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Types of Life Insurance
Posted on October 13th, 2009 1 commentAuthor: John Mussi
Source: articleage.comThere are different types of life insurance policies available. Shop around and compare policies to ensure that you receive the best deal possible. This sounds obvious, however, there are dozens of different types of life cover plans available and it is important that you select the right one for your circumstances.
Life Insurance is insurance that provides protection against the economic loss caused by the death of the person insured. There are several types of Life Insurance, each having different characteristics. Some of the key types of Life Insurance are: Term Life, Whole Life, Burial Insurance, Survivorship Life, Universal Life, and Variable Life Insurance. Outlined below is a useful description of each type:
Term Life Insurance
Term Life Insurance is the lowest cost and simplest product available. Term insurance is a life insurance contract that provides protection for a limited number of years. The death benefit is only payable if death occurs during the agreed-upon term. There are various types of Term Insurance Life Policies:
Level Term Life Insurance
Means that your premiums are set at a level at the beginning of the contract and do not move up or down. The sum assured will remain the same throughout the term.
Increasing term insurance
This is a fixed term policy where the sum assured will increase, either by a set percentage or by the Retail price index (RPI) throughout the policy term. Your premiums remain level throughout the term if the sum assured rises by a set percentage, or will rise according to the RPI if the sum assured does the same.
Renewable term insurance
This is policy lasting for a smaller period, usually five years, which can be renewed, although the sum assured cannot be increased, whilst the premiums will increase with age.
Renewable increasable term insurance is the same as above but provides for an increasing sum assured.
Convertible term insurance
Provides the option to convert parts of the sum assured to whole of life, endowment or further term assurance without further medical evidence.
Decreasing term insurance
Is where the sum assured decreases over time; hence, the premiums are set lower. This is commonly used to cover a mortgage.
Whole Life Insurance
Life insurance that remains in force during the insured’s entire lifetime, provided premiums are paid as specified in the policy. Whole life insurance also builds a savings element (called the cash value) as a result of the level premium approach to funding the death benefit.
Burial Insurance
Burial Insurance, or Final Expense Life Insurance, is essentially a whole life product with small face values. The application process is simple and does not have the associated medical requirements of other policy types. This type of life insurance is also referred to as a simplified issue or guaranteed issue policy.
Survivorship Life Insurance
A type of whole life insurance which insures two people and pays benefits only after the second person dies. It is generally designed to provide funds to pay estate taxes.
Universal Life Insurance
An unbundled whole life insurance product in which the mortality, investment, and expense factors used to calculate premium rates and cash values are expressed separately in the policy. In a universal life insurance policy, any applicable expense charges are deducted from the premium and the remainder of the premium is then credited to the policy’s cash value. Each month the insurer deducts the mortality costs from the cash value and credits the remainder of the cash value with interest.
Variable Life Insurance
A form of whole life insurance under which the death benefit and the cash value of the policy fluctuate according to the investment performance of a separate account fund. Most variable life insurance policies guarantee that the death benefit will not fall below a specified minimum. A minimum cash value is seldom guaranteed.
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Why Life Insurance Might Be Your Most Valuable Business Asset
Posted on October 12th, 2009 No commentsAuthor: Donny Lowy
Source: articleage.comWhile our business prospers we often cannot see ourselves ever lacking money.
Most of us reason that as long as we keep working, making sales, and satisfying customers, our businesses will continue to prosper.
And if our business slows down, or fails, we can always seek 9-5 employment.
But how many of us consider another alternative?
What if we are no longer around?
Would our families be able to enjoy a decent standard of living without the income we generate?
If the answer is no, then we should consider the benefits of having life insurance.
A life insurance policy can provide a decent source of financing for a family that has lost their breadwinner.
While life insurance can be expensive for some, there is another alternative to consider.
Term life insurance does not generally provide a cash build up value, but it can provide coverage at a substantially lower price.
By purchasing term life insurance you can also free up cash flow which you can reinvest in your business. Since term life insurance is substantially cheaper than life insurance, you can use the money you save to continue building up your business.
In essence, term life insurance is an agreement between you and your insurance company. In exchange for monthly payments the life insurance company will guarantee a death benefit to your survivors.
Term life insurance does have a downside, which is the lack of a cash value. But on the other hand, as a business owner, you might be able to obtain a better return on your money from investing your money in your business.
Term life insurance is also highly affordable, with term policies being available for as little as $20 a month, and guaranteeing a death benefit of up to $150,000.
Before making a purchase of any term life policy make sure to research the ratings of the life insurance company.
You want to ensure that the company will be in business 15, 20, and even 30 years from now.
When it comes to term life insurance, the Internet is your best research tool. Many insurance sites will give you instant quotes and let you compare different life insurance companies.
You can read up on term life insurance, and receive a free quote, by visiting http://www.americanlifedirectonline.com
Donny Lowy is the CEO of http://www.closeoutexplosion.com an online wholesale and closeout business.Uncategorized business, death benefit, insurance, insurance company, life, life insurance, life insurance company, term, term life, term life insurance