Three basic questions....good place to start.
Sunday, February 14, 2010
Friday, April 10, 2009
Wednesday, March 4, 2009
A Life Insurance Comparison: Whole Life Insurance Versus Term Life Insurance
By: Daniel Theron
What type of life insurance might fulfill your assurance needs? This article is a life insurance comparison about whole life insurance versus term life insurance.
The difference between whole life insurance and term life insurance.
Whole lifetime assurance consists of an insurance plus an investment section that stays in force until the contract is cancelled or the insured person dies.
Term living assurance covers the policyholder only for the predetermined length of the policy, e.g. 10 years. It offers no investment option.
A whole life insurance definition.
Whole lifetime cover presents death protection for the full lifetime of the insured person. It generally consists of basically two parts. The mortality charge is the primary part of the premium and it pays for the insurance coverage. The subsequent part of the premium contributes to the investment that earns interest. After the policy holder dies, the face value of the policy is paid out to the beneficiaries.
The advantages of whole life insurance.
* You can use it in your estate planning.
* A part of the life insurance premiums are invested and builds up a cash value.
* A whole life insurance policy may earn dividends.
* You may borrow money against the policy’s cash surrender value.
The disadvantages of whole life insurance?
* Insurance salespeople may tend to promote these policies because it pays a larger commission.
* Most people do not have life insurance after the age of 65.
* Whole premiums are far more costly than term life insurance premiums.
* The rate of return on a whole life insurance investment is smaller when compared to other investment opportunities.
* Policyholders cannot participate in the investment management process.
* It could take up to 10 years for a permanent lifetime policy to gain a significant cash surrender value.
A term life insurance definition.
Term lifetime assurance stays in effect for a limited period. The policy will end and the beneficiaries will receive nothing if the insured person outlives the duration of the policy. The beneficiaries will receive the death benefit if the insured person passes away within the limited period.
The advantages of term life insurance.
* Term may be used to provide cover for short-term needs.
* Term is generally cheaper than permanent lifetime assurance.
* Term may be easier to understand.
The disadvantages of term life assurance.
* It may prove to be inappropriate for long-standing needs.
* It provides only death protection.
Whole versus term life insurance premiums.
Whole lifetime assurance premiums are more costly than term premiums. The initial yearly premium is more often than not much higher for a whole life plan than for a term life plan. Term cover premiums increase as time goes by, while the premiums for whole cover stay the same for length of the policy.
When you can consider buying term life insurance.
* When you only require coverage for a particular period of time.
* When you cannot afford the cost of whole lifetime assurance.
* It may also be utilized on top of whole assurance.
When you can consider buying whole life insurance.
* You may consider buying it if you can manage to pay for the initially expensive premiums.
* When you are prepared to maintain the policy for the remainder of your life.
I can wrap up this life insurance comparison by saying that the subject of whole life insurance versus term life insurance will continue to be debated for years to come.
What type of life insurance might fulfill your assurance needs? This article is a life insurance comparison about whole life insurance versus term life insurance.
The difference between whole life insurance and term life insurance.
Whole lifetime assurance consists of an insurance plus an investment section that stays in force until the contract is cancelled or the insured person dies.
Term living assurance covers the policyholder only for the predetermined length of the policy, e.g. 10 years. It offers no investment option.
A whole life insurance definition.
Whole lifetime cover presents death protection for the full lifetime of the insured person. It generally consists of basically two parts. The mortality charge is the primary part of the premium and it pays for the insurance coverage. The subsequent part of the premium contributes to the investment that earns interest. After the policy holder dies, the face value of the policy is paid out to the beneficiaries.
The advantages of whole life insurance.
* You can use it in your estate planning.
* A part of the life insurance premiums are invested and builds up a cash value.
* A whole life insurance policy may earn dividends.
* You may borrow money against the policy’s cash surrender value.
The disadvantages of whole life insurance?
* Insurance salespeople may tend to promote these policies because it pays a larger commission.
* Most people do not have life insurance after the age of 65.
* Whole premiums are far more costly than term life insurance premiums.
* The rate of return on a whole life insurance investment is smaller when compared to other investment opportunities.
* Policyholders cannot participate in the investment management process.
* It could take up to 10 years for a permanent lifetime policy to gain a significant cash surrender value.
A term life insurance definition.
Term lifetime assurance stays in effect for a limited period. The policy will end and the beneficiaries will receive nothing if the insured person outlives the duration of the policy. The beneficiaries will receive the death benefit if the insured person passes away within the limited period.
The advantages of term life insurance.
* Term may be used to provide cover for short-term needs.
* Term is generally cheaper than permanent lifetime assurance.
* Term may be easier to understand.
The disadvantages of term life assurance.
* It may prove to be inappropriate for long-standing needs.
* It provides only death protection.
Whole versus term life insurance premiums.
Whole lifetime assurance premiums are more costly than term premiums. The initial yearly premium is more often than not much higher for a whole life plan than for a term life plan. Term cover premiums increase as time goes by, while the premiums for whole cover stay the same for length of the policy.
When you can consider buying term life insurance.
* When you only require coverage for a particular period of time.
* When you cannot afford the cost of whole lifetime assurance.
* It may also be utilized on top of whole assurance.
When you can consider buying whole life insurance.
* You may consider buying it if you can manage to pay for the initially expensive premiums.
* When you are prepared to maintain the policy for the remainder of your life.
I can wrap up this life insurance comparison by saying that the subject of whole life insurance versus term life insurance will continue to be debated for years to come.
Monday, February 23, 2009
Wednesday, February 4, 2009
The Value and Importance of Whole Life Insurance Policies
By: Nail Ramp
Initially all types of Life Insurance Policies were term Life Insurance. However as term life insurance only pays a claim upon death within the stated term, most term insurance policy holders became upset over the idea that they could be paying premiums for 20 or 30 years and then terminate the premium and have nothing to show for it. This gave birth to the concept of Whole Life Insurance, which proved to be beneficial to both the insured and the Life Insurance Company. By guaranteeing the death benefit and the cash value, the policy owner was assured that insurance coverage would be in force when the insured died. TheLife Insurance Company benefited because with every premium payment made, the net amount at risk, and thus the cost of insurance, was reduced In case of a Whole Life Insurance policy the premium rates are constant through out. It is advisable to invest in these kinds of policies though primarily for two reasons. Firstly the financial strain will be minimal for a person of that age. Secondly when a person invests early he won't find it difficult to pay the same amount even after he gets old because of two factors namely the rise in his income and the uniform rate of premium.
The two main categories of traditional whole Life Insurance are a) Ordinary whole life insurance policies & b) Limited pay whole life policies. Ordinary whole life insurance policies require the policy holder to pay a fixed sum of money up to an old age. This is done to ensure that when the policy matures that the insured gets money whose value equals death benefit. But in practical cases the insured fails to keep the premium carrying on as they either die during the payment tenure or surrender the policy to get the maximum value. For Limited pay whole life policies the insured is required to pay premiums at a uniform rate. Here the period for which the policy is taken is less compared to ordinary whole life insurance policies; hence the insured is required to pay a higher amount of premium. Limited pay whole policies are further categorized into A) Interest Sensitive Whole Life Policies - This policy does not pay returns to the insured. However the amount earned by investing the insured's investment is accounted and paid to the insured, B) Universal Whole Life Insurance Policies – A very flexible type of insurance policy, which allows for a change in death benefits every year & C) Variable Life Insurance Policies – Here the insured will be able to earn a higher amount when compared with the other policies. At the same time the insured will not be able to claim other insurance benefits like loan.
Major benefit of this kind of policy is the availability of loans. The amount of such loans will be decided on the basis of his policy amount and premiums. But in such cases the amount or refund that they will receive after the expiry of policy will be less. Whole Life Policies are for people guarantees returns on investments; hence it is best suited for people who are looking for something more then protection. If the investment (premium), that you make is invested in stocks then expected returns aren’t assured, but if they are invested in other financial instruments like banks or trading sectors then the returns are ensured.
Tuesday, January 27, 2009
Term vs Whole life insurance....The Great Debate
Over the next few weeks my posts are going to be focused on this debate between having whole life vs term life. No two households are alike so it going to be interesting to see how this debate turns out.
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