ABOUT TERM INSURANCE

 

Term insurance provides protection for a specified period of time. This period could be as short as one year or provide coverage for a specific number of years such as 5, 10, 20 years or to a specified age as high as 80. Policies are sold with various premium guarantees.

The longer the guarantee, the higher the initial premium. If you die during the term period, the company will pay the face amount of the policy to your beneficiary. If you live beyond the term period you had selected, no benefit is payable. As a rule, term policies offer a death benefit with no savings element or cash value.

 

Get a free Life Insurance quote now! Click here!

 

Premiums:

Premiums are locked in for the specified period of time under the policy terms. The premiums you pay for term insurance are lower at the earlier ages as compared with the premiums you pay for permanent insurance, but term rates rise as you grow older. Term plans may be "convertible" to a permanent plan of insurance.

The coverage can be "level" providing the same benefit until the policy expires or you can have "decreasing" coverage during the term period with the premiums remaining the same. If you do not pay the premium for your term insurance policy, it will generally lapse without cash value, as compared to a permanent type of policy that has a cash value component.

Currently term insurance rates are very competitive and among the lowest historically experienced.

It should be noted that it is a widely held belief that term insurance is the least expensive pure life insurance coverage available. One needs to review the policy terms carefully to decide which term life options are suitable to meet your particular circumstances.

 

 

Types of Term Insurance:

 

Renewable Term. Renewable term plans give you the right to renew for another period when a term ends, regardless of the state of your health. With each new term the premium is increased. The right to renew the policy without evidence of insurability is an important advantage to you. Otherwise, the risk you take is that your health may deteriorate and you may be unable to obtain a policy at the same rates or even at all, leaving you and your beneficiaries without coverage.

 

Convertible Term Convertible term policies often permit you to exchange the policy for a permanent plan. You must exercise this option during the conversion period. The length of the conversion period will vary depending on the type of term policy purchased. If you convert within the prescribed period, you are not required to give any information about your health. The premium rate you pay on conversion is usually based on your "current attained age", which is your age on the conversion date. This type of policy often provides the maximum protection with the smallest amount of cash outlay.

 

Level or Decreasing Term Under a level term policy the face amount of the policy remains the same for the entire period. With decreasing term the face amount reduces over the period. The premium stays the same each year. Often such policies are sold as mortgage protection with the amount of insurance decreasing as the balance of the mortgage decreases. If the insured dies the proceeds of the policy can be used to pay off the mortgage.

 

Adjustable Premium Traditionally, insurers have not had the right to change premiums after the policy is sold. Since such policies may continue for many years, insurers must use conservative mortality, interest and expense rate estimates in the premium calculation. Adjustable premium insurance, however, allows insurers to offer insurance at lower "current" premiums based upon less conservative assumptions with the right to change these premiums in the future. The premium, however, can never be more than the maximum guaranteed premiums stated in the policy.

 

Save 50%-70% on Term Life Insurance! Click here!

Save 50%-70% on Term Life Insurance! Click here!

Insurance Online - apply now for an online Insurance quote.

If you're in the market for a speedy online life insurance quote you have clicked to the right spot.

You will receive multiple Free Insurance Quotes with each single Insurance quote form you submit online. No need to run all over town and make dozens of phone calls. 

 

The best strategy for attaining the lowest insurance rate? Grab a fresh cup of coffee and a couple cookies, relax, and place a free online application from the ease and comfort of your home or office with each recommended company. 

Then relax and choose at your leisure the best offer from among the many you receive!

Below you will find the best online insurance service providers we could find for you.

The quotes are free, there is no obligation but that you fill out a quick form, and provide accurate information to each Insurer you wish to contact.

PERMANENT INSURANCE

(Whole Life or Ordinary Life)

 

While term insurance is designed to provide protection for a specified time period, permanent insurance is designed to provide coverage for your entire lifetime. To keep the premium rate level, the premium at the younger ages exceeds the actual cost of protection. This extra premium builds a reserve (cash value) which helps pay for the policy in later years as the cost of protection rises above the premium.

Whole life policies stretch the cost of insurance over a longer period of time in order to level out the otherwise increasing cost of insurance. Under some policies, premiums are required to be paid for a set number of years. Under other policies, premiums are paid throughout the policyholder’s lifetime. The insurance company invests the excess premium dollars

 

This type of policy, which is sometimes called cash value life insurance, generates a savings element. Cash values are critical to a permanent life insurance policy. The size of the cash value build-up differs from company to company. Sometimes, there is no correlation between the size of the cash value and the premiums paid. It is the cash value of the policy that can be accessed while the policyholder is alive.

 

The Commissioners 1980 Standard Ordinary Mortality Table (CSO) is the current table used in calculating minimum nonforfeiture values and policy reserves for ordinary life insurance policies. This table provides the minimum cash values that must be guaranteed in your policy.

The policy’s essential elements consist of the premium payable each year, the death benefits payable to the beneficiary and the cash surrender value the policyholder would receive if the policy is surrendered prior to death. You may make a loan against the cash value of the policy at a specified rate of interest or a variable rate of interest but such outstanding loans, if not repaid, will reduce the death benefit.

 

In 1984 a new federal tax law required that for permanent insurance to enjoy preferred tax treatment it must provide coverage up to at least age 95, limit the amount of premium that may be paid in relation to the face amount of coverage and establish a minimum ratio between cash value and face amount of insurance. Many permanent policies will contain provisions, which specify these tax requirements.

There are two basic categories of permanent insurance, traditional and interest-sensitive, each with a number of variations. In addition, each category is generally available in either fixed-dollar or variable form.

Save 50%-70% on Term Life Insurance! Click here!

Before You Go, We Recommend you Check the Rates from Termfinder.com

Easy quotes. Smart advice. Save up to 70%! Compare over 1,100 life insurance products and get professional guidance choosing the best policy for your family, health situation and budget.

Click Here!

 

Traditional Whole Life

 

Traditional whole life policies are based upon long-term estimates of expense, interest and mortality. The premiums, death benefits and cash values are stated in the policy. There are six basic variations of traditional permanent insurance:

 

1. Non-Participating Whole Life   A non-participating whole life policy will give you a level premium and face amount during your entire life. The advantages of such a policy are its fixed costs and generally low out-of-pocket premium payments. The disadvantage is that it pays no dividends.

 

2. Participating Whole Life  A participating whole life policy pays dividends. The dividends represent the favorable experience of the company and result from excess investment earnings, favorable mortality and expense savings. Dividends can be paid in cash, used to reduce premiums, left to accumulate at interest or used to purchase paid-up additional insurance. Dividends are not guaranteed.

 

3. Indeterminate Premium Whole Life   An indeterminate premium whole life policy is like a non-participating whole life plan of insurance except that it provides for adjustable premiums. The company will charge a "current" premium based on its current estimate of investment earnings, mortality, and expense costs. If these estimates change in later years, the company will adjust the premium accordingly but never above the maximum guaranteed premium stated in the policy.

 

4. Economatic Whole Life  An economatic whole life policy provides for a basic amount of participating whole life insurance with an additional supplemental coverage provided through the use of dividends. This additional insurance usually is a combination of decreasing term insurance and paid-up dividend additions. Eventually, the dividend additions should equal the original amount of supplemental coverage. However, because dividends may not be sufficient to purchase enough paid up additions at a future date, it is possible that at some future time there could be a substantial decrease in the amount of supplemental insurance coverage.

 

5. Limited Payment Whole Life  If you want to pay premiums for a limited time the limited payment whole life policy gives you lifetime protection but requires only a limited number of premium payments. Because the premiums are paid over a shorter span of time, the premium payments will be higher than under the whole life plan.

 

6. Single Premium Whole Life   Single premium whole life is limited payment life where one large premium payment is made. The policy is fully paid up and no further premiums are required. Many such policies have substantial surrender charges if you want to cash in the policy during the first few years. Since a substantial payment is involved, it should be viewed as an investment-oriented product.

 

Interest in single premium life insurance is primarily due to the tax-deferred treatment of the build-up of its cash values. Taxes will be incurred on the gain, however, when you surrender the policy. You may borrow on the cash value of the policy, but remember that you may incur a substantial tax bill when you surrender, even if you have borrowed out all the cash value.

 

Interest Sensitive Whole Life While insurers guarantee stated benefits on traditional contracts far into the future based on long-term and overall company experience, they allocate investment earnings differently on interest sensitive whole life in order to better reflect current fluctuations in interest rates. The advantage is that improvements in interest rates will be reflected more quickly in interest sensitive insurance than in traditional; the disadvantage, of course, is that decreases in interest rates will also be felt more quickly in interest sensitive whole life.

Save 50%-70% on Term Life Insurance! Click here!

Finance your Lifestyle

Click Here!

Compare Multiple Loan Offers and Choose The Rate that You Want!


Visit LoanWeb and get up to 4 free quotes from nationwide lenders!

We've been helping consumers like you since 1996.

* Lenders Compete for your Business
* Easy One-Page Form
* No SS# Required
* Any Credit is OK

 

 

Compare Multiple Loan Offers - You Choose the Rate! Click Here!