Hi, can anyone explain to me what is permanent life insurance and how does it differ from term life insurance.
Thanks,
Ruth Adams
Total Comments: 8
Posted: Thu Dec 14, 2006 12:52 pm Post Subject:
A permanent life insurance is a type of life insurance. As the name suggests, under such a policy, the insured is covered for the whole life. If the policy is kept current and if accrues its cash value, one is sure to get the payout at the end of the policy.
Thanks
Posted: Thu Dec 14, 2006 01:12 pm Post Subject:
Hey, i guess my friend Jeff missed out on the differnce b/w term life and permanent life. Anyways, i have some for ya,
The basic difference b/w these two is that the former has an end date to it, lets say when one turns 80, whereas, permanent life insurance provides coverage for life.
Term life is also relatively cheaper than permanent life as it provides the insured with a death benefit for a specific time. Here the premium paid by the insured mainly passes on to protection only while a part of the premium paid for the permanent life plan goes into death benefit and the rest is helpful towards building one's cash value. Most of the term life policies seldom build any cash value. One good thing is that most term life policies can be converted into a permanent life insurance one. On the other hand, both cash value and protection comes with a permanent life plan.
Hope that was informative!
Your friend,
Kenneth
Posted: Fri Dec 15, 2006 06:03 am Post Subject: My way of help!!
Hey, I found this out or you:
There are several different types of life insurance, all with a common purpose — to protect your loved ones from bearing a large financial burden in the event of your premature death.
Your needs will change throughout your life, so it's important to understand the basics, and periodically review your coverage to ensure that it's still right for you.
There are two basic types of insurance — temporary insurance , which includes Term Life and Group Life, and permanent insurance , which includes Whole Life, Universal Life, and Variable Universal Life. If you purchase life insurance, when you die the insurance company will pay a death benefit to the beneficiary or organization named in the policy. (In the case of temporary insurance, your death must be during the policy term.)
The choice between temporary and permanent insurance will depend upon your personal goals and objectives.
Temporary insurance
* Term Life is one of the simplest, most cost-effective types of life insurance. Generally, it provides the largest immediate amount of protection for the lowest cost.
With Term Life, your beneficiaries are paid the entire amount of your policy (subject to your policy's provisions) if you die during the term, which is typically from 5 to 30 years.
People who purchase Term Life generally have a substantial need for insurance protection during a specific period of time. They may be young and have growing families, and need temporary protection now with the option to convert to permanent coverage later.
Compare rates from some of the country's top Term Life insurance providers online at wellsfargo.com.
* Group Life insurance is typically offered as an employee benefit. Premiums under group policies are generally lower for younger employees, and higher for older ones.
In addition to employers, some membership organizations such as unions and alumni clubs also offer Group Life insurance plans.
Permanent insurance
* Whole Life insurance combines the security of lifetime insurance protection with the advantages of tax-deferred cash accumulation.
In addition to providing a death benefit, Whole Life policies also guarantee that premiums will remain level throughout the life of the policy. This allows owners to build the cost of their coverage into their long-term financial plans.
People who purchase Whole Life generally want to ensure that when they die, money will be available to pay final expenses, fund college costs, pay estate taxes, care for an elderly parent, or simply allow loved ones to maintain their lifestyles.
* Universal Life insurance combines the security of lifetime insurance protection with the advantages of policy flexibility and tax-deferred cash accumulation.
The difference between Universal Life and other forms of permanent coverage is the flexibility it offers. Within certain limits, policy owners can increase or decrease their death benefit according to their changing needs without having to purchase a new policy. Likewise, owners can increase, decrease, or cease paying premiums altogether provided the policy has sufficient cash value.
Like people who buy Whole Life insurance, people who purchase Universal Life generally want to ensure that money will be available to pay final expenses, help fund college costs, pay estate taxes, care for an elderly parent, or simply allow loved ones to maintain their lifestyle.
* Variable Universal Life insurance (also known as "VUL") combines the security of lifetime insurance protection with the advantages of policy flexibility and tax-deferred cash accumulation through investments.
The difference between VUL and other forms of permanent coverage is the flexibility and growth potential it offers. Policy owners determine how the assets within the policy are invested depending upon their tolerance for risk and the amount of time over which they will be investing.
Within certain limits, policy owners can increase or decrease their death benefit depending on their changing needs without having to purchase a new policy. Likewise, owners can increase, decrease, or cease paying premiums altogether, provided the policy has sufficient cash value.
People who purchase VUL generally want to ensure that money will be available to pay final expenses, help fund college costs, pay estate taxes, care for an elderly parent, or simply allow loved ones to maintain their lifestyle.
They also like the idea of controlling how their cash values are invested and are willing to assume some market risk to create a life insurance program that adjusts to economic conditions.
How much do I need?
Life insurance is intended to provide for your family's financial security, and can help bring peace of mind. Calculating the right amount of coverage to suit your situation can be difficult — and depends on your personal goals and objectives.
Most insurance companies recommend that your total life insurance coverage should equal to five to eight times your annual income. Many people use a combination of the types of life insurance listed above to meet changing needs over the course of a lifetime.
Source: Wells Fargo
Lemme know if you have any further queries.
Fatman
Posted: Sat Dec 16, 2006 12:12 am Post Subject: Life insurance in Australia
Well looks like you guys in the States have a huge range of options on the types of life insurance availible. Generally we have two term life insurance and whole of life insurance the later probably makes up less than 1% of the market with only a 1 or 2 insurance comapnies offering the policy.
Posted: Mon Jan 15, 2007 04:32 am Post Subject: Term vs Permanent
Term insurance to put it mildly is temporary, the premiums remain the same for a certain period of time 5, 10, 15, 20, or 30 years depending on the contract you have. Term insurance tends to be much cheaper but there are no cash values involved. Essentually you are "renting" your insruance coverage.
Permanent one example would be WL insurance would be more on the expensive side, however it will build a cash value and depending on the company you go with there can be some other perks as well. The premium remains the same for the life time of the contract usually age 100 where it is usually "paid up". At any time you can trade the policy in for the cash value or even take out a loan against it.
I strongly suggest that if you are going to go with a perm policy you should go with a highly rated company ie. New York Life (Yes I work for them) Mass Mutual is another good one, or even John Hancock...be sure to look at the companies background and talk to you agent about what goals you are trying to accomplish.
If you are going to go with a Term policy...I also strongly you suggest that you get one that is convertable....if you want more info feel free to ask!!!
Posted: Mon Jan 15, 2007 03:16 pm Post Subject:
hello!
there is a major difference in a term life insurance a permanent life insurance. term life insurance as the name suggest has a term of its existence. It matures in a specified period of time. There are term life insurance that matures after 5 years or after 10 years. After the maturity period, the insured is no longer covered with life insurance coverage. In the case of permanent life insurance, it has no maturity period. It can offer lifetime coverage to the insured.
In the terms of premiums, term life insurance is much cheaper compared to permanent life insurance. One of the reason is that, permanent life insurance accumulates cash values and term life insurance does not. And most life insurance companies offers dividends if the plan is a participating permanent life insurance.
In the payment of a permanent life insurance, there is what we call limited pay life insurance. this means that the insurance coverage is paid in a specified period of time. Lets say 5 years to pay and then the policy holder stops paying and he or she can avail life time protection.
One good thing about term life insurance is that it can be converted to a permanent life insurance after a specified number of years. Lets say, 5year convertible term life insurance. this means that after 5 years and the plan matures, it can be converted to permanent life insurance.
In choosing what kind of insurance, whether term or permanent, the best way to know is your need. classify your need and talk to your financial adviser about it. He or she can really help you in choosing the best for your self.
Posted: Thu Dec 14, 2006 12:52 pm Post Subject:
A permanent life insurance is a type of life insurance. As the name suggests, under such a policy, the insured is covered for the whole life. If the policy is kept current and if accrues its cash value, one is sure to get the payout at the end of the policy.
Thanks
Posted: Thu Dec 14, 2006 01:12 pm Post Subject:
Hey, i guess my friend Jeff missed out on the differnce b/w term life and permanent life. Anyways, i have some for ya,
The basic difference b/w these two is that the former has an end date to it, lets say when one turns 80, whereas, permanent life insurance provides coverage for life.
Term life is also relatively cheaper than permanent life as it provides the insured with a death benefit for a specific time. Here the premium paid by the insured mainly passes on to protection only while a part of the premium paid for the permanent life plan goes into death benefit and the rest is helpful towards building one's cash value. Most of the term life policies seldom build any cash value. One good thing is that most term life policies can be converted into a permanent life insurance one. On the other hand, both cash value and protection comes with a permanent life plan.
Hope that was informative!
Your friend,
Kenneth
Posted: Fri Dec 15, 2006 06:03 am Post Subject: My way of help!!
Hey, I found this out or you:
There are several different types of life insurance, all with a common purpose — to protect your loved ones from bearing a large financial burden in the event of your premature death.
Your needs will change throughout your life, so it's important to understand the basics, and periodically review your coverage to ensure that it's still right for you.
There are two basic types of insurance — temporary insurance , which includes Term Life and Group Life, and permanent insurance , which includes Whole Life, Universal Life, and Variable Universal Life. If you purchase life insurance, when you die the insurance company will pay a death benefit to the beneficiary or organization named in the policy. (In the case of temporary insurance, your death must be during the policy term.)
The choice between temporary and permanent insurance will depend upon your personal goals and objectives.
Temporary insurance
* Term Life is one of the simplest, most cost-effective types of life insurance. Generally, it provides the largest immediate amount of protection for the lowest cost.
With Term Life, your beneficiaries are paid the entire amount of your policy (subject to your policy's provisions) if you die during the term, which is typically from 5 to 30 years.
People who purchase Term Life generally have a substantial need for insurance protection during a specific period of time. They may be young and have growing families, and need temporary protection now with the option to convert to permanent coverage later.
Compare rates from some of the country's top Term Life insurance providers online at wellsfargo.com.
* Group Life insurance is typically offered as an employee benefit. Premiums under group policies are generally lower for younger employees, and higher for older ones.
In addition to employers, some membership organizations such as unions and alumni clubs also offer Group Life insurance plans.
Permanent insurance
* Whole Life insurance combines the security of lifetime insurance protection with the advantages of tax-deferred cash accumulation.
In addition to providing a death benefit, Whole Life policies also guarantee that premiums will remain level throughout the life of the policy. This allows owners to build the cost of their coverage into their long-term financial plans.
People who purchase Whole Life generally want to ensure that when they die, money will be available to pay final expenses, fund college costs, pay estate taxes, care for an elderly parent, or simply allow loved ones to maintain their lifestyles.
* Universal Life insurance combines the security of lifetime insurance protection with the advantages of policy flexibility and tax-deferred cash accumulation.
The difference between Universal Life and other forms of permanent coverage is the flexibility it offers. Within certain limits, policy owners can increase or decrease their death benefit according to their changing needs without having to purchase a new policy. Likewise, owners can increase, decrease, or cease paying premiums altogether provided the policy has sufficient cash value.
Like people who buy Whole Life insurance, people who purchase Universal Life generally want to ensure that money will be available to pay final expenses, help fund college costs, pay estate taxes, care for an elderly parent, or simply allow loved ones to maintain their lifestyle.
* Variable Universal Life insurance (also known as "VUL") combines the security of lifetime insurance protection with the advantages of policy flexibility and tax-deferred cash accumulation through investments.
The difference between VUL and other forms of permanent coverage is the flexibility and growth potential it offers. Policy owners determine how the assets within the policy are invested depending upon their tolerance for risk and the amount of time over which they will be investing.
Within certain limits, policy owners can increase or decrease their death benefit depending on their changing needs without having to purchase a new policy. Likewise, owners can increase, decrease, or cease paying premiums altogether, provided the policy has sufficient cash value.
People who purchase VUL generally want to ensure that money will be available to pay final expenses, help fund college costs, pay estate taxes, care for an elderly parent, or simply allow loved ones to maintain their lifestyle.
They also like the idea of controlling how their cash values are invested and are willing to assume some market risk to create a life insurance program that adjusts to economic conditions.
How much do I need?
Life insurance is intended to provide for your family's financial security, and can help bring peace of mind. Calculating the right amount of coverage to suit your situation can be difficult — and depends on your personal goals and objectives.
Most insurance companies recommend that your total life insurance coverage should equal to five to eight times your annual income. Many people use a combination of the types of life insurance listed above to meet changing needs over the course of a lifetime.
Source: Wells Fargo
Lemme know if you have any further queries.
Fatman
Posted: Sat Dec 16, 2006 12:12 am Post Subject: Life insurance in Australia
Well looks like you guys in the States have a huge range of options on the types of life insurance availible. Generally we have two term life insurance and whole of life insurance the later probably makes up less than 1% of the market with only a 1 or 2 insurance comapnies offering the policy.
Regards
xlife.com.au
post edited by evan
Posted: Sat Dec 16, 2006 06:07 am Post Subject:
Hey people why dont you join the community. :)
Posted: Tue Jan 09, 2007 11:53 am Post Subject:
post removed as per forum rules by evan, thanks
Posted: Mon Jan 15, 2007 04:32 am Post Subject: Term vs Permanent
Term insurance to put it mildly is temporary, the premiums remain the same for a certain period of time 5, 10, 15, 20, or 30 years depending on the contract you have. Term insurance tends to be much cheaper but there are no cash values involved. Essentually you are "renting" your insruance coverage.
Permanent one example would be WL insurance would be more on the expensive side, however it will build a cash value and depending on the company you go with there can be some other perks as well. The premium remains the same for the life time of the contract usually age 100 where it is usually "paid up". At any time you can trade the policy in for the cash value or even take out a loan against it.
I strongly suggest that if you are going to go with a perm policy you should go with a highly rated company ie. New York Life (Yes I work for them) Mass Mutual is another good one, or even John Hancock...be sure to look at the companies background and talk to you agent about what goals you are trying to accomplish.
If you are going to go with a Term policy...I also strongly you suggest that you get one that is convertable....if you want more info feel free to ask!!!
Posted: Mon Jan 15, 2007 03:16 pm Post Subject:
hello!
there is a major difference in a term life insurance a permanent life insurance. term life insurance as the name suggest has a term of its existence. It matures in a specified period of time. There are term life insurance that matures after 5 years or after 10 years. After the maturity period, the insured is no longer covered with life insurance coverage. In the case of permanent life insurance, it has no maturity period. It can offer lifetime coverage to the insured.
In the terms of premiums, term life insurance is much cheaper compared to permanent life insurance. One of the reason is that, permanent life insurance accumulates cash values and term life insurance does not. And most life insurance companies offers dividends if the plan is a participating permanent life insurance.
In the payment of a permanent life insurance, there is what we call limited pay life insurance. this means that the insurance coverage is paid in a specified period of time. Lets say 5 years to pay and then the policy holder stops paying and he or she can avail life time protection.
One good thing about term life insurance is that it can be converted to a permanent life insurance after a specified number of years. Lets say, 5year convertible term life insurance. this means that after 5 years and the plan matures, it can be converted to permanent life insurance.
In choosing what kind of insurance, whether term or permanent, the best way to know is your need. classify your need and talk to your financial adviser about it. He or she can really help you in choosing the best for your self.
Thanks!! Good day!!
Add your comment