A lot has been written about whole life insurance. Is it a good or bad type of insurance? It is not so easy to say that. We can now look at some of the bad about and benefits of whole life insurance.

What is whole life insurance?

Whole life insurance may also be recognized as ordinary life, straight life or permanent life insurance.

It is a life insurance policy that provides death protection for the insured person’s entire lifetime. An insurance payout is made to the contract’s beneficiaries when the insured person dies.

It consists primarily of the mortality charge which is the part of your premium that pays for the life insurance coverage. The secondary part of your premium pays for an investment component which builds up a cash value that the policyholder may withdraw or borrow against. The policyholder typically pays a level premium for his whole life, although some policies may differ in this respect.

What may be bad about whole life insurance?

* Life insurance is intended to substitute a paycheck and care for a family that still relies on your income. Most people do not have life insurance after the age of 65.

* Whole life premiums are far more costly than term life insurance premiums.

* Whole life is pricey because you are paying for a life insurance policy as well as an investment.

* The rate of return on a whole life insurance policy is very low when judged against other investment opportunities.

* Whole life insurance should not be used exclusively as an investment.

* Policyholders have no input into the investment management process of a whole life policy.

* It may take at least 10 years for a whole life insurance policy to gain any real cash value.

* Insurance salespeople have a tendency to push a whole life insurance policy because it conveys a bigger commission.

* Using whole life to support college tuition for a child may be unwise.

What may be the benefits of whole life insurance?

* The policyholder often pays a level premium for a whole life policy.

* The tax benefits and cash value is an added bonus when purchasing a whole life policy.

* Most policies also offer a withdrawal clause. This allows the contract holder to terminate her coverage and receive a cash surrender value.

* Some of the money you pay into your whole life insurance policy amasses as guaranteed cash values.

* The income on the cash value of a whole life insurance policy collects tax-deferred.

* The income on the cash value of the policy can be borrowed against in the shape of a policy loan.

* Whole life policies may earn dividends which can result when actual life insurance costs turn out to be less than what was understood in determining the premiums.

* You have lifelong coverage with no future medical exams unless you make a change to your policy.

That was some of the bad about and benefits of whole life insurance policies. If you want to know more I suggest you read up about the subjerct online or ask your local life insurance company.

Guaranteed term life insurance. One of the more loosely used terms when selling most any product is the word “guaranteed”. Sometimes there is a measure of validity to it, sometimes not. Fortunately for the life insurance buyer the phrase “guaranteed term life insurance” is for real. When a life insurance company says that certain values are guaranteed they certainly are…

A life insurance company depends a great deal on reputation and as a result they try to write language in their policies that will stand up to any type of legal scrutiny.

Some of the provisions included in your guaranteed term life insurance policy are as follows:

1) A guaranteed level or decreasing death benefit. This depends on the type of policy chosen.

2) Guaranteed payment upon death, free of income taxes. As long as the law remains as it is this is one of the more attractive benefits of the so called “guaranteed term life insurance policies”.

3) A guaranteed premium for a specific period of time. Some premiums increase after a certain number of years but even the increase is guaranteed.

4) Your term life insurance policy also guarantees that you can reinstate it should it end up in a state of lapse because of nonpayment of premiums. If your health changes you may need to prove insurability all over again. The policy must be reinstated within a certain period of time as stated in the contract itself.

5) Guaranteed term life insurance policies also cannot be taken away from you as long as you pay the premiums. If you own a 10 year term policy it can only be terminated by you within the 10 year period. The insurance company cannot terminate it.

6) Your guaranteed term life insurance policy assures you that if you should die by suicide within a certain number of years, usually two, the proceeds of the policy will be limited to the premiums paid plus interest. After the 2 year period if you should die a suicide the full death benefit will be paid. They force anyone thinking of this to wait at least 2 years. The result is that a person thinking of suicide usually changes his or her mind by that time.

7) If you should elect that your family receive an income instead of a lump sum your life insurance policy can also guarantee this income for life or for a specific period of time.

On the more personal side your life insurance policy can guarantee that your loved ones will always have food to eat, a roof over their heads and clothing to wear. The fact is that your term life insurance policy can guarantee that the lifestyles of the ones you leave behind will change very little, if any at all. This is the true power of your guaranteed term life insurance policy.

9) The businessman can be certain that if a key employee died suddenly the company could go on with their daily business without missing a beat. Your guaranteed term life insurance policy would be used as a kind of buffer while the company readjusts.

10) If a partner or stock holder of a business should die your life insurance policy can be used to provide sufficient cash to buy out the stock, or shares, from the survivors of the deceased. The business will go on and everyone will be aptly compensated.

Your guaranteed term life insurance policy can be an awesome tool. If you own such a policy, for the right amount, you can relax.

Take a look at how some guaranteed term life insurance policies work:

http://www.lifeinsurancehub.net/termlifeinsurancequotes.html

Let’s take a quick look at the dreaded term life insurance premium. The first take-away is that, hey…it’s not that bad! Term life insurance has become incredibly affordable especially compared with other types of life insurance such as whole or variable life. In fact, prices have dropped significantly over the past decade in an increasingly competitive market. Let’s dig a little deeper into what affects term life premiums.

The term life insurance premium is just a fancy insurance word for the amount of money you pay to keep a term insurance policy in effect. It’s your part o f the contract with the carrier. As long as you pay your policy, the coverage will remain in effect for your desired term regardless of health. It is guaranteed renewable in this sense for a fixed period of time. Depending on the life carrier, you typically have the option of paying premium in different ways and there can be a discount to paying for longer amount such as a year versus monthly. The rates given in the quote engine are usually the monthly amount but a discount can be applied for annual payments when you go through the application process. There are various ways to pay your premium depending on the carrier that range from billings to credit card/auto deductible options.

What factors affect the term life insurance premium?

There are three main factors that drive your term life insurance premium amount. Think of a triangle with age at time of enrollment, term length, and amount of coverage. You really can’t control the page part (apart from not procrastinating) but keep in mind that there is a considerable cost to waiting to purchase term life insurance. You will end up paying more in total dollars by waiting. The key then is to find the right “blend” between term length and amount of coverage. You can play around with these variables when you run your instant term life insurance quote in our free engine.

Health condition at time of enrollment

Your general health and pre-existing conditions can affect both your ability to qualify but also your pricing. Factors such as smoking, being overweight, etc can have a bearing on your pricing as the premiums are usually set up among health class such as Preferred, Standard, etc. There may be options for you even with health issues although they might be for lesser amounts and different than the one listed in the quoting engine.

For those who are frustrated with the incessant rate increases from their health insurance carriers, you’ll be pleasantly surprised to find that term life premiums are fixed during the desired term length. This is why it’s so important to purchase life insurance as young as possible. That fixed rate will be higher with each passing year of your life if you wait to purchase term life insurance.

Different carriers have riders available that affect your term life premium. These “riders” are essentially specific add-on benefits to your core life insurance coverage that cost extra premium. For example, you may be able to stop paying premium and keep the policy in effect if disabled. You usually pay an extra amount for each rider. This is really a question of personal preference. Our thought is to buy as much core term life protection (combination of length and amount) as possible with your available budget. An extra $10/monthly might buy you $100K more in coverage and that would be our recommendation. That being said, do not buy more than you can afford over the long haul or it defeats the purpose to lapse coverage when in financial hardship in the future due to over-insuring your life insurance needs. There’s a middle ground there and that is where we recommend purchasing.