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Types of Life Insurance

There are two basic types of life insurance. Permanent or whole life insurance and term life insurance are the two predominant forms of coverage.

Following are some of the points you should know before getting a life insurance quote from providers.

There are three forms of permanent life insurance. Depending upon the carrier, each form of permanent life insurance may have certain variations. The most popular form of permanent life insurance is whole life insurance. Many policy owners enjoy the benefits and stability of a whole life policy. Whole life insurance is as an equity investment and is central to many individual’s investment portfolios.

Whole life insurance is the cornerstone product of most life insurance companies. More than 50% of active life insurance provides whole life coverage. Whole life insurance pays a guaranteed death benefit to designated beneficiaries whenever the insured dies. Unlike term insurance policy owners, whole life insurance policy holders build cash value as premiums are paid.

The cash value of a whole life insurance policy can be borrowed by the policy owner. The owner must then pay interest on the loan until the loan is repaid. If the insured dies before the cash value loan is repaid, the amount of the cash value loan would be deducted from the death benefit paid to beneficiaries.

Many whole life insurance policy owners use this cash value to meet emergency needs or to pay education. There are several significant tax advantages to this form of equity building.

Whole life insurance policies also earn dividends. Often these dividends can be used to offset premium costs. Otherwise, they can be added to the policy’s cash value or paid to the policy owner on an annual basis.

The other forms of permanent life insurance are universal life and variable life insurance. These variations of whole life are not offered by all life insurance companies. Persons interested in these forms of coverage should discuss their attributes with the insurance agent.

Term Life Insurance is the second major form of life insurance. Term life coverage provides a guaranteed death benefit in the event death occurs during the life of the policy. Term life does not accrue any cash value and is not an equity investment. As a result, premiums are significantly lower for term life insurance than for permanent life insurance.

The two basic forms of term life insurance are Level Term and Decreasing Term. Level Term provides a fixed death benefit during the life of the policy. Decreasing term produces a death benefit that reduces each year. Approximately 40 % of all life insurance is term life insurance.

The death benefit of term life insurance also has tax advantages. Term life insurance is generally an interim form of life insurance and often seems as a bridge until a permanent life insurance policies is acquired.

For many Americans, permanent life insurance is a comforting investment in times of economic unrest. During the Great depression, whole life insurance policies continued to pay death benefits, build cash value and provide dividends to their policy holders. As a result, life insurance companies are viewed as responsible finical managers by most clients

8 Auto Insurance Riders to Understand

Policy holders may believe their auto insurance carrier has an endless variety of add-on options, usually called riders, that can be added to their policies.  However, the availability of these riders presents opportunities for savings and tailoring of each auto insurance policy.  Experienced policy holders realize that auto insurance should be personalized.  Every individual, every family and every company has different auto insurance requirements.  Many states set minimum coverage requirements.  These requirements vary from state-to-state.

Understanding the riders is the key to tailoring the policy holder’s coverage.  A quick review of the 8 riders listed below should help policy holders better understand their auto insurance policies.  While different insurance companies may have different names for each rider, the concept remains the same. Also they will help you to understand auto insurance quotes and making descision about choosing right auto insurance policy.

Liability Coverage – Liability coverage protects the policy holder against claims for injury or property damage in an accident where the policy holder is responsible.  Liability coverage has limits which are set by the policy holder in conjunction with the insurance company.

Collision Coverage – Collision coverage helps pay for repairs or replacement to the policy holder’s vehicle if that vehicle is involved in an accident with another car or a stationary object.

Comprehensive Coverage – Comprehensive coverage provides protection for damages resulting from natural disasters, theft, vandalism, or similar occurrences.

Uninsured Motorist Coverage ­– This relatively new rider provides protection when the policy holder is involved in an accident with an under insured or uninsured motorist.

Medical Payment Coverage – This rider provides payment for medical expenses for the policy holder or the passengers in a covered accident.  When other members of the policy holder’s family are driving the insured vehicle, this rider also provides protection.

Personal Injury Protection – This popular rider provides for payment of lost income, child care costs, medical expenses and related charges for the policy holder.  This protection is not available is all states.

Limits and Deductibles – These amounts are set to establish the maximum limit of exposure the auto insurance carrier will pay for a covered accident and the amount of out-of pocket deductible the policy holder would pay for each covered accident.  Policy holders must carefully review these limits.

Additional Coverage Options – These riders provide the nuisance items that are associated with an accident.  Riders for sound system protection, rental car reimbursement, towing fees are among the most common of these riders.

As mentioned previously, each auto insurance company offers different riders to be added to the basic policy.  These riders will impact the appeal of the policy and the cost of each policy.

Most policy holders prefer to begin customizing their auto coverage by beginning with the mandated coverage and selecting coverage for each vehicle.  Policy holders should understand that one size does not fit all in the auto insurance industry.  The policy specifications should be customized for each covered vehicle.

Term Life Insurance

Term life insurance is a low cost, effective form of protection for a defined period of time.  Like all life insurance, term life insurance provides a guaranteed death benefit to the policy’s beneficiaries.  Most policy holders enjoy the security and peace of mind associated with term life insurance coverage.

As the name implies, term life insurance has a starting and ending date.  When the term of the policy expires, the policy owner can attempt to replace the coverage with another term policy or with permanent life insurance.  Some term life insurance policies contain provisions allowing the owner to convert to whole life coverage.  Not all life insurance company’s offer this option.

Many families and young couple purchase term life because the premiums are reasonable while the death benefit remains substantial.  Term life insurance is a viable safety net for an unexpected death.  The death benefit allows beneficiaries to know that should the unexpected occur, they will be able to continue their lives without severe financial distress.

Unlike most permanent insurance plans, term life does not provide the accrual of cash value and does not pay dividends.  Term life is strictly for persons who want the security of a death benefit.  The death benefit does have several tax advantages.  The death benefit is only paid upon the demise of the insured.

The insured does not have to be the policy owner.  The policy owner can insure a third party.  However, the owner is responsible for premium payments.  Term life insurance usually is paid in monthly installments although other arrangements may be available.  If payments are not maintained, the policy will be terminated.

The policy owner selects and declares the beneficiaries.  Beneficiaries cannot be altered without the written approval of the policy owner.  Policy owners are encouraged to review the beneficiaries on a regular basis.

Many times term life insurance is obtained to protect loved ones in the event of a tragedy.  Divorced parents often use term life insurance to assure a child’s educational opportunity if an unforeseen death should occur.

The typical age of a term life insurance policy is 20 years. Coverage periods should be taken care while searching for life insurance quote online.  Many times policy owners view term life a short term protection.  Many times homeowners purchase term life insurance to coincide with the life of their mortgage.  In the case on an untimely death, beneficiaries may then use the proceeds to payLife Insurance, Life Insurance Quote the mortgage.

As term policies age, the premiums usually increase.  Policy owners can obtain projected payment schedules upon commencement of the policy.

There are two basic forms of term life insurance.  With Level Term Life Insurance, the death benefit remains constant for the life of the policy.  With Decreasing Term Life Insurance, the death benefit decreases as the policy ages.  Usually the decrease occurs annually.  Policy holders will be provided a death benefit statement upon origination of a Decreasing Term Life Insurance Policy.  While term life does not generate cash value or equity, it does provide a stabilizing death benefit.