Posts Tagged: Universal Life Insurance

When you are ready to purchase a life insurance policy, you are advised to make a life insurance comparison. You should ensure that you are getting the best possible life insurance at the best possible rates. There are different types of life insurance policies available in market with different rates so you are recommended to spend a little time and gather valuable information of the various companies to get the best deal.

During a life insurance comparison, first you have to justify the type of life insurance policy you would like to prefer, whether it is a low cost term life insurance or a universal life insurance. There is a huge difference between these two life insurance policies. Term life insurance is meant only for a short span of time. In case you remain alive after that period, then the term life insurance policy needs to be renewed or you will need to purchase a new one. Whole life insurance or universal life insurance on the other hand lasts for your whole life.

There are lots of whole life insurance companies available online, and it is not difficult to compare the benefits of different online life insurance companies, their quotes etc. If you are in search of a term life insurance then you are advised to request for a minimum of three online term life insurance quotes to compare premiums and settlements offered by each of them.

When you are comparing life insurance policies, the most important aspect is to make a comparison of monthly premiums that you have to pay. The premium should be as low as possible and in case of universal life insurance, the premium depends upon the market conditions.

Only comparisons of premiums are not enough, you should also compare whole life insurance rates with term life insurance rates. The best method for comparison is free life insurance quote. If you are not confident it is advisable to seek help of a reliable insurance agent to get you the right policy.

Term insurance provides coverage for a pre-specified period. For example, term insurance is designed to protect a mortgage or provide income for your family in case of your death. You pay the term insurance premium each month and as long as you pay the premium your policy will stay in force. Once the contract reaches maturity (usually in 10 years) you need to renew your policy at a higher price. If you die while you’re paying the premium your estate gets a large sum of money.

In contrast, permanent or whole life insurance remains in force until you die. You pay the premium on a monthly basis for a pre-specified term, which can range between 10 to 20 years. A portion of your monthly payment pays the insurance and the life insurance company that provided the insurance invests the remainder. Eventually you don’t pay any premiums but your estate still receives a large payment upon death.

Whole life polices have been criticized because their investment returns are low. Thus you were often advised to buy life insurance protection with a term policy and invest the difference between term and whole life payments in a separate investment vehicle, such as mutual funds, stocks, or bonds. Once you have built up a large pool of assets you don’t need the insurance because the assets will provide security and stability in the event of an unexpected death.

However, there is a new, more flexible product called universal life insurance. While the life insurance company controls the savings in a whole life policy, the savings in a universal life plan are owned and controlled by the policyholder. Insurance companies offer a large variety of investment options for this savings component, including mutual funds. Thus, you have the ability to meet your life insurance needs and increase your return on investment.

The major advantage of a universal life policy is tax-advantaged growth. When you pay the policy premium, a portion of the premium pays for the insurance and a portion is invested. However, when you are ready to withdraw the money from your investment, your cost basis ( the portion not subject to tax) is higher with a universal life policy. The cost base for a universal policy is equal to the sum of all your premiums – the amount of money you have invested plus the money you have used to buy life insurance. This is very useful because increasing your cost base will ensure you pay less tax once you sell your investments within the universal life policy.

Universal life insurance provides a powerful combination of life insurance and tax-advantaged investment opportunities. Investors should realize that universal life insurance premiums work twice as hard as other premiums. They should also know that choosing the right product is an important element in the overall success of this strategy. Finally, the benefits of this strategy are magnified if you are in a higher tax bracket.

Life insurance – Tackling the top reasons why we put off buying it

OK, thinking about your own mortality is not a topic anyone enjoys, but our own death is one of the few certainties in life. So why do 35% of Canadians not insure their own life to make sure their family or loved ones are financially protected? While the number of reasons likely match the number of people not insured, the following are the most commonly heard.

Reason #1 I dont have a need for life insurance:
Lets be honest, this reason is by far the most common and for most people untrue. Unless you are an individual who does not have children, has money on hand to cover all debts and funeral expenses, and does not feel the need to offset the loss of their income to a spouse, leave any additional money to family, or to a charity, then it may be true, you dont need life insurance. But few people have the funds readily available to fulfill all their wishes or meet their obligations after their death.

At the very minimum, if you have anyone who relies on your income for their day-to-day needs like a spouse or children, or if you have debts like a mortgage, then you likely need life insurance.

Reason #2 Life insurance is too expensive:
If in the past people have found life insurance to be too expensive it could be because of the type of coverage they were seeking, like whole or universal life insurance. Term life insurance is the most affordable of all the products and is very popular because of it.

Term 10 Life insurance, the most popular Term product in Canada, offers a premium guaranteed not to change for 10 years.

A male non-smoker seeking 100,000 in coverage could be paying as little as*:

1125 for a 30 year-old
2129 for a 35 year-old
3157 for a 40 year-old
4207 for a 45 year-old
5281 for a 50 year-old

A female non-smoker seeking 100,000 in coverage could be paying as little as*:

6106 for a 30 year-old
7112 for a 35 year-old
8133 for a 40 year-old
9163 for a 45 year-old
10219 for a 50 year-old

As you can see, for very little money a year, you can get 100,000 in life insurance coverage.

* Lowest quote online from October 2005 for a Term 10 policy, one of the most popular life insurance products in Canada. Premiums shown are the rates if paid annually.

Reason #3 I dont know anything about life insurance and dont know where to start:
A number of free online tools have been developed to help you decide which term life insurance product is best for your specific situation and how much life insurance coverage you should get.

1Term Life Insurance Analyzers. By answering a few simple questions, these tools will assess your needs and let you know what product is most commonly recommended for people with similar lifestyles.

2Term Life Insurance Calculators. These tools will help you put a pound value on the amount of coverage you need in order to ensure that your family, loved ones and your debts are covered in the event of your death.

Reason #4 Life insurance is a hassle to get:
Thanks to the Internet, getting term life insurance quotes is now fast and easy. If you want to shop around first, getting quotes online means you can avoid hard-sell tactics by someone sitting across from you. There is no sales pressure or obligation to buy when you get quotes online. Its easy, can be done any time at your convenience and is simply a better way to shop for life insurance because of it.

The information you need about the best term life insurance quote is only a click away when you search for term life insurance online. You dont even have to know anything about the insurance industry to get the best term life insurance quote from an online insurance company.

So many life insurance companies have an online presence that you can shop for anywhere from one year to 30 year life insurance terms. Term life insurance is cheaper than whole life insurance because your family only collects a settlement if you die during the term of the life insurance. If you are still alive at the end of the term, then you have to start looking all over again for the best term life insurance quote.

There are several ways to look at term life insurance. If you want to have life insurance as protection for your family, you can look for the best term life insurance quote online and then change over later to a whole life insurance that provide 30 year life insurance terms or one that lasts for your whole life. You might also want to look at universal life insurance that covers everything.

In getting a term life insurance policy you need to get the best term life insurance quote with monthly premiums that suit your budget. Usually term life insurance policies are for 5, 10, or 15 year terms, but it is possible to get 30 year life insurance plans as well. Since the longer term plans are more expensive, you are probably better off with a whole life insurance policy.

You should contact several life insurance companies in order to get the best term life insurance quote, you need to compare the quotes from different companies. This comparison not only involves the bottom line price, but the length of the term, the monthly premiums and the amount of the death benefit each policy offers. Only then can you make an informed decision about the life insurance protection you have for your family.

Some term life insurance companies will give you a policy with no medical exam. It really depends on your answers to various questions about your age, occupation, and health whether or not you get the best term life insurance quote for such as policy. The younger you are, the better quote you get. It pays to shop early for life insurance.

Looking for best term life insurance quote? Look online. But dont just get the quote, check out the company.