Term insurance provides coverage for a pre-specified period. For example, term insurance is designed to protect a mortgage or provide income for your family in case of your death. You pay the term insurance premium each month and as long as you pay the premium your policy will stay in force. Once the contract reaches maturity (usually in 10 years) you need to renew your policy at a higher price. If you die while you’re paying the premium your estate gets a large sum of money.

In contrast, permanent or whole life insurance remains in force until you die. You pay the premium on a monthly basis for a pre-specified term, which can range between 10 to 20 years. A portion of your monthly payment pays the insurance and the life insurance company that provided the insurance invests the remainder. Eventually you don’t pay any premiums but your estate still receives a large payment upon death.

Whole life polices have been criticized because their investment returns are low. Thus you were often advised to buy life insurance protection with a term policy and invest the difference between term and whole life payments in a separate investment vehicle, such as mutual funds, stocks, or bonds. Once you have built up a large pool of assets you don’t need the insurance because the assets will provide security and stability in the event of an unexpected death.

However, there is a new, more flexible product called universal life insurance. While the life insurance company controls the savings in a whole life policy, the savings in a universal life plan are owned and controlled by the policyholder. Insurance companies offer a large variety of investment options for this savings component, including mutual funds. Thus, you have the ability to meet your life insurance needs and increase your return on investment.

The major advantage of a universal life policy is tax-advantaged growth. When you pay the policy premium, a portion of the premium pays for the insurance and a portion is invested. However, when you are ready to withdraw the money from your investment, your cost basis ( the portion not subject to tax) is higher with a universal life policy. The cost base for a universal policy is equal to the sum of all your premiums – the amount of money you have invested plus the money you have used to buy life insurance. This is very useful because increasing your cost base will ensure you pay less tax once you sell your investments within the universal life policy.

Universal life insurance provides a powerful combination of life insurance and tax-advantaged investment opportunities. Investors should realize that universal life insurance premiums work twice as hard as other premiums. They should also know that choosing the right product is an important element in the overall success of this strategy. Finally, the benefits of this strategy are magnified if you are in a higher tax bracket.

About the author: Tony Reed is the author of Life insurance as an investment, please visit his website Life Insurance for more information.

This article is free for republishing as long as you leave the article title, author name, body and resource box intact (means NO changes) with the links made active.

Life is mysterious in that at any time anyone of us can fall into the hands of fate. When sickness knocks on your door, the one question you will need to ask, is do I have enough coverage to support my medical needs and my families? needs during the trial? Did you purchase enough coverage that will provide Joint plans with individual cash sums?

It is possible to have different levels of coverage when there is more than one person involved. Joint Life Plans will provide ?variable levels? of different coverage while each policyholder has their level of coverage. Joint Life Plans cover will only cover the initial policyholder. In other words if you become ill and pass on, then the Joint Holder will not have coverage when it is needed. Therefore, if you become ill and die, then your partner will need his/her own coverage, and if the person has aged, or deteriorated during that term of your coverage, then companies may not cover the mate. If coverage is available, you can bet the Premiums alone will create additional health problems, due to the surmounting stress of financial problems. The Single Coverage Plans may cost a few dollars more per individual, however, when the family needs that helping hand the extra cost will payoff. If the policyholder holding the Joint plan passes then the policy will expire.

Life Insurance differs from Critical Illness Coverage. During the term of the activate policy, if the policyholder falls ill and passes on, then the mate will receive a ?tax-free? hefty sum of cash. Since the policies are designed to offer a measure of protection against a person?s life, the policy will cover the person if he/she falls critically ill for any reason. The Policies will provide money for burials, thus your mate or family members will rest, knowing the cash is there to help them avoid debt. The policies often payout almost immediately once the claim is filed, therefore having the cash now can help later when your family is preparing burial arrangements.

A word of caution is that some insurance coverage will not provide coverage further than burial arrangements. Few Life Insurance Policies may cover a determined level of terminal ills, but may not provide Mortgage coverage if you should become ill and/or die. Many Insurance plans for Life have ?Terminal Illness Coverage? included, however, some companies my not attach the plan. Thus you may want to ask questions pertaining to terminal ill and critical ill when applying for Life Insurance. In addition, make sure the company explains the Premiums and additional cost for the extra coverage thoroughly.

Furthermore, if you own a home, currently paying Mortgage you may want to consider mortgage plans that will also provide a measure of coverage when times are hard. The Repayment and Interest Only Mortgages may be the first place you look, however, you should only consider these options if you have only Life Insurance. On the other hand, if you have combined Life and Critical Illness Coverage then you won?t need to worry about mortgage. Many Critical Illness plans will pay expenses, including mortgage, burial, medical treatment and procedures, college tuition for children, adjustments for medical purposes to both, home and car, vacations, and more.

Critical Illness Plans will also cover your families expenses (providing you included them in the plan) if you should fall ill and need long-term medical treatment. The family will need cash to pay survival cost, trips to the hospital if in-care treatment is required, hotel fees, and other expenses they will need to visit you while you are away. Nurses may also be needed to visit the home if you are ill. Thus, having Critical Illness Coverage will benefit you when the nurse visits your home, since you won?t need to worry about the price she charges. Finally, Critical Illness Policies will often cover more than ?20? illnesses, therefore, providing you haven?t contacted a disease or illness that scientist hasn?t heard of, you will have coverage for both you and your family in times of despair.

Authored by Michael Bens. For more great information about all forms of insurance visit our free online insurance publication the Gabae Insurance Source to find the information you’re looking for!

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When considering life insurance, you?re planning and preparing for an event most of us would rather not think about. But life insurance represents a critical step in managing your personal finances and ensuring your family?s well-being.

The Two Approaches to Life Insurance

You can use one of two approaches to estimate how much life insurance you should buy: the needs approach or the replacement-income approach. Using the needs approach, you calculate the amount of life insurance necessary to cover your family?s financial needs if you die. Using the replacement-income approach, you calculate the amount of life insurance you need to equal the income your family will lose. Let?s look briefly at each approach.

You need how much?

Using the needs approach, you add up the amounts that represent all the needs your family will have after your death, including funeral and burial costs, uninsured medical expenses, and estate taxes. However, your family depends on you to pay for other needs, such as your child?s college tuition, business or personal debts, and food and housing expenses over time.

The needs approach is somewhat limiting. The task of identifying and tallying family needs is difficult, and separating the true needs of your family from what you want for them is often impossible.

Replacing Income

Using the replacement-income approach for estimating life insurance requirements, you calculate the life insurance proceeds that would replace your earnings over a specified number of years after your death.

Life insurance companies sometimes approximate your replacement income at four or five times your annual income. A more precise estimation considers the actual amount your family members need annually, the number of years for which they will need this amount, and the interest rate your family will earn on the life insurance proceeds, as well as inflation over the years during which your family draws on the life insurance proceeds.

Note: Do remember as you quantify the income you want to replace that Social Security provides generous survivors benefits if you?ve qualified. These benefits can easily total $2,000 a month or more.

Calculating Replacement-Income Amounts with Excel

If you?ve got access to a computer running Microsoft Excel, the popular spreadsheet program, you can use your computer to calculate the amount of insurance you need to replace a specified number of years of income. Suppose, for example, that you want to buy enough life insurance to replace the income from a $50,000-a-year job for 15 years. If you figure your family will earn 5% on the life insurance proceeds should the worst case scenario occur, you enter the following formula into a cell in an Excel workbook to calculate the replacement income life insurance amount:

=-PV(5%,15,50000)

Excel returns the formula result 518,982.90 indicating that you would need roughly $520,000 of life insurance, invested at 5%, to payout $50,000 a year for 15 years.

Two Calculation Tips

If you want to factor in inflation because you?re trying to replace income over a long period of time, you should use a real rate of return rather a regular, or nominal, rate of return.

To calculate a real rate of return, subtract the inflation rate from the interest rate in the formula. For example, if you expect 2% inflation, you could replace the formula shown earlier with this formula:

=-PV(5%-2%,15,50000)

Here?s a final calculation tip: You probably want to round up your number. For example, if the formula provided earlier returns the value 518982.90, you might want to round up this value to $600,000. Or $750,000.

Bellevue WA certified public accountant & author Stephen L. Nelson CPA has written more than 150 books. His bestselling book is Quicken for Dummies, which sold more than 1,000,000 copies. His books have sold more than 4,000,000 copies in English and have been translated into more than a dozen other languages.

Term life insurance is the easiest type of life insurance to understand. To put it simply, the insured person pays a minimal premium per thousand dollars of coverage on an annual, semi annual, quarterly or monthly basis. If he or she dies within the term of the policy, the life insurance company will pay the beneficiary the face value of the policy.

Distinctive Features of Term Life Insurance

To better understand some of the distinctive features of term life insurance consider the following points:

First, term life insurance is pure insurance because when you purchase a term insurance policy you are only buying a death benefit. Unlike with other types of permanent insurance such as whole life, universal life, and variable universal life, there is no additional cash value built up with this kind of policy. Term insurance only gives you a specific death benefit.

Second, the coverage is for a defined period of time (the term) such as 1 year, 5 years, 10 years, 15 years, and so on. Once the policy is in force, it only remains in force until the end of the term — assuming you pay the premiums, of course.

Third, most term insurance policies are renewable at the end of the term. With what is known as Level Term Life Insurance, the death benefit remains the same throughout the term of the policy, but since the insured person is getting older, the premium will gradually increase. As time goes by the cost of a level term insurance policy may become greater than you are willing to pay for a simple death benefit. An alternative is the Decreasing Term Life Insurance policy in which the premium remains the same, but the death benefit goes down as time goes by.

Fourth, most term policies can be converted to permanent policies within a specific number of years. If you decide it is important to retain the insurance coverage, converting may be something you should plan for. You can anticipate the accelerating cost of term insurance premiums and convert your policy before the premiums become prohibitively high. It is true that in the short term the premium will usually be higher than if you stayed with the term policy. But over the long term this difference will decrease because of the rapid acceleration of the term insurance premium as you get older. A permanent policy also accumulates cash value which increases the total death benefit paid to your beneficiary.

Popular Uses of Term Life Insurance

Term life insurance is most appropriate whenever you want to protect your beneficiaries from a sudden financial burden as the result of your death. Here are some of the most common uses of term life insurance.

Personal Costs Due to Death – When a spouse or family member dies there will be immediate costs. Many people purchase a relatively small term life insurance policy to cover these costs.

Mortgage Insurance – Banks and financial institutions often insist that mortgage holders retain a term life insurance policy sufficient to pay out their mortgage. Such policies make the bank the beneficiary of the policy. If the mortgage holder should happen to die before the mortgage is paid off, the insurance policy will pay it out. This is also a great benefit to a spouse whose earning power will likely be decreased due to the death of his or her partner.

Business Partner Insurance – Term insurance is also used by business people to cover outstanding loans with their bank, or to purchase a deceased partner’s shares on death, if they had an agreement to do so. Most partnerships have an agreement of this sort, and the policy premiums are paid by the business.

Key Person Insurance – When a company loses key individuals due to death, this can often result in hardship to the company. Key person insurance is purchased by the company for any individual it deems to be key. The company itself is made the beneficiary of the policy. So when a key person dies, the company receives a cash injection to handle the problems associated with replacing that person.

Getting a Term Life Insurance Quote

Here are some things to look for when getting a quote for term life insurance:

1. The cheapest rate today will not be the cheapest rate tomorrow. For instance, the cheapest premium today will likely be for a Yearly Renewable Term policy. This policy is renewed every year at which time your premium is also adjusted upwards. This is fine if you intend to convert to a longer term solution (permanent insurance) in a year or two, or if you have a very short term requirement for insurance. But if you think you will need this insurance for a longer period, you would be better to commit to something like a Ten Year Term Policy. This locks your premium and death benefit in for ten years. Your rates will not increase until you renew.

2. Compare coverage and premium projections for different policies. Think about the long term and get the coverage that saves you money in the long run.

3. Make sure you completely understand the conversion options built into the different policies you are considering. Most policies will let you convert part or all of your term insurance into permanent insurance within a specific period of time, and without the need of a medical examination.

4. For some situations you should consider options such as Decreasing Term Life Insurance in which the death benefit decreases as time goes by. This makes sense if the policy is being used to cover a mortgage or business loan.

Term life insurance is not the answer to all life insurance requirements, but it should be part of a sound plan for every person’s financial future.

For online insurance quotes and more information about Term Life Insurance and all other kinds of Life Insurance, visit LifeInsuranceHub.net

Rick Hendershot is a writer and publisher of the Linknet Publishing Network. For article writing and distribution services see Linknet Article Program. For another very cost effective way to enhance your search engine rankings, see Power Listings.

Some folks that are young between the ages of 20 years old and 40 years old take their mortality for granted. Why buy life insurance? I don?t plan to die for another 30 to 40 years many claim. Well, let me tell you a tragic story that will leave you speechless.

My dear friend Frank was a good man with 5 children and his wife was pregnant with number 6. He worked very hard to support is beautiful family. The love they shared was more precious then gold or fine diamonds. They were truly a happy family even through the hardest times imaginable. Well, Frank was not a rich man, but he was young. He was in his early 40?s and he just like most young men never gave thought to his uneventful demise. Then one day the unthinkable happened. While working under his car the jack gave way and crushed him to death. This was unforeseen and he was unprepared. His wife was left alone with 5 children while pregnant with number 6. She obviously could not work and he was her only means of support. This tragic event caught this family totally by surprise and now they will lose more than just Frank.

This happens to thousands every year. Is it that most people don?t want life insurance? Is it that they can?t afford life insurance? Whatever the case may be we need it. Accidents happen all the time and if we are not prepared the devastation can be catastrophic. Take the victims of Hurricane Katrina. They saw it coming, but thousands were not prepared for the aftermath. The horrible devastation of 9/11 left hundreds of family?s without means of support and this was not for seen. My point is that we need to take responsibility for our uneventful deaths while we can. If you don?t have life insurance by all means get it. If you say that you can?t afford it. I say that you can?t afford not to have it. Find a way to get it even if it means sacrificing something you enjoy. If you are a husband then your family depends on you. Just do the right thing. If you are alone remember that your burial costs money, so take responsibility for yourself.

The worst thing you can do is to make your family and friends a victim of your demise. Just do the right thing no matter what the costs. As for my dear friend Frank, his wife and children are doing fine due to the generosity and love of their family and friends. Frank will be remembered for his love and compassion. He is truly missed by those who knew him and loved him.

Don is the owner of several free information websites and the sole proprietor of Java Jakes Gourmet Coffee Co.

http://www.javajakes.com
http://www.megainfosource.com
http://www.egolfplace.com
Visit these sites today and become informed.

Life settlements also known as life insurance settlements, senior settlements, or senior life settlements have quickly become an important tool for insurance agents, financial planners, estate planners, elder law attorneys, and other financial related professionals.

A life settlement is a financial transaction in which a senior citizen policy owner of an unneeded, underperforming, or unwanted life insurance policy sells the policy to a third party, as opposed to surrendering or lapsing it back to the life insurance company. The senior citizen policy seller receives immediate cash for the policy from the purchaser.

Agents and financial planners are beginning to market life settlements to their current client base and to potential clients. The most current effective methods of marketing life settlements are one-on-one presentations, seminars, and client newsletters. There has also been success with direct mailing either a client base or demographic base fitting the life settlement parameters.

A life settlement broker can assist life settlement agents with marketing material, educational material, and evaluation material. Having the correct knowledge about the life settlement product and material is important for any financial planner or agent meeting with a client or potential client. Each life settlement case is looked at differently, the biggest factors are the age of the insured, health of insured, policy size, premium amount, and current cash value (if any). Most life settlement brokers can provide simple qualification or evaluation forms that will quickly determine if a settlement would be available for that specific individual.

Life settlements are still a new concept for most agents and financial professionals. Many still do not understand the concept or have the right education about life settlements. It is important for these professionals to take the time to learn about life settlements so that in return they can relay this information to their clients. Many policy owners do not understand that there could be a cash settlement available for a life insurance policy that they are going to surrender or lapse. Insurance agents and financial professionals need to take the correct marketing and education steps to reach those clients in need. A life settlement can create added financial benefits for both the client and the financial professional.

Life Settlement Pro is a Life Settlement Broker and provides detailed information about life insurance settlements, life settlements, senior life settlements, Life Settlement Company and more. LifeSettlementPro.com offers free Life Settlement Evaluations.

Grant Shellhammer
Life Settlement Pro
www.LifeSettlementPro.com/
1-888-973-8377

Life insurance, whether you need term or whole life, can be a major expense. We all know the importance of having adequate life insurance. The protection of loved ones is the major thing on the minds of millions of people. If you are among the many who are looking for term or whole life insurance, a quote is easily obtainable and you may find lower rates than you expected.

Life insurance can provide for the cash needs that your family will no doubt incur following the death of a loved one. You can create an estate that will provide for your family where there is currently no estate or savings to rely upon. Life insurance is an issue everyone must face at some point in his or her lives. Do not risk the well being of your family by having no or too little life insurance.

Getting a quote on life insurance may the first step in protecting your loved ones from financial hardship. The death of a family member can create unexpected expenses that you need to prepare for. Funerals and other expenses that occur when we lose a loved one can add up to thousands of dollars. Don’t leave your family unprotected. Get a quote today and find out how affordable life insurance can be.

If you have preexisting medical conditions or are in bad health, you can still get a life insurance quote and take the first step in providing for the future of your family. Too many families have been left with large debts following the loss of a loved one. Don’t let this happen to your family. Life insurance quotes are fast and easy. You and your family deserve the assurance that comes from having enough life insurance coverage.

If you need life insurance, you can get a quote for term or whole life insurance in just minutes. You can compare different life insurance quotes to find the one the is the cheapest and has the best coverage. One of the best things you can do for your family is make certain you are covered by a life insurance policy that will provide for their needs in the event of the loss of a loved one. You family’s future is just too important to put off the decision to purchase life insurance.

To view our recommended life insurance companies, visit: Recommended Life Insurance Companies.

Carrie Reeder is the owner of eZerk, an informational website with articles and the latest news about various topics. Visit her website to find more information about life insurance.

What Is Critical Illness Cover ?

Way back when, in 1694 to be precise, the first notion of insuring a persons health was put forward by by Hugh the Elder Chamberlen. Health Insurance developed through the centuries, but essentially it was insuring a persons health against a disablilty. That is, covering the costs of medical treatment for a person severly injured. As we have moved on into the modern world along with the development of many other insurances we now have critical illness cover, a form of insurance that is designed to pay a lump sum when the policy holder is diagnosed with a specific illness.

The list of illness you can obtain cover for is varied, and of course if you develop an illness that you are not covered for then your insurance won’t pay out. Some of the conditions you can get cover for are the following.

Alzheimer’s disease
Bacterial Meningitis
Blindness
Cancer
Coma
Coronary artery bypass surgery
Deafness
Heart attack
Kidney failure
Loss of limbs
Major organ failure requiring transplant
Multiple Sclerosis
Occupational HIV
Paralysis
Parkinson’s disease
Severe burns
Stroke

There are many more condition that can be covered, upon negotiation with your insurance company.

Why might I want Critical Illness Cover?

It is a fact of life that people get seriously ill. And if you do what are the consequences?

If you have a partner and/or a family what does the loss of your income mean?

Do you still have outstanding payments to be made on your mortgage?

Do you run your own business?

Does the illness you have developed require specialist treatment, perhaps not covered by other health plans you might have?

At the end of the day your Critical Illness Cover is there to provide a lump sum to help you through the potential financial difficulties arising from a serious illness.

Where can I get Cover?

With all types of insurance there are a multitude of providers. Some of the larger insurance companies that deal with all types of cover will undoubtedly be able to give you a quote for cover. But also do not rule out some more of the more specialist insurance providers. The main thing is to check out the full details of your policy, if your family has a history of a particular illness you must make sure your policy covers this, but also do bear in mind that you have to fully disclose your family health history and your insurance premium will reflect this.

Mike Bromley

Mike Bromley runs a site about Critical Illness Cover UK. Pop in for a visit – you are most welcome!

Life Insurance Quote

There may be plenty other things where you could spend your money, why put your money to buy Life Insurance? You could have bought that flat screen TV instead but then what good would it be after a few years? These things would not count for much when our spouses and children do not feel safe and sound. Life insurance provides your family security even when you are not there. This investment is long term.

Get the quote from the best company:

Life insurance quotes can be obtained from the best life insurance company so that you are sure that you get the best of what is offered. You would like to be sure that even when you pass away, your family will carry on living in the house you had built for them. The house you have seen your children grow up, where they took their first step and the house where you as a family dined together. They will feel safe that their house would not be taken away no matter what happens.

Why do you need it??

But in spite of the all the assurances of a guaranteed future and all, incase you do not take any action to attain the life insurance quote you got, then what? What if you did not buy that policy that would guarantee a financial security to your family? It can be clearly imagined that disaster would fall if you die early while your children are still young. These things should be pondered over for a while so that you can feel the necessity of possessing a life insurance plan.

There is another reason why you should get that life insurance quote and buy that life insurance policy. This though partially would include self interest but is still important. All of us want to live on and also live a good life and so the same goes for you. You would want to see yourself in your children and would want to give them a better life than what you must have had.

Suppose you are running your own business and you have put in all your years of savings into this business. This could be how you have earned your income. You gave your family a good life and you surely want them to enjoy it in your absence. Therefore it is important for you to get life insurance quote after having made the decision on how much you want to achieve your needs. Then you buy the policy.

Find out more at www.foxydeals.com

Nick Stanlow reporting. Check his website out for more articles and resources.

http://www.foxydeals.com

Insurance involves transferring a risk that you bare, onto an insurance company, so that you no longer have to worry about the event occurring. While you pay a fee, or premium for this, what you get in return is peace of mind. So what is the risk that you are transferring with life insurance? Well, quite simply, it is the financial risk of your own death. It should also be remembered that it is in certain circumstances possible to insure the life of another person, such as your husband or wife, or an important employee. The insurance company will then pay out to the named beneficiary once the event occurs, and this is usually a family member or business associate of the insured.

The thing that insurance companies will be looking for is insurable interest. It may come as a surprise but in the early days of aviation, there were some clever entrepreneurs who would hang around at airports and buy life insurance policies on the passengers. Since plane crashes were very common, a good proportion of the insured passengers died and the insurance companies were faced with the prospect of paying out vast sums to these men.

This is not the reason insurance was developed and the system was not designed to cope with this kind of speculation. Therefore the rule developed that you could only insure the life of someone you had a real interest in surviving. There is also the public policy issue that it would be tempting to some people to insure strangers and then make sure they died soon.

The insurance policy will have two important details defined right at the outset. The first is who is to be paid out under the policy. While this seems obvious, it is important to think carefully about it as, unlike in most insurance contracts, the purchaser of the policy is rarely the beneficiary under a life insurance policy.

The second is the amount to be paid out on to occurrence of the event. It must be remembered that this is also subject to the rule of insurable interest and therefore you cannot have a policy on your life for more than your life is reasonably financially worth. Since the premium is partially calculated on the amount of the payout, you will simply be paying for more insurance than you can receive. Therefore be honest with how much you earn and how much support your providing to your family so that the premium will be accurately assessed.

Joseph Kenny is the webmaster of the insurance site http://www.insure121.com/ where you will find information, news and links to the leading providers of insurance in the UK. If you found this article interesting you may find more articles of the same nature in the insurance guide located on site.