This is not rocket science – none of it is difficult conceptually, and it could be argued that some good foundational knowledge on life insurance might be worth many thousands of dollars to you over the policy you eventually purchase.

The best sources of information when it comes to life insurance would include websites like this one, that are not overly commercial or filled with ads for specific companies or types of insurance policies. A life insurance agent who’s going to actually listen to the details of your situation before attempting to route you into one type of policy or another is also invaluable. Specifically, look askance at any agent who pushes you into whole life insurance before adequately explaining variable life insurance, universal life insurance, and variable universal life insurance.

As well-meaning as friends and relatives are, is very easy for a layman to confuse the choice that was best for him with the best choice.

Term life insurance advice

Term life is the cheapest and most straightforward life insurance, with clearly defined premiums, payout amounts, and policy duration. The real downside with term life insurance is that it opens you up to the possibility of being in your 50s or 60s, after the policy is finished, without any life insurance at all. You can still get a new policy at that age, but it will be expensive, possibly prohibitively expensive. The way around this situation is to, when you take out your original term policy, make sure that it has a rider, or supplementary addition, that will enable you to either extend the policy or convert it to a whole life policy at the end of the original policy. Coverage like this, for most people, is preferable to whole insurance especially, because of the much lower premiums that you pay, more than anything else. These lower monthly premiums will hopefully leave you with some money each month towards building an investment portfolio. This nest egg in turn, after 20 or 30 years, will most likely be worth more than the death benefit payout that whole life promises you.

Whole life insurance advice

The best advice for many people regarding a whole life policy is “don’t buy it”. Whole life has a guaranteed payout, regardless of when the insured person passes away, and there is also a “cash value” amount associated with the policy, against which the policyholder may borrow. Agents will also trumpet the fact that whole life can be viewed as more than just life insurance, that it can also be viewed as an investment, or even a retirement plan.

The problem is that there are miscellaneous fees and expenses charged by the insurance company that eat into your yearly return, making it hard to justify the higher premiums that you pay in relation to the amount of your death benefit. Some people feel secure with the defined nature whole life insurance, and with the guaranteed payout. Let’s face it, if whole life didn’t make sense for at least some people out there it wouldn’t still be sold. However, in light of the alternatives you have with term or other forms of permanent insurance, declining whole life and choosing to be a little more proactive about your finances will be hugely beneficial to you in the long run.

Whole life is only one form of permanent life insurance i.e. policies that have a guaranteed payout. Other types are variable life, universal life, and variable universal. This life-insurance guide covers each of them in detail elsewhere, but the common elements that they all have relative to simple whole life is that they give you greater control over the previously-mentioned cash value amount, and flexibility as to the amount of your payout and premiums as your needs change over time. Now, they also usually involve a degree of risk that term life or whole life does not have, because you’re allowed to put a portion of your cash value amount into a wider range of investments such as the stock market, which will always involve some risk.

Life insurance advice is easier than ever to obtain via the Internet nowadays. Just make sure that the sources from which you get your information do not have commercial biases that unscrupulously attempted direct you into one form of insurance or another, without giving you all the facts.

What Are The Fees

With life insurance the fees can vary greatly from one policy to the next.  For example when looking at a term life vs whole life insurance policies, term policies will hold the same cost of insurance through out the entire period of the policy but when you go to renew the policy the cost will usually increase depending your age and health.

On the other hand whole life insurance, also known as permanent life insurance will change from year to year.  However as the cash value builds inside of these policies the cost of insurance will usually go down.  For example, if you have a $100,000 policy and have $75,000 in the cash value you are only paying for $25,000 of insurance.

You will also what to be aware of certain types of life insurance, especially when you get a high risk life insurance quote.  A lot of times the internal fees will be a lot higher than if you would have gotten a normal term policy.

How Is The Cash Value Illustrated

Another thing you need to pay attention to is the cash value and the interest rate they apply to it.  For the most part fixed life insurance policies like whole life and indexed universal life insurance will never have excessive interest rates.

However, with variable universal life insurance the interest rate can be changed to as high as 12% rate of return.  If you see these kinds of rates or higher in the illustration it should throw up red flag.   In fact ever illustration you look at that contains a cash value are required to show a 0% rate of return illustration.

What Kind Of Riders Are Their

It also makes a big deal as to what kind of riders you add on a policy.  For example if you were to have a permanent life insurance policy with a base amount of $300,000 for a death benefit the cost of insurance would be a lot more.

However if you would have gotten only a $100,000 in base coverage and added a $200,000 term rider onto the policy your cost would have been cut down dramatically.

The Next Step

Now that you know what to look for are you ready to take the next step?  If so before you make any hast decisions make sure you get several quotes from respectable life insurance agents.  You never know who might have the best deal.

It’s no secret that it becomes harder and more expensive to get life insurance as you get older. Life insurance companies prefer to cater to younger people who have a good chance of outliving their term life policies or paying into whole life policies for several decades. But this isn’t to say you have no options if you would like to use an insurance policy to take care of your final expenses while you are still alive, or leave a payout of some amount to your heirs when you pass away. There are a few things to keep in mind if you are shopping for the best life insurance for elderly people.

If you look at term life insurance for the elderly, just remember that if you do not die within the term of the policy that the insurance company is not obligated to pay anything out to your loved ones. Now, it is possible to get term insurance with an option to renew it after the policy term finishes. Naturally you will pay a higher premium (all else being equal), but weigh that against the benefit of knowing that an eventual payout is more likely. Another thing of which you want to be aware is whether the policy is level term or not: do premium payments remain the same over the life of the policy -level term- or do they increase?

Term life insurance for elderly people is often the way to go, relative to whole life, for other reasons. Will you be able to make the higher premiums in the years when your earning power will probably be declining? Also, and this is a big shortcoming, whole policies sold to people over 50 or so often have no cash value to borrow against, or to take if you would like to terminate your policy early.

It’s a major selling point of whole life when you are younger, even though the premiums are higher: these policies behave a little like investments. Even though most experts actually advise against whole life because of the hidden fees and lack of real flexibility (as one has with variable or universal life insurance for example), their investment aspect still makes them attractive to some people. Take that away, and the payout relative to what you will pay into the policy makes whole life an even less attractive option for most older people.

A final word: it’s very easy to find ‘guaranteed acceptance’ policies for the elderly online, and in direct mailings. The idea of needing no medical exam to get insurance that can at least pay for your final expenses is naturally attractive to older people, but buyer beware. The amount you pay into these policies may very well exceed the death benefit payout that your heirs receive. If you are reasonably healthy, it might be wise to find a renewable lower-premium term policy that does require a medical exam. Consult a knowledgeable agent that you trust to help you find what is best for you.

When it comes to purchasing life insurance, do you think that you are out of luck because of a medical condition or because you have a lifestyle that involves activities that might be considered ‘risky’? Well, think again, because high risk life insurance policies are sold every day to people who fall into one of these categories. I want to outline a strategy that you can use to purchase life insurance that will responsibly attend to the needs of your loved ones in case you should pass away, and give you peace of mind knowing that you have done so.

A good first step is to take a look at any policies that you already have, for what’s known as a ‘guaranteed insurability rider’. If you see this, it means you have already been paying for the right to increase the coverage you already have. If this doesn’t apply to you, check out the possibility of group insurance, which caters to a wider range of people, and for which one tends not to need a medical check-up. Premiums amounts are often higher with this form of insurance for this reason, but it may make the difference between you getting life insurance or being without it.

Many people with heart problems, diabetes, a history of cancer, etc., need another option, and fortunately today there is one. Whereas 30-40 years ago or more, a lot of people with these health conditions may have not been able to find a high risk life insurance policy at all, today insurance companies have a product generically known as “impaired risk” insurance. Between medical advances, better diagnostic tools and continuing care, as well as more knowledge on the part of patients with these chronic ailments as to how to properly take care of themselves, even ‘high risk’ policyholders have an incrementally better chance of long-term survival, and impaired risk insurance exists because of this fact. So-called clinical medical underwriting takes into account your improved chances, with a detailed look at the condition(s) you have, treatments available, as well as your present health.

What are some high risk life insurance companies? Often they are companies you already know, like Mutual of Omaha, CNA or GTLIC. There are also many companies to be found online, and now that you are aware of the concept of ‘impaired risk insurance’ you know the right term upon which to base your search.

There is such a thing as impaired risk life insurance specialists, who will do the legwork of finding you a high risk life insurance quote. If you have had problems getting a policy based on your health, an agent with experience in impaired risk might save you time as well as money.

Life insurance is an essential part of the financial portfolio of responsible adults who want to protect the interests of their loved ones in case something happens to them. With all the types of life insurance policies available, investing time to educate yourself about them is vital to making the right decision for you and your family. But this will take hours, not weeks, and the return on your time investment will be huge. All you need is a place to get comprehensive insurance information, and that is exactly what this site is.

Term life insurance is the cheapest and simplest form of insurance. The insured person pays premiums to be covered over a defined term, and if he/she passes away, the beneficiaries named on the policy get a ‘death benefit’ paid to them. There are several types of term life:

**Level term promises a coverage amount that doesn’t change over the life of the policy, with fixed premiums over a defined time period.

**With decreasing term, policy premiums usually don’t change, but the amount for which the policy holder is covered is reduced over the term of the policy, until the end of the policy term, at which time the payout is zero.

**A renewable term policy can be renewed at the end of the original term. If you purchase term life insurance, you should seriously consider renewable term, or you might find yourself with nothing to show for years of premium payments. Worse, it may be very difficult or impossible to find affordable life insurance when you are in your 50s or 60s.

**With convertible term you may convert the policy to permanent policy before the end of the term, which also circumvents the problem of being suddenly with no insurance in your later years.

**Group term is normally offered as part of a package by employers to their employees. The employer most likely can negotiate reduced rates, and employees are saved the hassle and expense of maintaining their policies.

As you might expect, there certainly are types of life insurance policies that provide coverage for your entire life. Permanent life insurance has a number of subtypes as well, but first, a definition: this insurance has a guaranteed payout, usually payable upon the death of the policyholder. This makes it more expensive than term. It is most accurately thought of as an investment as well as life insurance, because all of its subtypes use the ‘cash value’ of the policy as a provision for overall financial security of the policyholder, not just life insurance. For premiums that are usually higher than those of term, you are buying flexibility with permanent life, but there are varying degrees of risk involved in many of these policies, as well. Policies like variable life or variable universal require a level of financial sophistication not required by a term life policy. The following are the main types of life insurance policy that fall under the permanent insurance umbrella:

**Whole life promises the assurance of a payout, as long as (usually fixed) premiums are maintained as per the policy. Usually has a cash value amount which is designed to cover the eventual policy payout. Interest is paid on this cash value. Usually much more expensive than term life.

**Universal life insurance differs from whole life mainly in that the death benefit may be adjusted depending on the needs of the policyholder, and that the premium payment may vary depending on changes in the cash value amount. As with WL, the policy cash value increases by accruing interest. Benefits of UL over WL may include provisions to take out no-interest loans on your universal life cash value amount. Also, with this policy you know just what you are paying in miscellaneous charges, which is rarely the case with whole life.

**Variable life insurance differs from whole life insurance in that the policy’s death benefit and cash value vary based on the performance of accounts into which part of your premium payment may be routed. These accounts hold investments like stocks, bonds, money market funds, etc. and as the policy is more aggressive in its pursuit of investment gains, it involves more risk than universal life.

**Variable universal life insurance, as you might expect, gives you the premium payment and payout flexibility of universal life insurance and the investment flexibility (and risk) of variable life insurance. Assuming the investments tied to the policy perform well, the payout may be more than the guaranteed face value amount.

**Last survivor universal life, aka survivorship/second-to-die life insurance, is often designed to cover estate taxes, as it pays out when both of the policyholders have passed away.

**If you are in a position to pay for your life insurance with one large payment, you have single-premium whole life insurance as an option.

One article can’t be a totally comprehensive look at all the different types of life insurance, but thumbnail sketches of most of them might provide a good starting point for further research.

Life insurance is not high on the list of things people walk to think about, or chat with friends about in their spare time. Anything that involves acknowledging our own mortality is by definition hardly a recreational activity! However, rather than letting it get you down or having the question of “How Does Life Insurance Work” in the back of your mind as something you are putting off, if you will take just a little time to find out how life insurance works, you can actually turn the whole prospect into something positive, and here’s how:
From the moment you buy your policy, you and your loved ones will have the peace of mind that comes with knowing that in the event of your death they won’t be additionally burdened by financial hardship or uncertainty. It’s worth it, and a good site on life insurance will help you to cut the learning process from weeks to days or hours.

There are two main types of life insurance policies that you can choose from: term life insurance, and permanent life insurance, which has several subtypes like whole life, universal life and variable universal life.

So how does term life insurance work?

Term life is the simplest form of life insurance, where the policyholder buys a policy for a given term, usually between 10 and 30 years, with a monthly premium to be paid to the insurance company and a defined amount to be paid out to the policyholder’s beneficiaries (his/her loved ones), in the event of his/her death. Long sentence, but it’s a simple concept. If the policyholder survives the term policy nothing is paid out. The fact that most people with term life insurance do outlive their policies keeps their cost low. However, unlike permanent policies this policy does not have any kind of investment aspect to it, so you cannot borrow money against it or use any positive cash value that may have accrued in the policy, for investments.

How does whole life insurance work?
Whole life, as the name suggests, is in effect for your entire life. A payout will be paid to those you list as beneficiaries, upon your death, as long as your monthly payments or ‘premiums’ are kept up to date. The main thing to know about whole life insurance, or other permanent life insurance types for that matter, is that the cost of your premiums is usually quite a bit greater than they are for term life insurance, for similar coverage. Sometimes this difference amounts to several times the cost of a term life premium. However, with whole life you do get some benefits: you can borrow against the cash value that builds up in the policy over the years, and there are other ways you maybe able to use this cash value to invest. Many experts (who aren’t actively engaged in selling whole life insurance!) point out that there are probably better ways to save and invest for retirement than buying a whole life policy. At least the whole life premium normally stays the same for the life of the policy.

How does universal life insurance work?
Universal Life, is permanent insurance like whole life, except that the cash value is adjusted each month with interest, and debited by a so-called cost of insurance (COI) charge, plus miscellaneous fees. The upshot is that the premium payments are usually flexible with universal life insurance, depending on how much the interest credit adds to the cash value. ‘Universal’ refers to this flexibility one has in the premium payment amounts each month.

How does variable life insurance work?
The investment component of this policy usually allows the insured to be more aggressive with the cash value of his own policy, and invest in a separate account containing financial instruments like stocks, bonds, etc. within his insurer’s own portfolio. As you might imagine, with this flexibility comes increased risk, depending on the performance of the underlying securities. The ‘variable’ in the name refers to the fact that he overall value of the policy will fluctuate for this reason.

If the answer to the question of how does life insurance work can be largely given in a short article, you can see that deciding on the right policy might not be as difficult as you might have feared either. You should have a general idea already of what will work for you. Keep reading!

A life insurance policy is simply a contract between the policyholder and the insurance company. There is a wide variety of different types of life insurance policies but the concept is simple: by taking out a life insurance policy, you are transferring the risk of your death and the lost earnings this would represent for your loved ones, to the insurance company, at the expense of paying premiums over a certain period. Life insurance provides the policyholder peace of mind, knowing that people he or she cares about will be provided for should he/she die. It also provides those named as beneficiaries to the policy very real security if this happens.

What are the different types of life insurance? There are variations within the two major categories, but as an introduction, here are the different types of life insurance policies of which you should be aware.

In the beginning there was term life insurance (known in some countries as term life assurance). It was the first kind of life insurance. One simply is covered for a pre-defined, limited period (the ‘term’), by paying fixed payments each month (‘premiums’). Theoretically one could buy term coverage for as little as a year, but in practice 10, 15, 20, 30 years are the usual terms. Term cover for longer periods like this is known as level term coverage, but the concept is the same. If the policyholder dies withing the term of the insurance, the death benefit goes to whomever is named in the policy as beneficiary.

The critical thing to understand here is that if the policyholder does not die within the period for which the coverage applies, there is no payout at all. At that point, if the person still wants insurance, he/she will have to find coverage at an age when he/she will be more difficult to insure. Term life is more difficult to obtain after the age of 50 or so, and very difficult once you reach the age of 65. It is something you have to think about: term life insurance is very likely the cheapest of the different kinds of life insurance, but the fact that it is not permanent means that it may not be the best choice for you, even if you are young and healthy now.

So how to get around the expensive dilemma that you’ll face if you survive the term life insurance period? For this, insurance companies invented permanent life insurance, which guarantees a payout at the end of the life of the insured. Whole life insurance was the original form of this permanent cover (it’s referred to less commonly as cash surrender life insurance), set up as a fixed premium payments for a specified, fixed return. As you would expect, the fact of there being a guaranteed payout is going to make the permanent policy a lot more expensive than term cover, all else being equal. Estimates have even been made that it’s 8-10 times as expensive as term life, for similar coverage! That’s price of a guaranteed return.

Now as time went on, policyholders desired greater flexibility in their coverage. So much money is paid into a permanent policy over decades that insurance companies were able to offer some choices because of this accumulated cash value amount. Universal life insurance is a form of permanent life insurance that gives the policyholder some choice as to the premium amounts he must pay, and when he must pay them. A UL policy allows you to withdraw money interest-free from your policy (straight whole life often has provisions for cash withdrawals as well, but usually there is interest).

Many consumers wanted still more control over the investment component of their policies, and variable universal life insurance was created for them. With this type of life insurance, one can invest the policy cash value in different accounts containing a wide variety of investments, like stock or bonds. The fact of the value of these accounts constantly varying is why this insurance is referred to as ‘variable’. Along with the increased financial flexibility, Variable universal insurance has higher potential investment returns, but also greater risks associated with it, because of the fluctuating value of the investment component of the policy.

The purpose of this article was to lay out different forms of life insurance, in the hope that, with different types of life insurance explained, you can begin to narrow down your choices and make the best decision for yourself and your loved ones.

Does the process of getting a life insurance policy really have to be intimidating and time consuming? Not necessarily. Now, educating yourself well enough to make a good decision regarding the basic life insurance question, ie choosing between a term life insurance policy or a whole life insurance policy, is complicated. However, you and your family will reap the fruits of this self education for the many years you’ll be paying insurance premiums. What’s more, if you would just take the time to look at the many reasons why you need life insurance, these just might be enough for you to decide to go out and get a policy now.

Imagine losing a loved one in your family. Aside from having to deal with the emotional pain and grief that comes with death, families also have to deal with financial burden. Fortunately, you can relieve your loved ones of this particular burden, should you be the one to die. By taking out a life insurance policy, the insurance company will be the one to shore up you family’s finances. Imagine what relief this would bring to them. No one want’s to think about matters like this, but every responsible adult owes it to the people who depend on him or her to address the worse-case scenario.

Aside from this, there are also other reasons that you should know about, and this includes mortgage repayments. By taking out a life insurance policy, you can actually arrange to pay off your mortgage as well. This way, your family would not have to worry about this, should you die. Whole life insurance policies have an investment component, that depending on your situation, may make sense for you and your family.

With a life insurance policy, you can also arrange for the replacement of the primary earner’s salary. This means you can ensure that your family would not enter hard financial times upon your death. Aside from the primary earner’s salary, you can also arrange for childcare and many other thing to be indirectly covered. Education expenses can also be taken cared of by the provisions in your life insurance policy. This means that the school or university fees of your children would be covered, should you die. You are, after all, the primary earner, so you need to consider all of these benefits for your family.

With life insurance policies, you can still take care of your family even if you die in an untimely fashion. This is just about the best gift you can give your family.

To help cover the cost of final expenses, an insurance product called burial life insurance was created. This is a specialty life insurance policy that’s sole intention is to help cover the funeral and burial expenses at death. While it can be offered directly from an insurance agent, it is often purchased through the funeral home in which you plan to make arrangements with.

Upon passing, the burial insurance policy is redeemable and often paid directly to the funeral home. This allows the funeral director to make all of the arrangements, and assists the family by keeping them out of the financial stresses of the funeral. The family has enough on their mind and must deal with their emotional stress without the burden of financial stress as well. The insurance policy covers the cost of the casket, funeral services, funeral director fees, burial plot, burial costs, and other final expenses associated with the passing of your loved one. At the time of the policy, you will be able to discuss the details of the coverage, and make sure that you sufficiently understand what is included in the policy.

What is the Beneficiary?

The beneficiary is the person who will receive money if the insured dies.  For example, if you started a life insurance policy today, you would have to specify who you’d like the money to go to if you pass on.  If you are married, you’d most likely choose your spouse to be the beneficiary.  The beneficiary of your life insurance policy, however, doesn’t have to be your spouse.  It can be a relative or close friend.  The important thing is that you as the insured choose the beneficiary.

What is the Death Benefit?

As described in most life insurance policies, the death benefit is the money that your beneficiary will receive if you pass on.  When you started your life insurance policy, you were required to attached an amount of money to the policy.  This money is termed the death benefit.  The death benefit can range from as low as $50,000 all the way up to $5,000,000 and even more!  The most common amounts for the death benefit range between $250,000 and $2,000,000.

What is the Term?

The term is the length of time the insurance company is required to honor the policy (as long as you stay current with your payments).  Terms can range anywhere from 5 years all the way up to 20 years and longer.  The longer the term, the more expensive the insurance will be.  Also, the older the insured, the more expensive the insurance will be.  Most life insurance policies don’t have a term; term life insurance policies are the only type of life insurance that have an expiration date.

What is Cash Value?

Most life insurance policies have a cash value associated with them.  This means if, for whatever reason, an insured needs to cancel the insurance, or possibly allow it to lapse, he or she will receive some money.  The reason for this is because whole and universal life insurance policies couple as investment and savings vehicles.  They provide a lot more benefit then just insurance against death.  Payments for whole and universal policies are much larger than payments for a term life insurance policy, but with whole and universal life insurance, a portion of that money is being invested and saved for you.

What is a Rider?

A rider is a provision or addition added to the policy.  Adding children to a life insurance policy is considered a rider.  If your children die, you can receive a small amount of money if you added your children as riders onto your policy.  Riders don’t have to be children.  It is any provision that you choose to add to the policy outlining restrictions or limitations.