There can be an encyclopaedia of knowledge on life insurance and all things connected with it. Life insurance can even be offered as an employment ... ]]> There are several things that you could or should know about Life Insurance. The topic of life insurance is so extensive, that there would be many things that you don’t know about life insurance; even if your knowledge is sufficient. Essentially, life insurance is a risk management product that seeks to protect the welfare of the family of a life insured individual. In exploring life insurance, it is important to get an idea of the key aspects associated with the concept.

Although there will always be a debate about the utility and value of life insurance, it serves many functions. The fundamental role of life insurance is covering final expenses and providing replacement income for financial dependents. However, life insurance has other uses that include, mortgage protection, forced savings, and medical benefits. One school of thought suggests that some life insurance plans could be considered complete financial programs. This view is a little exaggerated, but it underscores the utility of a life insurance plan.

No exploration of life insurance is complete without an examination of the types of life insurance plans available. Indeed, the range of life insurance products is comprehensive. Permanent life plans and temporary life insurance constitute the dichotomy. Permanent life plans can be further subdivided into whole life and universal life plans.

Temporary life insurance is manifested in the form of endowments, mortgage protection and term life plans. Term life plans are quite varied as well. They provide coverage for different periods and can be convertible or refundable term plans. Term insurance and mortgage protection plans are not cash-value bearing. Permanent life insurance plans typically have a savings/ investment fund attached or provide returns in the form of dividends.

Whole life plans and universal life plans are not homogenous either. There exist different plan structures under either heading. Some of these include dividend-paying whole life, non-dividend paying whole life and variable and fixed universal life plans. The universal life plans offer greater flexibility and optional supplementary benefits than whole life plans.

Life insurance is a contract between an insurer and the insured. This means that it is a legally binding agreement that is based on the principle of utmost good faith. A life insurance contract would also indicate what an insurer will and will not cover in the event of the death of an insured. It will also state what will happen to the policy in the event of lapsed premiums or withdrawals.

Basic knowledge of the underwriting process is also useful when exploring life insurance. Underwriting for life insurance is conducted as a risk-assessment method. The three areas that are typically assessed are medical risk, occupational risk and financial risk. Underwriting helps give the insurer criteria on which to assess the risk posed by an insured. The insurer would then accept, rate or decline the offer made by the proposed insured. The insurance application also becomes part of the insurance contract.

There can be an encyclopaedia of knowledge on life insurance and all things connected with it. Life insurance can even be offered as an employment benefit. It should be noted that exploring the concept of life insurance is not merely an academic exercise. Life insurance knowledge helps you to understand how to make the life insurance concept work for you or your financial dependents.

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In a broad sense, life insurance is an investment in income protection. However, life insurance can also be considered as a savings and ... ]]> Should Life Insurance even be considered as an investment? The idea that life insurance could be perceived as such is ludicrous to some financial experts. That school of thought positions life insurance as a barely useful financial tool that is of limited value. The opposite perspective exalts the utility of life insurance. This category of believers includes insurance salesmen, agents and brokers.

Life insurance as an investment became a common notion after Universal Life insurance plans came into existence. The “investment” aspect is not necessarily a fancy way of presenting an old concept in a new way. Insurers structure the Whole Life and Universal Life plans as investment plans that can provide capital growth and reinvestment. Stating that life insurance is an “investment in your family” is just sales lingo.

Of course, the two sides of the divide will always have something to say about each other. The life insurance minimalists would suggest that the other side advocates life insurance as an investment to dupe people. Their motive is sinister. The objective is to boost commissions for representatives and premiums for insurers.

The life insurance believers would simply state that the minimalists do not properly understand financial reality and how the plans work. They advocate that life insurance can comprise of the major aspects of financial planning. More than an investment in the future, it provides you with a living benefit that could be used for myriad purposes.

The unadulterated reality is that some cash-value life insurance plans are really good and others are of dubious value. Some plans are useful in some circumstances but not in others. Certain life insurance plans can be used as a good investment while others cause you to lose money.

Forced savings are a major argument for cash-value life insurance as an investment. Saving and investment are related but different concepts. However, the forced savings can be translated to forced investment with variable universal life insurance or dividend options on Whole Life plans.

Variable Universal Life insurance has been criticized for overpromising and underperforming. This is because insurers tend to market the plan based on lofty future projected rates. The actual performance rarely matches projected performance, often with predictable losses to the client.

A better poster child for life insurance as an investment is the paid-up additional insurance option offered on certain life insurance plans. This is a dividend payment option that involves dividends being used to purchase additional insurance coverage. The dividend amount on these plans will be based on the amount of cover, so this will have a compounding effect on the annual dividends and the value of the Whole Life plans.

Fixed Universal Life insurance provides a stable rate of return. The savings portfolio on this plan can be viewed as part of income options on a diversified portfolio. The major limitation with viewing Universal Life Insurance as an investment is that investment contributions are sometimes limited by insurers.

In a broad sense, life insurance is an investment in income protection. However, life insurance can also be considered as a savings and investment tool. It must be noted that life insurance is not a perfect investment tool and should not be used exclusively as such. Cash-value life plans are more expensive and provide less coverage per dollar. This is why some experts advise people to buy term insurance. Ultimately, it is possible for some insured persons to use life insurance as a sound investment plan.

Life Insurance Riders

Life insurance ... ]]> People that are looking for Life Insurance to protect their family in the event of the unthinkable often find that they cannot understand the common terms used in the life insurance industry. Without being able to understand the terms that are being used by the industry to sell you on a particular policy, you will not be able to make an informed decision about which life insurance products are best for your needs. Below are some common life insurance terms and their meanings.

Term Life Insurance

These life insurance policies are valid for a particular time period, generally 10 or 20 years, and then expire if the policy is not renewed or a new policy is not purchased. During the term that the insurance policy is in effect, the person is protected in the event of an accidental death or a death from natural causes, but the policy is generally invalidated if the person dies from their own actions, such as a suicide or alcohol related accident.

Group Life Insurance

Group life insurance policies are aptly named because they cover a group of individuals, generally the employees of a company. The premiums for these insurance policies are often lower because of the large pool of people paying into the life insurance policy. The premiums paid by the people who are younger generally offset the benefits paid out for the deaths of the older individuals covered by the policy. For additional coverage, the people covered by the group life insurance policy can purchase individual insurance policies without jeopardizing their coverage under the group life insurance policy.

Joint Life Insurance

A joint life insurance policy is a life insurance policy that covers two people at the same time, generally a husband and wife, and pays out the benefits upon the death of the first person. These policies are helpful to spouses that desire coverage but to not want to have two life insurance policies, but can be difficult in the event of a divorce. Joint life insurance policies can be purchased as either a term or permanent life insurance policy.

Life Insurance Riders

Life insurance riders are the additional insurance products that are added to the life insurance policy at the time that the life insurance policy is issued. Some of the most common life insurance riders include a premium waiver that allows the covered individual to stop paying the premium on the life insurance policy if they become disabled and an accidental death rider that pays double the benefit if the person dies in an accident.

*Life insurance company

*Financial goals

*Helpfulness and capability of the Insurance agent

*Quality of life ... ]]> Finding the right Life Insurance agent may be best faciliated by utilizing several steps that distinguish, discern and assess the various aspects of life insurance that are important. For example, life insurance credibility, benefits, products and process are all factors that can add value to a life insurance policy. This article will discuss some the variables that life insurance shoppers may consider when finding a life insurance agent. Specifically, the following items will be disscussed:

*Life insurance company

*Financial goals

*Helpfulness and capability of the Insurance agent

*Quality of life insurance products

Choosing the right insurance company is a good first step in finding a life insurance agent. Different life insurance companies have varying performance, credibility and client services capacity which includes how well the agents are able to discuss your needs, and goals in combination with their products.

Finding the right life insurance company can involve a little due diligence i.e. researching the company by contacting insurance regulators, searching the web for consumer reports, studying the performance of the company’s mutual funds and comparing costs with other life insurance companies. It can be helpful to select three or four companies during your research so you can make comparisons after meeting with life insurance agents.

It can also be helpful to identify your goals before setting up an appointment with an agent. For example, do you want a policy that also has cash value, how much monetary coverage do you need, what events do you want covered by the insurance etc. Your life insurance needs should be matched by a specific policy available through the insurance company.

The next step involves calling the companies and asking to meet with an insurance agent. Making mental and/or written notes throughout the process can help you ascertain which agent and company you feel most comfortable with. Things to look for include professionalism, clarity of the insurance products, and the ability of the agent to answer questions and explain the insurance products well.

Once the agent meetings are completed, take some time to think about everything they have told you because there is likely to be a lot of information to process. Asking yourself questions like how much is this going to cost? are there hidden fees? what happens if the investment products don’t perform? and what guarantees does the insurance company offer? may be beneficial.

The life insurance products available through an agent and/or insurance company are also important as it is the history, quality, range, scope and success of these insurance products that can make one life insurance product, and therefore the agent that sells them, better than another life insurance policy. Life insurance terms, benefits, tax incentives, financial vehicles etc. can be comlicated at times so it is also helpful to choose an insurance agent who can adequately explain those products and answer questions about those products.

In summary, finding a life insuarnce agent can be a bit of a process. However, since life insurance is often a long term decision affecting retirement planning, family finances, the policy holder, and his or her beneficiaries, carefully choosing a life insuarnce agent is important. This article has outlined some of the key factors to consider when finding a life insurance agent including the agent’s qualities, the company and the products he/she represents.

Life insurance immediately creates an estate. This feature of life insurance suggests that it can replace the economic value ... ]]> Life Insurance is essential to some people. To others, it’s a completely unnecessary financial product. In between those two extremes are a range of views on the role of life insurance in a comprehensive financial plan. However, there exists a rather interesting perspective on life insurance yet.

There exists a school of thought that life insurance is not merely essential, but can be a complete financial program. Naturally, this perspective would have staunch opponents.

While life insurance is not of equal value to everyone, it can certainly contribute to a complete financial plan. The contribution of life insurance to financial planning is two-fold:

i) As a financial product in the “protection” phase of a financial plan.

ii) As a financial product that encompasses broader elements of financial planning

Life insurance immediately creates an estate. This feature of life insurance suggests that it can replace the economic value of a person. The financial dependents of an insured would not necessarily suffer economic hardship in the event of the insured’s death. Even if you just pay for pure life insurance, you would be adding value to our financial plan.

As a stand-alone financial product, life insurance can also ensure that ordinary people without large volumes of cash can acquire loans and mortgages. That life insurance immediately creates an estate makes it a vital tool for estate planning. Apart from merely creating an estate, life insurance can also help preserve and transfer it as well.

Life insurance plans are very diverse. This implies that some life plans offer more value than others; or at least greater facilities. Several life insurance products are hybrid, cash-value-based or have optional supplementary benefits attached. These benefits are what can convert a life insurance product into something resembling a complete financial plan. Here are some other areas that a comprehensive life insurance plan can offer:

i) Medical and health insurance: These are considered to be the most fundamental aspect of a financial plan. Life insurance plans also offer optional supplementary benefits like income disability and critical illness. Those provisions intersect with other aspects of financial planning.

ii) Retirement: Some hybrid life insurance plans may have an annuity or retirement plan embedded in them. In other cases, the savings accumulated over time in a cash-value life insurance plan can contribute to your retirement fund.

iii) Emergency fund: The forced savings feature of a life insurance plan can help you to create an emergency fund with minimum fuss.

iv) Savings: Although cash-value life insurance should not be used strictly for investment, the savings or investment portfolio may be used to assist portfolio diversification. The accumulation rate or rate of return for cash value insurance is normally a bit higher than rates for other cash and income options.

v) Taxes: In most cases, the proceeds of life insurance are immune from taxation. Also, the proceeds from cash-value insurance are not usually subject to tax. This may vary among states or countries. However, there would be a few conditional exceptions to this.

Life insurance is a financial tool. It is as not good or as bad as the person who uses it, but based on how it is used. The notion that a well-developed life insurance plan can be a complete program is a slight exaggeration. However, few would argue that a life insurance plan- whether pure or comprehensive- cannot contribute significantly to a complete financial plan.

Universal life insurance allows the policyholder to earn interest on their cash value account as well as have access to their cash ... ]]> When in the market for Life Insurance one can be over run with the number of companies to choose from, differences in rates, whether a medical exam is necessary, etc. Once finished looking at all the readily available information you may be confused as to what type of life insurance you really need. Before you purchase a life insurance policy you should know the types of life insurance available to you. The most common types of life insurance are term life or whole life. These are not the only choices you have when in the market for life insurance but they are the more common forms you will see and hear about. Aside from term and whole life polices you also have variable life, universal life, and universal variable life policies to choose from. Understanding the differences in these types of life insurance can help you make the best decision in your search for life insurance.

First we will take a look at term life policies. Term life is a very common type of life insurance that you often see advertised on TV, flyers, mailings, etc. A term life policy is the least expensive type of life insurance available. Term life policies have no cash value. In the case of the insured’s death term policies pay the lump sum of the policy to the beneficiary. Term life rates often vary according to age. The older you get the more your policy costs. Gender may also affect the cost of a term life policy.

Whole life insurance policies offer life insurance as well as cash value. Whole life policies cost more than term policies but offer the benefit of a locked in rate for as long as the insured keeps the policy premiums paid. Upon the death of the insured the beneficiary will receive the amount of insurance offered in the policy. As long as the insured is living they have the cash value of their policy. Should a living individual cash in their insurance policy they will only receive the cash value their policy has available which will be much less than the amount that would be received upon their death.

Variable life insurance like whole life insurance has a cash value. This type of insurance allows for more flexibility than a whole life policy in regards to the cash value the account has. An individual with a variable life insurance policy can borrow from their policy during their lifetime.

Universal life insurance allows the policyholder to earn interest on their cash value account as well as have access to their cash value account during their lifetime. This type