life insurance Archives - Page 20 of 27

Endowment Life Insurance Policy Explained

Are you looking for a life insurance policy that offers you a little something extra? If so, you might be interested in endowment life insurance, which is a specialized insurance product that doubles as a life insurance policy and an investment or a savings account. This type of policy is often misunderstood and therefore overlooked, but learning about it can help you determine whether it’s worth the investment for your family.

What Is Endowment Life Insurance?

Endowment life insurance insures your life like a traditional life insurance policy, but also offers a maturity benefit at the end of the policy term, like a savings account. With this type of policy, you will have an account that you can put any amount of money you like into; part of that money will be used to pay your premium, and the rest will be put into an investment fund. After the policy has matured for a specified amount of time, the money (called an endowment) will be paid to you, or if you pass away before the policy matures, your beneficiaries will receive the payout as your death benefit.

There are a few restrictions to this type of policy: for example, you can only receive benefits after you have paid premiums for at least two years. In addition, if you cancel your policy, you will receive a surrender value that is less than the total amount of premiums you’ve paid into the policy.

Benefits of Endowment Life Insurance

Endowment life insurance is a great choice for many families because this type of policy is two products for the price of one: you get a savings account that you can access once the policy matures, and a life insurance policy. The longer you let your plan mature, the more money you accumulate to use in the future; you then have the option to use that money however you choose: you can spend it, reinvest it, or use it for retirement.

The benefits of this type of policy include:

Maturity benefit– The amount you receive at the end of the term when your policy matures.
Death benefit– The money your family/beneficiaries get after you pass.
Tax benefits- The premiums you pay can reduce your taxable income.

Is Endowment Life Insurance Right For You?

Endowment life insurance policies are beneficial to those who would like the option of money that they can access before they pass away. This kind of policy will work for you if you:

Are looking for a low-risk plan with the dual benefits of insurance and investment.
Want a long-term investment that gives you a lump sum at maturity.
Want accessible money for your children’s college tuition, retirement, or long-term care.

Endowment life insurance is not the most well-known type of life insurance, but you should know that it is an option – and if you are interested in this option, you can find a great plan that meets your needs. 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.

Replacing A Life Insurance Policy

In some cases, when you purchase a life insurance policy, you might be set for life. But, in other instances, you might have a change of circumstances or obligations in your life that require you to replace your life insurance policy. Replacing a life insurance policy requires some thought and knowledge before moving forward; there are some important factors to take into consideration before replacing a policy, so you can get the most value.

Reasons To Replace A Policy

Sometimes people buy a life insurance policy and then never really revisit it after the initial purchase, but that could be a mistake: as you age, your financial obligations will change and it’s important that you keep up with your family’s financial needs. Take a good look at your current policy – you will need to replace your policy if:

The coverage is insufficient or is too much
You are retiring
You have had a career change
You have found a cheaper policy
You have remarried
You want a different type of life insurance policy
You have quit smoking or improved your health and can get better rates
Your policy is about to expire

Before Replacing Your Policy…

You should not cancel your old policy until you have a new one in place, because you never know what will happen. In addition, before you cancel your policy, there are some factors to consider, including:

Surrender Fees

If you have a permanent life insurance policy, such as whole life, universal life, or variable life, that you want to replace, the cash value that you have been accruing will be subject to a surrender fee, or a fee that is charged when you surrender your policy within a certain period of time. Any amount of cash value accrued over a certain amount, such as 10% of the account value, will be subject to the surrender fee; the fees will be highest during the beginning of the surrender period, and are then reduced each year until they reach 0. If you are still within the surrender period and are looking to replace your policy, be ready to pay the fee to transfer your cash value from one policy to another.

Churning

Finding a reliable life insurance agent is very important when you are looking to purchase a new policy, change policies, or replace a policy, since there are some unscrupulous agents who engage in the practice of “churning,” or trying to persuade you to replace your policy so they can earn a new commission. It doesn’t happen often, but it is something to be aware of, so make sure that you have a good agent on hand to help guide you. They might be able to help you add riders to your policy for extra coverage, or find a way to add another policy that will benefit you more than replacing your current one.

Your Waiting Period Starts All Over

hourglass filled with sand on the top sprinkling down — *When you replace your policy, your 2 year waiting period starts all over again.*

Life insurance contracts generally have a waiting period, or contestability period, of 2 years. If you pass away during the contestability period, your insurance company can investigate whether you gave accurate information on your life insurance application and deny the claim if you lied. When you replace a policy, your waiting period will start all over again, including the suicide exclusion (life insurance covers suicidal death only after an initial 2-year exclusion period).

You Might Need A Medical Exam

Depending on the type of policy you have, you most likely underwent a medical exam to help determine your premium rates. If you want to replace your current life insurance policy, you will need to have a new medical exam, and if you have developed any medical conditions since purchasing your current policy, you could face some challenges when trying to replace it. You will find that you’re probably not qualified for some life insurance policies, or that a new one will cost you more money.

When To Consider Renewal & Conversion Options

If you have a term life insurance policy, you will sometimes have the option to convert it into a permanent life insurance policy. Know that if you are diagnosed with a serious illness, replacing your term life insurance policy will not be possible, so it is in your best interest to try and renew or convert your current plan.

It is important to review your life insurance policy from time to time, especially if you have experienced any major life events. If you do decide to replace your current life insurance policy, you should always take the time to compare plans from different insurance companies, because each carrier will offer different premiums, coverage options, and pricing. 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.

Do I Need A Million-Dollar Life Insurance Policy?

Who couldn’t do with a million dollars, right? You might dream of making that much money, or of leaving that amount to your family so they won’t have to worry about money after you’re gone – and if you’re shopping for life insurance policies, you’ll find that million-dollar policies exist so that you can provide that to them. But is a policy that big right for you and your situation? Before considering a million-dollar life insurance policy, you’ll need to consider your needs and your eligibility.

Who Should Get A Million-Dollar Life Insurance Policy?

Million-dollar life insurance policies are just what they sound like – policies that promise a $1,000,000 death benefit to your family members in the event of your passing. As long as you pay your monthly premiums and do not let your policy lapse, or lie during the application process, your family is guaranteed a million dollars when you pass.

In general, your life insurance policy should cover 5-10 times your salary, so if you earn about $100,000 a year, then a million-dollar policy might be the right choice for you. However, a million-dollar life insurance can also work for you if you earn less and want to cover:

Large debts, such as a mortgage and student loans
Child care and dependent expenses
Funeral expenses
Your children’s education

You will need to factor in all of the above and estimate your future expenses to see how much coverage your family will need further down the line.

How Much Does A Million-Dollar Life Insurance Policy Cost?

Life insurance premium rates are always dependent on a number of factors, including your age, health history, smoking habits, and more, but you might be surprised to know that even million-dollar policies can be very affordable. If you are young and healthy, a policy can cost you as little as $35 a month, or a little over $1 a day.

Another factor that will help determine the price of your premiums is the type of policy that you choose, whether it be term, whole life, or universal life insurance. Term life insurance will be the least expensive choice of the 3 types because there is no cash value included with the policy. The benefits of term life insurance include:

Lower premiums
Guaranteed death benefit (as long as premiums are paid)
Choice of 10, 15, 20, 25, and 30-year policy term
Premium prices are locked in for the entire policy term
Renewable at the end of the initial term

But if you choose to go with a whole life or universal life insurance policy, you will have cash value that builds over time, which you will have access to at any time.

What Are The Eligibility Requirements for a Million-Dollar Policy?

If you are considering a million-dollar life insurance policy, be prepared to give some information to the life insurance company you have chosen; they will want to assess your risk to determine if you will qualify for that large of a policy. Not only will you have to pass medical underwriting, but the company will also look at:

Your age– Most insurance companies will issue a million-dollar policy that is 40 times your annual income for applicants under 40, 25 times for people ages 40-60, and 10 times for people ages 60-70.
Your income– Most insurers, though, will offer benefits that are anywhere between 10 and 30 times your annual salary, with some variation based on your age.
Your health– Any current and past health conditions will be considered.

Looking For A Life Insurance Policy?

If you are looking for a million-dollar life insurance policy to help protect your family’s financial future, you might find that you are eligible for one, and that it is more affordable than you thought it would be. But if you do find that a million-dollar policy is not the right fit for you, don’t worry: you can find another affordable plan with great coverage with the help of a life insurance agent.

There are many different life insurance companies with different coverage options and prices, which is why it is important to compare all of your options, and the best way to do this 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.

What Type of Life Insurance Annuity Is Right for Your Family?

Did you know that when it comes to life insurance benefits, beneficiaries of a policy have options for how they get their money paid out? You can choose to have benefits paid out in one lump sum, but if you’d prefer to receive your money over a longer period of time, an annuity might be the best option. Annuities are long-term investments that allow your money to grow over time, so that you will get guaranteed income for life; if you decide to go with this option, you should know that there are different annuities to choose from.

How Life Insurance Annuities Work

bag of money in black with a white money symbol in the middle — *Beneficiaries can choose one lump sum, or an annuity on life insurance payments.*

When a life insurance policy holder passes away, the beneficiary to the policy will generally receive their payout in one lump sum, but they also have the option to receive it as a life insurance annuity. Not to be confused with a life annuity, which is a standalone investment to supplement your retirement income, a life insurance annuity is only for beneficiaries of a life insurance policy; if you or your beneficiary chooses to receive benefits over an agreed-upon number of years, your life insurance company will convert the payout into an annuity, in a process called annuitization. The good thing about choosing an annuity is that the money that remains in the annuity will earn a fixed rate of interest determined by the insurer.

Types of Life Insurance Annuities

If you or your beneficiary chooses to invest your death benefit in a life insurance annuity, you will have various options, including:

Fixed-period annuity– Your money will be paid out over a period of 10, 15, or 20 years, and will grow tax-deferred at a fixed interest rate. If the beneficiary dies during this time, his or her beneficiary will receive the remaining payments until the fixed number of years expires.
Variable annuity– This kind of annuity can be a little risky, because it involves investing in the stock market, meaning the amount of money paid out will be determined by how well the investment is doing.
Lifetime annuity– Also known as life income annuity, with this type of annuity, the beneficiary will receive a percentage of the death benefit plus interest every year until they die.
Lifetime annuity with period certain– With this annuity, your insurance company pays out income for the beneficiary’s entire life or the period certain, whichever is longer. If the beneficiary dies within the time, a designated beneficiary will receive the remaining payments for the remainder of the period.

Younger beneficiaries will benefit most from lifetime annuities since there is a longer payout period, meaning there is a longer time for interest to grow. Older beneficiaries might prefer a fixed-period annuity so they do not risk passing away before receiving the full amount.

Tax & Interest On Annuity Payments

If you take a death benefit as one lump sum, you will not need to pay taxes on it, but if you or your beneficiary chooses an annuity payment, part of the income will be taxed. This is because the money that is left with the insurance company will earn interest each year, and that interest is taxable.

When it comes to life insurance payouts, you have options, and it’s important to go over these options so you can decide when the time comes. And if you’re still shopping around for a life insurance policy, remember that there are multiple policies to choose from, so make sure you compare different policies from multiple life insurance companies, since all of them have different ratings, coverage options, and pricing. 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 Planning For Different Stages Of Life

When it comes to life insurance, your needs will vary throughout your lifetime. That means, in order to be adequately covered by your life insurance policy, you will have to consider what coverage you will need at different stages of your life, and plan accordingly. So what should your life insurance coverage look like at each stage of your life?

Ages 20-30

This time in your life is full of possibilities, but also full of uncertainty and new financial obligations. You might be single, but in a relationship and looking toward getting married, and you might be either still renting or getting ready to purchase a house, all while juggling student loans, auto loans, and more. All of these financial obligations mean that you will want to get a life insurance policy now whatever your relationship status, especially if you have a co-signer on any of your loans. Not only that, but now is a good time to purchase a life insurance policy because at a younger age, life insurance is relatively inexpensive, so you will be able to get a larger amount of coverage with lower monthly premiums.

Ages 31-50

Whether you are still single or are married, life insurance is important during this stage in your life. You might be considering growing your family, which is not cheap, as well as trying to pay down any large debts that you have, including your mortgage. At this stage in your life, your salary is probably higher than it was in your twenties, which means your family will now be relying on a larger income, making it harder for them to go without it in the event of your passing. When assessing your life insurance needs at this stage of your life you will have to consider:

Any raise in income
The balance of your mortgage
Cost to maintain your family’s lifestyle
You children’s expenses, such as college tuition
Medical bills or any final expenses

Ages 51-60

During this stage of your life, you might be an empty nester and living in a quiet home that is almost paid off. Your life insurance coverage needs might not be as much as in previous years, but having a policy is just as important to help your family and partner. A policy can help cover: scale with a blue house on one side and a red percentage sign on the other

Any remaining mortgage balance or debts
Ongoing care for special needs
Final expenses
Creating a legacy
Healthcare and long-term care costs

Ages 61 & Over

Retirement is not too far off during this stage of your life, and you will want to be able to protect your retirement and your legacy with life insurance. Sure, you may not need as much coverage at this stage because you might not have the same financial obligations that you had when you were younger, but you should come up with a financial plan for the rest of your life – and life insurance can be a very helpful part of that plan. Life insurance coverage should be considered for:

Long-term care for yourself or your spouse
Estate planning
Any debts you may have left
Final expense costs

Whether you are young or old, it is important to consider life insurance in order to protect your loved ones and your assets – and it doesn’t matter if you are in your 20s or 50s, there are many great affordable life insurance policies to choose from that will provide enough money for your family. 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 I Get Life Insurance Or Just Use My Savings?

Having cash set aside for a rainy day is always a good idea: a savings account will give you a cushion of protection in the event of an emergency, and will help you in planning for your retirement. You might even think it will be enough for your family to live on in the event of your passing, but will you really be able to save enough to ensure their financial stability when you are gone? If you are deciding between buying a life insurance policy or relying on your savings account for your family’s future financial needs, there are a few things you should consider.

The Purpose Of Life Insurance

Life insurance will help give your family financial security in the event of your passing; the great thing about it is that you can choose the amount of coverage you want for your family (or any beneficiary of your choosing), and as long as you make your premium payments, they will receive a lump sum payout, or death benefit, which they can use to pay for your final expenses, or any other expenses that are paid for by your income.

Two of the most popular life insurance policies include:

Term Life– This is the most affordable and flexible type of life insurance coverage. The policy lasts for a specific amount of time, usually anywhere from 5-30 years, and is best for those who want to cover expenses that last a certain amount of years, such as a 30-year mortgage.
Permanent Life– This type of policy offers lifelong protection, and so typically costs more than term life insurance policies. It also builds up cash value over time, which you can borrow from, like a savings account; the money you borrow will be deducted from your death benefit, unless you pay it back into your policy.

Pros of Life Insurance

Life insurance offers multiple benefits, including:

In most cases, your death benefit will be a tax-free payout.
Your family receives the lump sum death benefit payout quickly after your passing, unlike with a savings account – with a savings account, your family will have to wait until your estate is settled to gain access to your account.
You pay a low monthly fee to receive a large payout- a term life insurance policy can cost as little as $15 a month for a death benefit of $250,000.

Pros Of A Savings Account

You can earn interest on your money
You have instant access to your money while alive

Why Choose A Life Insurance Policy?

brown casket — *Funeral costs alone can be too much for your family, and your savings might not be enough.*

Everyone should have a savings account for all of those rainy day expenses, or for retirement planning, but when it comes to your family’s needs when you are gone, just having money in the bank might not be enough to financially sustain them. In fact, did you know that the median savings account balance across American households is less than $5,000, and that, according to a recent study conducted by the Federal Reserve, 40% of adults wouldn’t be able to cover an unexpected $400 expense? Considering that the typical funeral alone costs around $10,000, one of the main reasons to invest in a life insurance policy is the fact that it can be nearly impossible to save up the thousands of dollars necessary to help your family when you are gone. For a few extra dollars a month, you can give your family guaranteed financial security when you are gone with a life insurance policy that will cover the loss of your income, their monthly and annual expenses, and any future expenses like college tuition.

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 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.

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