELATED ARTICLES
Term Life Insurance - A Safeguard for Small Business Owners Term life insurance can offer protection for a small business and its owners in surprising ways. If you own a small business, you probably pay property and liability insurance, and are protected against fire, theft, flood and other disasters. Health Insurance Online - Save Today It is now possible to thoroughly research and buy health insurance online. Without health insurance, the smallest of incidents, accidents, or illness can leave you with expensive medical bills that most people would have difficulty paying. Discount Auto Insurance Whether you are looking for car insurance in Canada, the USA, or somewhere else, finding discount auto insurance can save you plenty of money. The first thing you need to do is get auto insurance online quotes. An Annuities Primer Though popular among today's aging Baby Boomers and members of the Mature or "Senior" markets, annuities can be traced back to ancient Greece. The term "annuity" comes from the Greek word "annus"-or "year"-and refers to annual income payments. Protecting Your Expatriate Family If you and your family relocate overseas, one of your first priorities from a financial planning point of view may very well be establishing health care.Costs and services abroad can differ greatly to what you are accustomed to 'back home'. Independent Insurance Agents Unite! Insurance and Financial Discussion Forums are all the Rage The online discussion forum has emerged as the medium of choice for many Americans. Most recently, forum platforms like vBulletin, Infopop, and Snitz have enabled the novice webmaster to host and moderate their own forum. How to Reduce Home Insurance Premiums Here are some useful tips on how to reduce Home Insurance premiums.Home insurance, also known as Household Insurance is a policy designed to cover your home and if applicable its contents against the possible risks. Individual Health Insurance Plans - How To Find The Best Provider Online Whether you are self-employed or a small business owner, finding an affordable individual health insurance plan has gotten easy with online health insurance providers. By comparing quotes and coverage plans, individuals are able to choose a provider that best meets their needs. Six Crucial Insurance Claim Possibilities There are DOZENS of insurance claim possibilities which will increase the dollars awarded you in the settlement of your personal injury insurance claim. Some of them rarely see the light of day but some do. Business Insurance; Information you will need When you start a small business you will need to have insurance. You would be wise to shop around. Do I Need Travel Insurance? In the United States health insurance, unlike many other countries, you can find dozens of Blue Cross Blue Shield plans. Hundreds of regular commercial insurance and so many more health insurance plans like managed-care plans-HMOs, PPOs and PPG's. Who Else Wants to Understand Travel Insurance Policy Language? Aren't all travel insurance plans basically the same?No. When you read travel insurance policy language, remember that as with any legal document, the definition of the terms is what governs the working of the policy (including payment of the claim). Disaster Decision - Do You Need Insurance? The expenses involved with owning a home can be overwhelming at times - routine maintenance, repairs, seasonal preparations, improvements. Not to mention taxes, fees, and all those monthly bills. Insurance For All Your Gadgets Personalisation, Digitalisation, Mobilisation, these 3 words represent your life today. Here in the 21st century our lives have become more and more reliant on mobile items. Car Insurance Quotes Online - Why You Should Use the Internet to Find a New Insurance Company Before the internet, you picked a neighborhood car insurance agent, and you stayed with the insurance company for years. Now car and truck drivers are finding reasons to shop online for their car insurance company. Why Should You Shop Around for Auto Insurance? How do you know if what you are paying for your insurance is a good deal? What is a good deal? Is choosing the cheapest company the best way to go? Does buying from the most expensive company mean you are buying the best coverage? Generally, a good deal is a state of mind. As long as you are happy, with the amount of coverage, you have and how much you paid for it, you got a good deal. Insurance Credit Scoring: An Ethical Issue The issue at hand is the use of a consumer's credit score as an underwriting tool for auto insurance rates. What is a credit score or FICO score? A FICO score is a credit score developed by Fair Isaac & Co. Your Personal Injury Insurance Claim: Several Crucial Insights Into Medical Reimbursements The best judge of Total Disability and/or Partial Disability is "Ole" Doc Comfort your attending physician. The Medical Report he executes for the insurance company you're battling with, Rock Solid Insurance Corporation, should always contain his comments regarding the nature of your disability. Tips for First Time Insurance Buyers The are many scary things in this world. Buying insurance for your first time should not be one of them. Health Savings Account (HSA): What Happens to it When I Retire? The Health Savings Account (HSA) is a great tool that is going to help us all reduce our health insurance costs and avert the current healthcare crisis in America. But what happens when a person retires? What use is an HSA then? Your HSA transforms itself at that moment you turn 65, when you officially become eligible for Medicare.
|
||||||||||||||||
