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Term Life Insurance Online Options
Term life insurance is something which can be acquired via various means and avenues. However, one may find that buying term life insurance online is an extremely convenient option.
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Importance of Term Life Insurance
An individual who is aware of the underlying purpose of term life insurance is sure to understand the importance thereof. Term life insurance is coverage that is provided to the insured for a certain period of time. Once the policy term expires, so does the coverage. This is useful when an insured wants to be covered during a specific time in their life .
What Term Insurance Is All About
Term life insurance protection will give you life insurance coverage for a certain number of years that you specify when you take out the policy. It does not grow a cash value as time goes by and your premium generally just gives you protection should someone that is covered under your policy dies.
The General Concept of Term Life Insurance
Term life insurance is a type of insurance policy which will provide for the beneficiaries of an insured should death occur during the coverage period. The general underlying concept of a policy of this type is to have a safeguard in place for certain individuals for a specified period of time. One who purchases this type of policy will often see a more reasonable policy premium yet only be covered during a specific time period.
The face value of your term life insurance protection policy can remain level or decrease. You can choose the term to be for as little as one year or more years. It depends on how long you think you will need it. Your premium could remain the same or increase. One common type of term life insurance protection is known as annual renewable term life insurance. This policy type lasts for one year, but it can be renewed after the year is up no matter your insurability.
Reasons to Obtain Term Life Insurance
Term life insurance is a type of life insurance where the coverage only lasts for a certain period of time. Once the end policy date is reached, coverage ceases to exist. At this point in time the individual can either renew the policy and most likely pay higher monthly premiums or do nothing which will end the coverage altogether.
Are you a parent? Do you care for dependent children? If something happened to you, such as a sudden, unexpected death, what would happen to your spouse and children? Would they carry on as always, or would they be faced with hardship?
Today you can help alleviate that hardship with a term life insurance policy from Aviva Life and Annuity Company. Available in 10-, 15- and 20- year plans, there’s sure to be a policy that works best for you and your family.
• The death benefit can help your beneficiary pay off your obligations.
• Your premiums will remain level for the policy term period.
• Your policy will not be canceled during the term period, as long as you continue to pay premiums.
•• Coverage is available immediately without any paramedical exam or lengthy underwriting process
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The Importance of Term Life Insurance
Term life insurance has an important underlying concept. It is a type of life insurance which covers an individual for a specified period of time and allows individuals to protect their family should anything happen to them. This type of life insurance is frequently acquired when an individual wishes to put a safeguard in place for their children until they reach the age of majority. Term life insurance is useful as it protects loved ones in the event of the death of the insured.
Advantage of Buying Term Life Insurance
One of the biggest advantages of buying term life insurance protection is the ability to convert the policy into a permanent policy that will grow a cash value. Since your life insurance needs could possibly change in the future, it is very important to have the ability to convert your life insurance policy from term to permanent. When you decide to convert your term life insurance protection policy to a permanent policy, you won’t have to take another medical exam. If you’ve become uninsurable, you still won’t have to take a medical exam again. Many term life insurance protection policies are renewed automatically after the initial term ends and it doesn’t require any further underwriting. Term life insurance protection is perfect for those family’s that are just starting out in their life. You can set the term of your policy for any length that you want from a year to twenty or thirty years. It is entirely up to you and what you think your needs are.
How to Decide on the Right Policy
One way to figure out how much life insurance that you and your family needs is to look at how much you spend to take care of your family expenses now. Add in your future costs, like education and any health care. Also, you should think about how much the cost will be at the time of death for things like medical bills, burial expenses, and any estate taxes there are. Generally, it is recommended that you have between 6 and 8 times your annual gross income. If your household is a two income household, then you will want to make sure that both of you are insured. However, if your budget is limited, then at least insure the person that makes the most money. If you have children, then it might still be a good idea to insure both parents so that you can pay for any future childcare.
These factors all come into play when choosing life insurance. You want to make sure that there will be enough money to cover the cost of a funeral and burial along with any needs your dependents might have depended on your income for such as food, housing, and clothing.
The decision to purchase life insurance may be a bit more complicated than it sounds. To make it an easy purchase you need to ask yourself a few questions in order to find the best company and policy for you.
One of the first questions a consumer should ask before purchasing life insurance is how much your plan should cover. Some things to consider are: the cost of funerals, burial costs, any debts that would be in your name, and the number, if any of dependents you have. These factors all come into play when choosing life insurance. You want to make sure that there will be enough money to cover the cost of a funeral and burial along with any needs your dependents might have depended on your income for such as food, housing, and clothing.
Another consideration is how much coverage you will need. Most likely a young single employed person would not have dependents or many expenses, hence would not need a large life insurance policy. Other options of life insurance policies are credit life insurance which would require a higher monthly payment.
While you should know exactly what to look for while buying life insurance, you should also know what exactly is offered in your plan. Know exactly what is covered, who your beneficiary is and how to change that person should you need to, when does the policy expire, how can you renew itFree Articles, and what are some situations or occurrences that might increase premiums. These are just a few of the things you need to consider.
Whole Life Insurance
Whole Life Insurance is designed to provide coverage for the life of the insured. Whole life policies generally offer fixed premiums, guaranteed death benefits and are designed to build tax deferred cash value. For that reason, a whole life insurance policy can be described as providing life insurance protection with a savings feature.
- When should I consider buying a whole life policy?
Whole life insurance is generally used when the need for life insurance is lifelong, or permanent. In addition it has a built-in savings element since you will pay premiums and hence build up a cash value within the policy. Additionally, whole life insurance may be used as a part of your estate planning.
Premiums for whole life insurance can be much higher than premiums you would pay initially for the same amount of term insurance, but they are smaller than the premiums you would eventually pay if you were to keep renewing a term insurance policy until the insured’s later years.
Whole life insurance is a good choice for you if you want to ensure that you have a life insurance policy in place for your entire lifetime and can comfortably afford the premiums, or if it fits within the framework of your estate or retirement plan.
- How does whole life insurance differ from term life insurance?
Whole life insurance is designed to provide coverage on the insured for the insured’s entire life as long as premiums are paid and the policy has not been surrendered. On the other hand, term life insurance provides coverage only for a fixed period that is stated in the policy.
- What are the main types of traditional whole life policies available for purchase?
Non-Participating Whole Life Insurance
A non-participating whole life policy has a level premium and face amount during your entire life. The advantages of such a policy are its fixed costs and relatively low out-of-pocket premium payments. Since the policy is non-participating it does not pay you any dividends.
Participating Whole Life Insurance
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 your premium payments, left to accumulate at a specified rate of interest or used to purchase paid-up additional insurance which will increase your face amount of coverage. Dividends are not guaranteed to be paid to you.
Within the two broad categories of traditional non-participating whole life insurance and participating whole life insurance there are various whole life plans that are available for you to choose.
Level Premium Whole Life Insurance
Level premium whole life insurance features premium payments that are level and are required to be paid as long as the insured is living. In the early years the premium is more than enough to pay the current cost of insurance protection. The excess, including interest earnings, makes up the deficiency of premiums in later years when annual premium is not sufficient to pay annual cost of insurance. These extra premiums are held and invested by the insurer, creating the “cash value” of the policy.
Limited Payment Whole Life Insurance
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. Since the premiums are paid over a shorter span of time, the premium payments will be higher than under the ordinary whole life plan. Limited payment plans can provide for the payment of premiums for a set number of years e.g. 10 payment or 20 payment whole life insurance. Limited payment plans can also be based on age e.g. whole life paid up at age 65 or at age 85.
Single Premium Whole Life Insurance
Single premium whole life is a limited payment whole life insurance plan with one relatively large premium payment due at issue. The policy is fully paid up and no further premiums are required. Due to the single premium payment the policy will have an immediate cash value and loan value which could be significant depending on the amount of the single premium payment. Since a substantial single premium payment could be involved, this type of plan may be viewed more as an investment-oriented type of whole life insurance product.
Single-premium whole life policy – is it a good investment?
SPL policies represent what many consider as an extreme type of whole life, limited-payment life insurance.
Most of us have bought, and are buying, several things on an installment plan. It’s how most of us buy the larger items needed in life–a home, car, or expensive household appliances. It gives the average working person a chance to have many of the things not otherwise affordable. The problem? If you default on payments, you may lose your equity.
One of the few things you can buy without losing your equity if you have to default on payments is cash value life insurance. Cash value life insurance can be used for future needs, whether you find yourself needing it for an emergency or using it for an opportunity. It can be purchased on an installment plan and given back to you or your family in the form of cash when you need it most.
If this is something that sounds like it would meet with your needs and financial goals, Contact Us
How does a single premium whole life policy work?
The common features of SPLs include:
- Only a single premium payment is made. No other payments done in the future.
- The policy is paid up in full.
- The rates are low because interest rate assumptions are higher.
- When the single premium payment is made it creates cash value which immediately becomes available to serve as collateral to a loan.
- Cash value accumulates every year even though there are no additional payments.
- Dividends are given out yearly starting on the end of the policy’s second year.
What are the pros and cons of a single-premium whole life policy?
Advantages of single premium whole life insurance:
- Death benefit can be passed on tax-free. This is the biggest benefit afforded by SPLs. In addition, this benefit will go to an individual’s heirs without having to go through probate which is a huge advantage to those with larger estates.
- No worries that the policy will lapse. Because a single premium payment is made, there is no need to worry about late payments.
- Offers faster access to policy amount. This could be crucial in case the policy owner needs money to cover, for instance, long term care costs.
- Allows access to a portion of the death benefit. This may be possible if the policy holder is suffering from terminal illness.
- Constant and stable growth. This is because of the fixed interest rate attached to the policy.
- Money in the policy is tax-free. Which is possible when it is not withdrawn from the policy.
Disadvantages of single premium whole life insurance:
- The cost can be prohibitive to many people. The minimum amount pegged for SPLs is $5,000. Usually, this is not enough coverage for many consumers.
- You are required to pass strict medical qualification for life insurance. If you plan to increase the amount for death benefit, you will have to undergo another round of underwriting.
- Fixed rate on returns. The fixed rate of interest may provide protection in times of unstable market conditions. However, it will also prevent the policyholder from maximizing his benefits when the market is on an upswing.
- IRS penalties. This applies when the cash value is withdrawn or is taken out as a loan. When withdrawals are made or a policy loan is taken out prior to the age of 60, an IRS penalty of 10 percent is applied.
- Surrender charges apply. This happens when the policy is cashed in.
Taxation on Single Premium Whole Life
Beneficiaries will get the proceeds tax-free. However, if the cash value is withdrawn or a loan is made against the policy, the earnings portion of the policy amount will be subject to tax.
Is single premium whole life a good idea?
The following are situations where a single premium whole life insurance may be a good option:
- When the individual is below 55 years old and has a 30-year working horizon. The time frame allows the SPL enough time to let the cash-value grow.
- When buying for children. This is because of the cost savings as premium rates are low.
- For seniors 50 years old and above who are looking to maximize available benefits when transferring their wealth. The SPL will allow them to set aside a large amount of money for their heirs.
- For people who have heirs who will need a lifetime of income as in the case of special-needs grandchildren.