Determining How Much Life Insurance You Need

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.

<b>The Two Approaches to Life Insurance</b>

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.

<b>You need how much?</b>

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.

<b>Replacing Income</b>

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.

<b>Calculating Replacement-Income Amounts with Excel</b>

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.

<b>Two Calculation Tips</b>

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.

Definition of Whole Life Insurance

Whole life insurance, also known as “cash-value” insurance is a basic and consistent type of permanent life insurance which remains in effect your entire life at a level premium. This life insurance is a good choice got you if you do not expect your life insurance needs to diminish over time. A portion of your premium goes into a reserve fund called ‘cash value’ that builds up over the years your policy is in affect. Your reserve fund is tax-deferred and you can borrow against it, until you withdraw it.

The premiums must generally remain constant over the life of the policy and must be paid periodically according to the amount indicated in the policy. You may also have the option of a single premium -- paying all of the premiums at once with a single lump sum. Your cash values will grow to equal the amount of the death benefit when you turn to age 100.

Although, whole life insurance is very expensive, and if you're on a limited budget, you may not be able to afford all the insurance coverage you actually need. But the plus point is that the death

benefit is guaranteed as long as premiums are met. Also death benefit will never decrease if you don't borrow against it.

Whole life insurance policy's returns will fluctuate with the markets and will usually follow returns

available from other investments like equity mutual funds. However, if you decide to quit your policy, your cash value can be paid in cash or paid-up insurance.

Whole life insurance is most suitable for you, if you want to:

•    use it as a tax and estate planning vehicle,
•    accumulate cash value for a child's education or retirement,
•    pay final expenses,
•    provide money for a favorite charity,
•    fund a business buy/sell agreement,
•    provide key person protection. 

Before buying the whole life insurance, you need to think carefully about choosing your level of

coverage. Too often people make the mistake of insufficiently covering or even worse, financially

overextending themselves. This would be a tragic error with whole life insurance policy because

defaulting on premium payments can mean policy cancellation and the loss of your entire investment. So be careful and make sure you:

•    pick a life insurance policy that has a guaranteed cash value starting at the very first year,
•    choose the one with the highest cash value in the very first year,
•    consider "participating" insurance policies which can pay dividends, increasing your policy's value by boosting both the total cash value and the death benefits,
•    beware of any insurance policy that levies "surrender charges" when you cancel.
•    if you ever need to stop paying premiums, your policy lets you use the accumulated cash value of the life insurance policy to pay the premiums, thus keeping your coverage current.

Deciding if you need Life Insurance?

Most people are aware of how life insurance works and what are the events and dangers that it is designed to protect against. They may also have family commitments and people who they provide for and know that some sort of life insurance would protect their family financially, if something were to happen to them. However, it is still often a very difficult decision to make if you are trying to decide whether or not you need life insurance.

Life insurance is a big commitment financially speaking. The premium can vary in cost but can be considerable, then there is also the issue that life insurance often extends over many years, even decades. This means that not only are you committing to pay the premium for this year, but also for many years into the future. There are not many people who can say with certainty what their earnings will be in ten or fifteen or twenty years time.

There are also early termination penalties, which means if you want to end the policy before the expiration of the entire term, you will be financially penalised. This is generally more relevant for life assurance but can also apply to life insurance if your rate has been calculated on the condition that you remain insured for so many years into the future.

If you have life assurance, then it will also be a method of saving for the future. This is a very popular concept, especially these days with the growing concern about the state of pension funds, but it again deserves careful consideration. There are many ways to save for the future, and by deciding to do so by way of a life assurance policy still entails deciding that life insurance is something that you want and are willing to pay for. If you do not need life insurance, then there are probably more efficient ways of saving for retirement than with life assurance, which places a proportion of your savings against the insurance aspect of the policy.

In general, most people will really only be considering life insurance if they have a family to support. This can be a spouse and generally children. However, situations frequently change, people get divorced, and children always grow up and become independent. If your family situation is likely to change, you should familiarise yourself with the ways you can end the policy early and what penalties would apply. However, if you have a young family and are concerned about their financial security for the future, then life insurance will be a great opportunity for you to provide for these concerns.

Considerations When Choosing Life Insurance

Making the decision to buy life insurance can have a lasting effect. Without a life insurance policy your family could suffer great financial hardship when you die. Life insurance is a way to ensure that you can still take care of your family after you are gone. Knowing what considerations you should make when choosing a life insurance policy can help make the process easier.

Determining the amount of life insurance really depends on your personal situation. Consider what would happen to your family without your income. If it would cause financial problems then you should take that into account when choosing the amount of our policy. You should also consider factors like health insurance that could increase the needed income.

The cost of life insurance policies also varies depending on many factors. Company life insurance policies are usually always going to be the cheapest. Most often, though, you are only covered for the period of time you work for the employer. Also you usually have to be with an employer for a certain amount of time before you are eligible to receive life insurance benefits. Private life insurance polices can range in costs depending on the agents fees, types of coverage and limits. Other factors that effect costs are high risk factors, like someone who smokes, is overweight or has a preexisting medical condition.

The best way to choose a life insurance policy is to consider all the factors and take time to compare different policies. This is an important decision and should not be rushed. Discuss the policy with you spouse to ensure you have covered everything and haven’t forgot any important details. Once you have chosen a policy be sure to review it often, especially after any significant life change. The importance of life insurance is often underestimated until the need for it arises, so planning ahead and purchasing a policy will ensure a stable future for your family.

Compare Instant Online Quotes For Term Life Insurance Today

Get and compare instant online quotes for term life insurance today for the protection you and your family need.  Cheapest term life insurance term life insurance indiana term life insurance quote easy term life insurance term life insurance definition texas term life insurance!  Smoker term life insurance rate 30 insurance level life term year term life insurance quote comparison cheap florida insurance life term.  Term life insurance without medical exam term life insurance quote company term life mortgage insurance rate.  Term life insurance price quote! 

  Receive instant life insurance quotes online from top-rated insurance carriers.  Fast, instant quotes on auto, home, health and life insurance.  Get an instant life insurance quote to help you find a cheap price, low cost premium.  We provide instant life insurance indicative quotes here on the web.  BUDGET UK life cover quotes service, provides instant discounted online quotations; using Quote-link, the IDOL's comparative life insurance quote system.  Apply for general insurance, medical insurance or life insurance online now, and get premium quote, instant approval and year-round preferential pricing. 

  But please, don't rush out and cancel your existing life insurance policy as soon as you get a quote.  Our policy ensures that our life insurance quotes are always as cheap as possible without compromising the level of cover you require.  When deciding on a life insurance policy, it is extremely important to shop around and obtain multiple quotes from different insurance agents and brokerages.  Find the right life insurance policy at the best price and get an online insurance quote 24/7.  CompuQuotes Life Insurance quotes represent the best possible whole life policy matches for you and your family. 

  *Complete each field below to receive a free life insurance quote.  So rest assured, the quotes you receive are from life insurance companies with a financially sound rating of "A" (excellent) or higher by A.M.  Provides resources to receive free & cheap life insurance quotes.  By filling out the following form, you will receive life insurance quotes from up to 3 agents. 

  health, life insurance with free quote!  AIM Center: InsuranceProvides insurance quotes for products including car insurance, life insurance, health insurance, and homeowners insurance.  universal life insrance qiote, insurance quote and, insurancr qute and, also known as online health insurance ...  National insurance - get a free quote for auto, life or health insurance. 

  Budget Life also lets you obtain term life insurance quotes from independent agents.  BUDGET UK life cover quotes service, provides instant discounted online quotations; using Quote-link, the IDOL's comparative life insurance quote system.  However it is best to get online term life insurance quotes and then make a comparison based on your budget and requirement.  Our policy ensures that our life insurance quotes are always as cheap as possible without compromising the level of cover you require.

  Get a quote for life insurance , critical illness or income protection cover.  Apply for a life insurance quote!  Intelliquote.com Allows you to compare term life insurance quotes and apply online.  Apply for general insurance, medical insurance or life insurance online now, and get premium quote, instant approval and year-round preferential pricing.  The best way to find out how much life insurance will cost is to get quotes from multiple carriers.  Get an instant life insurance quote to help you find a cheap price, low cost premium.  Use this link to get a term life insurance quote on a low cost life insurance policy.

  And will show the life insurance company and the cheapest quote available in the UK insurance market.  For the cheapest life insurance quote we'll search the UK life market to compare thousands of deals for you.  Whatever your life insurance needs, CompuQuotes provides you the best options in today's market.  Get and compare instant online quotes for term life insurance today for the protection you and your family need.  Free life insurance quote And just as your life partner (spouse) and family count on you, you also count on your partner (spouse).  CompuQuotes Life Insurance quotes represent the best possible whole life policy matches for you and your family.  net - free quotes from local agents on whole and level term life insurance policies.  Where to lookFor the fastest, easiest, and most reliable online term life insurance quotes, visit Netquote.  Getting a term life insurance quote online is as simple as the click of the mouse.

  Further instructions on getting your quotes for term life insurance are below the form.  Smoker term life insurance rate 30 insurance level life term year term life insurance quote comparison cheap florida insurance life term.  "HometownQuotes found a life insurance agent in my area who saved me $280 a year!  HometownQuotes.Com works with life insurance companies nationwide so that you can always find the best agents and the best rates in your area.  Pilots may read articles, Avemco's newsletter, purchase renter's insurance, pay premium or request quotes on pilot-friendly term life insurance and aircraft insurance. http://www.insurance-life-quote.com/

Choosing the Best Life Insurance

Many people wonder why they should invest in life insurance. The fact is when you pass away and do not have coverage or money; your loved ones must take the burden of paying funeral costs, arranging, and so on. The cost of funerals is costly, so this is unfair to your loved ones. Life insurance will cover you, and will offer some stress relief in the event you die on funeral costs.

Moreover, if you pass on, your family will have to pay your mortgage, car payments and so on. Do not let this happen. Some life insurance policies will offer you unemployment coverage, burial, mortgage coverage and so on.

Life insurance plans will protect you and your family. You can find affordable plans online so there is no reason not to seek coverage. Some life insurance plans will cover debts you owe, expenses and so on. You will find life insurance plans that will cover all your estate costs too.

Life insurance often includes the cash value plans and the term life policies. Cash value will provide you coverage for the course of your life. In short, this is the permanent plan whereas term life is a plan that when it expires you must renew the policy. Obviously, the cash value is the better choice.

Cash value life will offer you benefits that will cover you in the event you pass. You have asset value that attaches to this plan. In other words, you have lifetime coverage at some of the best rates on insurance. In short, this plan will protect your financial interest. You have options to with some term life insurance. Some plans will allow you to request a conversion to change your plan to a cash value plan. Some term life plans will not give you this option.

You have other options with life insurance plans, but the cash value is obviously one of the better choices. Still, you can go online to use quote system at the insurance sites to find great rates, comparable costs, and several types of insurance plans.

If you are an employer, looking for group insurance coverage you will find a wide assortment of policies online also. Cobra, term life (group option) and other plans are available. Use the quote system to find the best rates on group life insurance. Check the packages offered, since some insurance plans give you better rates and benefits than other plans will.

Life insurance is important. To make your family's life easier, go online and search through the different plans to find what works best for you. Get the protection you and your family both deserve.

Cheap Term Life Insurance

Should you buy cheap term life insurance? It's an often-asked question to which there is a cheap and simple answer. If you have a mortgage or you have a partner, family or dependants that could suffer financial hardship as a result of your death then cheap term life insurance is a must!

Cheap term life insurance, otherwise known simply as life insurance or term life is a cheap life insurance policy that pays out a lump sum upon your death. The premiums are very cheap and term life insurance policies are very easy to obtain. There are two basic types of term life insurance available from insurers - cheap decreasing term life insurance and cheap level term life insurance.

Cheap decreasing term life insurance

Cheap decreasing term life insurance is very cheap. For only a few pounds each month a cheap decreasing term life insurance policy will pay the balance of your mortgage should you die before it reaches full term. This type of term policy is called decreasing term life insurance because the sum insured decreases in line with your outstanding mortgage balance. The cheap premium remains the same for the life of the policy, making it an exceptionally cheap way to secure life insurance. A cheap decreasing term life insurance policy ONLY pays out a lump sum to clear your mortgage. This type of cheap term life insurance does not make any other provision for the loved ones you leave behind.

Cheap level term life insurance

Level term life insurance policies are not as cheap as decreasing term life insurance, although these types of term policies overall are still cheap, having only slightly higher premiums attached to them. The reason for the premium not being as cheap is that level term policies pay off your mortgage AND leave a lump sum to your partner, family and/or dependants. The sum insured through a cheap level term life insurance policy remains the same through the life of the policy, as does the cheap premium.

A cheap level term life insurance is recommended to run in tandem with your mortgage. However, a cheap level term life insurance policy can run differently from the term of your mortgage. For instance, you could take out a 10-year level term life insurance policy that is separate from any other cheap premium life policy covering your mortgage. The premiums on the 10-year insurance policy will not be as cheap because the term is short, but it will provide you with additional life insurance cover in the unfortunate event of your death.

Cheap Insurance Life

Permanent life insurance provides lifetime insurance protection (does not expire), but the premiums must be paid on time. Most permanent policies offer a savings or investment component combined with the insurance coverage. This component, in turn, causes premiums to be higher than those of term insurance. The investment may offer a fixed interest rate or may be in the form of money market securities, bonds or mutual funds. This savings portion of the policy allows the policy owner to build a cash value within the policy which can be borrowed or distributed at some time in the future.

The characteristics of Permanent Life Insurance are: permanent insurance protection, it is more expensive to own; it builds cash value, loans are permitted against the policy; it has favorable tax treatment of policy earnings and it has
level premiums.

There are three basic types of permanent insurance: whole life, variable life and universal life. The two most common are whole life and universal life. Whole life insurance provides lifetime protection, for which you pay a predetermined premium. Cash values usually have a minimum guaranteed rate of interest and the death benefit is a fixed amount. Whole life insurance is the most expensive life-insurance product available. "Universal life insurance separates the investment and the death benefit portions. The investment choices available usually include some type of equity investments, which may make your cash value accumulate quicker. As the you can usually change your premiums and death benefits to suit your current budget".

Final Tips

• Consider buying a "break point" level of insurance coverage - better premium rates are given at coverage levels of $100,000, $250,000, $500,000 and $1,000,000.

• Make sure you obtain an illustration for the policy that you have chosen. If the insurer will not provide you with one, look for another insurance company.

• Always shop for a level-premium policy. Nobody likes a surprise increase in their premium payments! So, before you buy term or permanent insurance make sure your illustration shows that your premium payment is guaranteed not to increase over the duration of your coverage.

• Don't be sold on permanent insurance for the investment or cash-value feature. For the first two to 10 years, your premiums are paying the agent's commission anyways. Most policies don't start to build respectable cash value until their 12th year, so ask yourself if the feature is really worth it.

• Determine your desired duration of coverage so that you purchase the correct type of policy and keep your premium payments affordable. If you only need insurance for 10 years, then buy term. Also, check out multiple-quality insurance companies for their rates.

• Don't be taken with riders. A very few number of policies ever pay under these riders, so avoid things like the accidental death and waiver of premium riders since they will only jack up your premiums.

• For 24 hours before your medical exam, keep sugar and caffeine out of your system. It's best to schedule your exam early in the morning, and don't consume anything but water for at least eight hours beforehand.

• If your premiums are much too high due to medical reasons or you are denied coverage, check if a group plan is available through your company. These group plans require no medical exam or physical.

When seeking insurance, don't rush into buying expensive permanent life insurance before considering if term life insurance sufficiently meets your needs. Unfortunately, in many cases the fees charged for policies with investment features far outweigh the benefits. When you purchase life insurance, you're betting that you'll live, but also securing peace of mind in case you're wrong. Don't leave your family unprotected in the sudden event of your death - after all, they are your most important assets.

Can You Afford To Have Health Insurance?

You may think that the best way to acquire health insurance coverage, is simply to obtain the complete coverage that you can afford. Off course to some extent it is true, and if you have many liquid resources then it is  a good idea to obtain a good complete individual health insurance plan that includes everything from a small fees for hospital visits to full dental coverage. But, if you are not good budget, you may consider getting a smaller policy that you can afford and pay for some of  medical expenses from you regular budget.

If you are trying several other methods that are costly to fill and refill, or that need regular check ups with your medical adviser or doctor to make sure that you have the right cure, it is important to obtain a complete health plan. However, if you are searching for other ways to meet your health costs, it may make sense not to get such  plan. If you do not have any dependents and do not need to make regular hospital visits for any reason, consider whether you really need a full health insurance plan that gives you complete coverage. Paying more cost than your requirements for health insurance can be a heavy burden, so it is good to think creatively and realistically about what you really require and if it is possible to get the care you require without a large monthly payment to a health insurance providers.

Many people know that using a combination of free clinics and lower health insurance coverage, they are able to get by  much less money that they would pay for comprehensive health insurance. It is a cool idea to have coverage that can help alleviating the burden if you suddenly develop a condition that requires urgent care. However, it is a good idea to look for different kinds of plans that are available, as one of the most plans designed specially to give you emergency coverage may be a much better way than a plan that will leave you generally well insured.

It is not a good way to apply different trick with your health care, so make this sure that you if do not opted for the maximum amount of insurance that you can afford, then you have a plan for how to meet any medical cost that may arise in future. Think about other possibilities that you can use to get money for your health care needs, such as starting an investment savings account where you store away the money you would be paying for insurance every month. This will help you to get prepared for anything. Don’t forget coverage entirely though.

Buy your Term Insurance the modern way, online.

Now that so many term life insurance policies are available online, it makes sense to use this option when you are looking for protection for your family, you can take your time to consider all the different types of term insurance, and the different rates available. There's a ready supply of information, which puts you in a position of knowledge and will help you to make the correct decision.

There are several different labels applied to term insurance, but basically it comes down to three different types.

First, there is Level Term Insurance. This is designed to pay out a lump sum on the death of the life or lives assured, this type of policy can be used to cover immediate expenses i.e. funeral estate taxes outstanding debts, this type of term insurance can be written on either a joint or single life basis.

Perhaps the best-known type of term insurance is that associated with a mortgage, which not
unsurprisingly is called Mortgage Term Insurance. It is designed to cover the declining balance on the outstanding mortgage on your home. It is a very cost-effective type of term insurance because it is covering a reducing liability as a mortgage comes down so does the level of cover. This type of life insurance can also been written on either a single life, or join life basis.

The third main type of term life insurance is Family Income Benefit, unlike the previous types, as its name suggests this type of policy is designed to pay a regular income, rather than a lump sum. This type of policy has been rather overlooked until recently, but now that interest rates are so low, it is gaining in popularity, because of the extremely large amount of capital that is required to be invested to produce a reasonable level of regular income. By taking the Family Income Benefit route, you can sometimes save as much as 50% of the premium cost.

All the above types of policy can have various additional benefits added for instance, critical illness cover, guaranteed insurer ability options, automatic renewable options, etc obviously not all companies offer all the benefits, and it does require you to compare the cost of the policy with the benefits provided. However, by shopping for your life insurance online, you are better able to do this for yourself and hopefully will end up making the correct decision.

Term insurance is a very low-cost option, and while some would argue that it is better to go the whole of life route, with such a low-cost option, there is no need for any family to be without some life insurance or term insurance protection.

Roger Overanout

Auto insurance & the internet - a marriage made in Heaven!!

The internet is all about information, and, more critically, the ability to compare facts, data and information from several different sources quickly and efficiently.

Arguably, as a direct result of this simple fact, nobody has felt the effects of a potential customer’s ability to find, check and compare such data than companies trying to sell services (as opposed to products) online.

Unlike a physical product, a service is not tangible, you cannot pick it up, feel it, or touch it. Thus, a service provider needs to supply the maximum amount of information, because the more information the potential customer has, the more confident he is likely to be when making the buying decision.

What better way to do this than via the worldwide web?

A perfect example of this is the automobile or car insurance marketplace. In the past, if you wanted to get the most competitive quotation for your car insurance, you had to “shop around” by trudging from one insurance broker or company’s office to another, or by getting on the telephone to do the same thing.

The problem with this was that it was often difficult, if not impossible to know whether you were truly comparing like with like. There were (and, to a large extent, still are) so many potential variations from one company’s policy to another that it was almost impossible to know whether the two policies that you were comparing really did offer identical levels of protection and benefits.

This was not always a bad thing. For example, all car insurance companies tend to “load” the premium (i.e. charge extra) for “young drivers” to be included on a policy, which can be bad news for parents using the family car to teach their son or daughter to drive. However, Company “A” may define a young driver as someone below the age of 18, whereas Company “B” will use a threshold of 21 years of age.

If your child was 19, the chances are that Company “A” will be the best bet in these circumstances.

In other words in the old days, it was absolutely necessary to “read the small print”, to avoid ending up with a automobile insurance policy that really did not meet your requirements, although it appeared at first as if it did.

Coming right back up to the present day, whilst the small print is still extremely important, the internet has effectively ensured that  it is no longer so small! It is now possible to make meaningful and accurate comparisons of exactly what two companies are offering with their car insurance policy at the touch of a button.

You are still “shopping around” but you are doing it at our own speed, from the comfort of your own home.

In this way, the internet has made finding the best car insurance a far less stressful business than it was in the past, and has also guaranteed that the policy you buy is absolutely the most suitable for your own circumstances.  To read more, http://webbiz99.com/carinsurance/

Advantages of a Whole Life Insurance Policy

To begin with, you need to understand that life insurance falls into two very broad categories: Whole and term.  The basic difference between term and whole life insurance is this: A term policy is life coverage only.
In whole life insurance policy, as long as one continues to pay the premiums, the policy does not expire for a lifetime.  As the term applies, whole life insurance provides coverage for the whole life or until the person reaches the age of 100.  Whole life insurance policies build up a cash value (usually beginning after the first year).  With whole life, you pay a fixed premium for life instead of the increasing premiums found on renewable term life insurance policies.  In addition, whole life insurance has a cash value feature that is guaranteed.  In term and whole-life, the full premium must be paid to keep the insurance. 

With level premiums and the accumulation of cash values, whole life insurance is a good choice for long-range goals.  Besides permanent lifetime insurance protection, Whole Life Insurance features a savings element that allows you to build cash value on a tax-deferred basis.  The policyholder can cancel or surrender the whole life insurance policy at any time and receive the cash value.  Some whole life insurance policies may generate cash values greater than the guaranteed amount, depending on interest crediting rates and how the market performs.  The cash values of whole life insurance policies may be affected by a life insurance company's future performance.  Unlike whole life insurance policies, which have guaranteed cash values, the cash values of variable life insurance policies are not guaranteed.  You have the right to borrow against the cash value of your whole life insurance policy on a loan basis.  Supporters of whole life insurance say the cash value of a life insurance policy should compete well with other fixed income investments. 

Unlike term life policies, whole life insurance provides a minimum guaranteed benefit at a premium that never changes.  One of the most valuable benefits of a participating whole life insurance policy is the opportunity to earn dividends.  The insurance company based on the overall return on its investments sets earnings on a whole life policy.  In addition, while the interest paid on universal life insurance is often adjusted monthly, interest on a whole life policy is adjusted annually.  Like many insurance products, whole life insurance has many policy options. 

Make sure you can budget for whole life insurance for the long term and do not buy whole life insurance unless you can afford it.  You should buy all the coverage you need now while you are younger, and if you cannot afford whole life insurance, at least get Term.  That is why whole life insurance policies have the highest premiums it is insurance for your whole life, no matter when you pass on.  The level premium and fixed death benefit make whole life insurance very attractive to some.  Unlike some other types of permanent insurance, with whole life insurance, you may not decrease your premium payments.

A CPA Talks About Buying Life Insurance

Not everyone needs life insurance. The first thing to do is make sure you need it. Life insurance is really meant for your family members or other dependents who rely on your earnings.

<b>Why You Buy Life Insurance</b>

You buy life insurance so that, if you die, your dependents can live the same kind of life they live now. Strictly speaking, then, life insurance is only a means of replacing your earnings in your absence. If you don’t have dependents (say, because you’re single) or you don’t have earnings (say, because you’re retired), you don’t need life insurance. Note that children rarely need life insurance because they almost never have dependents and other people don’t rely on their earnings.

<b>Life Insurance Comes in Two Flavors</b>

If you do need life insurance, you should know that it comes in two basic flavors: term insurance and cash-value insurance (also called “whole life” insurance). Ninety-nine times out of 100, what you want is term insurance.

<b>Term Life is Simple to Buy and Understand</b>

Term life insurance is simple, straightforward life insurance. You pay an annual premium, and if you die, a lump sum is paid to your beneficiaries. Term life insurance gets its name because you buy the insurance for a specific term, such as 5, 10, or 15 years (and sometimes longer). At the end of the term, you can renew your policy or get a different one. The big benefits of term insurance are that it’s cheap and it’s simple.

<b>Cash Value is Trickier</b>

The other flavor of life insurance is cash-value insurance. Many people are attracted to cash-value insurance because it supposedly lets them keep some of the premiums they pay over the years. After all, the reasoning goes, you pay for life insurance for 20, 30, or 40 years, so you might as well get some of the money back. With cash-value insurance, some of the premium money is kept in an account that is yours to keep or borrow against.

This sounds great. The only problem is that cash-value insurance usually isn’t a very good investment, even if you hold the policy for years and years. And it’s a terrible investment if you keep the policy for only a year or two. What’s more, to really analyze a cash-value insurance policy, you need to perform a very sophisticated financial analysis. And this is, in fact, the major problem with cash-value life insurance.

While perhaps a handful of good cash-value insurance policies are available, many— perhaps most—are terrible investments. And to tell the good from the bad, you need a computer and the financial skills to perform something called discounted cash-flow analysis. If you do think you need cash-value insurance, it probably makes sense to have a financial planner perform this analysis for you. Obviously, this financial planner should be a different person from the insurance agent selling you the policy.

What’s the bottom line? Cash-value insurance is much too complex a financial product for most people to deal with. Note, too, that any investment option that’s tax-deductible—such as a 401(k), a 401(b), a deductible IRA, a SEP/IRA, or a Keogh plan—is always a better investment than the investment portion of a cash-value policy. For these two reasons, I strongly encourage you to simplify your financial affairs and increase your net worth by sticking with tax-deductible investments.

If you do decide to follow my advice and choose a term life insurance policy, be sure that your policy is non-cancelable and renewable. You want a policy that cannot be canceled under any circumstances, including poor health. (You have no way of knowing what your health will be like ten years from now.) And you want to be able to renew the policy even if your health deteriorates. (You don’t want to go through a medical review each time a term is up and you need to renew.)

10 key reasons why a person needs life insurance

Insurance is designed to protect a person and the family from disasters and financial burdens. There are many kinds of insurance of which, the basic and most important is considered to be life insurance. It provides for the dependants after your death.

Since there are certain financial commitments you need to meet throughout life and do contribute in some way to the family income, you need to provide something even in death—to secure the home, help the family meet expenses for a while, protect dependant parents, or secure the children or spouse.

Financial obligations could include funeral expenses, unsettled medical bills, mortgages, business commitments, meeting the college expenses of the children, and so on.

How much insurance a person needs would vary, depending on lifestyle, financial needs and sources of income, debts, and the number of dependants? An insurance adviser or agent would recommend that you take insurance that amounts to five to ten times your annual income.   It is best to sit down with an expert and go through the reasons why you should consider insurance and what kind of insurance planning would benefit you.

As an important part of your financial plan insurance provides peace of mind for any uncertainties in life.

1.    Life insurance correctly planned will on premature death provide funds to deal with monies due, mortgages, and living expenses. It offers protection to the family you leave behind and serves as a cash resource.

2.    It secures your hard earned estate on death by providing tax free cash which can be utilized to pay estate and death duties and to tide over business and personal expenses.

3.    Life insurance can have a savings or pension component that provides for you during retirement.

4.    Some policies have riders like coverage of critical illness or term insurance for the children or spouse. There are certain rules regarding eligibility for riders which you will need to determine clearly.

5.    Having a valid insurance policy is considered as financial assets which improves your credit rating when you need health insurance or a home loan or business loan.

6.    In case of bankruptcy, the cash value as well as death benefits of an insurance policy is exempt from creditors.

7.    Life insurance can be planned such that it will cover even your funeral expenses.

8.    Term life insurance has double benefits, it protects and you can get your money back during strategic points in your life.

9.    Insurance protects your business from financial loss or any liabilities in case a business partner dies.

10.    It can contribute towards maintaining a family’s life style when one contributing partner suddenly dies.

Insurance is vital to good financial planning and security but you would need to assess your personal risk and long term commitments. Insurance stands a person in good stead throughout life and can be used in case of emergencies during a life time by requesting a withdrawal or loan.

Why Should You Get Life Insurance?

Everything in life is uncertain that people should prepare for any eventuality. In fact, the only things certain in life are taxes and death. One or both of these things are bound to happen at some point in a person’s life. While taxes will always be present in every society, death can come like a thief in the night.

Sickness and death are frightening as it is. They become all the more frightening when a person has not prepared for such an eventuality. This is the reason why every person should get a life insurance.

People should always plan their finances and getting a life insurance is one way of planning their finances. Getting a life insurance is just like saving up for the future because there are life insurance policies that provide for a cash value in the event that the insurance is not used up by the person insured. Under this provision, the insured can withdraw or borrow from his insurance policy. It also means preparing for the future of the people you love in case something happens to you.

A life insurance can come a long way in helping dependents who experience the death of a loved one. When the bread winner dies, these dependents have no one to turn to but if the bread winner has a life insurance, then he is assured that he will leave his dependents with something to hang on until such time when they are already capable of fending for themselves.

Any person who has an income should get a life insurance not only to serve as a lifeline for their dependents. A life insurance can also take of the death-related expenses of the deceased including expenses for the funeral and even for probate of his will.

Some people are not as lucky as others and they will not be able to leave mansions and lands to their dependents. With a life insurance policy, a parent can now leave even a meager inheritance to his dependents or beneficiaries.

Getting a life insurance policy is very important especially for people who have dependents, particularly very young children who are not yet able to work and fend for themselves. The amount of life insurance a person should get should be based on the number of dependents he has and also on his paying capacity.

A person interested in getting a life insurance policy can choose from several kinds of insurance---the term insurance and the whole life insurance are examples. A term insurance is paid out by the insurer after the death of the insured. A whole life insurance is much more complicated and involves a lot of provisions and benefits.

No matter what kind of insurance you want to get, every person should look at the possibility of getting a life insurance. This will assure them that their loved ones would be taken care of in the event that they are no longer there to support them.

Insurance Made Easy: A Guide For The Consumer

For most of us, insurance coverage represents a love-hate relationship. We hate paying for the premiums, but love having the right kind of coverage when it is needed. We realize that is important to have insurance coverage, but just the thought of contacting different insurance agents, or researching different insurance plans, can not only be a scary experience, but incredibly overwhelming. Knowing what types of insurance are available, and making sure you have the correct coverage for your life’s needs is a task that should be given careful consideration.

Using the following suggestions, whether you are a novice or a veteran insurance buyer, will help you to make critical insurance coverage decisions. First and most important, is to ask yourself the question; what kind of insurance do I need? There is auto insurance to protect yourself and others when driving. Health coverage is a vital issue to address, as well as life insurance, disability and long-term health care. If you have a home, you need to protect your most valuable possession with home-owners insurance. There are many types of insurance for each of the categories mentioned. Asking the right questions can make all of the difference in deciding on the policy that fits you best.

Auto Insurance

Auto insurance is required in most states. You may not be required to carry full coverage, which includes collision, comprehensive and medical coverage; but you are required to carry liability coverage. Liability is the foundation of any auto insurance policy. If you are at fault in an accident, your liability insurance will pay for the bodily injury and property damage expenses caused to others in the accident, including your legal bills. However, if your vehicle is damaged, the expense to repair it will not be covered without having a full coverage policy. Collision, comprehensive and medical coverage are for your benefit. Collision will pay for the repair to your vehicle, while comprehensive coverage will pay for damages to your car that weren’t caused by an auto accident. Medical payments coverage will pay for you and your passenger’s medical expenses after an accident. This coverage will pay no matter who is at fault.

Collision coverage is usually the most expensive part of a policy, you can choose a higher deductible, say $500 or $1000, and keep your premium costs down. If you have a newer vehicle and have a lien against it, the lending institution will require that you have full coverage. By working with a professional insurance agent, the agent would be able to give you many cost saving suggestions that you could take advantage of to lower your rates, and still give you the coverage you need.

Health Insurance

Health insurance is one of the largest expenses that we face today. Educating yourself about the different types of health insurance available will assist you with your insurance buying decision. There are many types of plans, but essentially two kinds of health insurance: Fee-for Service and Managed Care.

Fee-for-Service assumes that the medical professional will be paid a fee for services provided. Managed Care encompasses various plans and can include: health maintenance organizations (HMOs), preferred provider organizations (PPO), or point-of-service (POS). These plans provide comprehensive health services to their members and offer financial incentives to their members to use providers in their network. Health insurance is one of the least understood types of insurance; many people feel they do not need health coverage, but just one major illness or accident can force you into bankruptcy when you can’t pay your bills. This is why you need to understand all the different types of plans available and what plan would best suit your needs and budget. Meeting with an insurance professional and asking the right questions, can save you many sleepless nights of worry and provide you with some peace of mind.

Life Insurance

There are some basic things to consider when you are assessing your life insurance needs. You should first consider your financial situation and the standard of living you would want your dependents or survivors to maintain. Would you want a policy that would cover funeral expenses and final medical bills, or do you have a family to consider where your coverage would also pay outstanding debts, child-rearing expenses, and educational costs? There are two main types of life insurance available. They are Term Life and Permanent or Whole Life.

Term provides death benefit protection for a specified period of time. You can buy a policy in increments of 10, 20 or 30 years. These are usually less expensive, but your rates can increase each time you renew your policy. With Permanent, the costs of the policy are stretched out over a longer period of time, usually spread out over your entire life. Permanent can also be used as a savings vehicle. Once the premium has been paid, the company invests the additional funds. It’s a very important choice as to what insurance company you choose. A knowledgeable and experienced agent can answer all of these and your personal questions about life insurance.

Disability Insurance

Is disability insurance really necessary? Many of us can easily become sick or disabled tomorrow and not be able to work for two or three months. Would you have enough savings to cover your living expenses? There are two types of disability insurance. Short term and long term disability.

Short term will pay you a percentage of your salary for a short period of time. These policies are usually not very expensive, and usually cover a period of three to six months. Long term disability insurance picks up where your short term leaves off. Long term will pay a percentage of your salary until you are 65 years old. Disability insurance can be costly when you by it on your own, but it should be a part of everyone’s financial plan. It could easily be argued that you need disability coverage more than life insurance.

Long-term care Insurance

Another form of insurance that people around 50 years of age should consider is long term care insurance. There are many confusing forms of this insurance, but it essentially covers costs you would incur when you can no longer perform activities of daily living, such as dressing yourself, bathing yourself, or the need of skilled nursing care at home or in a care facility. Medicare and Medicare supplemental insurances don’t cover most long term care expenses. This is a very important insurance, you would need the help of an insurance professional, one who specializes in long term care insurance, to make sure you have the best coverage to fit your long term care needs.

Homeowner’s Insurance

If you are a homeowner and you have a mortgage on your home, your lender requires you to have homeowner’s insurance. There is much more to consider than how much your coverage will cost, you need an adequate policy that will give you the right level of protection; plus special provisions for your valuables and other possessions. You may need additional coverage for things such as earthquakes or floods. Before you get a policy, you will need to take an inventory of what you have in your home. Know what your insurance limits are, learn the difference between replacement-cost and actual-cash-value coverage. Again, consulting with an insurance professional and one who will listen and understands your specific needs is essential.

With all of the different types of insurances available, it is best to be prepared when selecting a policy. Choosing the wrong insurance policy can have disastrous consequences for both you and your family. There are many decisions that need to be made when looking for insurance, such as deciding what type of insurance you would need, and also considering what you can afford. You want to be able to speak to an insurance agent who will not pressure you or try to sell you insurance coverage you do not need. A professional can suggest and compare different plans and advise you which plan would best fit your own unique needs. All the while, offering this service at no cost to you.

How Life Insurance Can Cover Your Mortgage Balance

Discussing the need for life insurance is never a pleasant topic, and certainly combined with talk of mortgage payments, it can be downright distasteful.  But it is your responsibility as the principle breadwinner in your home to consider what might happen if you or your spouse were to perish.  Would your spouse be able to meet the most basic needs of food and shelter?  While the money necessary to pay for basic amenities like food and transportation are attainable through a single income source, most families simply cannot afford to meet their most basic requirement, the mortgage payment, without the income from both spouses.

How it Works
If you are in this situation, it is important to take the necessary precautions in case you or your spouse dies unexpectedly.  While saving enough to cover your mortgage is certainly an ideal solution, it is largely unfeasible for most contemporary families.  As a result, individuals often opt for mortgage protection life insurance policies.  These policies are designed specifically to meet the needs of your home mortgage payment in the event that you or your spouse dies. 

The idea behind mortgage protection life insurance is simple: you pay a monthly premium in exchange for which the insurance company agrees to pay off the rest of your mortgage should you die. 

Pricing
Pricing for mortgage protection life insurance policies parallels that of traditional life insurance price criteria.  For example, if you smoke your rates will be higher, just as if you are an older individual.  But certainly the most determinative factor in your price will be the amount of coverage you need.  The more you owe on your home, the more insurance you will need to pay it off, which of course means the more expensive the insurance premium will be.

Alternatives to Consider
While mortgage protection life insurance will cover your mortgage payment, as all home owners know, this is only part of the cost of owning a home.  In addition there are taxes and repairs to prepare for.  For a family that has lost a breadwinner, making these types of allocations can be difficult.  As a result, many individuals opt for coverage which goes beyond just mortgage protection and instead provides payments sufficient to cover all the expenses associated with owning a home.  This type of insurance often comes in the form of a term life policy which is for an amount which exceeds the price of your home.  Of course, this extra coverage comes with a price.  But with this coverage also comes quite a bit more flexibility.  Under a term life policy your family is not bound to pay off the house with the money they receive, but can instead use it in whatever manner they feel most compelled to.  This can be especially helpful if there are other medical costs to consider or if you have children approaching college age. 

Life insurance is not a pleasant concept to consider because it requires that we think about the potential for our own demise and the resulting consequences of our death.  It is vital, however, that as individuals who are responsible for the financial support of others, we consider these difficult questions and decide whether a life insurance policy is the best solution for us.

Affordable Life !Insurance

So, you’ve decided to purchase life insurance. Well then, you have made a good decision! If you have dependents, you know that you must provide for them long after you are gone. Buying life insurance shouldn’t be a budget buster either. Take a look at the following options which can help you save big time!

<b>Shop Online:</b> There are several companies that will give you free life insurance quotes right online. By entering your personal information, the amount of insurance coverage desired, and policy terms, you will receive within moments sufficient quote information. Naturally, you will want to talk to an agent at some point, but at least you will get a very good ballpark figure to consider. Some good sites for you to visit include: Insure.com; SelectQuote.com; ReliaQuote.com, IntelliQuote.com; and InsWeb.com. There are many others, so do some comparison shopping.

<b>Types of Life Insurance:</b> There are four types of life insurance plans from which you can choose: Term Life, Whole Life, Universal Life, and Variable Universal Life.

<u>Term Life</u> is the most affordable as it lets you lock in a fixed rate for the length of the policy [typically 10 or 20 years], but it does not have any cash accumulation. So, the only way it pays is if you die!

<u>Whole Life</u> offers policy holders lifetime coverage, guaranteed level premiums, tax-deferred accumulation of cash values. In other words you can borrow off the policy if you need the cash.

<u>Universal Life</u> offers policy holders Lifetime coverage, flexible premiums and death benefits, tax-deferred accumulation of cash values. Rates are adjustable.

<u>Variable Universal Life</u> offers lifetime coverage, flexible premiums and death benefits, tax-deferred accumulation of cash values, a selection of investment options. Rates are adjustable.

<b>Contact an Agent:</b> Once you have determined which type of insurance is best for you and your family, contact an agent for further guidance. If you received an acceptable life insurance quote online, follow through with it to allow an agent to contact you personally. This person will go over your policy and discuss with you the various types of companies offering coverage. If you are satisfied and want to proceed further, the agent will order a comprehensive medical exam that can be done in the convenience of your home or office at no charge to you! About four to six weeks later the results will be in and if all goes well, coverage will begin almost immediately thereafter. At no point are you obligated to accept coverage until you sign a contract.

<b>More Savings:</b> Do you want to save even more money? Pay the premium all at once. Monthly or quarterly payments usually carry a surcharge. By paying the entire premium in advance you can save around 5%.

Providing for family members after your death is one of the most important reasons to include life insurance as part of your financial planning. You can receive your free life insurance quote by shopping online today; don’t delay!

(c)2005; Matthew C Keegan, LLC

3 Ways Your Life Insurance Company Is Scamming You

Although it makes sense to get in touch with a life insurance company to cover your dependents in the eventuality of your untimely death, there are integrity issues surrounding the insurance companies and agents. Broadly there can be 3 ways your life insurance company is scamming you. We have enlisted them for your benefit.


Selling Coverage that you don’t need!
The insurance companies thrive on the fact that most people don’t understand their life insurance needs. With standard products, they try to sell you coverage that you might not need, but, which are lucrative for them. The insurance agents expedite the process so that you skip the fine print and sign up for a coverage that is ill-suited to your needs. The trick is to play on your fear factor and sell you heavy insurance, even if you don’t have dependents.


Coaxing you to pay ‘Cash’
We strongly suggest, do not pay your premium through cash to an agent. Further, do ensure that you get a receipt for the payment. There are numerous fraudulent entities posing as genuine insurance agencies that extract hard cash from you in lieu of insurance premium. They ask you to sign at blank spaces in a form, assuring you that it is just a formality. Once you have fallen for their trick, you are left without an insurance coverage. The worst part is that most victims only come to know of this scam, when they have met with some mishap and there is not insurance to cover them.


Luring you with benefits!
Insurance agencies and agents have a way of promising you unbelievable benefits out a life insurance policy. Life insurance agents might offer you plans, with a guarantee that the policy would run premium-free for a specific period. Some agents play it smart and offer you great discounts for signing you up for a new policy, while replacing an old policy. The trick is that the old coverage gets terminated and new coverage does not get initiated due to the cumbersome procedural bottlenecks. Thus, exposing you to risk without cover.