Buying Life Insurance
Traditional wisdom is not bought life insurance, says it is sold. In other words, some people are reluctant to discuss the importance of the life insurance, life insurance should be, and others are simply not aware. Many large companies offer life insurance as part of a package, if be, this report may be inadequate.
Who needs life insurance? , To Depends on you for financial support and child care, or, like eating with family at home cleaning, life insurance work, if necessary individuals. Mature couples in the pair-retirement assets are depleted by unexpected medical expenses at a life insurance policy to protect the surviving spouse may be required. And those with significant assets or property taxes to reduce the impact of life insurance you need can transfer wealth to future generations.
Types of insurance
Term life insurance coverage for persons under the age of 50 years and usually the most expensive, most basic form. A term policy is usually a 10-year-old, at the end of each period may be extended for a period of time posted. In addition, the increase in the premium end of each semester, prohibitively expensive for older people. A level term policy locks the annual premium for a period of up to 30 years.
Balance of term life insurance has been written to match your mortgage principal amortization, a variation on this theme is used as mortgage insurance generally fall. Term, while the premium remains constant, gradually reduced the nominal value. After paying the mortgage, the insurance expires and no longer needed. Unlike many other policies term care insurance has cash value. In this sense, without any investment option, a "pure" insurance. Benefits are only paid if you die during the policy. If you will renew the mandate of the end of this policy, the coverage ends. When buying long-term care, renewable up to 70 years old and without a medical examination to look for a policy convertible to permanent insurance.
Combines permanent protection with a savings component of life. As long as you continue the premium, the premium rate of pay to a level able to lock context. A portion of that premium accrues as cash value. Policy gains value, you may accept up to 90% of your cash value policy, free of tax.
Universal life-saving equipment component, similar to the whole life with the advantage of potentially higher returns. Universal life insurance policies are extremely flexible in terms of the premium and face value. The premiums can be increased or decreased the cash values to be postponed and may be withdrawn. In addition, the option to change to the face value. Universal life insurance is usually less than 4% in general, we offer you a guaranteed return on cash value. Details you will receive an annual statement of cash value, total protection, earnings and wages.
Disadvantages of this type of insurance has higher fees and interest rate sensitivity. Universal policy, premiums of 5% to 7% of total fees, as well as ongoing management fees are included in front of you. In addition, if interest rates fall you can find to increase the premiums.
Variable Life generally offers the policy cash value and control over the fixed premium. Present value of the shares, bonds or deposits in money market funds preferred financing. Cash values and death benefits and investment opportunities can be based on performance. Although death is usually the ground, there is no guarantee on cash values. This may be higher than for universal life energy policy, fees and investment options can be volatile. Funds invest more grow in the insurance contract plus side, capital gains and other investment income are deferred tax so long.
Variable universal life insurance, the most aggressive form. such as variable life, mutual funds, to manage investments. But on the original face value death benefit, there is no guarantee of universal service policy variable. Risks of this policy is probably the best suited for wealthy clients.
Important terms and definitions
* Face Value - The original paid death.
* Convertibility - Option without a physical examination, usually in another (whole life) policy (term) to convert from one species.
* Cash Value - or can be borrowed against the money in savings, part of a policy
* Reward - required to report on a monthly basis, quarterly or yearly payments.
* Recipient - the person (s) or beneficiary as the designated entity (eg trust).
* Paid-in - no more premium payments, a policy that requires advance payment or return from.
As insurance is very Need
A popular approach to buying insurance is based on income replacement. In this approach, often 5:00 to 10:00 times the annual salary will be calculated formula, how much coverage I need. Another approach is to purchase an insurance policy according to individual needs and preferences. The first step is to determine the unique income needs to be replaced.
Currently, a large proportion of the income tax and its own life support (insurance benefits are normally exempt from income tax). Start a net profit after tax. Then you need to change so that the annual income to the insurance, food, clothing, magazine subscriptions, club memberships, personal expenses such as travel expenses can add. If you invest this amount to the annual income you want a death benefit amount will meet supply. Then you have to add that you pay off your kids tuition fees or debt such as mortgages or amounts necessary to fund a one-time expenses.
Revenue for the replacement of co-working and often overlooked insurance need. Amount of daily maintenance cleaning, or for the cost services. Add this to any net income from part-time job.
Finally, property taxes, uninsured medical expenses and funeral costs of their own "final expenses" to appreciate.
Other types of life insurance
Insect life insurance is a unique type of contract guarantees the lives of two people (and die-to-End or Second-to-die will be called). That after the death of the second insured person pays a death benefit. Therefore, it is usually more expensive than two individual policies. through insurance premiums - - survival in today's dollars could be used to leverage the potential of life in the rule for estate planning, property tax or utility to prosperity for future generations, fund a potentially significant death benefit is used to create the charity. If you have a medical insurance, these measures are available "uninsurable."
The first-to-die life insurance protects the lives of at least two people and pays for the first after the death of the insured. This policy is a mortgage or other large debt ratio compared to more than one is useful for covering. In addition, in a closely held corporate finance a buy-sell agreement may be an ideal tool.
Conclusion
Life insurance is an important part of a healthy financial plan. a variety of personal lifestyle and financial questions are asked whether to buy insurance. If you do not already have an insurance professional work, check your insurance options that could provide an objective look at financial planner a fee-for-service advice. If you decide what you want to vote at an insurance company are very robust. To view the information of the library or an independent insurance companies with the highest score among the four rating agencies for the professional: AM Best, Duff Phelps, Standard & Poor's and Moody's.
Summary
* Term insurance premiums increase over time, and that monetary value, with basic, inexpensive coverage.
Change must be extended and convertible to whole life, consider a long-term policy.
* All life provides level premiums and coverage. This is a part of the premiums in deferred tax savings.
* All life insurance companies, which control rates and compare them with other investment opportunities.
* Variable life offers control over your investments.
* Premium variable policy, but the investment value of fixed nominal value and are subject to change.
* Universal life offers more investment options, but are sensitive to high interest rates. Variable universal life, although extremely flexible and offers no guarantees other than the original face value.
* Insurance preferences must be based on income replacement and personal.
The checklist
* To protect the survivors for the long-term financial security, you need life insurance to accurately determine how much money.
* If the term life insurance policy or a policy decision by savings from preferred feature.
* Shop around for the best deal and read the policy before buying. Do not think you are getting the benefits are not clearly defined.
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