Should I Buy Whole Life Insurance Or Term Life Insurance?

Both whole and term life insurance policies are beneficial for consumers. Proper financial planning for most individuals and families will include life insurance in order to provide guarantees for the beneficiaries. In most cases, term life will provide the needed liquidity in times of need, but whole life will also provide needed benefits in certain situations.

Term Life Insurance

Term life has quite a few advantages and the most obvious is cost. Families can purchase policies with large face amounts for pennies on the dollar. These benefits will provide loved ones with funds to pay for mortgage expenses, raising children, tuition, debt, and everyday living expenses.

Term life literally buys time. Policies are usually purchased to cover a 20 or 30 year term. Conceivably, after this term has expired, the insured would have less debt, children would be young adults, and the family would be stronger financially overall.

However, term life will eventually expire and is quite expensive to convert to whole life. Should there still be a need for insurance after the end of the term, then the proposed insured would pay much more for a similar policy. Life policies are always much less expensive when for the young and healthy. If the insured has very poor health, then he or she may no longer qualify medically for life insurance.

Whole Life

Whole life is advantageous as it provides benefits for the entire life of the insured. Consumers need not worry about their future insurability as long as they pay their premiums. And a well structured whole life policy will eventually be a paid up life policy. Premiums will no longer be due and the interest earned will pay for the cost of insurance itself.

Consumers can borrow against their whole life policies and use the cash value in times of need. In this way, whole life plans are much more like an investment than term life. Additionally, the internal cash value can always be used to fund a single premium paid up policy. The face amount would be less, but premiums would no longer be charged by the insurer.

Whole life plans work very well to provide for known future obligations like estate and inheritance taxes. Life insurance can be setup outside of the estate and provide needed liquidity for tax, business, and personal obligations. Smaller final expense policies are always funded by whole life insurance.

However, these polices can be expensive and if they are not properly funded in the present or the future, then they can become a financial burden. In some cases, a whole life policy could lapse and become worthless to the owner and the beneficiary if premiums are underestimated or simply ignored.

In all, both whole and term life have a place in any financial plan. It is wise to discuss present and future needs with an agent and to perform a life insurance needs analysis. With proper planning, consumers will have peace of mind knowing that their obligations will be accounted for.

Where Can I Buy Cheap Life Insurance?

Because life insurance coverage is so important, most people consider where they should purchase it from. Several options are available while purchasing a policy. An individual can acquire they coverage desired via local brokers, life insurance companies or directly from the web.

To uncover the best deals and rates requires a great deal of research. Become an insurance rep and help people decide what policy would work best for them. Consumers can now purchase insurance by contacting a salesperson personally, or via email or telephone.

Prior to choosing a company to purchase policies from, it is very important to verify that the organization is sanctioned by your state’s insurance commissioner and BBB.

The internet is the greatest source of all the needed information. The simplest, most reliable, and best means of finding and buying good life insurance is online. A wealth of information can be found on the internet, along with quick access to accurate quotes. There are many businesses that are listed in the online industry directories. These can also help you to revise, equate, and buy a fitting policy for your state

There are many sites online that provide searches for life insurance plans. Here are the websites that disclose ratings and policy information of the major companies. The organizations listed here provide life coverage policies and have similar fundamentals; they all meet the needs of customers. Nevertheless, they each are different in coverage, exceptions and terms.

Some of the interne tinsurers are: Metropolitan Life Insurance Company, Transamerica Occidental Insurance Company, American General Insurance Company, CIGNA and Aetna.

These insurance agencies deal with many forms of life insurance. Each company will have their own website where you can check ratings and information about life insurance. Before purchasing, customers should compare and find the least expensive plan with the need coverage on these sites.

Dependable applications and worry-not management of policies are some unique things that Metropolitan Life Insurance Company presents. For monitory planning their solution and services are the best. MetLife provides policies in Asia and Europe in their role as members of the Reinsurance Group of America.

(AIG) (AIG) leads the way in handling such economical services as insurance, savings, and retreat planning. The company will cover all international service in North and Latin America, Asia and Europe. AIG’s affordable rates represent a 75% discount in prices on these insurance policies. Over the internet quotes make shopping a lot less time consuming and infinitely quicker.

Term, whole, and universal life insurance policies are available at great rates from Transamerica Occidental Life. Other online companies who offer cheaper rates for coverage are Aetna and Cigna.

There exist some online life insurance websites which assist individuals which purchasing policies. These websites can be helpful for figuring out where to purchase it. Visit the websites below to get moving in the correct direction. The quotes from major life insurers will be compared as listed above.

Dividend Paying Whole Life Insurance – Understanding What Sets it Apart

Whole Life Insurance, Universal Life, Variable Life, Term…with such an array of life insurance options available, it’s easy to get lost in the confusion of what type of insurance is best for your life circumstances. Let’s start by looking at the pros and cons of each type of life insurance policy.

Term Life Insurance
The biggest upside of term insurance is that you get life insurance at very inexpensive rates, at least in the beginning. Term life insurance is very cheap if you buy it young. And for the first years of your policy it will remain inexpensive. But as you age, and as your actuarial factors change, your premiums will increase–sometimes dramatically.

Most people either drop or convert their policy to permanent life insurance when this happens. In fact, a 1993 Penn State University study found that only 1% of all term life policies were ever paid out. In truth, term life insurance is really designed for one benefit–to provide a cash settlement for your family in the event of your death. This is why term life insurance is often referred to as renting life insurance versus owning. It can be a great buffer against unforeseen tragedies, and can, in the short term, provide necessary, inexpensive coverage. But as a long-term solution, it doesn’t hold up.

Universal Life and Variable Universal Life
Universal life coverages combine the benefits of whole life insurance with some other flexible features. Like whole life policies, universal life allows you to accumulate cash on a tax-deferred basis. The cash you contribute will be invested by your insurance company and the profit from those investments are applied to the cash values of your policy tax-free. Investments are handled by the insurance company and are usually in bonds and money market funds. Investment profits can sometimes be applied toward premiums; the flipside of that being that in years of poor investment performance, your premiums could increase.

Variable Universal Life is universal life but it allows you to invest your cash values in the stock market. Essentially it puts you in control; you’ll choose where your cash values are invested and all earnings within the policy are tax free. Because the stock market historically outperforms other investments, the potential for greater returns is significant.

But the stock market is volatile and cash values within this type of policy can fluctuate up or down depending on how the markets are performing. Many of these policies are sold using illustrated returns that are truly not indicative of what actually happens. In 2008, when markets were at all-time lows, sales of both universal life and variable universal life insurance dropped off considerably while people sought safer investments and either the guarantees of whole life or the cheap cost of term life insurance.

Additionally, the cost of these types of insurance is expensive and they do not offer the best protection or guarantees in the long term. The internal cost of the life insurance within these policies is often very steep and can offset the investment gains.

Whole Life Insurance and the Dividend-Paying Difference
Whole life insurance is also called permanent life insurance. You can also say it’s, “What you see is what you get.” That is, what’s illustrated in the contract is guaranteed to happen. You pay a set premium for the duration of the policy and upon your death, your beneficiaries will receive the exact amount of your policy’s stated death benefits. Like other cash accumulating life policies, the cash values within your whole life policy grow tax free.

But even whole life policies can vary in what they offer. Dividend-paying whole life insurance, for instance, provides the safety and security of whole life, while also providing performance-based dividends. A dividend paying whole life policy will pay dividends to its policyholders based on the company’s annual profits. Like universal life policies, the company makes investments for policyholders, using the paid premiums. But there are some important differences.

With dividend paying whole life policies, investments are made in very safe financial instruments such as bonds, and they also diversify by industry, maturity & geography. This keeps costs and risks very low, and profits very steady.

As the cash values of a dividend paying whole life policy accumulate, policyholders are able, and even encouraged, to borrow money from the account for personal financing. This is often called self-banking or the Infinite Banking System. The Infinite Banking system’s whole life policy is structured to maximize liquid cash values instead of concentrating on the death benefit. Which means you can enjoy your money now and still leave a financial legacy for your heirs.

What the Infinite Banking System does is make you the bank. You will save with your bank (premiums), you will borrow from your bank (tax free), and when you pay interest on your personal loans, you’ll be paying yourself. So instead of paying out interest to a bank or other financial institution, you make money on yourself. The dividend-paying whole life insurance policy provides the financial structure to make this concept possible.

There are numerous other benefits associated with dividend-paying whole life and the Infinite Banking Concept. Cash values within your policy accumulate free of tax. Distributions from your cash value via personal loans are also tax free. Withdrawals from the policy can be made tax-free up to your basis, or the amount you have contributed to the policy. Additionally, the death benefit proceeds pass to your heirs income tax-free.

The Company You Keep…
With these types of insurance policies, it is wisest to choose a mutual company as opposed to a company traded on the stock market. In a mutual company, the policyholders are the owners. So, the policyholders will be the first in line to benefit from strong company performance.

A stock company, on the other hand, is owned by its stockholders. It will be run by a board of directors who are trying to get the best return on investment for their stockholders, not their policy owners. This can make a huge difference in investment profits and dividend earnings.

Safeguard One’s Retirement With a Whole Life Insurance Policy

Whole life insurance is one of the best investments that everyone should take into consideration. Many people put their hard-earned money into many investment schemes and tend to overlook the importance of getting an insurance policy for themselves and their family. This is one investment that is sure to bring good returns and yet there are not many who invest in it. Investing in whole life insurance is actually a good option especially when your retirement is in the horizon.

One of the reasons why whole life insurance is an attractive investment is the fact that insured people do enjoy many tax benefits depending upon the law of the land they live in. Preferential tax treatments are awarded to whole life insurance policies under the internal revenue code. This basically dictates that the funds coming from death claims will not be subjected to income tax.

As mentioned earlier, death claims paid to beneficiaries under an insurance policy are not subject to tax. The same goes for any increase in cash value that an insurance policy may accumulate during its existence. The withdrawals and loan proceeds from the insurance are also tax-free for as long as that the insurance policy is in force. It is only when the policy is surrendered that taxes are imposed. This is why it is advisable for the whole life insurance policy to not be cashed in before its maturity or before the insured reaches the age of 60.

The premium rates for these policies are based on death benefits at age 100 or 120 which make them quite low and affordable. Interests on the paid premium are then credited to the plan as added cash value, which form the basis for the insurance company, to pay dividends or be used to increase the value of the insurance at the option of the insured.

As an additional service of the company, estimates on the values of the insurance based on one’s data like age, health condition and other factors can be done for any interested parties. The amount of the premium based on the data supplied is then calculated and the amount of interest that would be earned through premium payments are also provided to the insurer for his or her consideration.

The advantage of a this policy used as an investment is that the accumulated cash value earns interest at a fixed rate and the cash dividends paid by the company are added into the value of the policy itself. The added value on the insurance is not subject to garnishment by creditors and is also protected in many states as long as its classification is maintained as a “whole life insurance”. The insurer must make sure that the insurance is not modified as an endowment contract, in which case there is a 10% tax penalty for cash withdrawals made by the insured before his 60th Birthday.

So should you consider it? By all means, yes. It isn’t just for the money that the policy would eventually earn. It is also for your family’s security in the future.

Top Reasons International Health Insurance Claims Are Declined

Receiving medical care is a stressful enough time in anybody’s life; but imagine needing treatment whilst living overseas but your health insurance company says that the claim is not covered and that they will not pay.

NowCompare, an international insurance comparison website has looked at claims made by expatriates from around the World to see what are the most frequently denied claims.

Policy limitations: The top reason for a claim denial within the global community is not that the claim itself is excluded but the amount the claim is for is not covered by the health insurance policy.

Expatriates are often subject to higher medical costs when they are living outside of their country of citizenship and should make sure that they have an appropriate insurance plan in place to cater for these costs. Arranging a local plan may not be sufficient for an expat and they should look to invest in an international private medical insurance coverage for themselves.

Pre-existing Medical Conditions: A pre-existing medical condition is a condition that you had prior to buying your health insurance and more often than not, international health insurance companies from around the World will not cover these at all.

This can be a confusing exclusion on many insurance plans as the definition can change from company to company. Make sure you are open and honest about your previous medical history and if in doubt, ask! Whether it is covered or not, you need to know what risks you are exposed to whilst living overseas.

Medical Necessity: Health insurance companies will often question whether medical treatment is required or not or even if the care will have any bearing on the wellbeing of the patient. Many insurance policy wordings will have exclusion relating to cosmetic treatment, holistic treatment or may blanket exclude anything they deem unnecessary with the term “medical necessity.”

Medical necessity is debatable and if the insurance company declines your claim on this basis and you feel it is unfair, don’t give up; It is sometimes a case of the insurance company having not been informed of how necessary the treat actually was. Ask the treating doctor to explain it clearer in a way that relates to your overall wellbeing and the symptoms you were suffering from.

Health insurance companies often have a bad reputation for wanting to get out of paying a claim. On the whole, this is underserved and the companies can be reasonable and will authorize payment if there is cover in place. One simple rule is communication; if you are concerned about anything discuss it with the company prior to buying the insurance. If you need treatment, advise them beforehand and they will be able to confirm the coverage under the policy or even guarantee it directly with the medical facility.