Term Life Insurance Digest

I recently took a continuing education course on life insurance.  One of the first things I learned was about the introduction of universal and variable universal life insurance products into the life insurance marketplace.

Up until that time, all of the available products (term life insurance and whole life insurance) were based completely on the premiums, and had very little flexibility.  When universal life insurance was introduced, all of a sudden life insurance policies had more flexbility.

With universal life insurance you can change your death benefit and also the amount of premiums you are going to pay.  You can use your accumulated cash value to borrow against it or to supplement your premium payments.  Overall, a universal life insurance policy provides the opportunity to have much more flexibility with your life insurance.

I just realized how much I really don’t know about what’s going on with the ecomony (and how complicated everything is).  Hopefully we can find our way out of this mess.  My biggest fear right now is that the people trying to solve the problem may not be smart enough or disciplined enough to do what needs to be done.

I was reading on this blog.  It has a ton of info about what’s going on.

What is term life insurance?

Term life insurance is the simplest form of life insurance protection.  It is also the cheapest.  It covers you for a specific term period (hence the name ‘term’ life insurance).  It has a guaranteed price that will not change during the guaranteed term.

So, if you purchase a 20 year term life insurance policy at 25$ a month, then the price each month for 20 years will be 25$.  At the end of the 20 years the policy will continue if you continue to pay the premiums.  However, the price will begin to go up each year–and it will go up dramatically.

At that point it’s good to either get a new term policy, convert to a universal policy, or purchase a new universal or whole life policy.

Term life insurance is a great option for young family’s, people with mortgages, and businesses with key employees.  It’s a good option if you only need coverage for a certain period of time.

I came across some common life insurance myths.  I think education about life insurance is very important.  Through it, people will understand better the different options they have when it comes to life insurance.  Also, hopefully people won’t be so afraid when it comes to life insurance.  When you think about the benefits to your beneficiaries, I can’t think of any reason why you’d want to put off your purchase of life insurance any longer than you already have.

Have you ever wondered why life insurance takes so long to get?  Check out this article about underwriting by Wholesale Insurance.  They’ve got great information and explain why it takes so long in a short and simple way.  Unfortunately, to get the best rates, you better be willing to wait a few months for the life insurance company to completely underwrite your policy.

If you don’t mind paying a little more and would rather just get it taken care of sooner rather than later, then you might want to try a no exam life insurance policy.  They cost more but can be purchased immediately.

If you are looking for a good resource for life insurance information, I suggest checking out the research library at Wholesale Insurance.  They are excellent at providing good and easy to understand information about life insurance.

It always surprised me how little people understand about the life insurance world.  I guess I shouldn’t be that surprised, since I didn’t know that much at first either, and I grew up surrounded by life insurance.  Life insurance can be confusing, but you can get around that by making sure you have a life insurance agent that has your goals in mind.  A good life insurance agent is something that can be hard to come by.  I’ve realized in the last couple of years that not all life insurance agents have the best understanding of the different types of life insurance.  That’s why getting a good life insurance agent is so important.  The last thing you want is to be guided into a purchase that doesn’t line up with your financial goals.

Life insurance is so readily available today.  If you do not have life insurance, then you should definitely look in to getting some.  Life insurance rates are at an all-time low.  The funny thing is that even though rates are so low, the number of people getting life insurance has dropped as well.

If you are healthy, you can get life insurance for much cheaper than it costs you to pay for your cable bill each month.  That is amazing!  Especially when you understand the far-reaching effects that life insurance can have on your family or business if it is ever needed.

When it comes to term life insurance quotes, it’s important to understand what they are, how they are derived, and how they can change.  They are after all just quotes; they are not guaranteed rates.

Once you have offered basic information to your life insurance agent or an online life insurance website, a quote can be given.  This is a quote of real rates based on the information you have provided.  The reason it is not guaranteed (unless it’s a guaranteed issue life insurance policy that is being quoted to you) is because the life insurance carrier will most likely need to send your application through underwriting.  Underwriting is the process that determines which health class you fit into.  Rates are based on the health class of the individual applying.  If after underwriting you fit into the same health class that you were quoted, then the rates will be the same as the quote.

If you do not fit into the same health class you were quoted, then the rates will be different.  Having an agent that knows how to ask the right questions will help you get a term life insurance quote that is less likely to change after underwriting.

There are a few different types of life insurance.  Within those different types, there are many different purposes for your life insurance.

The simplest form of life insurance is term life insurance.  Term insurance is most often used for mortgage protection, and with people that are younger.  It is purchased for a specific term.  At the end of the term, you can keep the policy, but the premiums are no longer guaranteed and will go up each year.

Whole life insurance is like term life insurance, except for the term and the price.  It is purchased to cover you for your whole life, and the term is guaranteed to stay the same until you die.

Universal life insurance is like whole life because it’s meant to cover you for your whole life.  It builds up cash value, and you can borrow against the cash value or withdraw it at different times in your life.  This type of life insurance is a little more complicated.  To get a policy that works right for you, you need to speak with an agent and have a clear idea of what you want.  They’ll direct you toward the correct policy.

Return of premium life insurance is normally a term policy that refunds all of your premiums at the end of the term.  It can be a good investment if purchased for 20 or 30 years, but normally isn’t worth the extra cost if only purchased for 10 years.  (It would make more sense to get term insurance and invest the difference, even if the return on the investment isn’t that great.)

Guaranteed issue life insurance is a type of life insurance where the issuance of the policy is guaranteed.  In other words, if you apply for the policy, you get it no matter what.  Most policies require underwriting, but this policy does not.  It is often the most expensive form of life insurance because it carries the most risk.

My last post was about a political/socio-economic subject.  I will refrain from straying much from life insurance on this blog, as I don’t think politics generally has much to do with life insurance (although definitely there are laws that affect life insurance, so I’ll continue to talk about those).  Hopefully my message that everyone should have life insurance will continue to spread.  Life insurance is for everyone, regardless of race, color, gender, age, or financial situation.