LIFE INSURANCE

Life Quotes

Life insurance is a contract between an insured (policy holder) and an insurer where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. Often referred to as living benefits. (see video for more information)

Life-based contracts tend to fall into two major categories:

Protection policies – designed to provide a benefit, typically a lump sum payment, in the event of specified event. A common form of a protection policy design is term insurance.
Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms are whole life, universal life, and variable life policies.

Types of Life Insurance

Life insurance may be divided into two basic classes: temporary and permanent; or the following subclasses: term, universal and whole life insurance.

Term insurance

Term Insurance provides life insurance coverage for a specified term. The policy does not accumulate cash value.

There are three key factors to be considered in term insurance:

Face amount (protection or death benefit)
Premium to be paid (cost to the insured)
Length of coverage (term).

Level premium term can be purchased in 5, 10, 15, 20, 25, 30 or 35 year terms. The premium and death benefit stays level during these terms.

Permanent Life Insurance

Permanent life insurance is life insurance that cannot be cancelled for any reason except fraud, so long as the owner regularly pays his premiums. A permanent insurance policy accumulates a cash value up to its date of maturation, reducing the risk to which the insurance company is exposed as well as the policy's expense to the company. The owner can access the money in the cash value by withdrawing money, borrowing the cash value, or surrendering the policy and receiving the surrender value.

The two basic types of permanent insurance are whole life and universal life

Whole Life Coverage

Whole life insurance provides lifetime death benefit coverage for a level premium. Whole life premiums are much higher than term insurance premiums, Part of the insurance contract stipulates that the policyholder is entitled to a cash value reserve that is part of the policy and guaranteed by the company. This cash value can be accessed at any time through policy loans that are received income tax-free and paid back according to mutually agreed-upon schedules.

Universal Life Coverage

Universal life insurance is a relatively new insurance product, intended to combine permanent insurance coverage with greater flexibility in premium payments, along with the potential for greater growth of cash values. Universal life insurance policies have cash values. Paid-in premiums increase their cash values.

To learn more about Life Insurance.
Contact us at: 1-901-221-8834