life insurance Archives - Page 19 of 27

Set It & Forget It: Single Premium Whole Life Insurance

Let’s face it, there are a lot of different life insurance policies out there to choose from – in fact, there are so many that it can become overwhelming trying to find the right one for you. How do you choose? Start by narrowing it down this way: if you want life insurance for a specific amount of time, you can choose a term life policy, but if you want a more permanent policy, whole life insurance is the way to go.

Whole life insurance is the most common type of permanent insurance policy, and rightfully so- there are so many great benefits to these policies. If you decide to go the whole life insurance policy route, the next step is to check out all of the different whole life insurance policies that are available. You can choose from policies like level premium whole life, limited payment whole life, and single premium whole life insurance, which is the type of policy we will focus on below, so you can decide if it might be right for you.

Single Premium Whole Life Insurance

hundred dollar bills in a large stack — *Single premium whole life ,gives you the opportunity to pay for your policy in a single upfront lump-sum.*

Single premium whole life is permanent life insurance that covers you until you die. But unlike with other types of whole life insurance, with which premiums can be paid on a monthly or annual basis, with single premium whole life, you can pay for your policy in a single upfront lump-sum. In return, you receive a guaranteed death benefit amount; these policies also have a cash value that will grow over time, and that you can borrow against.

For example, a single premium whole life policy might have one $25,000 premium at the start of the policy and no more payments will be needed after that. When it comes to how much the death benefit will be, it will depend on the amount of money invested, as well as your age and health when you purchase the policy.

The Benefits

Having the ability to pay your premium off at once and not having the hassle of monthly or annual payments is a great plus, since you will not have to worry about forgetting or being unable to make a payment and losing your policy forever. Not only that, but there are tax benefits to whole life: you can pass on death benefits to your family tax-free without the time delay and expense of probate. In addition, in some cases, you will have tax-free access to the death benefit to cover any long-term care costs (although there are cases when you might have to pay some tax, more on that below), which can protect your other assets so you do not have to dip into them. If you do choose to use part of your death benefits for long-term care expenses, the death benefit remaining in the policy when you die will pass income-tax free to your beneficiaries. And if you don’t use any of it, the money will go to your loved ones just as you had originally planned.

Another benefit to making one upfront premium payment is that the cash value of the policy will be larger than with other types of policies, because the policy is fully funded from the start of coverage, so the value can grow more quickly. For example, if your premium is $30,000, some of this will go to fees, and some of it will go into the cash value: if the cash value is $20,000 (after the fees are paid), and you were guaranteed a 3% interest rate, the policy will grow $600 in the first year.

How You Can Withdraw Money

atm machine — *If you want to withdraw money, you have to take out a loan that can be up to 90% of the policy’s cash surrender value.*

The only way to withdraw money from the cash value of a single premium whole life insurance policy is by taking out a loan. The loan amount can be up to 90% of the policy’s cash surrender value (cash surrender value is the sum of money an insurance company pays to the policyholder or account owner upon the surrender of a policy/account). Insurance companies usually have a minimum amount that you can take out, so be sure to check that out. You can typically withdraw 10% of the premiums paid, or 100% of the policy’s gains (whichever is higher) in each calendar year without having to pay a surrender charge.

It is important to note that if you withdraw cash from the policy, either as a loan or partial surrender, there will be some tax implications. Because this type of policy is considered a modified endowment contract (MEC) by the IRS, meaning that it has been funded with an amount of money that exceeds federal limits on policy funding, withdrawals are subject to income tax on the earnings. Typically there is a 10% IRS penalty on all gains withdrawn or borrowed before age 59½. You will also have to pay income tax on those profits, and if you cash in the policy, the insurance company might hit you with a surrender charge.

Is This Type of Policy Right For You?

Single premium whole life insurance is best for someone who has the ability to pay their premium all in one shot, and who wants a tax-sheltered legacy that their family can receive when they are gone. These policies are a great way to maximize your cash value growth so you can use that money as you get older and possibly require long-term care. If you are considering a single premium whole life insurance policy, you should first consider if you can afford it, how much coverage you will need, and any riders you would like to add on.

The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Should You Pay Your Life Insurance Premiums Annually, Quarterly, Or Monthly?

When it comes to purchasing life insurance, you’ll have a lot of decisions to make, including how much coverage you need, who your beneficiary will be, and which carrier to buy a policy from. But you will also have to consider how you are going to pay for it: depending on the life insurance policy, you will have the option to pay your premiums annually, quarterly, or monthly. Each method of payment has its own advantages, and you’ll need to consider the following factors when deciding how frequently to pay your premiums.

Paying Life Insurance Premiums Annually

discount symbol in gold with a character in front of it with a calculator — *One of the benefits of paying your premiums annually is that you can get a discount from your insurer of up to 8% of your total premium.*

When deciding on how often to pay for your life insurance premiums, you will need to take into consideration your individual circumstances, including your budget and income. If you choose to pay your premiums annually, you will have to pay one lump sum every year, which can seem like a lot of money at once. But this method can be more convenient, since it eliminates the worry of having to pay your premium on time every month, and will free you from having to budget for your premium each month.

While paying a whole year’s worth of premiums in one lump sum is not in everyone’s budget, if you are considering this option and are unsure whether it makes sense for you financially, you should know that you can get a discount from your insurer of up to 8% of your total premium when you pay annually. These discounts can add up, and you could end up saving a lot of money, especially if you plan on keeping your policy for a long time.

If paying your premiums annually sounds like a good option for you, make sure you shop around and compare multiple life insurance policies, since different companies will offer different discount rates for paying annually.

Paying Life Insurance Premiums Quarterly

Some policies will also give you the option of paying semi-annually or quarterly, but this is less common, and is usually not ideal for most people, since you’ll have to make a large payment but will not receive the benefit of a discount like you would if you paid annually. But if you’re worried about missing monthly payments and can’t make one large lump-sum annual payment, a quarterly or semi-annual payment might be worth it.

Paying Life Insurance Premiums Monthly

hand holding a cell phone with the other pressing a button with a bank on the screen and money next to it — *Setting up autopay, or electronic fund transfer, from your savings or checking account will help you not miss a monthly payment.*

Paying your premiums monthly is the most common payment option for life insurance premiums. Depending on your income, it might be easier to fit smaller monthly premiums into your budget than it is to come up with one large annual lump sum. If you’re worried about missing a payment, you can use an autopay option, or electronic fund transfer, from your savings or checking account – in fact, many insurance companies will require that you do this.

When it comes to deciding how to pay your life insurance premiums, you have to take into consideration your income and monthly budget. If it is possible to pay your premium annually, this is your best option; however, if that’s not possible, monthly payments are your best option. In the end, the most important thing is that you never miss a payment, so you can prevent your life insurance policy from lapsing. And if you choose to make your payments annually and find out that you cannot keep up with it, you can always contact your insurance company and request a change to your payment schedule.

If you are looking for the best way to save money on your life insurance policy, work with a trained agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Level Term Life Insurance: What It Is and How It Works

Term life insurance policies are a popular pick for many Americans, because they are generally the most affordable and convenient type of life insurance policy. Not only that, but there are multiple kinds of term life insurance policies to choose from, so most people will be able to find one that is right for them. Among these many options, level term life insurance is probably the most popular, because with one of these policies you can get a large amount of coverage for a very low premium. If you want to ensure that your loved ones are financially secure when you pass, level term life insurance might be one of the best options to consider.

What is Level Term Life Insurance?

a family of four walking on the beach smiling — *Level term life insurance is great affordable life insurance for families who have accumulated debt.*

Just like other types of term life insurance policies, level term life insurance is a pure life insurance product, meaning there is no cash value component. You purchase a policy for a specific term, or time period, typically 10 to 30 years, and if you pass away during that time, your family will receive the agreed-upon death benefit. The name “level term” simply refers to the fact that your premiums and death benefit will remain the same throughout the policy’s entire duration. This type of policy is a great choice for people who require a lot of coverage at very affordable rates, like young families who have accumulated a lot of debt.

How Does Level Term Life Insurance Work?

When you apply for level term life insurance, you will be asked about your current health and your health history; depending on the insurance company, you might need to undergo a medical exam to determine your eligibility and rates. The exam is always paid for by the insurance company and will include checking your height and weight and answering questions on a health questionnaire.

Once you’re approved, you can choose the length of your policy, and the death benefit you would like to leave your family when you are gone. Again, the death benefit will remain the same over the life of the policy, as will your premium payments.

When your policy reaches the end of its term, you will have the option to either renew your policy, buy a new one, or convert it into a permanent life insurance policy. If you choose to renew it, your rates will be based on your current age, which means your premium rates will be higher than they were when you purchased the policy. If you choose to convert your term policy into a permanent life insurance policy, you might not have to undergo another medical exam, but the rates will be more expensive for a permanent policy than for a term policy.

The Difference Between Level Term & Whole Life Insurance

illustration of a scale — *Level term life insurance and whole life are similar, except whole life is permanent and more expensive.*

Term life and whole life insurance policies are very different from each other; the only thing that they have in common is that once the policies are issued, the premiums and death benefit will not change for the life of the policy.

One of the main differences between the two is that whole life insurance is a type of permanent life insurance, meaning that the policy remains in effect for your whole life, as long as you pay your premiums. The other major difference? Whole life policies come with a cash value component that will earn interest over time. Once you accumulate enough cash value, you can use the cash value to buy additional coverage, or even to pay your premiums. It’s important to note, though, that whole life insurance costs anywhere from 5 to 15 times more than level term life insurance, which is why level term life insurance tends to be a much more popular choice.

How Much Does It Cost?

Just as with any other life insurance policy, premiums for a level term policy are based on a number of factors including your age, health, medical history, and other risk factors like your hobbies and driving record. That means the younger and healthier you are, the lower your rates will be; your rates will also be affected by the amount of life insurance you’re applying for and the length of the policy term you require. The best way to find the most affordable policy is to compare policies from different life insurance companies in your area.

Pros & Cons Of Level Term Life Insurance

Level term life insurance is very popular, and it has some great features, but it also has its drawbacks, so you have to weigh your options carefully. For example, if you want coverage as a replacement for your income in case of your passing, level term life insurance is ideal, but it wouldn’t be a great option if you wanted lifelong coverage. Consider the following pros and cons before purchasing a plan:

Pros

one hand putting money into another hand — *Level term life insurance is the most affordable life insurance plan that is easy to manage.*

Cheapest form of life insurance for most
Predictable financial protection
Premiums and death benefits remain the same throughout the policy term
Easy to manage and understand

Cons

It is not lifelong protection so when it expires you might need to buy a new, more expensive policy
No cash value component
Premiums are not refunded if you outlive the policy

If you are considering a level term life insurance policy, you should first consider how much coverage you will need, how long you need the policy for, and any riders you would like to add on. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

The Different Types Of Life Insurance Policies

Shopping for a life insurance policy can feel a little bit overwhelming, because there are so many different types – but the upside is that, with so many options, you’re sure to find a policy that fits your needs and budget. If you’re not sure where to even begin, we have listed multiple types of life insurance policies, how they are different from each other, and what you can expect from each, in order to make the process a little easier and less stressful for you.

Term Life Insurance

illustration of a person walking with 3 arrows in front of him — *Term life insurance is great because it offers you insurance for a duration of time, and there are different options to choose from.*

Term life insurance is one of the most affordable types of life insurance available, but these policies only cover you for a limited period of time (or term), generally anywhere between 5 and 30 years. This type of life insurance is best for people who want coverage for large expenses such as mortgage payments, college tuition, and other debts, usually those who are younger or middle-aged and want to be able to replace income in case of an unexpected death. One of the great things about term life is you can convert your policy to permanent life insurance before it expires without having to go through medical underwriting again.

There are different types of term life insurance policies to choose from including:

Level term life insurance: Your premium stays the same for the entire term
Decreasing term life insurance: Your death benefit decreases as the debt amount decreases
Annual renewable term life insurance: Allows you to renew your term policy for one year at the end of the initial term
Return of Premium life insurance: All premiums paid will be refunded if the policyowner outlives the policy term

Whole Life Insurance

Unlike term life, a whole life insurance policy lasts for the entire life of the policyholder, as long as you keep up with the premiums payments. With this type of policy, premiums will remain the same throughout the life of the policy and cannot be raised for any reason. One of the best things about this type of policy is that it has a cash value component, meaning your policy will build tax-deferred cash over time at a guaranteed rate of interest.

Whole life insurance is best for people who want a longer policy with a cash value that they can borrow from. Be aware that you must undergo a medical exam to qualify for a whole life policy, and that these policies are more expensive than term life policies.

Universal Life Insurance

coins in a row growing, with the last one with a branch on top of the stack — *Universal life insurance has a cash value that grows over time.*

Universal life is similar to whole life insurance in that it is also a type of permanent life insurance with a cash value that grows over time. This type of policy will not only provide you with lifetime coverage, but the premiums are flexible, meaning that you can modify your monthly premium when needed, as well as increase or decrease your death benefit to accommodate different life events.

Premiums for this type of life insurance policy are generally higher than those for term life, because of the above features. It is best for people who prefer affordable permanent life insurance and want the ability to accumulate cash over time. With this type of policy you will need to undergo a medical exam, as well.

Variable Life Insurance

Variable life is a type of universal life insurance that also builds up cash value over time, but instead of earning a fixed rate of interest determined by your insurance company, the interest it earns is based on the performance of an investment account. You can withdraw cash from the policy through policy loans that are considered tax-exempt, but you can lose your cash value if the market performs poorly. This type of life insurance is best for people who are looking for permanent life insurance that builds up cash that can be used as a tax-exempt income. Premiums are based on your medical history, so you will have to undergo a medical exam.

Simplified Issue Life Insurance

With this kind of life insurance policy, you do not have to undergo a medical exam, meaning policies will typically be more expensive because the insurer is taking a risk by insuring you without knowledge of your medical history. On the other hand, though, you don’t have to worry about being approved, and you will be able to get a policy in a matter of days as opposed to weeks or months. This type of policy is best for people who need coverage quickly, as well as for those who have pre-existing medical conditions and are afraid they might get denied any other type of coverage.

Guaranteed Issue Life Insurance

Like simplified issue life insurance, guaranteed issue life insurance is a whole life policy that will provide insurance without requiring a medical exam. As long as you are within the eligible age requirements, you can purchase one of these policies, but it will cost more than traditional life insurance because of the risk the insurer is taking, and will generally only provide $25,000 to $30,000 in coverage.

hourglass with blue sand in it dripping down — *Guaranteed life insurance has a 2 year waiting period before the death benefit is paid.*

There is one other caveat to this type of policy: there is a two-year waiting period before the full death benefit is payable to the beneficiary. This means that, if the policy owner dies within 2 years, the insurance company will only pay out 110% of premiums paid (as long as the insured dies from natural causes), instead of the agreed-upon death benefit. Guaranteed issue life is best for people who cannot qualify medically for traditional life insurance, but would like the opportunity to cover their loved ones when they are gone.

Final Expense Insurance

Final expense insurance is generally bought to cover funeral expenses, burial expenses, and any other medical debts you may have. There is no medical exam required, and it is relatively affordable, but the death benefits are usually capped at $35,000.

Joint Life Insurance

Joint life insurance will provide coverage for you and your spouse. You can choose from a universal or whole life policy, but the death benefit is usually not paid out until both policy holders have passed away. A lot of couples will choose this option because it is cheaper than purchasing two separate policies, and the underwriting and rates are based on the younger and healthier partner.

Your family has financial obligations that will not go away when you are gone; they will need your help more than ever with their expenses, and the last thing you want them to worry about is money while they are grieving. There are many great affordable life insurance options to choose from that will provide enough money for your family, for a low monthly price. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Key Tax Benefits of Your Life Insurance Policy

Most people don’t think that taxes and life insurance have anything to do with each other, but in reality, nothing could be further from the truth. One wrong move when purchasing your policy, and you and your beneficiaries could face large tax consequences, resulting in lost money. But on the other hand, if you play your cards right, you could actually see some tax advantages to your life insurance policy. For example, policies like whole or permanent life insurance can not only provide your family with financial security when you are gone, but can also help you avoid the taxes that come with stocks or retirement accounts. Find out just what tax benefits you could get from your life insurance policy.

Tax-Advantaged Growth

coins stacked in rows getting larger each time — *Not only do you get tax-deferred cash value with your whole life insurance policy, but there are other tax benefits.*

First things first: you should be aware that, if you have a whole life insurance policy, the cash value that comes with your policy will not be taxed while it grows. Your cash value is tax-deferred, meaning your money will grow more because it is not being eaten away by taxes each year.

Tax-Free Exchanges For Other Policies

Did you know that you have the option to change your life insurance policy if it no longer works for you? Not only that, but if you decide to switch plans or buy a new one, you will not have to face any tax consequences: you will be able to do what is known as a tax-free 1035 transfer on your cash value, which is similar to rolling over a 401k.

Accelerated Death Benefits

If you are diagnosed with a terminal illness, or have to surrender your life insurance policy early, notify your life insurance company of your condition: if you meet the requirements of your policy, you could receive tax-free accelerated death benefits.

Early Distributions Are Tax-Free, Depending On Your “Basis”

If you have a whole or permanent life insurance policy, you will have a cash value that continues to grow tax-free over time, and if you decide to take an early distribution, or withdrawal, from your cash value, you will only owe taxes on any amount that goes over your what is known as you basis, or the amount you have paid in premiums.

So, let’s say you have a policy for which you have already paid around $10,000 in premiums, and your cash value is around $40,000. If you withdraw $5,000, you will not pay any taxes on your withdrawal, because it does not exceed the $10,000 premiums-paid basis. But if you choose to take out $30,000 from your cash value, you will owe taxes on the $20,000 that exceeds your basis.

Tax-Free Loans

Sometimes the unexpected happens, and you could need to borrow a large sum of money – if you do, you will be able to borrow from your life insurance policy, tax-free! You have the option to borrow an amount that exceeds the amount you have paid in premiums without facing any tax consequences by taking out a loan up to the amount you have in cash value. Just be aware that your insurance company will charge you interest until you pay the loan back, and each insurance company has its own rates; you will also have the choice to not repay the loan and have it deducted from your death benefit, or pay your loan back to keep your death benefits larger for your family. It is important to note, though, that if your policy lapses, you could owe taxes on the loan you have taken out.

Looking For A Policy?

Life insurance is a great way to protect your family and continue to help them financially when you are gone. They will need your help more than ever with their expenses after you pass, and the last thing you want them to worry about is money while they are grieving. There are many great affordable options to choose from that will provide tax benefits for your family, for a low monthly premium. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Life Insurance for HIV Positive Applicants

While some of the focus has been taken off of HIV these days, the sad reality is there are still many people contracting and living with this virus in the U.S.: according to HIV.gov, about 1.2 million people in the U.S. have HIV. Fortunately, we have made great strides in controlling the virus with medication, and those living with HIV can now go on to live long and normal lives, which brings up the question of life insurance. Will life insurance cover people who are HIV positive?

risk gage with green, orange, and red lines — *Life insurers will provide a policy to people who are HIV positive, but they will first assess your risk.*

HIV & Life Insurance

Because life insurance companies offer policies based on how risky it is to insure you, many life insurance companies will not insure you if you are living with HIV. With that being said, there are life insurance companies who will consider applicants who are HIV positive, and will offer traditional life insurance policies like term life, whole life, and even universal life insurance, with some limitations.

For example, insurers will generally not consider an applicant who was diagnosed less than a year before applying for coverage, and there are often age limits on applicants. In addition, you will have to go through the underwriting process, which will determine your rates; living with an illness like HIV will usually mean that your premiums will be higher than other people’s.

What To Expect During The Underwriting Process

When applying for life insurance, you have to disclose any health issues, including if you are HIV positive. Insurance companies will require that you provide information regarding:

The date of your diagnosis
Current CD4 count and viral load
Medications you have been prescribed and the dosage of each
Whether you are currently symptomatic or whether you have ever been symptomatic

In addition, during the underwriting process, life insurance companies will need to know what stage of HIV you have:

Acute HIV, which is considered the earliest stage of the virus, extending from two to four weeks from the initial infection.
Chronic HIV, meaning that your number of CD4 cells is decreasing, leading to damage to the immune system.
AIDS, which is the most advanced stage of HIV.

Insurers will also ask your age, because most insurance companies that will consider an HIV positive applicant will require that the applicant be no older than 50 years old. They will want to know your overall health, including anything that could raise a red flag for them, as well as if you are following a treatment plan prescribed by a doctor, including managing the virus by taking prescribed medications and regularly having your CD4 levels checked.

Once you have disclosed all of the above information, you might have to wait a few weeks to a few months while the insurance company sifts through your medical records and the statements that they will request from your doctor.

Life Insurance Options For HIV Positive Applicants

If you are unable to qualify for a traditional life insurance policy, you do have other options, most of which you can be approved for in a matter of days. These policies include:

Final Expense Insurance

This type of insurance is usually bought to cover funeral and burial expenses, as well as any medical debts. A final expense policy is ideal for you if you are living with a chronic health condition like HIV, because you are guaranteed approval.

Simplified Issue Life Insurance

This type of policy will not require a medical exam, although there will be some medical questions on the application. Premiums are usually higher for simplified issue policies than for traditional term life insurance because there is no medical exam, and those purchasing these policies might be riskier to insure.

Guaranteed Issue Life Insurance

light bulb standing in front of 3 white doors with blue question marks on them — *You have many options for life insurance, and if you are denied, then you can opt for a no medical exam plan.*

This type of life insurance policy does not consider your health or health history during the underwriting process, which means anyone is eligible for it. The two downsides of guaranteed issue, though, are that your insurance company will cap the death benefit at $35,000, and your premiums will be higher than with traditional term life insurance, because you will be approved no matter how much of a risk you are to insure.

Term Life Insurance

If you are following a treatment plan, some life insurance companies will approve you for term life insurance.

Need Help?

Just because you are living with HIV does not mean you won’t be able to provide for your family when you are gone. Finding a life insurance plan that is affordable and will provide enough coverage for your family, though, means that you will have to do a lot of research and compare different insurance companies and their plans: some companies have strict underwriting guidelines, while others have looser guidelines, and they will all price plans differently. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.