Life insurance is an important component of financial planning and security that people often don't think about. While it can seem confusing, complex, and even boring, it is necessary if you want to ensure your loved ones can continue their lives without you when you pass away. What is permanent life insurance? Permanent life insurance is the general term for life insurance policies that do not expire. Unlike term life insurance which pays a death benefit for a specific period of years, permanent life insurance lasts the lifetime of whoever is insured, as long as premiums needed are paid. How does a permanent life insurance policy work? Permanent life insurance premiums are used to...
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Buying life insurance to protect your family’s future requires you to make some important choices, including the type of life insurance you need. If you’re a first-time life insurance shopper, chances are you may not know which option may be the right one for you. Below is a breakdown of various life insurance options to help you find the best match. Term life insurance Term life insurance has level premiums that last for a set number of years (the term). This life insurance includes a death benefit in the form of a lump sum of cash that’s paid out to a beneficiary by the life insurance company if you die while this coverage is active. This lump sum can be used for a variety of things,...
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Universal life is a type of permanent life insurance coverage. Like traditional whole life insurance, it offers a tax-deductible cash value component that serves as an investment or savings account. But unlike whole life insurance, which features fixed premiums and guaranteed returns, premiums and returns for universal life can vary. Read more about the best life insurance companies offering both term and permanent policies with Money's expert guide. Table of contents What is universal life insurance and how does it work? Universal life is similar to whole life insurance in that both can last the entire life of the policyholder and have a cash value component — a type of savings...
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What is the difference between whole life and universal life insurance? You’re thinking about life insurance to protect your family. That’s great! The right policy can give you the peace of mind that comes from knowing your loved ones will be safe and able to maintain the life they are accustomed to should something happen to you. We’ll be the first to admit that life insurance choices can be confusing. There are different terms and options and opinions. Don’t let that stop you. While there are dozens of names and ways to offer different life insurance policies, almost all fall into three basic categories: This article will cover the similarities and differences between whole life...
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Term vs. Universal Life Insurance: An Overview Although life insurance comes in various forms, two common types are term life and universal life insurance. The main differences between these are the duration of the term, cash value accumulation, and cost. Term Life Insurance Term life insurance is the most basic insurance policy. It is a life insurance policy that provides coverage for a specific period of time and usually for a fixed premium. Some policies provide coverage for dismemberment and additional coverage for accidental death. If you or your beneficiaries do not make any claims during the term the policy, it will expire. At expiration, some insurers allow for the continuation...
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How can i get life insurance. Universal Life Insurance Universal life insurance is permanent life insurance — that is, it remains in force for your whole life. But universal life insurance has an important difference from other types of permanent insurance: it provides a flexible premium. Universal life insurance policy. That means the policyholder decides how much to put in above a set minimum. By extension, the policyholder also determines the face amount of the policy. Universal life insurance policies accumulate cash value — cash value that grows tax deferred. Guarantees are based on the claims-paying ability of the issuing company. Universal life insurance policies normally...
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Choosing Between Term And Universal Life Insurance Surely anyone who has been in the market to purchase a life insurance policy has run into the confusing array of plans available. The following will give you a brief summary two of the most popular life insurance coverage choices: Choosing between The first thing to understand is that term life insurance is known as “pure” insurance. That means that term life is straight life insurance and does not build any cash value. You can buy this coverage for a certain amount of years, known as the “term,” and once the term is over you may either renew the policy for another set amount of time or simply walk away. The...
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We’re big believers in long-term care insurance (we both own policies), but the premiums can be quite expensive. One relatively recent innovation in the insurance realm is the option of converting a portion of the cash value on a life insurance policy into a long-term care policy. One listener of our radio program recently asked us to outline the pros and cons of converting a portion of his universal life policy’s cash value to a long-term care policy. It’s a topic that’s rife with complexities, and we wanted to clarify what you need to know before utilizing this strategy. An Overview of Universal Life and Long-Term Care Insurance Before delving into the conversion, it’s important to first...
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There are two types of Permanent life insurance: Each policy will last the duration of your life, but there are some significant differences between these two types of life insurance policies. For example: The cost of the insurance itself – including the factors that determine pricing and flexibility of premiums – vary greatly. Universal life insurance offers lower premiums than a whole life insurance policy and you can still get the permanent protection you may need. These concepts can be difficult to understand, so we seek to explain these ideas in an intelligible manner. A Guaranteed Universal Life (GUL) policy will last until a person is 121. It is the most affordable way to get...
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Is Term Life Insurance The Best Option? The use of life insurance and what type to buy is widely debated. Knowing what type of policy to purchase, and how much insurance to carry is critical, as is knowing which will work best for your situation. The first step in determining how much coverage you need is to identify the specific reason you want the coverage. Are you simply covering a debt or obligation, or do you want to replace an income to support loved ones? Now, the second step is to determine what type of coverage you should have by first understanding how long you need or want the coverage to last. Do you only need coverage for a few years, or do you need it long term? Typically the...
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