Advantages Of Life Insurance

Brad Cunard learnt the value of life insurance the difficult way. While stuck in traffic with his wife Lisa and two boys, Max and Owen, they hit a violent thunderstorm. Nothing could have prepared Brad for what happened next.

A tree fell on their car with horrible precision, instantly killing Lisa, 38, and their boys, who were three years and five months old. Brad had always believed he and Lisa would live to enjoy Little League games, proms and grandchildren. Now he found himself alone, not sure how he'd pick up the pieces.

Luckily, Brad and his wife had purchased life insurance, which gave him the financial security to grieve. "The money won't bring Lisa, Max or Owen back, but it makes the existence I find myself in easier. I don't have to work while I'm not ready, or sell my house because I can't afford the mortgage. I've been able to think slowly about my future," Brad says.

The insurance money also helped keep Brad's business running while he was home. Brad says because of financial planning, "I know I'll do better than survive. I'll live and succeed in the second chapter of my life and make my family proud."

Insurance firms offer various insurance policies depending on the individual. For example, Term insurance is inexpensive, but is for a limited time and does not build cash values. Permanent life insurance, like a whole life policy, has a fixed premium at date of issue that never increases. If it's a mutual company, they pay dividends that can be applied to reduce the premium. A valuable part of a whole life policy is the build up of guaranteed cash values that can serve as a reserve that can be used for educational, retirement or other needs.

Term, which is sometimes referred to as temporary insurance, an individual buys a policy for a specific time (1yr, 10 years or even a 30 year span) where a death benefit is paid to the beneficiary if the insured dies during that period. For a healthy almost 40-year old man, this could amount to $15 a month for this policy that would provide a $100,000 payment if the insured dies during the time period he selected.

Whole life insurance can cover an insured for his or her lifetime. The payout is assured at the end of the policy (assuming the policy is kept current) and the policy accrues cash value." Upon death, the proceeds from the policy are paid tax-free to the beneficiary. This offers consumers guaranteed cash value accumulation. This whole life policy is considerably more expensive than term insurance, but offers a premium that never increases and the policy holder can build guaranteed cash values.

The whole life plan offers the insured $100,306 in death benefits. The permanent plan also costs more because it gives the same insurer $192,785 at age 65 in retirement benefits. You can also have a combination of term and whole life insurance to make a policy that covers the specific needs of a family. Whole life insurance builds guaranteed cash value and although dividends are not guaranteed, diviidends can provide additional benefits.

Everyone has different circumstances; however both plans offer some financial security for individuals and their families. Many people think they can't afford insurance so they never consider the option. But $15.49 is an amount most can pay. The cost of not having insurance can be a big toll for a family.

Kent Schiner, a financial adviser (CLU, ChFC), says "Life insurance is a character purchase because it is for the benefit of another even though the insured has use of the cash values during his lifetime; a win-win situation"

Sofia is an author of several articles pertaining to Life Insurance. She is known for her expertise on the subject and on other Business and Finance related articles.

Easy Life Settlements for Term Insurance

Someone once said that change is the only constant in life. Life insurance, of all places, provides the underlying proof to this remark. Something called a Life Settlement has sprung up in this heretofore stodgy industry.

As one would expect, a Life Settlement is a financial transaction between the policy owner and an entity called a Settlement Provider. The policy owner sells his policy to the Settlement Provider. Thanks to the emergence of this relatively new financial transaction a person in possession of an unneeded or unwanted life insurance policy can sell his policy to a Settlement Provider for more than the cash value offered by the life insurance company.

People sell their policies for a variety of reasons. They range from premiums being no longer affordable to a beneficiary predeceasing the insured. Sometimes the policyholder owns multiple policies and wishes to eliminate one or more of the policies.

Maybe the insured needs money for long term care, ongoing medical bills or wants to replace the policy with a survivorship type of policy.

Estate planning may dictate a change in insurance coverage or the insured may wish to transfer the cash into higher paying investments. Charitable or family gifting arrangements may now be the best means to distribute assets or cash.

Some folks may have experienced bankruptcy forcing a complete revamping of their financial plan. Others may have become unemployed or under employed. The circumstances are as numerous and diverse as the population.

Businesses utilizing a key-man policy may find it is no longer necessary because the business has folded or the individual is no longer integral to the business's success.

All in all, the sale of the policy allows the policyholder to maintain a desired standard of living and live out his final years with dignity. Personal welfare and comfort rank high on the policy sale consideration list.

Generally speaking, people with universal life policies make up the bulk of current policy sellers. However because the industry has matured in its ability to perform accurate financial analysis and predictions, term insurance owners are now able to come to the table and receive consideration for what was once considered a worthless form of insurance.

Heretofore, their only options were to let the term-life policy lapse or convert at a premium increase. The only party benefiting from this travesty was the original insurance company. They received premiums for a certain number of years and because of the lapse, they faced no obligation to pay the face amount. Profit in its purest form.

This meant the policyholder simply lost everything no matter how much money he now needed to pay medical bills, living expenses or meet long term care obligations. Thanks to the secondary market, Life Settlement, the opportunity for term life insurance owners has improved. They too now enjoy a liquidity almost on par with whole life policy owners.

Since they can be sold with a life settlement as long as the policy still can be converted, their face value can be lower. This has transformed them from a worthless program to one gaining value in the eyes of the Settlement Provider.

Life Settlement is, and will remain, an individual choice. It may not be right for everyone but it is an important option on the personal welfare menu that could possibly increase the return on a policy owner's life insurance program.

Grant Shellhammer is an affliate Life Settlement Broker and a Licensed Life Insurance Agent with numerous years of experience in the field. You will receive a free Life Settlements information packet and policy quote by calling 1-888-973-8377 or visiting his website. Get it now at: => http://www.LifeSettlementPro.com/

Remembering Your Loved Ones With Life Insurance

While recent studies have heralded modern medicine as the average life expectancy of the average Brit has steadily increased. People are living for longer and illnesses that once spelled out your doom now have cures and courses of treatments to manage various conditions, symptoms and ailments.

The sad truth is that while the average life expectancy has increased there are still huge numbers of people that don't live out their full potential and succumb to chronic diseases, accidents and disasters.

Statistics show that one in five people will die before the age of 65, that is not to say that they will contract an illness, no before reaching that conclusion mountains of statistical data was compiled, information about car accidents, illnesses and traumatic events was aggregated and studied. Mathematicians made their calculations on probability and risk factors and that was their conclusion. Such reports add credence to the sayings related to ‘living for today’ and ‘you don't know what’s around the corner...’ life offers no promises and no guarantees and it is for this reason that it is always better to be prepared for any and every eventuality.

When you look around you and your mind’s eye catches images of your loved ones, your children, your other half and your parents. As a working adult whoever and whatever your wages contribute to needs to be protected, whether it is just you and your other half or if it’s you and your brood of mini-me’s, they all need to be considered.

When you think of the worst case scenario relating to you and your health and what would happen to those that rely on you and your wages no doubt your heart strings are tugged. It may be an uncomfortable realty to face up to, but face up to it you must, your dependants need to and can easily be looked after in your absence with the relatively easy purchase of life insurance.

Some refer to the covering policy as life assurance, wither way it is a financial arrangement that will cater to your dependants in the event of your demise. When considering purchasing a life insurance policy it is vital to take two things into account, what you need and what you can afford. Rather than looking for the cheapest level of cover or being attracted by the promise of cheap monthly premiums, you must consider why you are purchasing life insurance in the first place. While you ponder on your motivations for purchasing a policy you will be reminded of the key features and these are the features you should insist upon.

For one person it could be the assurance of having your mortgage payments settled up immediately, for others it may be the provision of a monthly allowance for their remaining loved ones, whether it’s for a lone partner or a widow/er and a cute clan of little ones. Once you have fully established what’s vital for the cover to include you can look at the optional extras. As well as protecting your loved one in the event of your demise you can also look at covering your own interests.

What would you do if you found yourself in a position where you were unable to work and provide the level of income your family have become accustomed to? Will the money provided by the government be sufficient for not only their needs but wants as well? If the answer is no you may very well consider taking out income protection as an add-on to your life insurance cover.

Onome is an author of several articles pertaining to Life Insurance. She is known for her expertise on the subject and on other Business and Finance related articles.

Compare life cover online

Many people are under the assumption that life cover is taken out to pay just for funeral costs. While of course your life insurance could come in handy to pay for the funeral it is also taken out for many more reasons. Taking out a policy requires you to give thought to many factors; these include how much cover you would need, whether or not you have a family including children to consider and how much support your family would need.

The first hurdle you will have to cross when looking to take out your insurance is the amount you need to insure your life for. While this might seem like a daunting task there is a simple formula you can bear in mind. You are able to take your annual salary you have coming in and use this as a guide from which to work. As a rough guide you need to at least multiply your salary by 10 times. Depending on the circumstances you might even have to consider multiplying this by as much as 25 times, this will depend of what you plan the insurance to be used for by your family.

Once you have worked out how much life cover you need to take out then you need to turn your attention to the type of protection you want? There are many different types so you will have to give this a great deal of thought before rushing in to buy. Of course to some extent the type will be determined by what you want to leave to your family.

The most basic form of life insurance you can choose is term life assurance. When taking this type of policy you will pay a premium which is based on certain factors. Some of which include your age, whether you are a smoker and drinker and your occupation. Smokers and drinkers will have to pay out more for life insurance than those without the habit. Someone who is fit and healthy will also pay less for the insurance than someone who suffers a pre-existing condition. Once the premium has been determined then it would be paid for over a certain period of time, while you are paying the premium you are covered for the sum you insured against. However if you are still alive when the policy ends then the policy would also end and no payment would be made.

When taking out term life assurance you could be asked if you wish to take out a policy to protect you in the event that you should suffer from a terminal or critical illness. If you choose to do so then you would have to pay an extra premium for this.

If you want to ensure that you would receive a payment in any case, whether you outlived the policy or not then you could consider taking out whole of life assurance. This type of insurance is dearer than the term life assurance but your family would be guaranteed a lump sum payment when you expired.

Any form of life cover needs looking into very carefully before taking out the policy. All policies come with terms and conditions which have to be met and these will include certain exclusions. You have to read the small print that comes with the cover if you are to know what is and is not included in the policy.

David Thomson is Chief Executive of BestDealInsurance an independent specialist broker dedicated to providing their clients with the best deal on their life insurance, critical illness cover and home and motor insurance.

Top Ten Pitfalls of Life Insurance

Before you take out a life insurance policy, be aware of these potential gaps in coverage. By becoming aware of these possible loopholes, you will be able to choose your life insurance policy wisely.

1. Decreasing coverage.

There are policies where the face value decreases over the term of the life insurance. This works for some people, but make sure it works for you before you take it up.

2. Unsure coverage.

A life insurance policy has specific terms of coverage. For instance, beneficiaries of those who die by their own hands cannot claim death benefits. Read the specific claim conditions of your life insurance policy.

3. Inadequate coverage for disability.

Even if your policy gives you both life and disability coverage, check how much disability benefits you can claim and under what types of circumstances disability coverage can be enforced.

4. Inadequate face value.

You should buy an insurance policy that covers your family's needs for at least a year. It should be even greater if you think you'll have lots of debts that need paying.

5. No withdrawal option.

Some life insurance policies with a cash value component let you withdraw your money after a certain period of time. However, some insurance policies - especially those with a very low premium - will not return your money. All those years of payments will then be lost.

6. Depreciated value.

If you get the life insurance policy that has an investment component (your payments will be used to invest in high-yield accounts and a percentage of the proceeds will be returned to your policy), bad investment decisions by the insurance company can leave you with a depleted policy and face value.

7. No death benefits.

If you die and your beneficiaries begin claims procedures, insurance companies may still refuse to pay them if you omitted an important (even a trivial) piece of information from the insurance application form. They can refuse coverage on the grounds that you have not been entirely honest with the company.

8. Wrong beneficiary.

When you apply for your life insurance, you have to name your beneficiary. Make sure that the name of the beneficiary may be changed at some later date in case you change your mind or in case your beneficiary dies before you do.

9. Loss of benefits or severe depreciation for one unpaid premium.

What happens if you miss one premium payment? You should make sure that your beneficiaries will not lose your death benefits or that these benefits will not be significantly reduced after just one missed premium payment.

10. Not enough to retire on.

If your insurance agents assure you that your whole or permanent life insurance policy is a good investment, they may be trying to mislead you. The typical life insurance covers you in case of death. While the cash value equivalent of your policy may be withdrawn in full upon maturity or converted to an annuity plan, this still does not make a life insurance policy a good retirement plan. You get the most benefit from it after death, and you'd do better to get a different plan - one that has a higher rate of interest - you're your retirement.

For more information on Life Insurance, please visit http://ezinsurance.com.au, a website that helps you compare prices, features, and financial strength of hundreds of life, trauma and income protection insurance policies in Australia! Get a FREE life insurance quote online and figure out your insurance costs quickly and easily.

Different Types of Life Insurance

Universal Life Insurance

Universal life insurance is a variation of whole life insurance. It is a blend of term insurance and a savings account. It earns interest at a money market rate, the policy holder paying an annual fee for coverage, which includes a fee for managing the policy. Funds not used for paying the life insurance earn a tax deferred interest.

With a universal life insurance policy, the premium can fluctuate. The policy holder decides how much to devote toward insurance and how much toward savings. The face amount of the policy can be changed as well as the amount of premium payments and how often they are paid. However, the insured must make certain their savings are large enough to cover the monthly premiums for the insurance as well as the policy expenses. If the savings are not sufficient enough, the monthly charges will consume the cash value and the policy will be of no value.

Universal life insurance offers two options. The first option is keeping the death benefits the same from year to year if the policy holder does not request any changes. The second option is having the death benefit at any time stay equal to the original face value in addition to the policy's cash worth.

Universal life insurance can often give an elevated interest rate when inflation rises, even if the insuring company guarantees a low rate. Because of this risk, premiums are lower for whole life insurance but pricier for term insurance for younger individuals. In addition, when the price for managing the policy is added to the premium, the policy holder will receive a lower return on their investment. It is crucial to keep in mind that changes in interest rates will affect both a policy holder's yields and premiums.

Variable Life Insurance

Variable life insurance is a type of permanent life insurance that allows the holder to target their premium to one or more detached investment funds. These funds can be fixed income investments, stocks, bonds, or money market funds. Depending on the company policy, the holder can change their investments from two to five times annually. Unlike universal life insurance, with variable life insurance the insured can manage the investment of their cash value.

The policy, however, can be risky because the investment has the ability to rise or fall. The cash value and investment will differ, depending on what the investment fund does. The death benefit cannot fall below the total amount of life insurance primarily purchased. As with traditional whole life insurance, the policy holder pays fixed premiums and can borrow against the policy at either fixed or variable rates.

Because an individual decides where to invest their money and put themselves at risk, variable life insurance should be considered. Insurers must, by law, offer variable life insurance by prospectus. A prospectus is a document that gives the prospective policy holder important facts concerning the company and the policy. Variable life insurance can often cost more than other varieties of cash value life insurance. According to current laws the cash value of variable life insurance, similar to those of universal life insurance and whole life insurance, cannot be taxed until the policy holder cashes in their policy.

Universal Variable Life Insurance

Universal variable life insurance is also commonly referred to as flexible premium variable life insurance. This kind of policy combines the flexible features found in universal life insurance policies and the investment alternatives of variable life insurance. As with universal life insurance, the policy holder can choose to raise or lower their premiums in a single policy. As with variable life insurance, individuals have the right to decide how their cash worth will be invested.

The insurance company does not have to make any kind of guarantee on the policy holder's cash value. With universal variable life insurance, the value of the cash fund is in direct relation to the market worth of the assets in the cash worth fund. Therefore, a policy holder could have $15,000 in net cash worth one day and $10,000 on the following day, dependent on market fluctuation. Thus, one of the central problems with universal variable life insurance is that the policy holder can lose their insurance coverage.

Adjustable Life Insurance

Adjustable life insurance is another variety of permanent protection that allows the policy holder to change the amount of their premiums. They can also increase or decrease the face amount of the policy, or lessen the protection period. If the policy holder increases the death benefit, they must prove that they are still in fact insurable.

Sarah Martin is a freelance writer specializing in home improvement, life insurance, and education. For more information on life insurance policies or for a free quote, please visit http://www.equote.com.

Term Life Insurance Demystified

Term life insurance can be a confusing topic and purchasing life insurance can be a daunting task, to some. With so many options out there, it may seem impossible to fully understand where to start. While some consider universal life insurance, many have turned to term life insurance. Either way, however, smoking can severely affect the amount that you pay. Term life insurance rates will affect people who smoke.

How smoking affects term life insurance rates

Something important to understand about term life insurance rates is that they're easily affected by multiple lifestyle habits that affect your health. One of the major things that life insurance companies look for is the health of the individual. Depending on your health, and the things you do that affect your body, your term life insurance rates may go up or down. Life insurance companies focus on health for good reason. They want their customers living long, prosperous lives. This benefits both parties. For the insured, the longer that you stay insured, the longer you can be protected by your policy. For the insurer, the longer the insured pays for insurance, the more money the company accumulates. With that being said, it becomes more obvious as to why health plays a part in term life insurance rates.

But how exactly does smoking affect term life insurance rates? It's common knowledge that smoking is bad for your health. The affect that smoking has on the individuals who smoke is impossible to ignore. There are many illnesses, many resulting in death, that are linked to smoking. The life expectancy of smokers is shorter than those who do not smoke. When life insurance companies identify that an applicant is a smoker, it automatically raises red flags. The person is considered to have a shorter life span, and is expected to possibly have health issues later in life. Because of this, term life insurance rates for that specific individual, are likely to be higher.

How can they tell if I smoke?

There are multiple ways that life insurance companies can tell if someone is a smoker. First, there is a questionnaire that is given to every individual looking into term life insurance rates. Some of these questions include smoking. Many see this and think that it would be easy to lie to the company, saying that you do not smoke. That is untrue. One of the other steps in the process of getting life insurance is to have a medical exam. The company is looking for specific things through this exam. Because there are chemicals left behind in your body by smoking (such as nicotine), the company can easily tell if you are a smoker. This is why it is important to understand that you should never lie on the questionnaire, under any circumstances. All of your life insurance (and policies) can be revoked if they find out you lied.

How can I lower my term life insurance rates?

While it is easier said than done, managing to quit smoking can lower your rates. If you are already locked into a life insurance policy, you are allowed to update your medical exam at any time. If you have quit smoking, updating this exam can be a way to show that you've quit. While quitting smoking can be difficult, managing to do so can help you out in lowering your term life insurance rates.

Christian Ward is an author of several articles pertaining to Life Insurance. He is known for his expertise on the subject and on other Business and Finance related articles.