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What Is Life Insurance?

Term Life Insurance & Whole Life Insurance Discussion

What Is Life Insurance?

Postby Finan » Sat Sep 30, 2017 10:51 am

Life insurance is an insurance plan that provides death benefits. The main reason why people buy it is to protect their family's income in case he/she dies. For example, a wife and husband both have kids. They live in a house. So, the main source of income is coming from the wife and husband. What if the husband dies, the source of income is now cut in half. What will the family do if they husband didn't have life insurance? Kids probably won't be able to go to college, the family may have to move to a cheaper place, wife may need to go into her retirement funds. The family will be in a complete mess. That's why life insurance is so important to have.

There are many life insurance products out there, one is very cost effective and the rest are very expensive. Read this blog: http://obe231.blogspot.com
Finan
 
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What Is Life Insurance?

Postby aston81 » Sat Sep 30, 2017 3:33 pm

time period insurance -the position insurance is offered for a unique era (many times a year, or for factor sessions jointly with 5, 10, 15, 20 even 25 and 30 years) the position a death earnings is in trouble-free words paid to the beneficiary if the insured dies in the course of the wanted era. on survival no longer some thing is payable everlasting existence insurance is one of those existence insurance jointly with entire existence or endowment, the position the coverage is for the existence of the insured, the payout is guaranteed on the top of the coverage (assuming the coverage is kept modern-day) and the coverage accrues money cost.
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What Is Life Insurance?

Postby Northrop » Sun Oct 01, 2017 1:40 pm

I work for an insurance brokerage and I can give you some pointers and talk about the different types of products if you are interested, just shoot me an e-mail at [email protected]!
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What Is Life Insurance?

Postby Milap » Mon Oct 02, 2017 2:38 am

Some clarification.....life insurance is a contract between you & the insurance co. You decide (there are guides to help you) how much protection (coverage) you need & then pay the premium based upon your age,gender, & whether you smoke.

Parents of young children buy it to make sure their kids have college funds if they aren't alive to help. Couples buy it to make sure that there is money to cover the mortgage if one dies prematurely. Others buy it to make sure there is money available for final expense upon their death. Perhaps you wish to donate a bunch of money to a charity or your college......you could make them the beneficiary.

Unlike auto or home insurance which you may or may not ever collect on......you ARE going to die (Hopefully many years from now!)....and the money provided by the policy will take care of whoever or whatever you wish to indicate.

In fact, to correct a previous post. After a waiting period, usually two years, a life policy will pay regardless of how you die, even suicide, provided you did not commit fraud by lieing on the application.

On the other hand, if you bought a policy tomorrow, & a bus ran you over next week, the company will pay (again provided no fraud is involved)
Milap
 
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What Is Life Insurance?

Postby Washington » Tue Oct 03, 2017 4:06 am

Life Insurance is a financial tool where you can pay a yearly premium say 1000 bucks a year in exchange for 200,000 bucks to your family if you were to die suddenly.
Long Term Care Insurance is another type of life insurance but the concept is the same.
You pay 2000 bucks a year and if you ever go into a nursing home that costs 100,000 per year the insurance company will pay the bill and not you.
Hope this helps.
Washington
 
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What Is Life Insurance?

Postby Rick » Tue Oct 03, 2017 9:59 am

When buying life insurance, you want a policy which fits your needs without it costing too much. First, you should decide on how much you will really need, how much you can afford to pay, and the type of policy you want. Second, find out what various companies charge for that specific kind of policy.


One way in deciding on how much life you will need is to figure out how much cash and income your dependents will need if you were to die in the near future. Think of life insurance as a source of cash needed for final exprenses, paying off taxes, mortgages and/or other debts. Life insurance can also provide income for your family's living expenses, educational costs, and other future expenses. Your insurance policy amount should come as close to making up the difference between 1) what your dependents would need if you were to die now, and 2) what they would actually need.

There are three basic and current life insurance policies: term insurance, whole insurance, and endowment insurance. The following is an outline in which the important features are noted.

TERM INSURANCE

Coverage protection: for a "term" of one or more years, usually 30 years being the maximum

Death benefits: paid only if the policy owner were to die within that term of years

Renewable: some are renewable for more additional terms even if the olicy owners' health has changed

Convertible: before the end of the conversion period, the policy owner may trade the term policy for a whole life or endowment policy even if he/she is not in good health

WHOLE LIFE INSURANCE

Coverage protection: death protection for as long as the policy owner lives

Cash values: a benefit the owner does not lose when he/she stops paying the premiums

Loan: the cash value may also be used as collateral for a loan

ENDOWMENT INSURANCE

Income benefit: pays a sum or income to the policyholder if he/she lives to a certain age

Death benefit: if the policy holder were to die before that certain age, the death benefit would be paid to the designated beneficary or beneficiaries

In summary, do not buy life insurance unless you plan to remain faithful to it. A policy can be a smart buy when hels for 20 to 30 years, but it can be very expensive if you decide to quit during the early years of the policy.


When you finally receive your new policy, be sure to thoroughly read through it and inquire with the agent on anything that you do not understand. It is also important to review your life insurance policy every few years or so to keep up with income changes and life responsibilities.
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What Is Life Insurance?

Postby Bergin » Thu Oct 05, 2017 12:50 am

Life insurance is a product which pays out an amount of money when you die to whomever you designate as your beneficiary (there can be more than one). You buy the policy through periodic payments, called premiums. The policy has a value or ?face amount,? which is the amount of money your beneficiaries will receive when you pass on. This amount ranges from enough to pay for a burial to enough to help endow a university.

There are two basic types of life insurance: term (or temporary) and whole (or permanent). Term life is in effect for a set amount of years, although you often can extend the term. Term life policies pay out only if you die during the term. Whole life lasts throughout your life, as long as you keep up the premium payments.

This is a brief overview of life insurance. For more information, check out MostChoice.com. It has articles on life insurance, including a shopping guide. You can also compare different life insurance policies available in your state and speak to local agents without any obligation.

You can find MostChoice here: http://www.mostchoice.com/life-insurance...

Hope this helps,

[email protected]
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What Is Life Insurance?

Postby Jorel » Thu Oct 05, 2017 3:55 am

Like all insurance you only win when you lose.
There are several 'flavours' of life insurance depending on what your needs are.


Basically you pay a company a premium each month and they will pay your estate out an agreed value if you die.
You can also get a deal for permanent disability or disablement.

The premiums will vary depending on your gender, if you smoke or not, your occupation, your lifestyle and your family's medical history.
Naturally the higher the payout amount the higher the premium will be.

Most companies will have a clause that if you die from something like suicide or drug overdose they will not pay the claim, so it pays to read the fine print.

If you have a family it is worth having both income protection and life insurance.
That way if anything bad happens to you, your family will be able to survive financially (or that is the idea anyway).
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What Is Life Insurance?

Postby MacAlister » Sun Oct 08, 2017 2:21 am

In the event of your death loved ones get $$ .

Smart to do if you have kids as the insurance could go for them , but adults .
.
. they get it on another person, then off them to collect .
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What Is Life Insurance?

Postby Taidhg » Sun Oct 08, 2017 9:25 pm

TERM LIFE INSURANCE

Term insurance is, by definition, temporary insurance. Each year, a premium is paid to cover the risk of death during that year. Term insurance has no cash value. The only way to collect anything is to die during the term. If death occurs, the beneficiary generally collects the face amount (death benefit) of the policy, free of income tax.

Historically, term insurance premiums increased each year, as the risk of death became greater. While unpopular, this type of coverage is still available and is commonly referred to as annually renewable term (ART).


Many insurance companies now also offer level premium term. This type of coverage has premiums that are designed to remain level for a period of 5, 10, 15, 20, 25 or even 30 years. These policies have become extremely popular because they are very inexpensive and can provide relatively long term coverage. But, be careful! Most level premium term policies contain a guarantee of level premiums, however some policies don't provide such guarantees. Without a guarantee, the insurance company can surprise you by raising your premiums, even during the time in which you expected your premiums to remain level. Needless to say, it is important to make sure that you understand the terms of any insurance policy you are considering.


WHOLE LIFE INSURANCE

Whole Life Insurance is a form of permanent insurance, and is designed to remain in effect throughout one's lifetime. It is well suited to needs that do not diminish over time, such as paying estate settlement costs and taxes. Generally, the premiums for this type of policy remain the same throughout the life of the insured. During the early years of the policy, premiums are much higher than those of term insurance policies. As a result, and by design, these policies develop cash values which can be accessed by the owner of the policy through surrenders or policy loans.


Cash values in whole life policies typically include two components. Each policy has a guaranteed cash value, which typically grows based on a pre-determined schedule during the life of the policy and which "endows" or equals the death benefit upon maturity of the policy (typically at age 100). In addition, most whole life policies have a non-guaranteed cash value element, typically made up of "dividends" or "excess interest" which can enhance the value of the policy over time.


UNIVERSAL LIFE INSURANCE

Universal Life Insurance differs from Whole Life in that these policies distinguish and itemize the protection element, the expense element, and the cash value element. By separating the three elements, the insurance company can build more flexibility into the policy. This flexibility allows (within certain guidelines) the policy owner to modify the face amount or the premium in response to changing needs and circumstances.


Here's how these policies work: Premiums are credited to the policy as they are paid. Most plans deduct certain administrative charges from the premium before crediting the balance to the policy value as net premiums. Each month, the insurance company deducts certain amounts from the policy value to cover the costs of mortality (death benefits), as well as for any riders and/or supplemental benefits. Also, each month, interest is credited to the policy based upon the cash value in the policy and based on a current declared interest rate as determined by the insurance company. This rate can and will change periodically.


Most policies also have a decreasing surrender charge which is deducted from the cash value if the policy is surrendered. This feature allows the insurance company to recover certain expenses which are associated with the issue of the policy. The surrender value is the cash value less any applicable surrender charge.
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