Best Insurance Blog and Articles » Life Insurance

Advantages Of Single Premium Life Insurance

David — Mon, 05 Dec 2011 14:09:10 +0000

What Is Single Premium Life Insurance?

Find Out If SPLi Is Good For You!

This website has already explained single premium life insurance. If you are unfamiliar with the topic, you may want to go back and browse the basics.

One Payment Equals Lifetime Coverage

Basically, a lump sum of cash is put into a cash value life insurance policy a the very beginning. This is usually a whole life policy with some sort of indexed or percentage return.

This funds the actual coverage for the rest of the insured person’s life, and it should also start the policy with a cash value. Here are some basic things to note before we discuss the advantages of getting life policies this way!

This cash value will be somewhat less than the original cash funding amount because of administration feeds and the cost of coverage.
However, in simplest terms, now the cash account should have the opportunity to grow quickly because the coverage is already funded.

This probably all seems a bit odd. Most of us are used to purchasing our policies with an agreement to making monthly, quarterly, semi-annual, or yearly payments. For some people, this odd way of doing things can have some advantages though.

Single Premium Life Insurance Disadvantages

Here are the main disadvantages of single premium life insurance. They will only be disadvantages for some people, so you need to consider them carefully to see if they would be drawbacks for you.

You do need that lump sum of money to fund the policy, usually at least $5,000 – and probably more. If you do not have a sum of cash that you have set aside for long term use, then you should probably pass.
Since you fund the policy in one step, you may not get the full tax advantages of normal life insurance policies that get funded over a period of 7 years or more. Your earnings should be tax deferred while in the cash account, and your beneficiaries should still get tax free proceeds if you pass away. However, your withdrawals may be taxed. This is NOT meant to be tax advice, but just a heads up you need to look into the current rules where you live.

Single Premium Whole Life Insurance Advantages

Now we get to the good part! There are some benefits of being able to fund your lifetime coverage right away.

You may choose a fixed interest rate return (fixed) or a market return (variable), or some hybrid with market-like growth but guarantees. This means your cash account will have an opportunity to grow, tax deferred, within the account.
You will also, of course, immediately have fully funded life insurance for the rest of your life. Your own beneficiaries will be able to collect the proceeds without having to pay taxes, and without going through the hassle of probate, etc.
Many single premium life insurance policies also have provisions to withdraw some, or all of, the cash value in case of illness or long term care expenses. This means your policy may do double duty as a life insurance policy and a long term care insurance alternative.
Your policy may also allow you to withdraw some cash for daily living expenses. So it may be useful as an income source.
Since you have a funded cash value policy, you may also be able to use it in a senior life settlement, so you can get some percentage of the actual death benefit. This death benefit amount should be higher than the cash account or surrender value.

This article is intended as a very basic 101 of some of the disadvantages and advantages of single premium whole life (SPLi). Hopefully, now that you understand the basics, you can find a good life insurance agent who can give you in-depth information that has been tailored to your individual situation.

Life Insurance For Seniors

admin — Mon, 07 Nov 2011 14:25:57 +0000

Seniors Life Insurance

Why Buy Life Insurance For Senior Citizens

Why would anybody look for life insurance for seniors? It is actually a common misconception that senior citizens have outlived their need for life insurance policies. However, this attitude ignores many changes in the productive lives of older people today.

Actually, many of the top life insurance companies recognize that older customers have many different needs, and they eagerly court this booming market! If you need to buy a life policy for an older person – yourself, or somebody you care for – you can use this competition to your advantage.

You may also want to explore life insurance for seniors at a page where you can get free quotes for a variety of products.

What Type Of Life Insurance Do Seniors Buy?

There is never one simple answer to most insurance questions. This one is no difference. Each individual will have different reasons they want to purchase a life insurance policy.

Consider a few things that senior citizens may be looking for.

Some older people simply want a way to provide cash for final expenses. These smaller policies will pay the beneficiary cash that can be used to pay for a funeral, settle debts, etc. This may seem trivial, but these expenses can mount up. They may be a burden for cash strapped families and seniors on limited incomes.
Other seniors have plenty of cash set aside to cover a funeral and other final expenses. They are looking for more sophisticated uses. Some may want to enjoy tax advantages, transfer wealth, or even provide for a business.
There are even some uses of life policies that you can enjoy while you are still alive.

Burial Life Insurance For Seniors

These are simply intended to provide cash to pay for expenses after the insured person passes away. In the world of life insurance, the death benefits are considered small. They usually range from a twenty-five hundred to twenty-five thousand dollars. The policy owner, which could be the family member or somebody with a close relationship to that person, may name policy beneficiaries. The beneficiary will usually be the person who is expected to handle final arrangements.

You can learn more about burial insurance for seniors here.

Estate Transfers And Business

There are also some very sophisticated and useful reasons that older people want to be covered by life policies. It is easy to illustrate this with some simple examples.

Pass On A Business: Let us say that Mr. Brown wants to pass his widget business on to a daughter who has been very involved in the business for most of her life. His two other children are not involved, but he still needs to leave them a legacy. He could purchase a life insurance policy to settle with the two children that will not own the business, and basically – buy them out – in that way. This is a strategy he could use to make sure his intended heir gets the business, and his two other children are satisfied.

Tax Advantaged Wealth Transfer: In another case, Mr. Brown would just like to leave a legacy to his heirs, or perhaps even a favorite charity. He could name the beneficiaries in his policy. Normally, the proceeds from a death benefit are not taxed.

Key Man Insurance: In order to protect a business financially, against the loss of one of the owners or top experts, some companies purchase key man insurance.

Use Of Senior Life Insurance While The Insured Person Lives

This is a more pleasant topic to discuss. There are many uses of life policies that can actually benefit the insured person while they are still alive.

Senior Life Settlements are transactions that allow older people to sell their policy for some percentage of the face value. You may also be able to borrow against the cash value of your permanent policy.

Riders (policy options) that provide for the use of some percentage while the insured person is still alive. Some may actually allow the insured person to use some of the death benefit while they are still alive in the case of an illness. This could be a long term care insurance alternative, for example.

Finding The Right Life Insurance For Seniors

Before you set out to buy a new policy, be sure to think about the reasons you may want to be covered. Also think about other alternatives to life policies, like simply establishing a savings account. You should know that there are even brokers that specialize in the senior market, and you may find they can save you a lot of time. Otherwise, a good life agent should be able to help you.

We also offer more information and free online insurance quotes here: Life Insurance For Older People.

Do Work At Home Moms Need Life Insurance?

David — Thu, 28 Jul 2011 14:34:31 +0000

Do You Need Life Insurance If You Have No Actual Income?

Work At Home Parents And LIfe Insurance

Nobody needs to tell me the value of a work at home mom and wife! However, since these women do not usually generate an actual income, many families do not think the spouse needs life insurance. They figure that the only reason to get covered is to make sure a family can replace actual income. However, they may be missing the true value of the work that mom does, or the security that a policy can provide.

A recent article from Forbes estimates that stay at home moms would be paid salaries over $100,000 if they actually got paid! By the way, I do not mean to be sexist. The same logic applies to stay at home dads as it does to stay at home moms,

How much would it cost to replace the work that mom does at home?

If your family had to replace the car pool driver, tutor, home maker, cook, shopper, etc. in your family, how hard would that be? Sure, you may be able to get family or friends to pitch in and help, but you cannot rely on free services to replace all the chores that a stay at home parent does.

If the income generating parent is still at work, who will plan meals, go grocery shopping, make sure the kids get to school, help with home work, and keep cob webs off the light fixtures? I assume that some of these services will have to be replaced. This is always a lot more expensive and complex that anybody who is not responsible for these tasks ever thinks!

How To Get Insurance For Stay At Home Moms And Dads

You may decide to add a rider to an existing policy that covers the other parent. On the other hand, just to prevent future problems, it may make more sense to get the stay at home spouse covered with her (or his) own policy. Nobody can ever really predict the future, and this solution gives the spouse coverage no matter what the future brings.

Actually it may be a good idea to add a child rider for kids. Life insurance for children is usually very cheap, and some companies will allow this to be used to get the child his or her own guaranteed coverage when they become adults too!

Simple term or fairly small whole life policies should be fairly cheap for parents who are still in child raising years.

Life insurance quotes online are a fast and simple way to determine how much local companies charge to cover people in your family. You can get individual quotes, quotes for different types of life insurance, or see how much a bundle of coverage costs.

Deciphering Life Insurance

myfreeforum — Sat, 11 Dec 2010 14:52:49 +0000

Obtaining insurance has long been known to be a pretty laborious task; riddled with all sorts of hassles and terminology to try to understand. There may not be anyone who enjoys doing it, and it is known to suck all of the energy out of a person.

In any event, it’s crucial for a person to try to do a good job of shopping for a policy, and skipping it is very dangerous. In some cases, such as auto insurance, it’s mandatory by law in a plethora of countries. With this being the case, people find themselves shopping around to find something that will be there when they need it, but some people honestly don’t spend enough time getting to know their policies, specifically when it comes to the amount of insurance that one may have.

Life insurance is probably the most important of all types of coverage, perhaps taking a backseat to health insurance, but no one wants to really talk about it. We need to perform a good life insurance comparison before we buy!

Why the Hush About Life Insurance?

Namely, people really don’t want to think about death. It’s the end of everything, and people generally get a little somber talking about that. With there being a general social hush on the subject; one can easily determine why people may have inadequate life insurance policies. If it’s something that a person doesn’t want to have at least a fleeting conversation about, they probably won’t make any investments in it until they really need it. Granted, it’s a little understandable for those who do not have dependents, but no one really knows when that could change, and there’s never an early time to obtain insurance. Even some of the people who have life insurance may find that they don’t really have as much as they think they do.

What’s enough Coverage?

There’s no way to determine whether what the right amount of life insurance that one may need, as there are some factors that play a part in the equation. Some of it may depend on what a person may have counting on them, such as a family or any other dependent. What one has to think about is the future, and namely the likelihood of one having a family. It happens to most people, and it’s always best for the person to be thinking ahead. When it comes to the actual amount of coverage, it’s always best to consider the support that the policy will grant to your loved ones. For most, they find that 15 years is sufficient coverage, but that’s just one particular idea. One great way to ascertain how much insurance a person would need would be through the use of a life insurance calculator. They’re helpful in determining how much a person should be purchasing, and they have saved litanies of people a lot of time.

Life insurance is considered by most to be the necessary evil, but it’s assuredly one of the most responsible things that a person can do for the people that they love the most. While it certainly is no easy task, due diligence will make the process sufficiently easier.

How to Make the Task Of Understanding Life Insurance Easier?

You can use online life insurance quote forms. You simply answer some simple questions about yourself, and then let the system match you with good companies and local agents! Let computer systems and licensed professionals help you find the coverage you need! You can find out how much life insurance costs and what type of coverage you need!

Life Settlement Company Investment Scam

FinanceGuy — Sun, 28 Nov 2010 13:58:04 +0000

Texas Lawyer Pleads Guilty to Life Settlement Investment Scam

A lawyer, Mackert, in Spring, Texas has pleaded guilty to a life settlement investment scam.

What Are Senior Life Settlements?

Senior life settlements are transactions where investment groups or companies will purchase permanent policies from older people in exchange for cash which is less than the face value, but more than the owner could get if they sold the policy back to the insurer.

The investment companies make money when the insured people pass away, and they collect the proceeds of the policy. Since they purchased the policies for less than the death benefit, this difference is their profit.

It all sounds like a grim business with a sort of reverse-underwriting. Polices that cover older people, those closer to passing on, are actually more valuabe. But let us be chear that in this case, it was not the policy owners who were scammed. For some seniors or companies that hold policies on older people, there are some advantages to senior life settlements!

The Senior Life Settlement Investment Scam

The problem was the way the fund was marketed to potential investors! The company was pictured as risk free and promised guaranteed double digit returns. The lawyer pleaded guilty to misleading investors, and also to hiding millions of dollars in profit offshore.

Single Premium Life Insurance Explained

admin — Wed, 17 Feb 2010 20:07:40 +0000

Explain Single Premium Life Insurance (SPLI)

As the name implies, single premium life insurance (SPLI) is funded with one large payment. This is different than paying monthly premiums like most of us are used to. Since this is whole life, that one lump sum payment will guarantee that the death benefit will be payed upon the insured person’s death. As with any other life policy, the premium will vary by the insured person’s health and age, the insurance company, and the amount of the death benefit.

Where To Find Single Premium Life Insurance Quotes?

You can go directly to our single premium life insurance quotes. This system allows you to be matched with competitive companies that do business in your local area. The amount of coverage that your single premium will buy will depend upon your age, health, location, and the life insurance company.

Advantages of SPLI

Single premium life insurance policies are usually considered for estate transfers, and are usually done when the policy owner is certain they will not need access to the money for a few years (or ever). If you want to take a sum of money and turn it into a larger inheritance, it may be a good product for you.

It may also be a good product if you may like to have the option to borrow against it, or even cash it in, at some point a few years in the future. And many policies provide an accelerated death benefit, so part of the death benefit can be used if the insured person has a terminal illness or nursing home confinement under the terms of the policy.

Consider a retiree who comes into a lump sum of money he does not need to live on. With that money he could buy several times the value of cash in the face value of their policy. Let us say for this example that $15,000 could by a $60,000 whole life insurance policy which guarantees lifetime coverage.

He could put that $15,000 into a single premium whole life insurance policy. Then he would know that $60,000 would be passed on with his estate at the time of his death.

The cash value of that policy should also grow very quickly, giving the owner some options. The owner could borrow aganst the cash value, or if their situation changes, they could cash it in for the face value. Note that I mentioned the cash value should grow quickly, but the owner will usually lose some cash value if they have to cash it in too soon. I also noted that an SPLI policy is best considered when the money is not needed in the next few years.

Single Premium Life Insurance Benefits

One lump sum payment purchases a guaratneed amount of life insurance coverage that will not go down.
The face value (death benefit) of the policy should be much larger than the paymemt.
The owner has the potential to build up a cash value very quickly. This money can be borrowed against, but that loan may reduce the death benefit amount.
SPLI policies may accept older applicants, up to age 80, because of their ability to get funded very quickly.

Tax Considerations of a MEC

The IRS considers a policy that does not require at least 7 years of payments to be a Modified Endowment Policy. That means that you will lose some tax advantages of regular life poicies. Be sure to consider this before you purchase an SPLI policy.

Disadvantages of Single Premium Life Insurance

This type of policy is not for everybody. Before you make a decision, be sure and consult with an insurance professional so you find the best solution for you, and for your family. Here are some potential SPLI disadvantages to consider.

There could be fees or surrender charges for early withdrawals. Again, these type of policies serve best if the money can be set aside for a few years.
The IRS does not always treat these policies like normal life insurance. Make sure you understand the tax consequences of future policy transactions.

Learn More

You can get quotes or find a local professional: Life Insurance Quotes for Older People

ROP Pays You Back!

admin — Wed, 20 Jan 2010 13:32:08 +0000

Return of Premium (ROP) Gives Back Money

What if you could purchase an insurance policy, be lucky enough not to ever use it, and then get all of your money back at the end. This would seem like a win-win situation. You would be protected, but if you never needed to make a claim, you could get all of your premiums back in a nice check.

Well, this situation does exist in the real world sometimes. You can find return of premium term life insurance policies. You will still purchase your policy to last for a specified amount of time, like 20 or 30 years. Then, when the policy expires, if nobody has collected on the policy, a check comes back for the amount of all of the premiums paid.

An Example of ROP at Work

Consider the situation of a 40 year old man who wants to purchase a 20 year term policy with a death benefit of $500,000. Now understand that premiums vary by age, health, location, etc., but let us just say his premium is $50 a month. You can calculate his total premiums for twenty years by multiplying 50 * 12 * 20 = $12,000.

At the end of his term, he is now 60 years old. He has not passed away, so while he may be happy to be alive, he still has nothing left to do with that life insurance contract.

But let us say he choose to purchase a return of premium rider when he bought his life insurance. Now this additional benefit will cost a bit more, so for the sake of illustration, we will assume it adds ten dollars to his monthly premium. Now you can figure that he paid $14,400. In the end it cost him $2,400 more. than the basic policy without an ROP rider.

But now, instead of having a worthless piece of paper, this man will get back a check for $14,400! This seems like a good incentive to keep a policy in force. Not only do you have coverage for the period of your policy, you also get to look forward to collecting your premums if you survive it. If you do not survive the policy, the normal death benefit would be paid out ot your beneficiaries.

The Cost of Return of Premium Term Life Insurance

You understand that this example just used some figures for illustration. You can run some quick and free quotes to compare life insurance costs.

How Life Insurance Policies Work

admin — Tue, 08 Sep 2009 13:38:30 +0000

A life assurance policyholder pays a certain amount of money in his or her lifetime to an insurance company to safeguard their future or the future of their dependants. People do this by paying the insurance company a premium either at regular intervals or in one sum depending on the type of life assurance policy. In the event of the policyholder’s death, his or her dependants receive the stipulated amount that has been paid for in the policyholder’s lifetime, which helps greatly especially in case their children are young and incapable of looking after themselves.

Note: Term or Whole Life Comparison

Some life assurance policies pay back the premium paid during one’s lifetime in case of illness or any grave injury according to the agreements in the policy. There are various kinds of life assurance policies and before taking one, the policyholder should discuss all the pros and cons at length with their insurance agent, and fill out the life assurance form honestly, as there could be repercussions later such as non-fulfillment of claims.

Different life assurance products can confuse the individual who wants an insurance policy, hence choosing the right agent from a reputed insurance company helps settle qualms arising when making these choices. The most common life assurance product is the term policy, where you receive nearly 80% of your premium in case of any illness befalling you. In the case of death, the beneficiary gets the money that you have insured, provided it is within the period specified by your life assurance policy.

A whole life assurance policy allows the insurance company to invest your money in funds. Since you pay out more than the amount, you insure yourself. These rates change every 10 years and once you cross 65, you may have to pay premiums while the amount invested as stock in your name may or may not yield proportionate dividends. This is not a very popular life assurance policy unless you have many estates and are wealthy enough to want your dependants to reap maximum benefits from the estate.

Mortgage protection insurance and mortgage repayment protection are different types of life assurance products available with life assurance companies, which deal with repayment of loans for your home. There are several options with these types. Get the best life assurance deal as you shop around and always make sure you read the fine print at the bottom of any life assurance policy that you sign, as most often there are hidden catches, not spelt out by the insurance agent. Income protection insurance gives you cash benefits in case you are unable to work due to some serious illness and if you are self employed. The amount is non-taxable as long as your condition does not improve. Critical or serious illness insurance, on the other hand, will pay you a lump sum if you have one of the serious illnesses specified in your life assurance policy at the time of filling out the form. When choosing a policy, make sure you compare the costs against benefits before signing on the dotted line.

Why Compare Life Insurance Again?

admin — Mon, 17 Aug 2009 14:32:01 +0000

Why Compare Life Insurance?

You may be shopping for new coverage, or you may already have a policy, but want to evaluate your premiums. Either way, you should periodically review your coverage and how much you pay for that coverage. Some experts say you should do this every 10 years, and others advise their clients to do it much more often. It may be obvoius why you should shop around if you do not have a policy. But why go to this trouble if you already have a policy?

Life Insurance Premiums are Decreasing!

Premiums are lower than they were a decade ago, but how does that help you?

Well, consider the million dollar policy a 32 year old man purchased because he had a mortgage to pay and young kids to support.

Consider that same man at 47. Fifteen years later he may not need that much coverage. Maybe his mortgage has been paid off, or his kids have already been educated so they can enter the work force themselves. In addition, his own savings may have grown to provide a safety buffer.

In some cases, even though the man is a decade and a half older, it may be prudent to consider reducing the amount and term of the policy! He could compare the premiums for a 15 year term policy for $250K for instance. See, the amount of coverage that may have been right for a younger person with a young family, may be entirely too much for an older person with different needs.

Shopping for Life Insurance

How to compare life insurance costs? If you understand some of the things that insurers consider when they set rates, you will know how long it will take to call around to find competitive rates. Your age, general health, where you live, if you travel overseas, and many more things may be considered by some of the top companies for policy rates.

Our simple and free life insurance quotes can help. It takes less than 5 minutes to fill out a simple form with your basic information, and in return you can get competitive quotes delivered to you!

Save time and money with free life insurance policy quotes.

Life Insurance At Your Age? (Over 50 to Seniors)

admin — Sun, 12 Jul 2009 18:15:09 +0000

Life Insurance For Older People

What kind of life insurance do you want. Learn more about the advantages of whole life or term life for older people.

————————–

Just because you have turned 50, or even 65, does not mean you cannot find affordable life insurance.
When you were younger, you may have had a group policy through your job. Or perhaps you took out a 20 or 30 year term policy and thought that would be enough to get your through your working and raising kids years. That probably sounded like a good plan. After all, you could buy cheaper term with enough of a death benefit to provide for your children and spouse, pay off a mortgage, and provide financial security in case something happened to you.

The thing is, you probably outlived that coverage. That’s what major insurers count on when they sell you those cheaper term policies. Now, just when it is harder to find affordable coverage, you may find that you would still like to provide that same financial security for your loved ones.
Why would an older person even want life insurance?

As we get older, we still find that coverage can be a good part of our financial plans. A spouse may still need our incomes. Sometimes kids do not go out and become independent on their own, and they do need us to provide for them. In fact, many of those kids come home again, and they bring their own kids.
And those mortgages also do not get paid off on schedule all of the time. Sometimes we refinance our home loans, take out a second mortgage, or even move and take on a new mortgage.

Owning a business can give you another big reason to buy coverage at an older age. If the business owner passes away, they need to make sure that there is money to replace their contributions. In addition, only one family member may inherit the company. Other family members may need to be compensated because they do not get to run the business.

Alternatives for older people’s life insurance are on the market these days.

Americans are living longer, and so insurers are more willing to extend coverage to older people. They are also offering lower rates. In fact, rates may be lower now than they were 10 years ago. It is good to know that something is cheaper than it used to be.

You can certainly find many alternatives. Your choices may be limited by several unique factors though. Your age, health, and where you live matter. In addition, you need to find the type of life insurance that will work best for you. It can be really tough to sort through all of the companies and products on the market these days.

You can find online insurance quote forms to help you save time and money. Just fill your own basic information in one time, and then click the submit button. You will be able to sit back and relax because competitive companies will send you their information so you can find the best plans.

We can help you find older people’s life insurance with our safe, fast, and free life insurance quotes.