Category: Life Insurance

If the insured person passes away, their loved ones are protected by life insurance. The protection offered by term life insurance is fundamental and momentary. The benefits of term life insurance are broken out in this lesson plan.

Insurance on a Term Basis

The coverage period for term life insurance is typically between 20 and 30 years. If the policyholder passes away due to a covered cause while the coverage is in effect, the insurer will pay a death benefit. No reward is paid out if the policyholder passes away.

Several different insurance providers offer term life insurance. Certain employers do not need medical examinations. Policyholders are the ones who decide the coverage they want. It might be a few thousand dollars to pay for the funeral expenses or a million dollars or more. Insurers base the premiums they charge policyholders on the likelihood that the policyholder may pass away. Usually, people who are young and healthy have lower insurance costs. The person who owns the insurance may choose one or more people to receive the death benefit. The death benefit is larger, but the premiums are higher. If the policyholder passes away due to an event covered by the plan at any point during the plan term, the beneficiary will receive the death benefit. Beneficiaries are exempt from paying taxes on this money.

Whole as opposed to Term

There is a significant difference between term and whole life insurance regarding cost, purpose, and coverage. The duration of term policies is not permanent. If the policyholder does not pass away within the policy term, the beneficiary receives no death benefit. Insurance expenses affect premiums. Whole life insurance is more expensive than term life insurance. Value is not added to the currency by term policies. They can neither be cashed out nor invested in. The benefits of whole life insurance are permanent. A death benefit is always paid out if the insurance policy is still current. This is an excellent option for a parent who has a disabled child who will need permanent coverage. There is the potential for cash accumulation with whole life insurance. Investments. Policyholders have the option to borrow against their policies or cash them in.

Permanent vs. Term

Temporary coverage is provided by term life insurance. Permanent life insurance protects the rest of one’s life. The most common kind of life insurance is permanent whole life insurance. The term “universal life” refers to both permanent and temporary life insurance. The security provided by universal life policies is permanent. Nevertheless, both the premiums and the benefits upon death are negotiable. You have the option of using the cash value of your insurance to pay your premiums and increase the amount of the death benefit.

Contact Information:
Email: [email protected]
Phone: 2129517376

Variable life insurance is a type of permanent (cash value) life insurance that allows you to divide your premium payments among subaccounts, similar to mutual funds. Even if you transfer money from one subaccount to another, the growth is tax-free. Usually, you’ll pay life insurance premiums at regular intervals, which is a type of dollar-cost averaging.

If your subaccounts perform well, you can continue to pay the same premium amounts while your cash value and death benefits increase.

Alternatively, you can reduce future premium payments while maintaining insurance coverage. As a result, variable life insurance allows you to profit from the stock market’s long-term development. Furthermore, you’ll benefit from the permanent life insurance tax advantages.

The policy has no income tax on investment income. You can withdraw a part of your cash worth without paying income tax. When you want the funds in your policy’s cash value, you can withdraw them tax-free until you reach the amount you paid in premiums. After that, you can take advantage of tax-free policy loans.

After your death, your beneficiary will receive a tax-free settlement.

The bottom line is that variable life insurance may give tax-free retirement income to you and an income-tax-free death payout to your loved ones, provided you use the policy carefully.

Contact Information:
Email: [email protected]
Phone: 2129517376

Life insurance is one purchase that you make in the hopes of never needing it. However, some people refuse to purchase life insurance for one primary reason: they believe it isn’t worth the money to pay for something they will ideally never use.

However, that line of reasoning is incorrect since, while we all hope never to need life insurance, the truth is that you can never tell when disaster will strike. Without a plan in place, you could leave your loved ones in a situation where they can’t afford to live independently.

According to a recent ConsumerAffairs poll, 29% of respondents believe purchasing a life insurance policy isn’t worth the money. But here are several reasons why you should consider getting insurance.

 If You Have Dependents

Let’s say you’re offered $100 monthly in premiums for a 30-year term life insurance policy covering $500,000 in coverage. That’s $1,200 a year you could be spending on the insurance coverage you’ll hopefully never have to use.

You may believe that it’s best to save that $1,200 instead of paying it yearly as a premium. However, saving $100 every month for 30 years will get you $36,000. And if you died at that time, your loved dependents would have had a lot less than $500,000.

That also implies that you’ll be alive for the next 30 years to save that money.

The entire point of life insurance is to safeguard your loved ones against the unforeseeable. Under the same assumptions, if you died in five years, your family would have $6,000 in savings left behind. This may not even cover the expense of a burial.

Even if it appears to be an unnecessary expense, you should purchase life insurance. If you ever end up needing it, it may more than pay for itself.

How to Save Money on Life Insurance

Some individuals believe that whole life insurance isn’t worth the money, which may be true in some cases (although several benefits come with whole life insurance).

Whole life insurance offers protection for the rest of your life. It also builds up a monetary value over time. However, it can be more expensive than a term life insurance policy, which only offers coverage for a specified time (typically, 20 to 30 years).

Whole life insurance can be unreasonably expensive, to the point that many policyholders are forced to cancel or surrender their coverage owing to a lack of financial resources. Your loved ones will be unprotected if you cancel your policy.

Because term life insurance is cheaper, there’s a good chance that you can afford to pay the premiums each year to make sure that your family has the protection they need if you die.

The last thing anyone wants is to put their dependents in a financial situation where they can’t support themselves. Buying a life insurance policy is an excellent way to protect yourself from such a situation.

Contact Information:
Email: [email protected]
Phone: 2129517376

There are so many different kinds of insurance available — health insurance, vehicle insurance, home insurance, and so on — that it can be challenging to determine which coverages you genuinely need. Life insurance helps to guarantee that your dependents’ financial responsibilities are met if you die and your dependents lose their income — but do you need this form of insurance if you have no dependents?

Let’s see what financial planners and insurance agents have to say on this matter.

If one is single and with no dependents, they probably don’t need life insurance.

“There is absolutely little incentive to acquire life insurance if you are single and have no dependents,” said Jay Zigmont, Ph.D., CFP, founder of Live, Learn, Plan, a financial planning organization located in Mississippi that focuses on assisting childless adults.

However, if you have non-human dependents, this is something to think about.

“I’ve seen some folks get life insurance to pay for their pets when they die,” Zigmont explained.

But the best is to buy life insurance when you’re healthy.

Even if you’re single and have no dependents today, you should consider purchasing life insurance if you expect to have dependents in the future.

“One’s health may change, and a person could become uninsurable in the future,” said Shane Canfield, CEO of WAEPA, a non-profit organization that provides life insurance to civilian government employees and their families. “The easiest way to avoid that risk is to get a whole life insurance policy with the opportunity to acquire additional coverage at intervals with no underwriting.”

Life insurance is also less expensive to purchase while you’re younger and in good shape.

“Younger folks may want to buy insurance because it’s less expensive and can safeguard their insurability, or because they expect to start a family later in life,” said Chris Seabrook, a spokesperson with the insurance firm Country Financial.

Other reasons to buy life insurance

“Even if one is single and with no dependents, having life insurance may help pay off debt,” says Wilson Coffman, Coffman Retirement Group’s president. “Life insurance lets you depart or take care of financial obligations. No one wants to leave this life with the burden of duty or guilt on their shoulders.”

Life insurance helps pay funeral expenses.

“Whether you realize it or not, your death has costs,” Coffman added. “Burial costs can exceed tens of thousands of dollars. Someone must cover these ultimate costs. Again, life insurance may aid any organization or family member.”

A legacy is another incentive to seek life insurance.

“Life insurance is a tax-free advantage,” said Coffman. “Any life insurance left to beneficiaries is tax-free, allowing the money to help others or even charities.”

What amount of coverage do you need?

The amount of coverage you need and who should be your beneficiaries may be uncertain if you are single with no dependents.

“Typically, coverage is 10–12 times your income,” Coffman says. “For your beneficiaries, you should select numerous persons who will be responsible for your estate following your death. That can be a parent, a relative, or a close friend. After paying your obligations, your residual inheritance will go to these beneficiaries.”

Seabrook pointed out that your beneficiaries might be a trust or a charity.

Contact Information:
Email: [email protected]
Phone: 2129517376

While the policies work in different ways, term life and whole life insurance remain the country’s most popular forms of life insurance. Whole life insurance provides an investment component, growing tax-deferred, and provides the benefits of term life. Term life provides a death benefit upon your death if it occurs within a specific period. Term life is also more affordable and well-suited to a wide range of individuals. Let’s delve a little deeper into comparing whole life and term life insurance.

Whole Life Insurance

 Also referred to as permanent life insurance, whole life does not provide a specific coverage term. As the policyholder, it is your responsibility to maintain the policy to keep it in effect. Whether 2 years or 20 years after the initial date, the insurance company will pay out the death benefit to preselected beneficiaries regardless of when the policyholder dies.

Term Life Insurance

This type of life insurance insures the life of the policyholder. As such, you would choose your beneficiaries and your death benefit (i.e., $250k). The length of a term life policy ranges from 15, 20, and 30 years, etc. If the policyholder were to die within the term, the insurance company would pay the death benefit. Otherwise, the death benefit is not paid to beneficiaries.

Contact Information:
Email: [email protected]
Phone: 2129517376