Term life insurance is a life insurance plan that offers a specified amount of coverage for a specified period of time. The term of a term life insurance plan is typically from one to thirty years. Many term life plans last until the policyholder dies, at which time the policy expires. Term life insurance is cheaper than whole life insurance because the premiums are based only on the age of the insured at the time of purchase and not on the life expectancy of the insured.
Universal life insurance is a kind of variable life insurance that allows you to decide how much money you want to put into the insurance. The flexibility enables you to adjust your premiums according to fluctuations in the value of the investments you have chosen. Universal life insurance has a built-in savings component that can be withdrawn at any time without penalty or additional fees. Because of its flexible premiums, it is a good choice for many investors.
A universal life insurance policy would provide you with flexibility when it comes to the amount of money you want to contribute and the kinds of investments you would prefer to use. The premiums paid would go directly to your beneficiaries, leaving you with no tax liability. Premium payments would be tax-deductible to you and applied towards your death benefit. In most cases, the death benefit is equal to the remaining life expectancy of the insured.
A life insurance policy is either fixed or adjustable. With a fixed policy, as long as the premium payments are made and the insured does not become deceased during the contracted term, the insurance will continue to pay the death benefit. This type of life policy usually has a higher premium than the Adjustable Life Policy because the insurer trusts that you will not become ineligible for benefits during the contract. If you become ineligible, the insurer can choose not to renew the contract with you. Adjustable life policies remain in force until they are cancelled by the insurance company because of a change in financial circumstances.
Generally, a policyholder must visit an underwriting department in an insurance company to get the appropriate coverage. An underwriter will examine the physical appearance of the insured, review medical records, take demographic information, and review the financial history of the insured. He will also take other factors into consideration, including: the health of the insured, his age, whether he smokes, his driving record, his claims history, and whether he is a smoker. Once the underwriter has determined that the insured is eligible for coverage, he will recommend an appropriate level of bright house insurance to the insured.
Bright house coverage is not considered taxable. However, it is important to understand how premiums are assessed for it. If you purchase a policy from a high-risk broker, he may need to pay the difference between what you pay for life insurance and what the premium would cost you if you purchased it directly from the insurer. The amount that the broker pays to the insurer may be a lot more than the amount he could actually earn through your policy. A financial professional may need to talk to his insurer to get the right pricing on this issue.
If you have a high risk occupation or if you go to unusual lengths to get rich, you might have to pay more for your life insurance policies. If you are married or have young family members, your premiums will be higher. If you are a smoker, you will pay more than someone who does not smoke. The reason for this is that cigarettes and cigars contain more tar and nicotine than do chewing tobacco and pipes, and they also provide nicotine, which is highly addictive.
If you are close to death and have a lasting financial investment, your heirs will have less time and money to use to pay off your debts and have more cash to grow cash value. Your beneficiaries will get your entire estate, but they might have to divide the inheritance among your other creditors, or sell their home or other property to pay off their debts. Your premiums will grow in cash value much faster if you leave a huge estate behind for your surviving loved ones to split with you after your death. This is one way that permanent life insurance may be able to help you grow cash value.