WHOLE LIFE INSURANCE

WHOLE LIFE INSURANCE

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Whole life insurance is policy in which the whole life of insurer is taken care.

 Premiums under this policy are payable upto 80 years age of the policyholder or for 35 years whichever is later.

Purchase a whole life insurance policy for following reasons:

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-Life time protection

-Payments which remain same each year

-To put additional money in the policy for a tax-favored basis.

Important points to remember in whole life insurance:

-Fixed amount is paid.

-Coverage for renewal is for whole life.

-Yes death benefit is guarantee.

-Guaranteed amount of cash value is given depending on cash value in return.

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-Cash withdrawal is not given.

-Whole life insurance is expensive.

-Tax advantage is given

-No flexibility in payments.

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VARIABLE UNIVERSAL LIFE

VARIABLE UNIVERSAL LIFE

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Variable universal life is policy which provides death benefit as well as investments feature. Premium given in this insurance is flexible according to the need of the consumers which tend to increase the rate of return.

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-Variable life insurance provides protection till the death of policyholder.

-This insurance is expensive.

-They allow policyholder to take part in different types of investment.

To remember

-Fixed asset is paid throughout.

-Option for coverage is for whole life.

-Benefit upon death is guarantee because the value is dependent on cash value.

-Cash component is not given.

-No cash withdrawal.

-Cash growth depend upon the performance of the investment made.

Policyholder can invest as well as make changes in policy according to their needs.

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UNIVERSAL LIFE

UNIVERSAL LIFE

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Universal life insurance is type of insurance in which policyholder is allowed to alter the particular policy according to the changes in life by combining/merging benefits of term life with savings account.

Universal life insurance is also based on whole life insurance.

Universal life insurance came into existence to provide an easy way to policyholder by shifting money in-between the savings and insurance.

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Important points related to Universal life insurance

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-It is flexible to pay the amount of your own choice.

-Duration of universal life insurance is for whole life.

-Interest rate is minimum which is guaranteed.

-Policy criteria of universal life insurance is “pay interest and the credit will be given back by your policy”

-There are no cash withdrawals.

-Before purchasing universal life insurance one must seek that it is expensive policy

-It is flexible

-Tax advantage is given in this policy.

-It is permanent i.e. as long as you keep premium.

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Some components are also included in this policy:

– Death benefits – policyholder has right to choose the type of benefit he wants in future.

-Provide flexible premiums entirely related to situation.

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TERM LIFE

TERM LIFE

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Term life insurance is insurance which plays an effective coverage at fixed rate payment for limited time period. When the time period expires than there is no guarantee given for the previous decided rate.

Term life insurance has minimum cost to purchase death benefit for a specific time period.

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Term life insurance is not used for real estate or any charitable places but it is basically used for income needs of an individual, helps in repayment of loan.

Advantages of term life insurance:

– it is affordable

-it is flexible

-easy to understand

-they are easy to buy

  In Term life insurance policy – you can invest your earned money yourself, than letting an insurance company do it on your behalf.

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Term life insurance policy is beneficial for covering your short-term financial needs.

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Examples of these needs are your:

-children’s education and

-your mortgage

Important points to be remembered:

-Death benefit is guaranteed

-Premium increases according to renewal

-Value of cash component is not important.

-Cash growth is not possible because there is no cash value of cash components.

-Withdrawal of cash is none.

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PERMANENT LIFE

PERMANENT LIFE

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Permanent life insurance is a fully secured policy that do not expire i.e. they are meant to be paid for the time period of the insured’s life and provide life long protection.

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Permanent insurance remain in existence as long as you are continuing paying your premium.

Key point of permanent insurance is that it also provide death benefits to respective holders. This is also called as cash-surrender value or cash value.

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There is no need to pay any taxes until your permanent life insurance policy is active.

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-Withdrawl amount of premium which is paid is taken taxable.

-Permanent insurance policy is also used for asset protection.

-Provide special needs for loved ones and child who is not independent.

-Build way for funding for life’s emergencies.

Permanent insurance is YES for investing.

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MORTGAGE INSURANCE

MORTGAGE INSURANCE

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The loan borrowed by the borrower is normal issue but if he dies suddenly then the question arises that who will repay the loan?

Answer to the above question is by taking mortgage life insurance policy which is specially designed to repay the debt if the borrower dies. This policy is aimed to protect borrower’s rights to repay the debt in the form that their policy would pay the total capital so that the outstanding amount is left less which will help borrower’s family to repay easily.

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Be careful before taking this policy in following ways

Fill in all the minor details in the application so that later on there is no confusion.

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 If mortgage amount exceed the fixed interest rate then they will not repay your debt

They have no cash value

Make sure that the policy is long enough to cover your debt amount.

There are benefits also:

If there is death then your insurance company will pay the benefit to your lender directly. If by any reason the policy is not able to pay whole amount of loan then part of the amount will be owed.

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You must decide to apply for mortgage life insurance according to your age and the condition of your health.

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Mortgage life insurance help in reducing half part of burden by repaying the capital sum.

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