Life Insurance Quotes
There are different types of Life Insurance contracts, each serving a different purpose.
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Special Report on Life Insurance
Seventy-five percent of U.S. households agree that life insurance is the best way to protect against the financial consequences of a primary wage earner’s premature death. However, choosing from the many types of life insurance policies that are available can be a difficult process. It comes down to Purpose! A few main categories are described below to help you search for a life insurance policy that is appropriate for you. Is it for protecting the ones you Love, final expense Only, Designing a Tax-Free Retirement, Estate Planning Purposes and more? This information is to provide you a better understanding of Life Insurance. Use this information when you talk with your Insurance Advisor or when you talk with us.
Term Life Insurance
Term life insurance is the most basic and usually the most affordable. Policies can be purchased for a specified period of time. If you die within the time period defined in your policy, the insurance company will pay your beneficiaries the face value of your policy. Policies can usually be bought for short term to 30-year time spans. Annual renewable term insurance usually can be renewed every year without proof of insurability, but the premium may increase with each renewal. Term insurance is useful if you can afford only a low-cost option or you need life insurance only for a certain amount of time (such as until your children graduate from college). Return of Premium is another feature that pays you back after your term expires. Ask your agent the price difference.
Permanent Life Insurance
The other major category is permanent life insurance. You pay a premium for a longer period of time, sometimes most of your life, but there are policies where the policy is “Paid Up” after so many years. Permanent life insurance typically comes with a “Cash Value” savings element. There are three main types of permanent life insurance: whole, universal,and variable.
Whole Life Insurance
This type of permanent life insurance has a premium that stays the same throughout the life of the policy. Although the premiums may seem higher than the risk of death in the early years, these “overpayments” can accumulate cash value and are invested in the company’s general investment portfolio. You may be able to borrow funds from the cash value or surrender your policy for its face value if necessary. Of course, loans and withdrawals will reduce the policy’s death benefit.
Indexed Universal Life Insurance
Universal life coverage goes one step further. You have the same type of coverage and cash value as you would with whole life, but with greater flexibility. Many people use this type of policy for longevity and as a taxed advantaged vehicle. Once money has accumulated in your cash-value account, you may be able to vary the frequency, as well as the amount, of your premiums. In fact, it may be possible to structure the policy so that the invested cash value eventually covers your premium costs completely. Of course, it’s important to remember that altering your premiums may decrease the value of the death benefit. Ask your agent what the difference is between Target Premium and Minimum premium. It’s simple. Minimum is the amount you pay to keep your policy in-force for entire life usually quoted to ages 95 to 120. Target amount is what the maximum allowed according to tax code while building up the cash value. By the way, the cash value is calculated based on an indexed strategy that allows the benefit of upside in the Market without taking on the risk of actually owning any underlying stock. In other words, you get credit tide to the S&P Index (usually 10% to 16%) during a bull market, locking in the gains and PROTECTED when there is a market loss ….Never having to participate on the downside. Your interest is taxed deferred during your accumulation period and tax-free during retirement. Great option for supplementing a retirement.
Variable Life Insurance
With variable life insurance, you receive the same death protection as with other types of permanent life insurance, but you are given control over how your cash value is invested. You have the option of investing your cash value in stocks, bonds, or money market funds. The value of your policy has the potential to grow more quickly, but you also take on the Risk of Market Losses. If your investments do not perform well, your cash value and the death benefit may decrease. However, some policies provide a guarantee that your death benefit will not fall below a certain level. The premiums for this type of insurance are fixed and you cannot change them in relation to the size of your cash-value account. Any guarantees are contingent on the claims-paying ability of the issuing company. Variable universal life combines the features of variable and universal life insurance, giving you the investment options as well as the ability to adjust your premiums and death benefit. As with most financial decisions, there are expenses associated with life insurance. Policies commonly have mortality and expense charges. This will be illustrated when you request what a plan looks like. All insurance companies require you approve an illustration prior to having a policy issued.When selecting a life insurance policy, make sure to examine all your options, as well as the positives and negatives of each type, in order to choose a policy that suits your needs.
When you purchase or refinance a home is usually an appropriate time to ask an insurance professional what your options are for protecting your home for your family if there were a death, disability, or job loss. Some of these policies can be purchased with No Exam, but I would recommend a fully underwritten policy if you have the health to qualify.This positions you to qualify for maximum coverage and leverage your premium. For example, if you were age 30 and wanting to receive a protection plan to pay off your $150,000 house, you might want to see the numbers comparing a No-Exam policy and a fully underwritten one. We do this for every applicant so they understand and have choices.
Final Expense Insurance
This for the most part is a NO-Medical exam type of policy designed for convenience and for those who don't want to answer a load of questions about their health. Insurance companies can afford the risk because the amount of coverage is usually limited from $2000 to $35,000. A no exam policy is available to purchase up to the age of 85. This is typically a permanent policy (whole-life) contract that lasts a life time. Usually there is a level payment where premium requirement is locked in and never increases, while the death benefit maintains its original amount regardless of future health conditions. You can purchase this type of policy for a parent as an example. We see many cases where the Children, say age 50, purchases a policy for a parent ,say age 75. The policy in this case is used for a Funeral and Burial coverage with a death benefit to the Beneficiaries tax free (in this case owner is same person) so the financial burden is eliminated from the children. We also ask, would it be easier to pay 50 dollars per month or to come up with $7,000 to $10,000 when the unexpected happens to Mom or Dad. This plan also has a Free Funeral Assisting program that helps at the time of need. And lastly, if the for any reason there is a need to use any of the cash value inside the policy, it is there for you.
Protect the ones you Love.