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Life Insurance Policy for Child – Why Buy Life Insurance for a Child?
Posted on October 12th, 2009 No commentsAuthor: Gavin Bloom
Source: articleage.comThere are a few of pro’s and cons’ about purchasing life insurance on children. Life insurance must have an insurable interest. There has to be good reasoning behind the purchase of life insurance on children. The first priority is to first make sure that the income producers in the household have an adequate amount of life insurance. Large amounts of life insurance on children with little or no life insurance on the bread winners will make little sense to an insurance company underwriter. Life insurance underwriting departments will often require a certain ratio of life insurance on parents to children. There are advantages in purchasing life insurance on children after the parents are insured properly.
Most companies have children term riders that a very inexpensive. Children term riders will protect the insurability of the child. These term riders can be converted to permanent forms of life insurance when the child reaches the ages of 18-21. This is a valuable feature if the child is uninsurable because of health reasons.
Permanent Life Insurance on Children – Some parents have purchased permanent life insurance policies on children so that they can use the cash value accumulation later in life. Permanent life insurance is relatively inexpensive and should be considered on a child once the parents have taken care of their own life insurance needs.
Why Buy Life Insurance on a Child?
1. Protect Insurability – Purchasing life insurance on a child will protect the Childs insurability.
2. Cash Value Accumulation – Purchasing permanent life insurance and funding it with adequate enough premium to produce cash for college education or future needs. Universal Life policies are excellent policies for this purpose.
3. Final Expense – This is the basic purpose for all life insurance.
There is the added benefit of teaching the child about life insurance. Parents that show their children the benefits of life insurance prepare the child to take responsibility for their own financial future.
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Life Insurance: 4 Key Mistakes And How To Avoid Them
Posted on October 12th, 2009 No commentsAuthor: Evan C Davis
Source: articleage.comLife insurance, whether you are talking about whole life, term life, or one of the many policy variations available, can be a complicated and misunderstood subject. Perhaps for this reason it is not unusual that we make wrong decisions when purchasing a life insurance policy. With that in mind, we would like to bring up what some experts consider to be the four most common mistakes made when purchasing life insurance.
First, treating your life insurance policy as a savings account. Insurance is often purchased for two reasons, tax savings and as an investment instrument. Many experts believe that life insurance is best purchased to do what it is intended to do, which is provide protection in the event of loss of life. For this reason we suggest, as do many insurance experts, purchasing a term policy for life insuance, and for savings purchasing a separate mutual fund account. Granted, this view is somewhat of a purist viewpoint and will not be for everybody. Still, term policies are relatively inexpensive, free of complexities, and payout quickly.
Second, allowing your agent to make all of the decisions. Do your homework and understand what you are buying. We urge you not to trust your agent too completely-regardless of how honest or well intentioned you believe him or her to be. Your agent may be a model of intelligence and integrity, but the ultimate responsibility for any decision made rests with you; don’t give someone else all the power.
Third, treating the purchase of life insurance as a one-time-purchase-and-forget-about-it-activity. Your needs will change over time. As your life circumstances change, so will your insurance needs. For example, the sort of policy you buy as a single individual will not provide adequate coverage should you decide to marry and start a family.
Fourth, buying the wrong kind of insurance. Yes, this is an all too common mistake. For example, many people buy universal or variable life insurance policies without properly understanding the kind of insurance they’ve bought and that these are complicated investment instruments. This sort of purchase might be completely wrong for a single person whose income would not allow premium payment in the event of unfavorable market fluctuations.
When buying life insurance, be sure to take the time to do your research. It isn’t necessary to spend sleepless nights in the library. However, it is important that you thoroughly understand your needs and which sort of life insurance will offer the best protection with respect to the demands of your life. There is a great deal of concern about finding the cheapest, or lowest cost life insurance. But one action you can take to insure you get the lowest premium price for your “life” is to put in the time to learn how to make an informed decision about the life insurance that will serve you best.
Evan C. Davis works in Medicare customer service and is the webmaster and owner of Value Life Insurance. Find out about cheap term life quotes online and low cost term life premiums at http://www.a2b-life-insurance.info