How Life Insurance Coverage Protect

2008-04-30T09:28:00.000-07:00

The Subject of life insurance has under review many time,but today general public still have much misunderstanding how life insurance worked toward their family.By all life insurance not only to protect life insured love one,from IRS,.....but also protect insured itself to ward retirement.

There many type of life insurance which insurance companies offers in the market. Understand the right life insurance product works best for oneself will save a lot money as well as protection to ward one beneficiaries in case of insured suddently death.

UNIVERSAL LIFE INSURANCE

Flexible Protection Universal life products give you the flexibility to choose the amount of protection that best suits your family or business. It allows you to increase or decrease coverage as insurance needs change. Increased coverage may be subject to underwriting requirements. You may not decrease your coverage below the required minimum. A decrease may result in a surrender charge being applied against the policy's cash value.

Flexible Premiums With universal life insurance, you control the amount and frequency of payments. Looking towards the future? You have the option to increase the premium or make lump sum contributions, subject to limits as specified in the policy. The extra dollars grow tax-deferred, and may increase the cash and death benefit values. On the other hand, in a temporary cash crunch, you can pay less than the scheduled premium and let the policy's accumulated cash value pay the remainder of the monthly charges.

Flexible Design Universal life products can be customized with innovative policy features to fit your lifestyle. To learn more about how universal life policy riders can protect your spouse and children, protect your ability to cover monthly policy charges during disability, and increase the benefit to your family if you should die accidentally.

Universal life main objective to use it to create wealth for retirement, protect beneficiary from IRS and take premium time off when insured want.

TERM LIFE INSURANCE

Term life insurance offers life insurance protection for a specific number of years. It builds no cash value, you pay only for the life insurance. That's why term life is less expensive than permanent life insurance. So you can afford more protection for your loved ones.
Term life insurance lasts for a specific number of years, from 1-30 years. The most common term is 10 or 20 years.

Term life insurance policies pay the beneficiary the face amount of the life insurance policy if the insured person dies during the term of the policy. For example, a 15-year term life policy with a face amount of $250,000 would pay $250,000 to the beneficiary if the insured died any time during those 15 years.

Usually, term life costs less than permanent life insurance.
At the end of the policy term, the insured is no longer insured, and a death benefit is no longer paid. Some term life insurance policies are renewable, or can be converted to permanent life insurance.

Term life insurance work best for young family, while you pay very litlle to have high amount of coverage. Since most term life insurance policies also included renewable and convertible in term life policy. Polecy owner can convert the same amount of coverage to any whole life or universal life policy when needed and premium recalculated at age of converted

WHOLE LIFE INSURANCE

Premiums generally are level and payable for life: Since premiums are level, the younger you are when you purchase a whole life policy, the less expensive the annual premiums will be.State Farm also offers whole life policies that provide shorter premium payment periods, such as 15 years or a one-time payment.

Dividends: Whole life insurance policies can earn dividends. Dividends result when our actual life insurance costs turn out to be less than we assumed in setting our premiums. When this happens, State Farm may return a portion of your life insurance premium to you as a dividend. Dividends are not guaranteed, since we don't know our actual costs in advance.

Guaranteed Cash Values: Unlike term life insurance, which does not accumulate any cash values, some of the money you pay into your whole life policy accumulates as guaranteed cash values. If you choose to surrender the policy, these guaranteed cash values would be available to you. Or, as long as the policy is in force, you may borrow against them as a policy loan at the current policy loan interest rate. The amount of your guaranteed cash value depends on the kind of whole life policy you have, its size and how long you have had it. The growth in cash values is tax deferred under current federal income tax law. Borrowed amounts reduce the death benefit and cash surrender value.

Whole life insurance is an older insurance offered. It is only work for people like to pay of the life insurance policy in certain years and taken divident to buy additional insurance coverage. many of company offer this type of insurance to their most value employee.

LIFE INSURANCE RIDER FOR UNIVERSAL & WHOLE LIFE INSURANCE

Accidental Death Benefit (ADB)The ADB rider provides an additional death benefit equal to the face amount of the policy if the insured dies as the result of an accident, up to $300,000 maximum, to age 70.

Children's Insurance (CI)The CI rider provides level term insurance for the children of the primary insured. After the first three policy years, CI term insurance may be converted to permanent insurance of up to five times the face amount of the term insurance, without evidence of insurability required. (Only attained age conversions are permitted.) It may be converted to permanent insurance on the policy anniversary when the child is married or age 25, or the insured is age 65 — whichever comes first.

Child's Protection Benefit (CPB)The CPB rider protects the ability to continue paying for insurance purchased on a child. If a parent or guardian becomes disabled, the policy premiums on the child's policy will be waived by New York Life until the child is 25 years old.

Dividend Option Term rider for whole life only is a combination of a decreasing term insurance rider and base plan paid-up additions. It is ideal in situations where you need permanent coverage but can't afford the full Whole Life premium. It can be converted to a Whole Life or Modified Premium Whole Life policy in the first ten policy years.

Five Year Term (5YT)A 5YT rider is an affordable way to provide additional insurance on the base insured, a spouse, a child, a parent or a business partner. It can be converted to permanent insurance in the future on an attained age basis. Premiums are guaranteed and level for the first five years. Premiums in years 6-10 increase and are expected, but not guaranteed, to remain level. Thereafter, premiums increase annually.

Increasing Premium Term (IPT)An IPT rider can be an affordable way to provide additional insurance for the insured covered under the base plan. It can be converted to permanent life insurance during the conversion period without providing additional evidence of insurability. Premiums increase annually and are guaranteed for the first three years.

Insurance Exchange (IE)The IE rider provides for the exchange of a Whole Life policy only to a successor insured, subject to evidence of good health. It can be used in a business arrangement where, if a key employee decides to leave the company, the coverage could be used for the employee taking his/her position.

Living Benefits Rider (LBR)The LBR gives the policyowner access to a portion of the policy's eligible death benefit during the insured's lifetime should the insured be diagnosed with a terminal illness and found to have a life expectancy of 12 months or less.2 The LBR can be added to a Whole Life policy at the request of the policyowner at any time. Various states have established different life expectancy periods once terminal illness is diagnosed. Your agent or service center can provide you with the specific information.

Option to Purchase Paid-Up Additions rider for whole life policy only gives the policyowner the contractual right to purchase additional paid-up permanent life insurance, at an affordable cost, which has cash value and loan value, and is eligible for dividends.3 These cash values can be borrowed4 against to help fund retirement, education, or other needs. OPP cash values can also be used to help reduce out-of-pocket premium payments.

Policy Purchase Option rider for whole life policy only guarantees the contractual right to purchase additional insurance at critical junctures in a lifetime, when life insurance needs are likely to increase, such as a marriage, or the birth or adoption of a child. This additional insurance may be purchased, without evidence of insurability, at option dates every three years between ages 22 and 46. The amounts you may purchase at each option date range from a minimum of $10,000 up to $100,000 depending on your original issue age.

Spouse and Children's Insurance (SCI)5The SCI rider allows the insured to purchase term insurance for a spouse and child(ren). After the first three years, this insurance may be converted to permanent insurance. For a child(ren), it may be converted without evidence of good health required on the policy anniversary when the child is married or age 25, or the insured is age 65 — whichever comes first.

Spouse's Paid-Up Insurance Purchase Option (SPPO)6The SPPO rider gives the beneficiary/spouse the right to purchase a new paid-up whole life policy only on his/her life without providing evidence of insurability at the time of the insured's death. Since all the proceeds need not be used for the new policy, SPPO provides first and second death liquidity, and may serve to insure someone otherwise uninsurable. This rider can be an effective estate planning tool.

Survivor Purchase Option (SPO)The SPO rider allows the beneficiary of the death benefit proceeds to purchase a new life insurance policy on a designated insured (usually a spouse) without proof of insurability. The amount of coverage can be from one to five times the base policy. SPO is available to policyowners at an affordable cost.

Depend on you family or company situations, please consult with your financial advisor before buying any life insurance.

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