Term vs Whole

You may have seen ads for final expense insurance policies on TV, or maybe you got a card in the mail or in a magazine aimed at retired people. Many people are confused about what a final expense policy is, and if they should look into purchasing one.

In general, a final expense policy for seniors is a type of a whole life insurance policy. It has a lower face value then other policies, because it is intended to cover funeral costs, with some left over to pay for transportation, settle debts, and in general, leave the survivors with enough cash so they don’t have the double pain of grief and huge bills.

If you, or your parents, do not really have the extra cash to cover a funeral, then a final expense policy can be an affordable way to handle it. It is really awful to show up at the funeral home, after a death, and have to worry about how an average bill of $8,000 will be handled.

In general, monthly premiums are fairly low because the face values are low, and these policies are designed for older people, so they do not ask a lot of intrusive health questions. In fact, some policies are guaranteed issue, and do not ask any health questions! However, they are usually more expensive and may not pay out an immediate benefit, so look into your options before you buy.

final expense insurance, life insurance for seniors, whole life insurance

Share This

Technorati Tags: final expense insurance, life insurance for seniors, whole life insurance

Why Buy Life Insurance On A Child or Grandchild?

As a parent you probably get a lot of offers to buy life insurance on a child or grandchild. However, like many people, you really do not see a good reason to buy life insurance for a person that young. Hopefully, they will live a long life, and right now they do not have the responsibility of other people to support.

However, if you buy a permanent life insurane policy on a child, it will lock them in at a very low rate for the rest of their life. In fact, it would even make sense to buy a policy that can be paid up over a period of 10 or 20 years, and give them the gift of paid up life insurance. Many life insurance companies will also offer a guarantee of an ability to purchase more life insurance at various times without having to show any evidence of insurability. In other words, if the child should develop a health problem later, they will be able to purchase life insurance at a standard rate without going through an underwriting process.

Third, if permanent life insurance is started early, there is a good chance they will build up a cash value ot help your children fund their college education or other plans in the future.

Find No Medical Exam Life Insurance Now! Compare Life Insurance Plans for the Best Rates.

Choose The Right Life Insurance Here.

Share This

Need to Buy Life Insurance?

We found some great life insurance buying tips on the Washington State Department of Insurance. The basic rules will apply for a life insurance purchase in any US state, and probably anywhere in the world where life insurance policies are sold.  This article will also apply to anybody in the market to purchase an annuity, which is also an insurance product, as well as a savings vehicle.

Here are tips for consumers who are in the market for life insurance or an annuity:

Know what you need: The classic and best reason for an individual to buy life insurance is for protection against dying too soon. The person buying life insurance should be primarily concerned with seeing that his or her survivors do not face a financial handicap. There may be other reasons that apply: Life insurance is also purchased to pay estate taxes. Business relationships often require life insurance or can benefit from it, for example. Annuities offer a secure way for consumers to make sure they don’t outlive their money. Beware of anyone who tries to sell you life insurance as an “investment.” Life insurance should be purchased for the protection it will give you.

Term life insurance: Most consumer advocates feel that term insurance is the best life insurance buy. Term is different from “whole life” or “ordinary life” in that you build up no equity, or cash value. In term, you pay each year for the cost of insurance, which typically increases annually as your chances of being alive the next year decline. Most term policies are renewable on an annual basis, and some have level premiums or a decreasing death benefit for a stated period — one, five or ten years, or even to a specified age.

Whole life insurance: Whole, or “ordinary,” life insurance is usually sold with a level premium. In the early years of the policy, the annual premium will be higher than comparable term insurance. (But because its premiums are level, whole life’s annual premiums may eventually be less than term.) Whole life policies build up a cash value that consumers can withdraw or borrow against. There are many variations of whole life. Premiums may be payable for a specified number of years on a limited-payment basis. Consumers also may have the option of a single premium — paying all of the premiums at once with a single lump sum.

Know the company you are buying from: You can check the financial stability of any life insurance company through several reputable national rating companies. Some ratings are available at public libraries. The Commissioner’s staff can verify that a company is authorized to do business in Washington state, and you can also check here to see what kind of complaints have been filed by other consumers against a company. Information on ratings, complaints and licensing is available from Commissioner Kreidler’s toll-free Hot Line at 1-800-562-6900.

Accelerated benefits: Under rules adopted by Insurance Commissioner in 1994, authorized Washington life insurers can issue policies that include the possibility of accelerated benefits. Under these rules, a consumer suffering from a terminal illness can opt to receive discounted benefits prior to death.

Shop around for rates: Life insurance is a competitive marketplace, and much of the competition focuses on price. Don’t hesitate to seek premium quotes from several different companies.

Shop for your own needs: If term insurance fits, that’s what you should shop for. If you want to lower your premium at all costs, you may want to consider using a direct writer — a company that cuts costs by operating without agents. Consider your own convenience, however: Do you want personal contact with an agent? Or if you buy an annuity, how fast can you get to your money in case of an emergency? If you are buying whole life, how fast does your money accumulate? What will the cash value be in one year? Three years? Ten years?

Update your coverage as your circumstances change: Don’t be misled by someone who tells you you should buy additional policies for children as they are born. Children rarely have an income and seldom require life insurance. But your situation may change dramatically from year to year. Review your net worth every few years and reconsider the prospects your survivors may face if you die.

Don’t let yourself get fast-talked into changes: Some life insurance policyholders in recent years have fallen victim to a practice called “twisting” or “churning.” Churning occurs when your coverage is changed only to benefit the seller even though you may suffer a loss in the process. Churning often happens when people with cash-value policies are persuaded to convert their coverage to another policy, often one with a promise of better benefits. The problem is that the cash value of the original policy is raided in order to pay for the new policy. Luckless consumers may not realize until years later that the “higher” benefit policy is actually worth only a fraction of the value of the original policy.

Never buy a policy you don’t understand: If you are given illustrations or booklets, save that material with your policy. If your agent or company cannot explain the policy terms to your satisfaction, shop elsewhere. Make sure you understand the guarantees in your policy (not just the agent’s promises of returns) and the surrender penalties if you choose to drop the policy at any time. These costs are often hidden in a life insurance or annuity policy.

I hope this helps you make an informed purchase of life insurance or annuities

buy life insurance, buy annuities, insurance

Share This

Technorati Tags: buy life insurance, buy annuities, insurance

Life Insurance For Seniors - Guaranteed Vs Simplified Life Insurance For Final Expense And Estates
By Marilyn Katz

If you are over 50, or if you care for an elderly person, you have probably noticed ads for senior life insurance policies. Sometimes these are called guaranteed issue life or simplified issue. Sometimes the products are called final expense or burial policies, or sometimes they are marketed as a way to pass on a tax free estate to survivors. No matter what term is used, these are probably talking about a small face value whole life insurance policy. They are designed to be easy for older people, or people that are not in perfect health,to be able to apply for. By small face value, I mean that they usually provide coverage for $2,500 to $25,000.

A guaranteed issue life insurance policy sounds attractive, and for some people it can be the right choice. Basically, the company uses a waiting period instead of health questions in order to issue the policy. The insured person usually has to survive for a term of two or three years, depending upon the policy. If the person survives that period, then their heirs are entitled to the entire face value of the policy. If not, the beneficiaries will get back the premiums paid plus a set interest rate. If an older person, or a person in imperfect health, cannot be accepted by any other insurance policy, and if they feel they need life insurance, then this is certainly a no-lose contract.

However, guaranteed policies will be the most expensive per every thousand dollars of benefit. The small face value is what makes them affordable. On the other hand, simplified issue life insurance will pay an immediate death benefit. As soon as the policy is issued, the insured person is covered for the whole amount. Premiums will usually be cheaper too.

You will have to answer health questions, but they are not as intrusive as fully underwritten policies. In general, people within the age limits, who have not been diagnosed with a terminal disease and who do not live in a nursing home can qualify.It would be better to have a contract with an immediate death benefit, and with a cheaper premium, if you can qualify for it!

Now consider the reason you might purchase senior life insurance, either for yourself or for aging family members. If you are not clear how funeral expenses would get paid if a person passes away, then a few thousand dollars of coverage may be an affordable way to plan for final expenses. Money can also be used to travel, transporting a body, and to settle debts. Leftover money from the policy can be kept as an inheritance by the beneficiaries. Most of the time, the payout will not be taxed either.

Sometimes people buy these type of policies to make things fair between multiple siblings. Consider an elderly parent with two children. Let us say, for example, that one of the children will inherit a valuable family heirloom. The other child will be names as a beneficiary on a policy so they may have cash instead. In this way, a parent can try to be fair to both children.

Compare no medical exam life insurance for seniors with our fast, safe, and free online quote form! Also read more about guaranteed issue and simplified issue life insurance choices.

http://www.nomedicalexam.net/no-medical-exam-life.html

Article Source: http://EzineArticles.com/?expert=Marilyn_Katz
http://EzineArticles.com/?Life-Insurance-For-Seniors—Guaranteed-Vs-Simplified-Life-Insurance-For-Final-Expense-And-Estates&id=980756

Share This