Life insurance provides protection for those who depend on you and should be an essential part of just about any financial strategy.
Many financial advisers say the right insurance policy can be seen as an essential part of any financial strategy.
There are two basic types of life insurance: permanent life and term life. Permanent life insurance will cover you for the duration of your life provided that you pay the premiums necessary to keep the policy in force. It is designed to deliver a generally tax-free benefit to your loved ones upon your death.
In addition, whole life, a type of permanent life insurance, provides guaranteed premiums for the rest of your life, regardless of changes in your health or financial conditions and can generate guaranteed cash value that grows on a tax-deferred basis.
Whole life policies are designed to offer a number of options, such as the ability to plan for future financial needs such as college tuition, care for an aging parent or make a down payment on a retirement home. This type of insurance may be appropriate for those who have significant financial obligations, wish to fund estate taxes upon their death or leave charitable gifts in their memory.
Term life provides coverage for a specific time period-such as 10, 20 or 30 years-and provides a death benefit only if you die during the period specified in the policy. If you survive beyond the end of the term, you will no longer have coverage.
Term life insurance may be appropriate if you are just starting out in your career and have fewer financial obligations. It may also be useful for those who want to protect a long-term financial obligation-such as mortgage or a child's college education-for a specific period of time.
Determining which type of life insurance-or which combination of permanent and term insurance-best suits your situation depends on your own specific needs and financial goals. That's where a knowledgeable financial professional can often be helpful.
суббота, 25 августа 2007 г.
пятница, 17 августа 2007 г.
Life Settlements: What You Should Know
So the moment has come. You’ve worked all your life, and you’ve finally made it to retirement! Your kids are grown with families of their own. Your house is paid. And debt, well debt is a thing of the past. So what now?
If you’re like many older Americans, you may be considering life settlements, also known as senior settlements, where you sell your life insurance policy to a third-party company. In doing so, you eliminate premium payments and get a large sum of cash back.
But before you make a final decision on whether or not to enter into a life settlement, be sure you determine if it’s right for you. Talk it over with a life insurance agent, be sure you read the fine print, and most importantly, understand exactly what the life settlement entails—you don’t want it coming back to bite you later.
What’s the deal with life settlements?
When you sell your life insurance policy to an investment company, the company pays you a percentage of the policy’s face value. If you accept, the policy is out of your hands, and the investment company will pay the premiums until you die, then collect the death benefits.
Investment companies typically look at two major factors when considering how much to offer you and whether or not buying your life insurance policy is worth it to them:
* The total sum of the policy’s worth typically needs to be over $250,000
* If you’re in excellent health and your death risk is low, it’s unlikely the company will be able to profit off of you for a while
In order for life settlement companies to keep tabs on you, they may designate a lawyer or attorney to stay in touch with you. Another method they may use is sending out a postcard periodically, requesting you to send it back. If it’s not returned, an investigation will ensue.
How life settlements differ from viaticals
Though life settlements and viaticals are similar in processes, they differ in terms. Viatical life settlements are when a terminally ill patient sells their life insurance policy to an investment company. They are a “safer” and more stable bet for investors, because the death-risk for the policyholder is so high. With this being said, a policyholder will likely get more for a viatical settlement than for a life settlement. Even if the policyholder’s health declines, unless it is due to a terminal illness, the sale of their insurance policy will be declared a life settlement.
On the average, a policyholder may only get 20 percent off of a life settlement, where as for a viatical settlement, they may get between 50 and 80 percent.
Life settlement sales on the rise
When it comes to life settlements, policyholders can expect to get fair market value price for the sale. The lump sum of cash can help them with financial needs, estate planning, reinvestments, extended care, retirement or anything else they’d like to take care of. Also, by selling their life insurance policy, the burden of making premium payments, which continue to increase as they age, is washed away.
What to watch out for
The insurance industry does warn policyholders to be careful when considering a life settlement. Insurance.com has compiled a list of helpful tips for you to consider before you sell your life insurance policy:
* Research before signing into anything. Be sure to understand what the terms of the contract are and don’t be afraid to ask questions or just say “no” if you don’t feel comfortable with the sale.
* Go through a broker, but if you don’t, negotiate through provider firms and see what kind of market is out there for your life insurance policy.
* Be sure the company you are looking to sell to is licensed.
* Beware of scams like “wet papering,” where an insurance company pressures an older person into buying a life insurance policy then has them sell it to them.
* Beware of “cleansheeting,” where someone teams up with an investment firm and alters their health status on their records to be better than it is, so they can purchase a life insurance policy and then sell it back to the investment company.
If you’re like many older Americans, you may be considering life settlements, also known as senior settlements, where you sell your life insurance policy to a third-party company. In doing so, you eliminate premium payments and get a large sum of cash back.
But before you make a final decision on whether or not to enter into a life settlement, be sure you determine if it’s right for you. Talk it over with a life insurance agent, be sure you read the fine print, and most importantly, understand exactly what the life settlement entails—you don’t want it coming back to bite you later.
What’s the deal with life settlements?
When you sell your life insurance policy to an investment company, the company pays you a percentage of the policy’s face value. If you accept, the policy is out of your hands, and the investment company will pay the premiums until you die, then collect the death benefits.
Investment companies typically look at two major factors when considering how much to offer you and whether or not buying your life insurance policy is worth it to them:
* The total sum of the policy’s worth typically needs to be over $250,000
* If you’re in excellent health and your death risk is low, it’s unlikely the company will be able to profit off of you for a while
In order for life settlement companies to keep tabs on you, they may designate a lawyer or attorney to stay in touch with you. Another method they may use is sending out a postcard periodically, requesting you to send it back. If it’s not returned, an investigation will ensue.
How life settlements differ from viaticals
Though life settlements and viaticals are similar in processes, they differ in terms. Viatical life settlements are when a terminally ill patient sells their life insurance policy to an investment company. They are a “safer” and more stable bet for investors, because the death-risk for the policyholder is so high. With this being said, a policyholder will likely get more for a viatical settlement than for a life settlement. Even if the policyholder’s health declines, unless it is due to a terminal illness, the sale of their insurance policy will be declared a life settlement.
On the average, a policyholder may only get 20 percent off of a life settlement, where as for a viatical settlement, they may get between 50 and 80 percent.
Life settlement sales on the rise
When it comes to life settlements, policyholders can expect to get fair market value price for the sale. The lump sum of cash can help them with financial needs, estate planning, reinvestments, extended care, retirement or anything else they’d like to take care of. Also, by selling their life insurance policy, the burden of making premium payments, which continue to increase as they age, is washed away.
What to watch out for
The insurance industry does warn policyholders to be careful when considering a life settlement. Insurance.com has compiled a list of helpful tips for you to consider before you sell your life insurance policy:
* Research before signing into anything. Be sure to understand what the terms of the contract are and don’t be afraid to ask questions or just say “no” if you don’t feel comfortable with the sale.
* Go through a broker, but if you don’t, negotiate through provider firms and see what kind of market is out there for your life insurance policy.
* Be sure the company you are looking to sell to is licensed.
* Beware of scams like “wet papering,” where an insurance company pressures an older person into buying a life insurance policy then has them sell it to them.
* Beware of “cleansheeting,” where someone teams up with an investment firm and alters their health status on their records to be better than it is, so they can purchase a life insurance policy and then sell it back to the investment company.
Applying For Term Life Insurance Online
When you apply for term life insurance online, you shouldn't have to sacrifice quality for the sake of convenience. At Life insurance advisor, you can expect to enjoy the best of both worlds: fast, convenient service and free quotes from the top carriers in the country. Filling out the short online application only takes a moment and Life insurance advisor response time is second to none.
When we talk about quality in relation to a life insurance brokerage, we're really discussing a few different issues. One area of importance is the selection of insurance carriers with whom the brokerage is affiliated. Shopping and comparing policies from a large selection of carriers is important, allowing clients to count on competitive rates. But quantity doesn't always result in quality, so EFinancial screens out those carriers with substandard policies and business practices.
Life insurance advisor customer service is another area where quality takes center stage. Your Life insurance advisor agent will make special note of your individual needs, such as unique medical conditions you might have. You can also rely on consistent updates about your policy throughout the application process. Whatever your questions or concerns, Life insurance advisor customer service department is dedicated to responding in a helpful, efficient manner.
When we talk about quality in relation to a life insurance brokerage, we're really discussing a few different issues. One area of importance is the selection of insurance carriers with whom the brokerage is affiliated. Shopping and comparing policies from a large selection of carriers is important, allowing clients to count on competitive rates. But quantity doesn't always result in quality, so EFinancial screens out those carriers with substandard policies and business practices.
Life insurance advisor customer service is another area where quality takes center stage. Your Life insurance advisor agent will make special note of your individual needs, such as unique medical conditions you might have. You can also rely on consistent updates about your policy throughout the application process. Whatever your questions or concerns, Life insurance advisor customer service department is dedicated to responding in a helpful, efficient manner.
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