Whole life insurance - what do you need to do about it?

Whole life insurance is one of the most famous and one of the most sought after insurance policies in the market today. It is nothing but an insurance policy which will pay a lump sum of amount on the event of your death or during a critical illness. This is considered one of the best policies there due to a couple of reasons. First of all, it pays a lump sum of amount on the event of the policyholder's death. This can be greatly useful for the kith and kin of the policy holder. Second of all, it also pays you on the account of critical illness. This is considered a great benefit as usually you will have to pay through the nose in case of a critical illness. This lump sum of amount can be greatly helpful to you at that point of time. The premium insurance of this policy can be determined in many ways. You also have to think whether it is life insurance taxable or not. In fact, whole life insurance sometimes is linked with life insurance universal or universal life insurance, which is yet another important insurance policy available in the market. This policy is separated from other policies and it stays different and unique from other policies due to a couple of reasons. First of all, universal life insurance differs from whole life insurance or any other insurance for that matter to a great deal. While in most other insurance policies the premium amount is usually fixed for life time, in case of universal life insurance, the premium can vary according to the ups and downs in the market conditions. Now whole life insurance policy can be sometimes linked to universal life insurance and the policy can have the features of both these policies. The same analogy can be applied in the case of standard life insurance also.

One of the most important things you need to think about while choosing whole life insurance is whole life insurance quote. You can get whole life insurance quotes from insurance advisors who are in the best position to guide you through the process. Globe life insurance is one such company which has knowledgeable insurance advisors who can help you through the process. You can also opt for group life insurance, but you need to inquire your insurance advisor properly about the different terms and conditions of the policy which differ greatly from conventional policies. Life insurance annuity is a great help for people who want to go for insurance policies with the lowest risk possible and also get returns. The annuity can be received by the policyholder immediately or at a deferred date, depending upon the nature of the policy. Life insurance general is one of the most important generators of such policies. You can also check out life insurance jobs, which have a very positive growth rate. You can check out newspapers and websites which have adverts regarding life insurance jobs. If you have a knack for selling and understanding complex calculations, then these jobs will be suitable for you. You can also try your hands on life insurance medical which is one of the most used policies. Life insurance settlement is one issue which differs from policy to policy. In case of medical life insurance, different insurance providers have different set of rules for the payout for the policyholder. You need to check them out before choosing a policy.

Things you must know about term life insurance

Term life insurance is nothing but insurance assured for a particular period of time. You have to pay the premium as expected by the insurance company for a particular period of time mentioned in the term insurance policy you have taken up. During the period, if something were to happen to you or your property, the insurance amount will be given to you or your beneficiary on the event of your death. It is also considered long term care insurance because of the kind of protection it offers. In fact, the policy is so brutally honest that you will sometimes find it difficult to ignore this kind of policy. The insurance advisor should be able to tell you everything about the policy and because it is one of the most straight forward policies available in the market, you can find yourself easily relating to the terms and conditions provided and you can go ahead with the policy. The advisor should be also able to give you term life insurance quote. Term life insurance quotes are easily available from various other sources also. Some of the most popular and the most accessible sources apart from the insurance advisors are magazines, internet, and the concerned insurance companies' information centers.

As is the case with any other kind of insurance policy available in the market, you can also find cheap term life insurance. It is also one of the most popular ones available in the market as it is affordable for many lower middle class people. You can get to know about that from your insurance advisor and the internet. In fact, you can find a lot of information about term life insurance online. The internet has become an excellent source for insurance related queries and you can find a huge amount of resources available in the internet, which you can check out in a matter of minutes. One of the most important things you need to consider while taking a term life insurance policy is the term life insurance rate. The affordability factor comes into the play and you need to educate yourself with term life insurance rates. This is very important as this is the only way in which you can decide whether you would be able to afford the policy or not. While going for a policy, you should think whether it is an affordable term life insurance or not. Only an affordable term life insurance policy can be the best term life insurance policy for you. Also, you need to do some research on your part in order to find out the best term life insurance policy available in the market. You can also get into some deep research and come out with the best results. You can also see a lot of people going for instant term life insurance.

When you are planning to go for term life insurance, you should get in touch with a financial advisor or an insurance advisor. They should be able to give you an idea about the cost term life insurance. They should also be able to give you instant term life insurance quote in order to help you make a decision. You can check out various factors like the premium to be paid, life insurance term life, and other things. You can also go for low cost term life insurance if you are not sure whether you would be able to afford the high cost policy and the respective premium.

Tips on shopping for cheap life insurance quotes

Life insurance helps in the protection of economic value of assets. What this would mean to you in turn is that a life insurance quote that decides your policy will help you in being sure of your future. Life insurance is there to provide financial security. While most of us are aware of the need for life insurance, a lot of us are not aware of the factors that determine life insurance cost. The type of life insurance policy that you go in for decides the insurance rate. Other factors such as a person's age and his/her health too play an important part in the insurer determining the insurance risk that is involved with that particular person. This in turn would dictate the premium that one pays towards a life insurance policy.
You can find a lot of useful information on life insurance over online sources dedicated to the subject. From getting a free life insurance quote to information on the various aspects of life insurance you can find them online these days. Getting life insurance quotes online is a very simple process. In order to get life quotes insurance companies will request you to provide certain information. Once you key in the relevant information you can then get your life insurance quote in a matter of minutes. The actual cost insurance life low or high is dependant on several factors such as the age of the person and medical condition, to mention only two.
The first important decision that you need to make while going in for life insurance is to make a choice between permanent and term insurance. Term insurance is less expensive and provides coverage for a specific term as the name suggests. If something were to happen to the life assured then the death benefit is paid to the beneficiary in the case of term insurance. Permanent life insurance is designed in such a way to provide protection for the entire life of a person. Since there are several life insurance companies in the market you can always find some insurer who can offer you low cost life insurance. Contrary to what people think, cheap life insurance is not difficult to find. Since the competition is intense you can always find a company which can offer you lower rates. A simple search is all that you need to find out a low life insurance quote online.

You should also consider life insurance rate quotes based on some other 'riders' that are part of insurance policies. For instance you may want cover for health care costs for something extra along with your life insurance policy. All these factors will determine the premium that you need to pay for your life insurance. Even if you were to find an insurance company offering discount life insurance, you should make sure that you are dealing with a reputable insurer. Just because someone is offering you a life insurance price that is low does not mean that you should compromise on some aspect. These days with the advent of the internet getting a life insurance quote has become very convenient. You can easily get life insurance quotes online. You can also shop for some of the cheapest life insurance available online. Although this is the case it is always advisable to seek professional advice before you settle for the best option suited to your needs.

During your initial search phase for a life insurance policy try and get in touch with multiple life insurance companies. You should make it a point to find out every thing in detail from the customer service representatives of life insurance companies on all the aspects of a policy. Your insurance agent is another person who can help you in deciding the right life insurance policy which suits your circumstances best.

How Life Insurance Premiums are Determined

Many people have bought life insurance plans mainly for investments, tax benefits and the life cover that they offer. They have rarely tried to understand how their life insurance plan works for them or for that mater, how their premium is determined.

In this article, I will give you an overview of how premiums are determined and which life insurance plan proves to be a better option.

First and foremost , the primary purpose of life insurance is to insure the financial future of the nominees in case of an eventuality to the insured. It does so by paying a 'sum assured' to the nominees.

The sum assured is decided upon at the time that you buy the life insurance plan and the premium is paid accordingly. The premium consists of three important elements which you need to know in order to choose the right insurance plan.

1. Mortality charges
Mortality charges are incurred by the life insurance company to cover the risk of an eventuality to the policyholder. The mortality expenses vary based on the age of the individual and the sum assured. The higher the age and sum assured, the higher the mortality expenses.

2. Sales and administration expenses
These expenses are incurred by the insurance company for operational purposes and recovered from the premiums that the policyholder pays towards his or her policy. Agents' commissions, sales and marketing expenses and the general overhead costs incurred to run an insurance comapny every day are examples of sales and administrative expenses.

3. Savings component
This part of the life insurance premium is invested by the insurance company in various investments such as bonds, government securities, money market instruments and equities.

The savings component generates a portion of the returns that insurance companies pay to a policyholder by way of bonuses and the maturity amount.

Two Basic Types of Life Insurance

Now that you have a better understanding of the basic premium structure, I encourage you to evaluate their own needs and buy insurance coverage accordingly. To do this, you need to understand the two basic types of life insurance plans - term life insurance and endowment life insurance plans.

Term life insurance plans are pure risk cover plans. The premiums charged by term plans cover only the mortality charges and sales and administration expenses, not the savings component. With no savings element in the premium; there is also no maturity amount accrued. For this reason term life insurance plans are the cheapest form of life insurance coverage available.
Unlike with term plans , the premium towards an endowment type plan also includes a savings component. As already explained earlier, the savings component is what helps the insurance company in generating a corpus over the tenure of the policy.

But it is also for this reason that the premium paid for an endowment plan is a lot more than what you would have to pay for a comparable term plan.

A major portion of the premium difference between the term plan and endowment plan is the savings component, which is invested by the insurance company to generate returns for the policyholder.

What this also means is that the term plan premium works out approximately 87% cheaper than the endowment plan premium every year. Or in other words, the individual has to pay 7.5 times more premium for an endowment plan for the same amount of coverage!
In my view, you should ideally keep their life insurance needs and investment needs apart. Consider buying a term life insurance plan for the desired amount of life insurance coverage and devote the remaining 'investible surplus' to other investment avenues like mutual funds for instance.

You should therefore be certain that they have done you homework on understanding your life insurance needs. This will not only help you in making wiser decisions, it will also lead you to a better and more prosperous future.

Where can I get additional information on life insurance?

For more detail on life insurance, you can contact:

• American Council of Life Insurers 1001 Pennsylvania AvenueN.W., Washington, D.C. 20004-2599202-624-2000www.acli.com
• Life and Health Insurance Foundation for Education www.life-line.org

How can I locate a lost life insurance policy?

If a family member dies and you are unable to locate his or her life insurance policies, there is, unfortunately, no national or statewide database of all life insurance policies that you can consult. However, you can try to determine:

• which insurance company might have issued the policy
• which agent or broker might have sold or serviced the policy
• whether the deceased might have had insurance through an employer, union or trade association, or other group to which he/she belonged.

Here are some strategies that might turn up useful information:

1. Look for insurance-related documents. Search through files, bank safe deposit boxes, and other storage places to see if there are any insurance-related documents. Also, look through address books to see if the names of any insurance agents or companies are listed. An agent or company who sold the deceased their auto or home insurance may know about the existence of a life insurance policy.
2. Contact current and prior financial advisors. Contact current or prior attorneys, accountants, investment advisors, bankers, business insurance agents/brokers and others who might have known about the deceased’s life insurance.
3. Review life insurance applications. The application for each policy is attached to that policy. So if you can find any of the deceased’s life insurance policies, look at the applications for them. The application will have a list of all other life insurance policies owned at the time of the application.
4. Contact previous employers. Former employers may have a record of a past group policy or policies.
5. Check bank books and canceled checks. See if any checks have been made out to life insurance companies over the years.
6. Check the mail for a year following the death of the policyholder. Look for premium notices or dividend notices. If a policy has been paid up, there will no notice of premium payments due. However, the company may still send an annual notice regarding the status of the policy or it may pay or send notice of a dividend.
7. Review the deceased’s income tax returns for the past two years. Look for interest income from and interest expenses paid to life insurance companies. Life insurance companies pay interest on accumulations on permanent policies and charge interest on policy loans.
8. Contact all relevant state insurance departments. The National Association of Insurance Commissioners has a “Life Insurance Company Location System” to help you find state insurance department personnel who might help identify companies that might have written life insurance on the deceased. To access that service, click here.
9. Check with the state's unclaimed property office. If a life insurance company knows that an insured client has died but can’t find the beneficiary, it must turn the death benefit over to the state in which the policy was bought as “unclaimed property.” If you know (or can guess) where the policy was bought, you can contact the state comptroller’s department to see if it has any unclaimed money from life insurance policies belonging to the deceased.
10. Contact a private service that will search for “lost life insurance.” Several private companies will, for a fee, contact insurance companies for you to find out if the deceased was insured. This service is often provided through their Web sites.
11. Do you think the life insurance might have been bought in Canada? If so, you might contact the Canadian Life and Health Insurance Association (phone: 1-800-268-8099; Web site: www.clhia.ca).
12. Try the MIB database. There is a database of all applications for individual life insurance that were processed during the last 12 years. There is a $75 charge per search. Many searches are not successful: a random sample of searches found only 1 match in every 4 tries. For information, click here.

How do I file a life insurance claim?

To begin the claims process:

• Get several copies of the death certificate.
• Call your insurance agent. He or she can help you fill out the necessary forms and act as an intermediary with the insurance company. (Don’t keep life insurance policies in your safe deposit box. In most states, safe deposit boxes are sealed temporarily upon the death of the owner, which can delay the settlement. ) If you don’t have an insurance agent, or don’t know who the deceased's agent was, contact the company directly.
• Submit a certified copy of the death certificate from the funeral director with the policy claim. Once the claim is submitted, a settlement should be issued to you shortly. Once a life insurance claim is submitted, you must determine how the proceeds will be distributed. These are some of the options available:

1. Lump sum -- You receive the entire death benefit in a single
   amount.
2. Specific income provision -- The company pays you both principal and
   interest on a predetermined schedule.
3. Life income option -- You receive a
   guaranteed income for life. The amount of income depends on the death benefit,
   your gender and your age at the time of the insured's death.
4. Interest income option -- The company holds the proceeds and pays you interest on them. The death benefit remains intact and goes to a secondary beneficiary upon your death.

If I can’t pay my premium, what should I do?

If unexpected expenses come up and you can’t pay your life insurance premium, you should know the possible consequences. The effect depends on the type of policy and coverage you have and the policy terms and conditions.

Term: If you stop paying premiums, your coverage lapses.
Permanent: If you have this type of policy, you will have the following choices:

• Cash out the policy. This means that you can stop paying the premium and collect the available cash savings. You will no longer be covered by life insurance, but you will at least save some of the proceeds of the policy. You may, however, have to pay taxes on some of the cash value if the sum exceeds what you have paid in premiums.
• Non-forfeiture options There may be a “reduced paid-up” option. This means that you can stop paying premiums completely in return for a reduced death benefit and no cash saving. You may also be able to convert the permanent policy to an extended term policy for a time period based on the accumulated cash savings in the policy.
• Policy will lapse If this happens, see if the policy can be reinstated. Some insurers may allow this if you do it within five years of lapsing. You will most likely have to pass a physical examination for the reinstated policy and pay back the premiums you would have paid plus interest. Annual premiums for the reinstated policy may be lower than those for a new, comparable policy.

HELP!

• If I can’t pay my premium, what should I do?
• How do I file a life insurance claim?
• How can I locate a lost life insurance policy?
• Where can I get additional information on life insurance?
  

How often should I review my policy?

You should review all of your insurance needs at least once a year. If you have a major life change, you should contact your insurance agent or company representative. The change in your life may have a significant impact on your insurance needs. Life changes may include:

• Marriage or divorce
• A child or grandchild who is born or adopted
• Significant changes in your health or that of your spouse/domestic partner
• Taking on the financial responsibility of an aging parent
• Purchasing a new home
• A loved one who requires long-term care
• Refinancing your home
• Coming into an inheritance

KEEPING YOUR LIFE INSURANCE CURRENT

• How should I organize and store my life insurance records?
• How often should I review my policy?

How should I organize and store my life insurance records?

The last thing you want to happen after you die is for your beneficiaries to be unable to locate and submit a claim on your life insurance. To prevent this, you should have copies of your life insurance records in at least two places. This is to make it less likely that you’ll lose them (to fire, flood, accidental discarding, etc.) and more likely that, after your death, your beneficiaries will find them.

What information should I keep?

For each individual life insurance policy on your life, you should record the following information:

• The full name of the life insurance company that issued the policy
• The city and state of the home office of the company that issued the policy
• The name and U.S. headquarters of the group, if the issuing company belongs to a group of companies
• The policy number
• The date the policy was issued
• The amount of the death benefit
• The name and address of the agent/broker who sold you the policy
• The type of policy (e.g., term, whole life, etc.)
• The location of the original life insurance policy

You might have life insurance automatically from your employer. Your employer also might offer you the chance to buy additional life insurance under a group policy. And you might be eligible to buy life insurance under a group policy from your union or trade association or other group you belong to (such as a college alumni association or an automobile club). For each of these life insurance benefits, you should record the following information:

• The name of the employer or group that sponsors the insurance
• The office or person to contact when it’s time to file a claim
• The certificate number (comparable to the policy number under an individual policy)
• The date the insurance was started
• The amount of the death benefit

Sometimes financial programs that are mainly designed for income or other purposes have death benefits as additional features. This might include pensions, annuities, workers compensation programs, disability insurance, travel accident insurance, etc. For each such program, you should record the following information:

• The type of policy that has a death benefit as part of its features
• The full name of the life insurance company that issued the policy
• The city and state of the home office of the company that issued the policy
• The policy number
• The date the policy was issued
• The amount of the death benefit
• The name and address of the agent/broker who sold you the policy
• The location of the original insurance policy

Credit cards and lending institutions may offer life insurance to pay off your outstanding loans in the event of your death. For each life insurance benefit on your life dedicated to paying off a loan, you should record

• The full name of the lending institution through which you obtained the life insurance
• The loan number and issue date of the loan
• The name of the person or office to contact when it’s time to file a claim
• The policy number of the life insurance policy that pays off the loan

Where should I keep the information?

Keep one set of these records in your home, in a place where others who need this information are likely to find it (and after you put the information there, tell the people who’ll need it where it is). This might be with your other financial records (such as income tax, checking account, investment records), with your other legal papers (such as a copy of your will, living will, health care proxy, etc.), or anywhere your survivors are likely to look for them.

Keep another set of these records “off site”—that is, outside of your home, perhaps in a safe deposit box, or with a professional or a relative who can be counted on to produce them when they’re needed.On each page, record the date on which the information was last updated. That way, if the copy in your home differs from the one in the safe deposit box, it’s easy to tell which is the more current.