what are some different types of life insurance policies
Total Comments: 16
Posted: Sat Jun 13, 2009 02:37 pm Post Subject:
Good luck on your project. If you have any specific questions, please try to post them in the individual forums. There is one for life, one for auto, and one where you can ask general "agent" questions. Here is the other link for the information you need:
http://www.ampminsure.org/life.html
Posted: Sat Jun 13, 2009 06:11 pm Post Subject:
what are some different types of life insurance policies
1) Whole Life
2) Term insurance
Every other type is a combination of those two types or a fancy variation of one of them.
Posted: Mon Jun 15, 2009 06:51 am Post Subject:
Hi Indigo,
1) Whole Life
2) Term insurance
The benefits are the same. The difference is about the policy term and the cost.
If you have gone through the link shown above by Chris, you may ask any query that comes to your mind.
Steven
Posted: Mon Jun 15, 2009 08:42 am Post Subject:
Hi Indigo, do you have any specific question regarding life insurance?
However, what Expert has said is right there are only two main types of policies available the other forms available are only combinations of the main two forms. And, you need to pick one that would satisfy your needs.
Hope it would clarify things for you. For further queries, you may return to us anytime.
~Jeremy
Posted: Thu Jun 25, 2009 02:21 pm Post Subject:
Two basic types of life insurance include Term life and Permanent life insurance.
Term life insurance provides temporary life insurance for a specific number of years.
Term life plans are usually available for 10, 15, 20, or 30 years, depending on your age, and health.
Term life insurance is not an investment, it ir pure life insurance protection. There is no cash value build up inside the term policy.
If you outlive the term of your policy, your life insurance coverage expires, unless you have renewable term life insurance.
Permanent life insurance is also known as whole life insurance and provides lifetime coverage as long as you pay the premiums.
Permanent life insurance builds cash value inside the policy, from which you can take a loan, subject to the Loan Provisions of your policy.
The prices vary for these types of plans, with term life providing lower premiums, sometimes 2-3 times less than permanent life insurance coverage.
Make sure you consider how much life insurance you need, what you can afford, how many years you need life insurance, and which type may be right for your needs.
Also, review the financial strength rating of the insurance company before choosing your policy. The financial rating is an indication of the insurer's ability to meet their financial obligations.
Posted: Fri Jun 26, 2009 12:02 am Post Subject:
Hadley, I going to pick on your post a little bit, but mainly because I'm tired and don't want to go to bed yet.
Term life insurance provides temporary life insurance for a specific number of years.
Term life plans are usually available for 10, 15, 20, or 30 years, depending on your age, and health.
The policies almost always go to a certain age and not a number of years like that. That is simply the period of time for which the premium remains level.
Term life insurance is not an investment, it ir pure life insurance protection. There is no cash value build up inside the term policy.
Permanent life insurance is also not an investment.
Posted: Fri Jun 26, 2009 12:07 am Post Subject:
Permanent life insurance is also known as whole life insurance and provides lifetime coverage as long as you pay the premiums.
Whole life is a subset of permanent life insurance, but all permanent insurance isn't whole life.
The prices vary for these types of plans, with term life providing lower premiums, sometimes 2-3 times less than permanent life insurance coverage.
Whole life is much more than 2-3 times more expensive in terms of initial premium, but the comparison is apples to oranges.
Posted: Wed Dec 21, 2011 09:48 pm Post Subject: Business Types
For individual insurance they answered correctly above, there is term or permanent. This is also Universal Life insurance. Which is like a combination of the two. It offers low premiums for a certain term, but then allows you to continue the policy permanently without showing evidence of insurability for a higher cost. The benefit of this is that if you want to pay the higher costs in the later years you can continue to keep the same policy. Let's say you have a 10 year term and you are diagnosed with cancer in the 10th year and you are given 1 year to live. If you only have a term policy it will expire and you may not be able to get new coverage because of your condition. However, with a universal life insurance policy, you could continue to pay the higher fee and have coverage until you did pass away.
In case you were looking for the types of business life insurance here are a few of those:
1. Key Man Insurance- This is a life insurance policy that covers a key employee in your company. If that employee were to die, the business would receive the benefit to offset the loss of money that the employee brings in. Also, the funds will help the business find and train a new employee to replace the key employee.
2. Buy Sell Agreement - If your business is a partnership you should have one of these. Basically, if your business partner or co-owner dies you will receive a benefit to purchase his portion of the company. This prevents the family from inheriting his part of the business as they may not have the skills necessary to run the business.
Posted: Fri Dec 23, 2011 02:59 pm Post Subject:
A couple of minor problems with Matthew's understanding of life insurance.
This is also Universal Life insurance. Which is like a combination of the two. It offers low premiums for a certain term, but then allows you to continue the policy permanently without showing evidence of insurability for a higher cost.
This is a poor explanation of Universal Life Insurance (UL). And the prior discussions of Term and Permanent insurance are perhaps better restated as Term and Cash Value.
UL is a cash value policy that combines Annual Renewable Term insurance to age 121 with a cash accumulation component that earns a "current" rate of interest. That interest rate is set by the insurance company, and it may increase or decrease the rate it credits at will, but not less than the minimum rate guaranteed in the contract. The policyholder has no control over the interest crediting rate.
There are two additional variations of UL available today: Indexed UL and Variable UL. The indexed policy (IUL) ties its current interest rate to the performance of a specific index, such as the S&P 500. As the S&P 500 "return" moves up, the policy interest rate may also move up. If the S&P 500 falls in value, the interest rate may also fall, but, again, not below a stated minimum interest rate in the contract (usually somewhere between 0% and 3%). The minimum interest rate protects against the loss of cash value if the S&P 500 were to dip into "negative" territory. Neither the insurer nor the policyowner has control over the rise or fall of the interest crediting rate. The insurer can protect itself against large rises through the use of "participation rates" and "rate caps."
Variable UL (VUL) is similar, but the cash accumulation is directly tied to stock market investments owned by the insurance company (called the Separate Account). As the stock market rises or falls, the "subaccounts" may rise or fall (in relation to, or opposite to, or with no correlation to the market at all -- it depends on the kind of subaccount). The hazard in VUL is that negative market performance can cause an unlimited loss of cash value in the investment component of the contract, because there is no guaranteed minimum interest rate. The policyowner is fully responsible for the interest crediting (investment gain or loss) through their "well-allocated portfolio" comprised of selections from the available subaccounts based on their risk tolerance and investment objective.
Both UL, IUL and VUL are now available with "secondary guarantees" designed to avoid a policy lapse. All forms of UL contracts are subject to lapse (no insurance, no cash value) when the Cost of Insurance is more than the premium being paid (or not paid -- paying additional premiums is not required after payment of the first premium) combined with the cash value. The secondary guarantees usually require the continuous payment of premiums. If a single premium payment is missed, the guarantee could be lost. Once lost, the guarantee may not be eligible for reinstatement.
To avoid a lapse, the policyowner may begin paying premiums or deposit more money into the contract without paying additional premiums.
All forms of UL are more complex than the "plain vanilla" Whole Life policies mentioned in the earlier posts. Those WL policies require continuous premium payments to keep the policy in force. If the policy has developed cash value (after 2-3 years in most cases), that cash value may be "borrowed" to pay future premiums, until no cash value remains, at which time the policy will lapse (no insurance, no cash value). All UL policies require that the policyowner learn to read their annual (or more frequent) statements to determine the condition of their policy. If the policy is no longer "healthy", corrective action (paying more premiums, reducing the death benefit amount, or both) can be taken to prevent a future lapse.
All UL policies offer a choice of death benefit options. There are at least two choices: (1) a level death benefit (which could increase if the cash accumulation is ever greater than the face amount of insurance) and (2) an increasing death benefit (which pays the beneficiary the face amount of insurance plus the accumulated cash value).
As for "Buy-Sell Agreement" -- the discussion by Matthew is essentially accurate, but it is not a type of insurance. It is a legal contract between business partners (or a business owner and another person) concerning the future of the business if a partner becomes disabled, dies, or simply wants to leave the business.
The two or more persons may agree to sell each other their interest in the business at death. The written Buy-Sell Agreement identifies the purchase price at that time (or how the price will be determined). A Buy-Sell Agreement may be "funded" with life insurance proceeds rather than a person's own cash or assets. The policy is an individual life insurance policy -- could be term or cash value insurance. If done with life insurance, VUL is not always a recommended choice of policies because of the "market risk" involved. But WL, UL, IUL are all acceptable methods of covering the financial aspect of the Agreement.
Posted: Thu Apr 26, 2012 03:31 am Post Subject:
Term life insurance is the most affordable type of life insurance. Whole life insurance, on the other hand, is more expensive as you're not only paying for the insurance coverage but for the investment portion as well.
Posted: Sat Jun 13, 2009 02:37 pm Post Subject:
Good luck on your project. If you have any specific questions, please try to post them in the individual forums. There is one for life, one for auto, and one where you can ask general "agent" questions. Here is the other link for the information you need:
http://www.ampminsure.org/life.html
Posted: Sat Jun 13, 2009 06:11 pm Post Subject:
what are some different types of life insurance policies
1) Whole Life
2) Term insurance
Every other type is a combination of those two types or a fancy variation of one of them.
Posted: Mon Jun 15, 2009 06:51 am Post Subject:
Hi Indigo,
1) Whole Life
2) Term insurance
The benefits are the same. The difference is about the policy term and the cost.
If you have gone through the link shown above by Chris, you may ask any query that comes to your mind.
Steven
Posted: Mon Jun 15, 2009 08:42 am Post Subject:
Hi Indigo, do you have any specific question regarding life insurance?
However, what Expert has said is right there are only two main types of policies available the other forms available are only combinations of the main two forms. And, you need to pick one that would satisfy your needs.
Hope it would clarify things for you. For further queries, you may return to us anytime.
~Jeremy
Posted: Thu Jun 25, 2009 02:21 pm Post Subject:
Two basic types of life insurance include Term life and Permanent life insurance.
Term life insurance provides temporary life insurance for a specific number of years.
Term life plans are usually available for 10, 15, 20, or 30 years, depending on your age, and health.
Term life insurance is not an investment, it ir pure life insurance protection. There is no cash value build up inside the term policy.
If you outlive the term of your policy, your life insurance coverage expires, unless you have renewable term life insurance.
Permanent life insurance is also known as whole life insurance and provides lifetime coverage as long as you pay the premiums.
Permanent life insurance builds cash value inside the policy, from which you can take a loan, subject to the Loan Provisions of your policy.
The prices vary for these types of plans, with term life providing lower premiums, sometimes 2-3 times less than permanent life insurance coverage.
Make sure you consider how much life insurance you need, what you can afford, how many years you need life insurance, and which type may be right for your needs.
Also, review the financial strength rating of the insurance company before choosing your policy. The financial rating is an indication of the insurer's ability to meet their financial obligations.
Posted: Fri Jun 26, 2009 12:02 am Post Subject:
Hadley, I going to pick on your post a little bit, but mainly because I'm tired and don't want to go to bed yet.
Term life insurance provides temporary life insurance for a specific number of years.
Term life plans are usually available for 10, 15, 20, or 30 years, depending on your age, and health.
The policies almost always go to a certain age and not a number of years like that. That is simply the period of time for which the premium remains level.
Term life insurance is not an investment, it ir pure life insurance protection. There is no cash value build up inside the term policy.
Permanent life insurance is also not an investment.
Posted: Fri Jun 26, 2009 12:07 am Post Subject:
Permanent life insurance is also known as whole life insurance and provides lifetime coverage as long as you pay the premiums.
Whole life is a subset of permanent life insurance, but all permanent insurance isn't whole life.
The prices vary for these types of plans, with term life providing lower premiums, sometimes 2-3 times less than permanent life insurance coverage.
Whole life is much more than 2-3 times more expensive in terms of initial premium, but the comparison is apples to oranges.
Posted: Wed Dec 21, 2011 09:48 pm Post Subject: Business Types
For individual insurance they answered correctly above, there is term or permanent. This is also Universal Life insurance. Which is like a combination of the two. It offers low premiums for a certain term, but then allows you to continue the policy permanently without showing evidence of insurability for a higher cost. The benefit of this is that if you want to pay the higher costs in the later years you can continue to keep the same policy. Let's say you have a 10 year term and you are diagnosed with cancer in the 10th year and you are given 1 year to live. If you only have a term policy it will expire and you may not be able to get new coverage because of your condition. However, with a universal life insurance policy, you could continue to pay the higher fee and have coverage until you did pass away.
In case you were looking for the types of business life insurance here are a few of those:
1. Key Man Insurance- This is a life insurance policy that covers a key employee in your company. If that employee were to die, the business would receive the benefit to offset the loss of money that the employee brings in. Also, the funds will help the business find and train a new employee to replace the key employee.
2. Buy Sell Agreement - If your business is a partnership you should have one of these. Basically, if your business partner or co-owner dies you will receive a benefit to purchase his portion of the company. This prevents the family from inheriting his part of the business as they may not have the skills necessary to run the business.
Posted: Fri Dec 23, 2011 02:59 pm Post Subject:
A couple of minor problems with Matthew's understanding of life insurance.
This is also Universal Life insurance. Which is like a combination of the two. It offers low premiums for a certain term, but then allows you to continue the policy permanently without showing evidence of insurability for a higher cost.
This is a poor explanation of Universal Life Insurance (UL). And the prior discussions of Term and Permanent insurance are perhaps better restated as Term and Cash Value.
UL is a cash value policy that combines Annual Renewable Term insurance to age 121 with a cash accumulation component that earns a "current" rate of interest. That interest rate is set by the insurance company, and it may increase or decrease the rate it credits at will, but not less than the minimum rate guaranteed in the contract. The policyholder has no control over the interest crediting rate.
There are two additional variations of UL available today: Indexed UL and Variable UL. The indexed policy (IUL) ties its current interest rate to the performance of a specific index, such as the S&P 500. As the S&P 500 "return" moves up, the policy interest rate may also move up. If the S&P 500 falls in value, the interest rate may also fall, but, again, not below a stated minimum interest rate in the contract (usually somewhere between 0% and 3%). The minimum interest rate protects against the loss of cash value if the S&P 500 were to dip into "negative" territory. Neither the insurer nor the policyowner has control over the rise or fall of the interest crediting rate. The insurer can protect itself against large rises through the use of "participation rates" and "rate caps."
Variable UL (VUL) is similar, but the cash accumulation is directly tied to stock market investments owned by the insurance company (called the Separate Account). As the stock market rises or falls, the "subaccounts" may rise or fall (in relation to, or opposite to, or with no correlation to the market at all -- it depends on the kind of subaccount). The hazard in VUL is that negative market performance can cause an unlimited loss of cash value in the investment component of the contract, because there is no guaranteed minimum interest rate. The policyowner is fully responsible for the interest crediting (investment gain or loss) through their "well-allocated portfolio" comprised of selections from the available subaccounts based on their risk tolerance and investment objective.
Both UL, IUL and VUL are now available with "secondary guarantees" designed to avoid a policy lapse. All forms of UL contracts are subject to lapse (no insurance, no cash value) when the Cost of Insurance is more than the premium being paid (or not paid -- paying additional premiums is not required after payment of the first premium) combined with the cash value. The secondary guarantees usually require the continuous payment of premiums. If a single premium payment is missed, the guarantee could be lost. Once lost, the guarantee may not be eligible for reinstatement.
To avoid a lapse, the policyowner may begin paying premiums or deposit more money into the contract without paying additional premiums.
All forms of UL are more complex than the "plain vanilla" Whole Life policies mentioned in the earlier posts. Those WL policies require continuous premium payments to keep the policy in force. If the policy has developed cash value (after 2-3 years in most cases), that cash value may be "borrowed" to pay future premiums, until no cash value remains, at which time the policy will lapse (no insurance, no cash value). All UL policies require that the policyowner learn to read their annual (or more frequent) statements to determine the condition of their policy. If the policy is no longer "healthy", corrective action (paying more premiums, reducing the death benefit amount, or both) can be taken to prevent a future lapse.
All UL policies offer a choice of death benefit options. There are at least two choices: (1) a level death benefit (which could increase if the cash accumulation is ever greater than the face amount of insurance) and (2) an increasing death benefit (which pays the beneficiary the face amount of insurance plus the accumulated cash value).
As for "Buy-Sell Agreement" -- the discussion by Matthew is essentially accurate, but it is not a type of insurance. It is a legal contract between business partners (or a business owner and another person) concerning the future of the business if a partner becomes disabled, dies, or simply wants to leave the business.
The two or more persons may agree to sell each other their interest in the business at death. The written Buy-Sell Agreement identifies the purchase price at that time (or how the price will be determined). A Buy-Sell Agreement may be "funded" with life insurance proceeds rather than a person's own cash or assets. The policy is an individual life insurance policy -- could be term or cash value insurance. If done with life insurance, VUL is not always a recommended choice of policies because of the "market risk" involved. But WL, UL, IUL are all acceptable methods of covering the financial aspect of the Agreement.
Posted: Thu Apr 26, 2012 03:31 am Post Subject:
Term life insurance is the most affordable type of life insurance. Whole life insurance, on the other hand, is more expensive as you're not only paying for the insurance coverage but for the investment portion as well.
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