by Guest » Tue Oct 23, 2007 06:31 pm
If you want to insure your life for a permanent period then whole life insurance is the one we are talking about. You may purchase a whole life insurance policy depending on your age and health. This insurance provides whole life coverage for you and not just for a specific period.
A whole life insurance does not just enable you to save money for the financial security of your family from the money that you pay as premiums, it also builds cash value. This cash value is a return on a portion of your premiums that is invested by the company. Until you withdraw the cash value it will be tax-deferred.
A whole life insurance does not just enable you to save money for the financial security of your family from the money that you pay as premiums, it also builds cash value. This cash value is a return on a portion of your premiums that is invested by the company. Until you withdraw the cash value it will be tax-deferred.
When should you buy whole life insurance coverage?
You should buy whole life insurance when you want to ensure a life insurance policy to provide financial protection for your family. The premium that you choose to pay must be affordable by you or should fit the outline of your estate or your retirement plan. The premiums that you pay for whole life insurance can be far more expensive than what you pay for a term insurance of the same value. However, the amount that would accrue in case you were to renew your term insurance policy until your later years would be greater than what you pay for a whole life insurance.
If your need for insurance is lifelong or permanent, you may get whole life insurance. Your whole life insurance builds up a cash value within the policy which is an addition to the premiums that you pay for the future. For more click here.
If your need for insurance is lifelong or permanent, you may get whole life insurance. Your whole life insurance builds up a cash value within the policy which is an addition to the premiums that you pay for the future. For more click here.
What are the types of whole life insurance?
Whole life insurance is categorized in to 6 main types:
- Non-Participating Whole Life Insurance: Such a policy has a level premium and face amount during the tenure of your life. The fixed costs and the comparatively low out-of-pocket premiums are an advantage. However, since this policy is categorized as non-participating, it does not pay you any dividends.
- Participating Whole Life Insurance: You will receive dividends here that represent the profit of the insurance company and this may be paid in cash. However, these dividends are not guaranteed to be paid to you.
- Level Premium Whole Life Insurance: In such a plan the premium payments are level and are required to be paid throughout the insured's lifetime. In its initial years the premium is more than enough to pay the current amount required to get insurance protection. The interest earned as well as the excess that remains make up for the later years when the premium paid annually may not be able to cover the cost of insurance. The extra premiums that are generated are held by the insurer and thus the cash value of the policy is created.
- Limited Payment Whole Life Insurance: Such a plan offers you life time protection and with a limited premium too. However, since the premium payments are for a shorter period of time, the amount paid each time will be higher compared to a general whole life insurance premium. This plan can be based either on the number of years that a premium has to be paid or the age limit till which the premium will be paid.
- Single Premium Whole Life Insurance: This plan includes coverage for the entire lifetime of the insured with one large premium payment. Due to its nature this policy has an immediate cash value and loan value that may be significant in relation to the amount of single premium payment.
- Indeterminate Premium Whole Life Insurance: Except the fact that this policy provides for adjustable premiums, it is similar to an ordinary life insurance policy. There is a current premium charged on the basis of company’s current investment earnings, mortality and expense costs. The company will change the premium in accordance with the changes in the mentioned estimates of the company but that will never go beyond the maximum guaranteed premium stated in the policy.
What are the benefits of whole life insurance?
Whole life insurance benefits include the following:
- The investment that you make in a whole life insurance is divided into smaller more specific investments. A portion of your premium goes towards the insurance portion of your policy, a portion towards administrative purposes and the remaining amount will go towards the cash portion of your policy.
- The cash value that is accrued in this life insurance plan belongs to the policy holder.
- The cash value can be taken out in the form of policy loans. You may even cash the policy in.
- The interest accumulated through your policy is tax-deferred until the time you withdraw it.
- This cash value can also be used later to pay your premiums. In case of unexpected expenses you may even stop or reduce your premiums (conditions apply). The cash value accrued can be then used to pay the premiums.
- The premiums for whole life insurance are fixed. No matter what your age or sex is the insurance company fixes a particular amount as premiums for you to pay each year.
- If you take a whole life insurance policy early in life, you have a god chance of getting a substantially built up lump sum amount at the time of your retirement and hence secure the future of your children. You may even use this money for their education.
- If your life insurance policy has sufficient accumulated capital, you may also use it as loan repayment option for the bank.
I have a personal finance blog and I've written about Whole Life Insurance and how it is absolute garbage. 20 year fixed Term Life is the only way to go.
Posted: Fri Apr 17, 2009 11:51 am Post Subject:
There aren't 2 policies. There are hundreds of policies. There are also plenty of things that someone can do other than insurance.
We simply can't know what is best in advance. That's why I say that the best kind of insurance is that which is in force at death. Are you going to die this year? Buy annually renewable term insurance. Within the next 20 years? Buy 20 year term. Within the next 30 years? Buy 30 year term. At age 120? Don't buy life insurance.
What are you saying? You don't know when you'll die? You think that you'll probably die when you are old, but you might die before then.
This is the case for all of us. We need to figure out how much money we would like for our family to have now. Because of budgetary constaints, in many cases, this will all have to be term insurance. In many cases, this will be a combination of term insurance and permanent insurance. In a few cases, this will all be permanent insurance.
So, if the need is $1,000,000, and you buy $1,000,000 of coverage, regardless of what type of coverage you get, if you die prematurely, she'll get about the same amount of money.
People have limited dollars. If all of the coverage is term coverage and death occurs "late", insurance won't be in force at death. If all of the coverage is permanent and death occurs early, the death benefit may be too small.
1)Worry about amount of coverage
2)Worry about type of coverage
3)Ignore #2 until #1 is handled
Posted: Wed Dec 27, 2017 01:30 pm Post Subject: Life insurance
Need for a 86 year old
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