Basic Life Insurance

Choosing the right insurance is a critical undertaking. We’re talking about money that you’re going to have to shell out regularly, in the hopes that your loved ones would be taken care of if something happens to you. With all the different kinds out there, what should you choose? There are two basic types of insurance, whole life and endowment policies. Whole life policies are life insurance contracts that will pay you a lump sum only after your death. While endowment policies are life insurance contracts that are designed to pay a lump sum after a specified term. Generally, premiums are higher for endowment policies than for whole life.
Normally, I always suggest getting an endowment policy, since I like the idea of getting my money back. I also like to look at endowments as forced savings or long-term investments. Also, with endowments, you get insurance during the critical period of your kids’ growing up years. Once they’re all grown-up and well-established, then it would be your turn to need the money for your retirement.

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If you are age 60 or older and currently have a Life Insurance Policy in force, you may have questioned if you are truly getting the best policy for your money. Do you have the highest death benefit available? Are you paying the lowest cost in premiums available? Are there any available financing options you should be aware of? When you purchased the policy, were the proper array of carriers and products presented - tailored to you, and even if so, have your circumstances since then changed? A recent study concluded that up to 70% of the currently in-force permanent (Universal, Whole, or Term with conversion options) Life Insurance policies for people over 60 years of age are woefully insufficient, given changes in the health since the issuance of the policy. The bottom line is that health does change, circumstances do change, needs change, and in fact the available product lines and pricing changes as well over time. A comprehensive analysis can be an invaluable undertaking for those who wish to be fully protected and optimize their coverage, maximizing benefit and minimizing premiums. A review by licensed professionals from a reputable non-partisan firm can yield amazing results, and is generally thought of as well worth the minimal time invested.

Life insurance pertains to a contract agreement between two parties namely the policy owner and the insurer. The policy owner commits to pay a certain amount of money on a regular basis to the insurer. In turn, the insurer agrees to pay the policy owner, also known as the insured, an amount of money in the event of a critical illness or an accident. If in case, the insured died, the money will be given to the beneficiary/beneficiaries specified in the contract.

Several companies offer life insurance. These companies differ in terms of coverage and payment schemes. Choose the one that matches your needs and your budget.

by: Djai Tanji

Alcohol consumption, just like cholesterol level, weight, and blood pressure is a significant life insurance underwriting factor. There is of course a significant correlation between DUIs and alcohol abuse that is why insurance companies adjust their premiums consequently. Insurance companies have three things to consider before rating you with regards to alcohol consumption. They will ask you some questions regarding your alcohol consumption, questions about your driving record and will discuss with you the result of your medical exam. Make sure that you answer the questions accurately and honestly so that in any case that you pass away, the policy will not be canceled in realization that you provided false information.

A rider refers to the modifications added in the insurance policy at the time that it is issued. A rider is usually added to the policy to accommodate the features requested by its owner. A rider may be in the form of accidental death and premium waiver. An accidental death rider, also known as double indemnity, requires the insurer to double the payment of the policy face value should the policy owner die as a result of untoward accidents. Premium waiver, on the other hand, waives future premiums in cases where the policy owner becomes critically ill or permanently disabled.

Permanent life insurance includes the following:
• Whole Life Coverage – guarantees a level of premium and cash value in its policy. This type of insurance ensures death benefits, guaranteed cash values and fixed and known premiums. Mortality and expense charges will not be deducted from the cash value indicated in the policy.

• Universal Life Coverage – a relatively new product that offers permanent coverage with an accompanying flexibility paying premiums and provides the potential for higher returns.

• Limited Pay – a form of permanent insurance that requires the policy owner to pay the premiums for a certain period. Afterwhich, no additional premiums will be paid to continue the enforcement of the policy. Pay periods are usally in 10 to 20 years and are paid up when the policy owner reaches the age of 65.

• Endowments – more expensive type of insurance. The terms of annual premiums are higher than that of other forms of permanent insurance. The cash value of endowments builds up in the policy. The cash value equals to the death benefit and the face amount.

Life insurance comes in three types: temporary, permanent and accidental death. Read on and find out the difference of one from the others.

• Temporary Life Insurance – provides limited coverage to the policy owner. There is a specified number of years in which the policy owner will be insured. The premium for this type of insurance is usually low because there is an agreement between the insurer and policy owner that the insured is highly unlikely to die during the coverage. No cash value is accumulated in this type of insurance.
• Permanent Life Insurance – covers the policy owner until the contract matures. This type of insurance has a cash value that grows over time. The policy owner has the option to withdraw and borrow the contract’s cash value. Surrendering the policy to get the contract’s equivalent value is also possible.
• Accidental Death Insurance – provides coverage for the policy owner in the event of death due to accidents. This includes deaths resulting from serious injuries and not from health problems and suicide. Premium for this type is relatively lower than the other forms of insurance.

When buying life insurance always remembers that there are ways to save money. As much as possible, try to look for policy that meets your need. If you think that buying low premium is a saving for you, think twice because it is just a waste not a saving.
As your top priority, look for a policy that meets your needs. Here are some reminders to maximize your life insurance.
1. Almost everywhere you can find companies selling life insurance so you need to focus on financially sound companies.
2. Give enough time to shop around to get a sense of the premium you’re likely to pay.
3. Look into group insurance so it can be less expensive than individual life insurance because employers often subsidize their group insurance costs.
4. Most importantly is to take good care of your health. Maintain a healthy life to qualify for a more favorable rate class.