What is a Beneficiary?

A beneficiary is the person or entity you designate to receive the proceeds (death benefit) from your life insurance policy. You can name a single beneficiary or multiple beneficiaries: one person, two or more people, a business, a trustee, a charity or your estate. Should you elect to have multiple beneficiaries, you can decide how the proceeds will be split between them.

When naming beneficiaries, you should identify them as clearly as possible and include their social security numbers. This will make it easier for the life insurance company to find them and make it less likely that disputes will arise.

There are two kinds of beneficiaries: “primary” and “contingent.” The primary beneficiary receives the death benefit if he or she can be found after your death. Contingent beneficiaries receive the death benefit if the primary beneficiary is deceased or cannot be found.

If no primary or contingent beneficiaries can be found, the death benefit will be paid to your estate. In this case, probate proceedings could delay distribution of the benefit, and the resultant costs could diminish the amount available to your heirs. It is therefore advisable to specify how the benefits are to be handled if one or more beneficiaries have died or cannot be located.

As your life situation changes, so could your choice of beneficiary. Marriage, divorce or the birth or adoption of a child are all events that could cause you to change your initial selection. It is a good idea to regularly review your beneficiary designation in order to make sure your choice is still appropriate.

This article adapted from information provided by the Insurance Information Institute.

How Should I Choose a Life Insurance Agent?

Buying life insurance can be complicated and confusing. The key to buying the right amount and the right type of policy at a good rate is a good agent or broker. You should choose one who:

• Works with a reputable firm that has a strong financial rating

• Understands your financial situation, including your attitudes about risk, your income and estate tax brackets, your other financial assets and obligations, as well as your personal situation (age, marital status, dependents, etc.)

• Explains – in terms you can easily understand – issues, options and planned use(s) of life insurance in your financial program

• Provides you with a personalized written recommendation that

records the facts of your current financial and personal situation.

describes the features of the life insurance policy and how it fits into your situation.

• Does not pressure you into a decision, but works with you until you’re ready and convinced that you are doing what is best for you

• Is prepared to review with you periodically—perhaps every three years or so—whether the product continues to be suitable for your needs and circumstances

• Is licensed by your state insurance department

• Has not been disciplined by your state insurance department or any other professional body to which they might belong

Another indicator of expertise is professional designations. It takes several years to complete them, and they can help identify agents who are committed to their profession and held to a high standard of ethical conduct. Designations you might see include the following:

• CLU: Chartered Life Underwriter

• ChFC: Chartered Financial Consultant

• CFP: Certified Financial Planner

• RR: Registered Representative

• RP: Registered Principal
  
  

If you don’t have an agent or broker who fits this description, ask for a referral. Your lawyer, accountant, friends, relatives and business associates might be able to provide you with names of insurance agents or brokers with an excellent reputation.

You can also use this link: http://www.life-line.org/find_agent.html to connect with the nearly 70,000 members of the National Association of Insurance and Financial Advisors (NAIFA), who subscribe to the organization’s Code of Ethics (http://www.naifa.org/about/ethics.cfm).

The Compensation Issue

Most agents and brokers are paid by commission, but some work on a fee basis. Typically, the largest part of the compensation is paid at the time you purchase the policy, since most of the agent’s or broker’s work occurs at that time or just before it.

As with any professional service, you should understand how your agent or broker will be compensated and how that might affect the purchase recommendation.

How Much Life Insurance Do I Need?

The amount of life insurance you decide to purchase depends on your anticipated final expenses and your family's projected monetary needs in the future.

In most cases, if you have no dependents and enough money to pay your final expenses, you do not need any life insurance.

However, once you have dependents you should buy enough life insurance so that, when combined with other sources of income, it will replace the income you now generate for them, plus enough to offset any additional expenses they will incur replacing services you currently provide (for example, if you do the taxes for your family, the survivors might have to hire a professional tax preparer).

Your family might also need extra money to make some changes after you die. For example, they might want to relocate, or your spouse might need to go back to school to be in a better position to help support the family.

Most families have some sources of post-death income besides life insurance. The most common source is Social Security survivors' benefits. Many also have life insurance through an employer plan, and some from other affiliations, such as an association they belong to or a credit card. Although these sources might provide a significant income, it is rarely enough.

A multiple of salary?

Some experts recommend buying term life insurance or whole life insurance equal to 20 times your salary before taxes. If the benefit is invested in bonds that pay 5 percent interest, it would produce an amount equal to your salary at death, so the survivors could live off the interest and would not have to "invade" the principal.

While this formula is a useful starting point, it does not take inflation into account. It also assumes that one could assemble a bond portfolio that, after expenses, would provide a 5 percent interest stream every year. But assuming inflation is 3 percent per year, the purchasing power of a gross income of $50,000 would drop to about $38,300 in the 10th year. To avoid this income drop-off, the survivors would have to tap into the principal each year. And if they did, they would run out of money in the 16th year.

The "multiple of salary" approach also ignores other sources of income, such as Social Security survivors' benefits. These benefits can be substantial. For example, for a person who had been earning a $36,000 salary at death ($3000 a month), maximum Social Security survivors' monthly income benefits for a spouse and two children under age 18 could be about $2,300 per month, and this amount would increase each year to match inflation.

In this example, the survivors would need life insurance to replace only $700 per month (adjusted for inflation) of lost income; Social Security would provide the rest. These survivors would need life insurance to replace about $1,150 per month (adjusted for inflation) once the non-working surviving spouse has only one child under 18 in her care, and the surviving nonworking spouse would have to replace the entire $3,000 (adjusted for inflation) when the youngest child turns 18.

Bottom line: the amount of life insurance you need varies according to your financial, family and marital circumstances, but once you have dependents, you definitely need insurance coverage. It is probably best to seek the advice of a qualified insurance agent when you are ready to ask about getting a life insurance quote.

This article adapted from information provided by the Insurance Information Institute .

How Do I Pick a Life Insurance Company?

Many people choose their insurance company simply based on the competitiveness of their life insurance quotes. While price is undeniably important, there is a host of other factors to weigh when making this vital decision. Here are the main points to keep in mind:

• Financial Solidity - This is probably the most crucial factor in selecting a life insurance company. No matter how good a company's products, you need to be assured that your provider is financially secure enough to pay your claim(s). There is no guarantee for life insurance policyholders similar to that provided for bank accounts by the Federal Deposit Insurance Corporation (FDIC), so select a company that is likely to be financially sound for many years, by using ratings from independent rating agencies.

• Product - Most companies offer a broad range of policies and features, so choose a company that offers the product(s) and features that meet your needs.

• Customer Service - For many people life insurance is a complicated subject, so it helps to deal with a representative whom you can trust, who understands and is attentive to your needs, and with whom you can communicate easily.

• Claims and Market Ethics - Your state insurance department can tell you if the insurance company you are considering doing business with had many consumer complaints about its service level relative to the number of policies it sold.
  
  Similarly, it makes sense to do business with a company that has high ethical standards. Some life insurance companies subscribe to the principles and codes of conduct of the Insurance Marketplace Standards Association, a nonprofit organization that promotes ethical conduct in life insurance marketing.
  
  The better a company's rating in these two vital areas, the better your chances of being treated fairly, efficiently, and courteously.

• Premium and Cost - The premium is the amount you pay the company for the life insurance policy. Even for a given death benefit and type of insurance (e.g., term life), the premium can vary widely among companies, either because some companies' policies have features that others don ot or because some charge more than others for the same coverage. So the first step in comparing policies is to make sure you compare similar insurance plans, based on
1. Your age
2. The type of policy and policy features
3. The amount of insurance you are purchasing

Bear in mind, however, that the premium for the policy is not the same as the cost of the protection portion of the policy. One policy might have a higher premium but also offer more benefits (for example, it might pay policy dividends) than another. Or both might promise dividends, but in different amounts at different points in time. In each case, the higher-premium policy might have a lower cost of protection. How can you tell what a policy's cost is? Companies should tell you a policy's Net Payment Cost Index and its Surrender Cost Index. Use the Surrender Cost Index if you are thinking of keeping the insurance only for a specific period of time; use the Net Payment Cost Index if you expect to keep the policy indefinitely. Generally, the lower the cost index, the better.

One last important point to keep in mind when selecting a life insurance company:

• Licensing - Not every group of insurance companies licensed to operate in each state. As a general rule, you should buy from a company licensed in your state, because then you can rely on your state insurance department to help if there is a problem. If the insurance company becomes insolvent, your state's life insurance guaranty fund will help only policyholders of companies it has licensed. To find out which companies are licensed in any state, contact that state's state insurance department.

This article adapted from information provided by the Insurance Information Institute.

How Do I Assess the Financial Strength of an Insurance Company?

When choosing a life insurance company, one of your primary considerations should be their degree of financial strength. A company with the lowest premiums is not necessarily the best choice—you should choose your insurer based on their ability to pay the contracted benefits and settle claims.

The simplest way to verify an insurance company’s financial solidity is to check their financial strength ratings.


Five independent agencies—A.M. Best, Fitch, Moody’s, Standard & Poor’s, and Weiss—rate the financial strength of insurance companies. Each has its own rating scale, its own rating standards, its own population of rated companies and its own ratings for that population of companies. Each agency uses numbers or plusses and minuses to indicate minor variations in rating from another rating class.


You should consider a company’s rating from two or more agencies before judging whether to buy or keep a policy from that company. Moreover, agencies will announce changes of ratings on any day. It’s probably prudent to check annually on the ratings of any company in which you’re interested.

Some points to consider when reviewing a company’s financial strength:

* Don’t rely only on what the insurance companies say about their ratings from these agencies. Companies are likely to highlight a higher rating from one agency and ignore a lower one from another agency, or to select the most favorable comments from a rating agency’s report.

* To use the ratings from more than one independent agency, you need to understand that each agency’s rating code is different from the others. For example, an A+ from A.M. Best is the next-to-top rating of its 15 categories, but an A+ from Fitch or S&P is their 5th-highest rating (out of 24 categories for Fitch, and out of 19 categories for S&P). Moreover, Moody’s doesn’t have an A+ rating.

* Many insurance companies market their products under a brand or marketing name. Be sure you know the names of the underwriting companies that market under that brand name when looking up a company’s ratings. For example, AIG markets life insurance in the United States under the marketing name “AIG American General,” but several companies underwrite products under that name, including American General Life Insurance Company and AIG Life Insurance Company. Check the company’s Web site for a complete list of the underwriting companies for that brand name.

Why Should I Buy Life Insurance?

Many financial experts consider a term life insurance or whole life insurance policy to be the cornerstone of sound financial planning. A solid life insurance policy can be used to:

1. Help replace your income and provide financial security for your dependents.
If you are the primary earner in your household and people depend on your income, life insurance can help replace that income if you die. The most commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, disabled relatives, siblings or adult children who continue to rely on you financially.

2. Help pay final expenses such as your funeral and burial costs, probate and other estate administration costs, debts, and medical expenses not covered by health insurance.

3. Create an inheritance for your heirs by buying a life insurance policy and naming them as beneficiaries.

4. Help pay federal and state inheritance and estate taxes. These are generally due within nine months of death and could absorb nearly half of your assets before a single dollar goes to your heirs. Life insurance benefits can pay estate taxes and settlement costs so that your heirs will not have to liquidate other assets or take a smaller inheritance. You can be secure in the knowledge that your loved ones will receive the legacy you have spent a lifetime creating, not just a piece of it.

5. Make significant charitable contributions. By making a charity the beneficiary of your life insurance, you can make a much larger contribution than if you donated the cash equivalent of the policy's premiums.

6. Create a source of savings. Some types of life insurance create a cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the owner's request. Since most people make paying their life insurance policy premiums a high priority, buying a cash-value type policy can create a kind of "forced" savings plan. Furthermore, the interest credited is tax deferred (and tax exempt if the money is paid as a death claim).

This article adapted from information provided by the Insurance Information Institute .

Tips for buying life insurance

10 Tips: How to find the policy that is right for you and your family


By Laura T. Coffey
MSNBC contributor

Updated: 6:46 p.m. ET May 29, 2007

Let’s face it: Life insurance isn’t the most fun subject to dwell on at length or think about during your time away from work.

In fact, most of us don’t want to think about this subject at all. According to the Insurance Information Institute, one-third of all U.S. families with a new baby at home don’t update their life insurance coverage.


For one thing, having the right kind of coverage can give you incredible peace of mind. Another detail to consider: Prices have been dropping significantly. The Insurance Information Institute notes that premiums have plummeted 50 percent for standard-risk term insurance since 1994, and they’re expected to drop by another 4 percent this year.

Honestly, how often do you hear about rates dropping for anything these days? The following tips can help you secure good coverage without spending too much.

1. Figure out your needs. You can use online calculators to get a rough idea of how much money it would take to cover your surviving spouse’s expenses until retirement, and/or your children’s expenses until they reach adulthood or finish college. The Life and Health Insurance Foundation for Education offers this calculator. MSN Money offers this one as well.

2. Opt for term life. A term-life policy is the best and simplest option for most Americans ranging in age from about 20 to about 50. Cash-value life insurance can make sense for wealthy people over the age of 60 – but for most people, term insurance is the way to go.

3. Get quotes online. Web sites such as Accuquote.com, FindMyInsurance.com, LifeInsure.com and InsWeb can give you plenty of pricing information fast – although all of it will be subject to a more detailed application process and a medical exam.

4. Get in shape. To improve your risk class, you can take steps such as quitting smoking, losing weight and reducing your cholesterol and blood pressure if they’re high. You also can get that exam before you apply for insurance so you’re not hit with any surprises. In some cases, the changes you make can save you tens of thousands of dollars over the life of a policy.

5. Decide how to buy. You can go it alone and buy insurance directly from the company, seek guidance from a fee-only financial planner, buy it through a commission-based financial planner, or buy it through an insurance agent.

6. Understand how these folks get paid. Insurance agents and commission-only financial planners don’t make money unless they sell you insurance products. Fee-plus-commission (or fee-based) planners charge both a fee and a commission on products. Fee-only planners charge a fee for their guidance but don’t sell products; you would buy the insurance coverage on your own.

7. Do your homework. Whether you decide to buy a policy on your own or hire a professional to help you, you should bone up on life insurance on the sites mentioned in Tip No. 3. This will help you feel more confident and informed.

8. Buy from a financially strong company. The insurance company should have an “A” rating or higher from rating agencies such as A.M. Best, Standard & Poor’s, Duff & Phelps, Weiss, Moody’s and Fitch Ratings.

9. Be alert for red flags. Avoid advisers who say they’re more knowledgeable about the insurance company than the rating agencies, or who claim the ratings are unimportant or unavailable. If you have a complaint, contact the adviser’s customer service department and speak up. You also can file a complaint with your state’s insurance department or attorney general’s office. To start the process of finding the correct contact information for your state, click here.

10. Make adjustments as needed. Your life insurance needs will change over the years – most notably when you marry, divorce, have a child or start caring for an aging parent. At a certain point – once your kids are all grown up, and once you know you’ve saved enough for retirement – you can decide to stop paying for life insurance entirely.

The Quick Guide to Buying Pet Insurance Online

By Simon Markham

Not so very long ago, the idea of insuring a pet was almost laughable. It was the sort of thing reserved for those who owned posh pooches, the crème de la crème of the pet world. It made sense to insure pedigreed pups and their feline companions when they cost so much. Things have taken a turn, though. Rising vet fees and publicity about the expenses of owning and caring for a pet have prompted many people to invest in insurance for their pets.


Of course, the trick is to find the right pet insurance policy - the one that offers the best cover for your pet at the lowest price for you. The internet makes the process of comparing and choosing the best pet insurance policy far easier and quicker, and allows you to purchase and pay for your choice instantly online. Here are some tips to help you find and choose the best pet insurance.


Evaluate your insurance needs and prioritize...


This is always a good first step, but especially so for pet insurance which covers so many different options. Do you need a policy that will cover a lifelong condition like diabetes? Do you have a pedigree pet? Is your pet a breed that has a higher chance of snapping or biting others? In each case, you'll want to be sure that the insurance you choose covers specific claims. So know what you need before you start searching.


Search for "pet insurance reviews" in your favorite search engine...

A search for "pet insurance" will bring up lots of individual insurers. That's helpful, but it's not much better than calling around to each insurer. By searching for reviews, you'll come up with a list of internet sites that allow you to check out and compare many different insurers at once. Some may even compare policies side by side for cost and benefits, and many include reviews from people who have used the firm's insurance. Some of the criteria you might use for comparison are:

* Premiums - how much does the policy cost per month?

* Voluntary Excess - do you pay an excess for each condition, or an overall excess per annum?

* Benefit Caps - how much will the policy reimburse in total? Is that per condition, per incident or overall?


Other benefits - policies offer a wide variety of other benefits from discounts on pet care products to paying kennel fees if the owner is hospitalized overnight. They may include reimbursement for expenses to find a lost pet or for canceled holiday tickets if your pet becomes ill and you return home early.

Narrow your choices and investigate further...

Read any reviews offered by customers on the review site, then check the company's own web site. Do a further web search to check for any complaints that might be on discussion forums.


Apply for the policy that suits you best...


Before you enter any personal information, be sure that you're on a legitimate web site and that the page on which you enter and submit your information is secure. Most insurers will confirm the acceptance of your policy immediately, and some will even email your policy documents.


Visit UK Insurance Index for easy access to all of the most popular UK pet insurance companies like Petplan and Animal Friends plus money saving tips and real customer reviews to help you find the best pet cover for you and your furry friend.

Article Source: http://EzineArticles.com/?expert=Simon_Markham

How Should I Choose What Type of Life Insurance to Buy?

Life insurance is a long-term commitment. Before getting a life insurance quote, ask yourself these very important questions:

* How much insurance do I need? If I were to die, what would my spouse and dependents need in order to live comfortably?

* What am I trying to accomplish with life insurance? Am I accumulating funds for education costs? Providing a way to pay estate taxes? Do I need supplemental income for my retirement or emergencies?

* How much can I afford to pay for a policy?


After answering these questions and consulting with a life insurance agent, your next step is to choose which type of insurance best meets your needs.



Term Life Insurance

You should consider Term Life Insurance if:

* You need life insurance for a specific period of time. Term life insurance enables you to match the length of the policy term to the length of the need. For example, if you have young children and want to ensure that there will be funds to pay for their college education, you might buy 20-year term life insurance. Or if you want insurance to repay a debt that in a specified time period, buy a term policy for that period.

* You need a large amount of life insurance, but have a limited budget. In general, term life insurance pays only if you die during the term of the policy, so the rate is lower than for permanent forms of life insurance. If you are still alive at the end of the term, coverage stops unless the policy is renewed. Unlike permanent insurance, you will not build equity in the form of cash savings. If you think your financial needs may change, you may also want to look into "convertible" term policies. These allow you to convert to permanent insurance without a medical examination in exchange for higher premiums.

Keep in mind that premiums are lowest when you are young and increase upon renewal as you age. Some term insurance policies can be renewed when the policy ends, but the premium will generally increase. Some policies require a medical examination at renewal to qualify for the lowest rates.


* Term Life Insurance Advantages

* Offers temporary life insurance protection at a very affordable price

* May be converted to permanent policy

* Income-tax-free death benefits




* Permanent (or Whole) Life Insurance

You should consider permanent (or whole) life insurance if:

* You need life insurance for as long as you live. A permanent policy pays a death benefit whether you die tomorrow or 100 years from now.

* You want to accumulate tax-deferred savings that could be a source of borrowed funds for a variety of purposes. The savings element can be used to pay premiums to keep the life insurance in force if you cannot pay them otherwise, or it can be used for any other purpose you choose. You can borrow these funds even if your credit is shaky2. The death benefit is collateral for the loan, and if you die before it is repaid, the insurance company collects what is due before determining what goes to your beneficiary.

Keep in mind that premiums for permanent policies are generally higher than for term life insurance. However, the premium in a permanent policy remains the same no matter how old you are, while term premiums can go up substantially every time you renew.

Permanent Life Insurance Advantages:

* Lifetime protection.

* Tax-deferred cash value.

* Access to your cash value to use however you wish

"Locked in" premiums.

* Income-tax-free death benefits.





1Assuming policy does not lapse due to insufficient premiums paid. Death benefit is subject to a deduction of unpaid premiums during grace period and any outstanding loan balances past the grace period.


2Borrowed funds are generally subject to an interest rate.


This article adapted from information provided by the Insurance Information Institute.

A Short Guide to Buying Life Insurance

At some point in everyone’s life, especially for those who have a family, the thought of your family’s financial security in the unfortunate event of your premature death can be both worrisome and depressing. Will your loved ones have a stable source of income after you’re gone? Since you have no control over this situation, how will you really know? For these reasons and many more, a life insurance policy can ease one’s mind on the topic of providing for your dependants after you’re gone.


Life insurance policies come in all shapes and sizes and are offered by more and more financial institutions than just insurance companies. So just how are you supposed to know where to begin?


For starters, you will need to calculate a dollar amount for your life insurance policy. After analyzing the needs of your family, you will want to select an insurer that you feel comfortable with (and even more importantly, one that you trust), for purchasing an item that’s equivalent to at least five years of your annual salary. Different insurance agents will have differing theories and opinions regarding your particular policy and how much it should be worth. But the simple truth is that it’s your money (the five year salary point is a generalized industry guideline). Never buy more insurance than you can afford, taking into consideration the possibility of your company downsizing and such in the future. Your policy won’t do anyone any good if it ends up being cancelled.


Your policy’s primary purpose should be for your untimely death, disability, or illness- to assist your family during discouraging times, to help pay the mortgage, college tuition, and other costly items. This is the part of a life insurance policy that you hope you’ll need to use, for paying for all of these items before you pass away is a huge financial milestone for so many. After this, retirement savings and other perks can come into your goal. But above all, be sure to check the reliability of the insurance provider before signing anything.


On a final note, it’s never a good practice to surrender your life insurance policy. The value of your policy is, again, to protect and assist financially in the untimely event of your passing – it’s not an investment strategy.


James Kinley writes about a variety of financial topics. He recommends http://www.Accepted.co.uk/life_insurance to search for life insurance.

Whole Life Insurance

Solid Goals for the Future

Whole life insurance provides the happy solution to the delicate matter of un unhappy death. In sickness and in health, we care and provide for our families. And at the end of that time, a whole life insurance policy can help you to continue to provide for them after you’re gone.

But whole life provides for your family in a very unique way…because with whole life, your premium payments become more than just a payment. They accrue and become a cash value account. And with this you can provide for yourself and your family.

How Do Whole Life Insurance Policies Work


Whole life insurance is a permanent life insurance…meaning it lasts your entire life. In most cases, the premium amount does not change, and the death benefits stay the same. Even if you have serious health problems. While it costs more than term life insurance, it’s still the most popular kind of individual life insurance in America today.

When you sign for a whole life insurance policy, you agree upon the premium payment, and how much of that payment will contribute to the cash value of the policy. As you get older, the premiums stay the same or increase according to what you agreed regardless of your age or health conditions. The cash value of a whole life insurance policy continues to grow. And all this time, your death benefit (the amount they’ll pay your beneficiary at the time of your demise) stays the same.

What Can I do with the Cash Values of a Whole Life Insurance Policy


The cash value of a whole life insurance policy is there for as long as the policy is in effect. You can withdraw the money and use it for anything. But withdrawing the cash decreases the death benefit.


The best way to use the cash value is to borrow against it. You can use this money for anything from paying off other loans to education funds. Borrowing the money also allows you to continue deferring taxes on the cash value (it’s taxable when you withdraw it.)

How Long Do I Pay the Premiums on a Whole Life Insurance Policy


On most policies, you continue to pay the premiums on a whole life insurance policy for as long as you live. Companies also offer the option to pay a lump sum in the beginning (creating an immediate cash value to the policy) and then make smaller premium payments throughout your life. You can also choose to pay a larger lump sum, without paying any premiums at all. Whole life insurance with modified premiums is a policy where the premiums incrementally increase as you grow older.

With any whole life insurance policy, everything is clearly defined when you purchase the policy. This includes the premium amounts, death benefits, and the amount of premium that contributes to the cash value.

Whole life insurance is about setting and meeting financial goals. When people depend on your financial decisions, whole life makes sense.

Talk to your Insurance Agent to ensure Whole Life Insurance is right for you!

More Whole Life Insurance Articles:


Whole Life Insurance is still a Preferred Choice


For a long time in America, whole life insurance was what most people bought. Lately, insurance companies have been offering other insurance at lower rates, but in most cases, whole life insurance is still the most beneficial of all plans.

Whole Life Insurance Explanation


A whole life insurance explanation should be required reading for anyone about to purchase life insurance. Whole life, in my humble opinion, has in recent years got a bad rap. People tend to buy term life insurance because it is cheaper...

By: www.compuquotes.com

Variable Life Insurance

When You’re in It for the Long Term

Young, impressionable, and ready to take on the world. This is who variable life insurance is made for. Variable Life Insurance is the greater way to glory…it’s a security and an investment. It’s much like whole life insurance, but different in that variable life insurance gives you more control over the cash value and death benefits amount.

How Does Variable Life Insurance Work?


With variable life insurance, the premium may go up or down, depending on the status of the market. Part of this payment goes to pay for life insurance. Another part (usually around 4%, but it depends on the policy) goes to build cash value in your ‘investment portfolio’.


As the variable life insurance policy owner, you decide how to invest this money. You can invest in stocks, bonds, etc. As the market changes, so will your cash value and the death benefits. You’ll decide how much of your investment is applied to the policy and how much is reinvested. You have more control over this policy than any other…which means you’re more at risk. Then again, you have more potential to receive higher benefits when the market is up.


Each company issuing a variable life policy will issue a prospectus, which will define the policy. You should read it carefully before signing the policy. Both the Securities and Exchange Commission and The Commissioner of Insurance regulate these policies, and the agent must have a NASD in order to sell variable life insurance.

What if the Investment on a Variable Life Insurance Policy Goes Bad?

In extreme cases, when the investment choices for a variable life insurance policy loose their value, the policy can lapse, and it will no longer be considered a valid policy. Most companies offer a guaranteed minimum death benefit to keep this from happening. With these policies, the insured must pay a minimum premium each month.


What else does Variable Life Insurance Offer?

Since variable life insurance isn’t a strict investment, all the monetary growth within the policy is tax deferrable. This also makes it an easy way to avoid estate taxes. People often purchase variable life insurance policies for their heirs, who can then either withdraw the cash value or borrow against it.

Withdrawing has the same effect it would with a whole life policy. The more cash value withdrawn, the more the death benefits would decrease.


Variable life insurance also gives you the opportunity to make changes in your investment choices without incurring taxes or transaction fees. Most companies limit the number of transactions to about 12 per year.


Most companies will offer a ‘survivorship’ policy. In this case, two people are covered under the variable life insurance policy, and benefits will only be paid when both of them die. This kind of policy helps many people when they could not obtain life insurance by themselves due to health reasons.

Variable life insurance isn’t for everyone. Talk to an agent to find out if it’s right for you. The opportunity can be huge, but so is the risk, so review all your insurance options before making a decision.

Talk to your Insurance Agent to ensure Variable Life Insurance is right for you!

By: www.compuquotes.com

Universal Life Insurance

For the Investor Who Likes To Prepare for the Future


Universal Life Insurance is a lot like whole life insurance, but different in that the cash value of the policy earns interest. This way, universal life insurance becomes an investment, and not just an insurance policy.


With universal life insurance, your premiums are divided. Part of your payment covers the cost of insurance, and the rest becomes part of the cash value of the policy. The cash value in universal life insurance policies earns interest. Some policies offer a guaranteed minimum interest payment.

Universal Life Insurance is Ideal for Your Family


If you want protection for your entire family but want to leave your options open, then universal life insurance is the perfect choice. Universal life offers guaranteed death benefits (as long as the cost of insurance doesn’t exceed the cash value amount) along with a solid investment that you can withdraw or borrow against.


Most universal life insurance policies come with optional term riders, so you can temporarily increase your benefits amount without purchasing a new policy. You can also usually add people to the policy, like a spouse or children. This versatility makes universal life insurance great for growing families.

Universal Life Insurance allows you to Invest Tax-Free


You can defer capital gain taxes on your universal life insurance policy. These gains can be kept in the cash value of the policy until the time of death, and will only be subject to estate taxes. To use the cash value amount before death, you can borrow against it without paying taxes and without ending the policy.


Universal life insurance policies often allow you to choose how much of your premium to put into the tax-sheltered amount. Investments can be safe and guaranteed, or you can put them into something more like a mutual fund.

Other Options with Universal Life Insurance

With universal life, there are three kinds of premiums.

* Single Premium – You pay one amount for the entire policy. The policy remains in effect as long as the cost of insurance does not entirely deplete the cash value or investment.

* Fixed Premium – You make monthly payments for the premium for an agreed upon time. Usually, this universal life insurance policy is in effect long after you stop paying the premiums.

* Flexible Premium – You decide when to make payments and how much. If you go for a period without making a premium, the cost of insurance is deducted from the cash value of the policy. This type of universal life insurance gives you the chance to make one large payment when you first purchase the policy, and make sporadic payments according to your financial situation.

Most policies offer a ‘Waiver of Premium’ option. This way, if you’re disabled, you can continue coverage without continuing your premium payments.

Planning for the future is part of starting a family. It means more than just setting a few dollars aside for a rainy day. Universal life insurance gives you the ability to save, invest, and protect your family when you’re gone. It helps you now, and it will help them in the future

Talk to your Insurance Agent to ensure Universal Life Insurance is right for you!

By: www.compuquotes.com

Term Life Insurance

The Affordable Plan for Life and Family

Term life insurance is the most affordable option for anyone who needs to provide a future course in the event of their untimely demise. It’s called ‘term life insurance’ because it lasts for a defined term at the time of the purchase. As long as the premiums are paid each month, the beneficiaries are paid the full death benefit if the policy holder dies during that period.


Term life insurance costs less than permanent life insurance policies like whole life and variable life. The reason is because the policy accrues no cash value (except in the case of Return of Premium Term Life Insurance, where you can get a full refund for all the premiums you’ve paid at the end of the policy period). Another reason is because the policy is guaranteed to end within a certain number of years. The insurance company hopes this will be before the policy holder dies.


What Will Term Life Insurance Pay

Mortgages, education, cost of living, or burial costs. Term life insurance is typically set up to pay for all the things that the regular ‘bread winner’ of the household would pay. You can also use it to pay the taxes involved in a estate inheritance.


You can purchase term life insurance policies for terms of one to thirty years. The most popular option is for fifteen years. At the end of the term, the policy ends. Some policies come with a guaranteed renewal rate, so you can purchase a new policy when the old one ends. The rates will obviously be higher because of the age increase.

Will I Need a Medical Exam to Qualify for Term Life Insurance


In most cases, companies require policy holders to undergo a brief medical exam before qualifying for term life insurance. Insurance companies try to make it as simple as possible. Some companies will even send a qualified nurse to your home for the exam.


It might be possible to bypass the exam and receive immediate coverage depending on your age. You can expect to pay more for this kind of term life insurance, and if you have serious health problems, it might be unavailable. Remember that insurance is something you buy ahead of time. You couldn’t make an accident claim on an auto insurance policy if the accident happened before you purchased the policy. In the same way, if you have serious health risks, term life insurance might be much more expensive or unavailable.

What Else Should I Know About Term Life Insurance


Some policies provide you with accelerated benefits options. They’ll pay you benefits before death if you have a terminal illness. This would cost more, but in some cases, the added protection is worth the money.

Sometimes you can lower your premiums by presenting your health profile before purchasing a term life insurance policy. Show the company that you have less risk of dying than an average person.


Term life insurance isn’t for everyone. But if you can’t afford an investment insurance, but still want to protect your family if you die at an early age, term life insurance might be the answer.

Talk to your Insurance Agent to ensure Term Life Insurance is right for you!

By: www.compuquotes.com

Return of Premium Life Insurance

The Alternative to Collecting Death Benefits


We pay for health insurance in high hopes that we’ll never need it. Insurance, by its definition, is something we hope not to collect on. And so after paying years and years of life insurance premiums, and being ‘lucky’ for all those years, it’s easy to feel like it was all just a big waste of money.

Return of Premium Life Insurance, eliminates this problem…because you can collect money without dying. After paying 20 years of life insurance premiums, a person can receive the money they’ve invested back. Not just a portion of it (as with whole life insurance) but return of premium life insurance offers everything back…100% of the premiums you’ve paid.

How Much does Return of Premium Life Insurance Cost?


The premiums for this kind of policy vary from state to state. They generally run between term life policies and whole life policies. Return of Premium Life Insurance has benefits from both of these. It has the affordability of term life and the cash building value of whole life. You can buy it for periods of anywhere from 3 – 30 years.


Most companies can give you an estimate within 24 hours. The cost for return of premium life insurance is based on age, physical conditions, and habits (tobacco use) of the applicant…much like any other kind of life insurance.

Who Needs Return of Premium Life Insurance?


If you want to protect your family, but don’t want to throw away the cash necessary to insure your life, return of premium life insurance is perfect. Not only do you get your money back at the end of the policy’s period, but you won’t have to pay income taxes on that money.


Return of premium life insurance is ideal for someone young who anticipates a lot of change before retirement. Whether you’re just starting a family or still single, it allows for changes in the future.

What Happens if I Want to Cancel My Return of Premium Life Insurance Early?

Even if you don’t keep your return of premium life insurance for the full term, you can still get a portion of your premiums returned to you. The longer you keep it, the higher percentage you’ll get back. Canceling early will give you a small percentage back, and not canceling at all will give you 100% back.


On the other hand, you might want to keep the insurance after the end of the policy’s period. Most companies will offer a continuance term after the original one ends. And since you’ll be receiving a large sum of cash, it might be a good idea to invest it directly into a whole life insurance policy. The whole life insurance policy will also have a cash value, but not quite the same kind as a return of premium life insurance policy. You’ll be able to borrow money against this policy, without loosing the coverage.


Return of premium life insurance is the easiest way to insure yourself without ‘loosing’ money. It’s one of the few ways to collect the benefits, without actually using it.

Talk to your Insurance Agent to ensure Return of Premium is right for you!

By: www.compuquotes.com

Mortgage Life Insurance

Insuring Your Life’s Biggest Investment

If you’re like most people, your home is the largest investment you’ll ever make. And if other people depend on this investment (like your family) then Mortgage Life Insurance could be a perfect safety net for their security. Mortgage life insurance is a term policy (it doesn’t build cash value) designed to cover your mortgage in the event of your untimely death.


Your mortgage isn’t only your largest investment, it’s also the longest financial commitment most people will ever make. A lot can happen during the life of a loan. Health conditions, financial situation, and the value of your home will all change by the time a mortgage loan is fulfilled. A mortgage life insurance policy is long term protection…the kind a family needs.

Different Kinds of Mortgage Life Insurance


There are several ways to open a mortgage life insurance policy. Sometimes, banks and real estate companies will sell a mortgage life insurance plan. The security it provides is beneficial to them, so they often offer it as an extra when you close your loan. In most cases, your benefits decrease as the principal decreases…you’re only covered for what you owe on the mortgage. Yet the premiums stay the same throughout the life of the policy.


You can also open a mortgage life insurance policy directly with an insurance company. Working with an insurance company, in most cases, offers more advantages than the policies sold by banks and real estate companies. One benefit, is that the benefit amount often stays the same instead of decreasing (depending on the policy).

Other Differences in Mortgage Life Insurance Policies through Insurance Companies

Beneficiary – In most cases, you have the option to choose your beneficiary.

* Mortgage life insurance from other sources almost always name the mortgage owner as the beneficiary. Also, the beneficiary can choose how to use the money.

* Conversion Options – Companies can usually offer mortgage life insurance policies with a pre-defined option to change coverage and payment in the future…one without regard to age and health conditions.

* Guaranteed Premiums – Sometimes, a mortgage life insurance policy doesn’t guarantee the premiums. Using an insurance company gives you more options to set a defined premium or a variable one.

* Freedom of Lenders – Since other options make your lender the beneficiary of your mortgage life insurance policy, you loose the policy if you decide to refinance with a new lender. This can be a problem if your health conditions have changed since your policy started…obtaining a new policy might be impossible. But many insurance companies offer you the option of keeping your policy even if you switch lenders.

Mortgage life insurance is the right move for most because it offers a discounted rate for a term life policy. It’s secure for you and secure for your family. Among the millions of home owners in America, few can guarantee their stability for the next thirty years. Mortgage life insurance changes that, so anyone can feel secure that their families’ won’t loose their home when the worst happens.

Talk to your Insurance Agent to ensure Mortgage Life Insurance is right for you!

By: www.compuquotes.com

Key Man Life Insurance

For the Sake of the Company

If your business relies on one or two key players, key man life insurance might be an important part of your future. Whether that key player is you, one of your star sales persons, or an office manager, you owe it to your shareholders to insure the ‘key man’. This way the company won’t end in bankruptcy if the unthinkable happens.

What Is Key Man Life Insurance


Key Man Life Insurance is a life insurance policy written to help a company when its survival rests on one or two people. The company pays the premiums and is the beneficiary if the person dies.

Small companies often purchase key man life insurance when the owner’s relationships with clients and vendors are what keep the company working. But it’s not always the owner who is insured. Sometimes an owner retires and leaves the company in the able hands of someone else…and that person becomes the ‘key man’.

Key man life insurance policies sometimes cover a main salesperson. In small companies, clients often get used to dealing with one person and refuse to do business with anyone else. And sometimes a company relies on an employee’s personal relationships for clients or discounts from vendors. In case of a sudden death, key life insurance would give the company a cushion to fall back on.

What Happens to the Benefits in a Key Man Life Insurance Policy


The money is generally either used to keep the company afloat while finding a replacement, or to make it easier to liquidate the company, pay off debts, and split the proceeds between shareholders (often the owner’s family).


Owners insure themselves because several of their employees are dependant on the company…even though the company wouldn’t exist without the owner. The key man life insurance policy would guarantee the employees a salary while they searched for another job.

Do Companies Really Need Key Man Life Insurance


In a small company, there’s often a ‘one for all, all for one’ mentality. For some, the lack of office politics makes it a more enjoyable atmosphere…and perhaps a more reliable one. People feel like they’re less likely to undergo the mass layoffs commonly associated with large corporations.


Small companies are also more likely to hire people with certain situations that intrude on their work lives. A single mother might have to take off work if a child is sick or if school is canceled due to bad weather. Someone with chronic health problems may have to call in sick often. Small businesses often offer the flexibility to deal with such problems when large corporations do not.


For the reasons above, small business workers are often more dedicated to their employers. It’s not uncommon to find cradle to grave employees, who never consider switching jobs…so they’re completely dependent on the company. And if the company is dependant on one person, not having key man life insurance on that person is an injustice to the company on a whole.


Remember, you’re not the only one who relies on your business. Key man life insurance is the protection you need for your company, your employees, and your family.

Talk to your Insurance Agent to ensure Key Man Life Insurance is right for you!

By: www.compuquotes.com

Guaranteed Issue Life Insurance

When Your Medical History Doesn’t Look So Good

Guaranteed issue life insurance is a policy that’s guaranteed to anyone... without regard to health conditions. You might think this sounds awfully risky for the insurance companies. They get around it in two ways.


Guaranteed Issue Life Insurance

First of all, guaranteed issue life insurance policies have ‘graded benefits’. This means that if the insured person dies within a specified amount of time, the beneficiaries only receive a portion (or none, in the case of contestable periods) of the death benefits. Most guaranteed issue life insurance policies only pay full benefits after the first two years of the policy. So if John Doe purchases a guaranteed life insurance policy in 2006, and dies of cancer in 2007, the beneficiaries will only get a portion (or none) of the benefit.

Another way companies make money off guaranteed issue life insurance is by charging more for the premiums. They also set age limits on the policies (typically, they won’t insure someone over seventy years old.)

What Kind of Insurance is Guaranteed Issue Life Insurance


It’s a whole life insurance policy, but the premiums are higher because no-one can be turned down. This means that guaranteed life insurance policies accrue a cash value over time (usually after the first couple of years). A portion of the premiums pay the cost of insurance, while the rest builds the cash value.


And since it’s a permanent life insurance, the premiums do not change…nor does the death benefit. As long as the premiums are paid, guaranteed issue life insurance is good for as long as you live.


Are There Exceptions to the Graded Benefits with Guaranteed Issue Life Insurance

Most policies will still pay the full amount of death benefits if the insured dies in an accident. But this is generally the only reason. In other words, if you find out you’ve only got three months to live, guaranteed issue life insurance won’t help you.

What Else Should I Know About Guaranteed Issue Life Insurance


Since the policies are open to anyone, guaranteed issue life insurance doesn’t require a medical exam or even a medical history. The questions asked are very general, like name, age, address, etc.


Most guaranteed issue life insurance policies have a limited death benefit amount (you’ll have a hard time finding a policy for more than $50,000). Guaranteed issue life insurance policies are most often sought to cover burial expenses, debts left in the estate, and medical bills.


You can use the cash value in a guaranteed issue life insurance policy to cover emergency expenses while you’re still alive. You can withdraw the money, and end the policy or accept a lower death benefit. Or you can borrow against the cash value and keep your benefits the same once you’ve paid the loan.


Guaranteed issue life insurance isn’t for everyone. But if you have trouble obtaining other insurance policies because of a health condition, and expect to live for at least two years, guaranteed issue life insurance might be your only option.


Talk to your Insurance Agent to ensure Guaranteed Issue Life Insurance is right for you!

By: www.compuquotes.com

Child Life Insurance

The death of a child isn’t something parents want to think about. But life insurance isn’t necessarily all about death. Child life insurance is about the future…and preparation. Taking steps today can help create a better tomorrow. And as parents or grandparents, our chief concern is making the future better for our children.

How Does Child Life Insurance Help a Child


Right now, when a child is young, strong, and healthy, life insurance is obtainable at a minimum cost. But if a child develops a problem like a chronic disease, life insurance can be almost impossible to obtain. So signing up for a low premium term life insurance policy now, with a guaranteed periodic purchase option, will make it possible for them to have life insurance as adults.


Another possibility for them is to purchase a whole life insurance policy, which will last for the rest of their lives. Their age and health status won’t make any difference…nor will it matter if they serve in the military or have dangerous occupation hazards.


Such child life insurance is perfect for planning for the future because of the cash value the plan would accumulate. As an adult, they could borrow against this value…or stop the policy and withdraw the money (to pay for college or any number of things).


Who Can Purchase a Child Life Insurance Policy


Parents, grandparents, and legal guardians can all purchase child life insurance policies. New parents often have heavy financial burdens during the first few years of a child’s life, and buying insurance is difficult. So grandparents (who might be more financially stable) purchase insurance for their grandchildren.

When Does Coverage Start for a Child Life Insurance Policy


When you start a life insurance policy for a child, the coverage begins immediately. There are no necessary medical exams to go through…just a few health related questions on the application is generally enough to get a child qualified.


The rates for child life insurance vary. Whole life rates stay the same. Term life rates depend on the policy, how old the child is, and several other factors. Policy renewal agreements can vary also, so make sure it’s spelled out before signing up for term policies. Some times you can purchase a term policy and then switch it to whole life at the end of the policy’s period.

Child life insurance policies can last as long as you wish to sign for. Again, whole life policies for children don’t ever end, while term policies are defined before you purchase it.

Who Receives the Benefits

In child life insurance policies, the parents or legal guardians are the beneficiaries. But the one who benefits the most is the child. He or she benefits from the security of a life insurance policy that will continue even if he or she is diagnosed with a life threatening disease. Secure your children’s future now with child life insurance. It’s good for them, it’s good for you


Talk to your Insurance Agent to ensure Child Life Insurance is right for you!

By: www.compuquotes.com

Group Life Insurance

Does your company offer group life insurance? If not, you might be ignoring one of the most cost effective ways to make your benefits package more attractive to potential and current employees.


Is Group Life Insurance Important


Today’s employees expect more than a salary from their employees. In a recent survey by Wall Street Journal, participants were asked if they would rather: have no pay increase but retain current benefits, or get a raise and see benefits decrease. Fifty six percent of respondents said they would rather keep their benefits. This illustrates how important it is for employers to offer a competitive benefits package, aside from a decent salary.


Among the many benefits an employee can offer, group life insurance serves as an excellent way to attract new employees. It also increases the morale of current employees and creates loyalty within the company.

Who Will Group Life Insurance Cover

Group life insurance policies can apply to any existing or new employees and associates. And most policies can offer extra benefits that employees can opt for at a discounted rate if they want to pay for the added expense. This makes it easy for employers to offer more than one plan, but still only pay a minimum for premiums.


How Does Group Life Insurance Costs Compare to Individual Life Insurance

Group life insurance is often cheaper than individual life insurance for several reasons. First of all, it’s a form of collective bargaining…it’s buying in bulk. So you’re getting bulk rates, and everything is cheaper in bulk. It involves less paper work for the agents and less time selling to each individual. These are the incentives for insurance companies to give lower rates on group life policies.


Employers especially benefit from group life insurance in a unique way. There’s no mandatory medical exams in order to be qualified. For some, this is the difference between being able to obtain insurance and not being able to. Chronic diseases make getting life insurance difficult. The fact that they can obtain life insurance through your company could be enough of a reason to persuade hard working employees to stay in their positions.

What other Benefits does Group Life Insurance Offer

* Since group life insurance is part of the wages you pay, it’s tax deductible. If you’re going to use a tax write-off, it may as well do something for you. Adding benefits to employee packages increases morale and, consequently, work productivity.

* Many plans offer a Waive of Premium benefit. If an employee is totally disabled, he or she can continue group life insurance coverage without paying the premiums. This (again) is a tangible sign of appreciation for your employees.

* You can customize group life insurance policies to fit your company needs. Many plans offer customization to fit specific employees (per salary, years with the company, etc.)


Your company’s benefits package is the ‘main attraction’ to the work force. Adding to it will attract a better working class, and help you retain your hardest workers. Take steps now to add group life insurance to your benefits package.

Talk to your Insurance Agent to ensure Group Life Insurance is right for you!

By: www.compuquotes.com