LIFE INSURANCE
Life Insurance is a contract where an insurance company agrees to pay a certain amount of money to a beneficiary upon the death of the policy holder. The policyholder pays a regularly scheduled fee, known as a premium. The purpose of life insurance is to help the loved ones who survive the policyholder with financial support. The insurance proceeds pass to the beneficiaries free of probate, when the policyholder dies. Though free of probate, they are counted for federal estate taxes.
WHOLE LIFE INSURANCE
Whole Life Insurance is life insurance that remains in force during the insured's entire lifetime, as long as the scheduled premiums are paid. It is the oldest and most common type of permanent life insurance, with premium rates that do not increase with age. Whole Life Insurance policies also provide tax-deferred buildup of cash value, payable upon surrender or payment default. Policyholders may use the cash from their dividends in variety of ways. A few uses are: they can be used to lower their premiums or eliminates them completely; they can also be used to purchase more whole life insurance, or to buy term life insurance.
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TERM LIFE INSURANCE
Insurance that covers the insured for a fixed period of time as described in the policy agreement. Term periods can be for one, five, ten, or even thirty years, often with a renewal option. Premiums are paid throughout this time, but unlike whole life insurance, premiums ususally increase (at the time of renewal) as the insured person becomes older and risk of death increases. Form of pure life insurance without cash surrender value or loan value which could be used as collateral for a loan. Term life insurance provides a pre-set amount of coverage if the policyholder dies during the time period specified in the policy, and pays a death benefit to your beneficiary or beneficiaries if you die while the insurance is in force. Policyholders usually have a renewal option at the end of the term for the period of years specified in the policy. Term life insurance is normally the most inexpensive form of life coverage and most commonly purchased.
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UNIVERSAL LIFE
Universal Life Insurance is a product that combines the low cost coverage and security of a conventional term life insurance policy with a tax-deferred savings account and investment yields. Unlike traditional whole life policies, universal life separates death security and cash value accumulations into separate components. Making a flexible policy, in which the cost of the premium, the savings value and the coverage can change as your needs change. Often Universal Life Insurance can be set up with a lower premium initially than whole life insurance. Premiums and values are based on projections of assumed interest rates, the cost of insurance (also known as mortality cost) and the insurance company’s expenses. ...
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FINAL EXPENSE POLICIES
Final Expense Life Insurance policies are sometimes mistaken with burial protection policies. Usually, burial protection policies are intended to cover only those expenses that are related with the actual funeral. In comparison to burial protection policies, final expense policies can be used to compensate your loved ones for all the expenses they will encounter at your death. Some outstanding expenses include medical bills, legal fees, and taxes. With a final expense policy, you have the flexibility of setting aside adequate amount money to pay your funeral expenses as well as any outstanding debts. You can relax knowing that when your loved ones are faced with the burden of expenses such as funeral, administrative and probate fees, you have provided for them. Your policy will accumulate cash value over time, which allows you to do one of the following: you can cash it out; you may take a loan against it, or transfer it into an annuity. When you purchase final expense/burial insurance you should be aware of the many financial burdens your family may incur. Some, not all, are listed below.
Burial Expenses
• Casket
• Outer Vault
• Embalming
• Cosmetics
• A Viewing
• Flowers
• Music
• Minister
• Fee for the church or chapel
• Cemetery Plot
• Headstone
• Hearse
• Celebration of Life (Luncheon)
• Death Certificates
• Fee for obituary in newspaper
Final Expenses
• All doctor and hospital bills
• All Attorney and legal fees
• Any outstanding debts you may have
Final Expense Insurance features
• Policy cannot be canceled regardless of age or health as long as premiums are paid.
• As long as premiums are paid your policy cannot be canceled regardless of age.
• A Cash value that is accessible for your emergency expenses.
• Your death benefit will never decrease.
• Your premiums will never increase.
• An Accelerated death benefit: If diagnosed with a terminal illness, you will receive up to
50% of your death benefit earlier.
Until the replacing policy has been issued never cancel your existing coverage. Make sure
you have confirmation of this!
Ownership and Beneficiaries
All though the policy may be financial secure for your life, the policy owner does not need to be you. In many cases, the policy holder is your spouse. The general rule that applies is that the owner and beneficiary need to have an "insurable interest". In other words that person is required to have a financial interest in your living.
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