Life Insurance Policy

A Different Choice

Choosing a life insurance policy isn’t an easy task. There are several policies
to choose from, each with elements that we want and need. The two most popular
kinds of life insurance policies are term life insurance policies and whole life insurance policies.
If a term life insurance policy and a whole life insurance policy got married
and had a child, the child would be a universal life insurance policy. Universal life insurance policies are a mix of term life insurance policies and whole life insurance policies. Just like all children do, universal life insurance policies have a few positive features and a few negative features of each parent, i.e.,
the term life insurance policy and the whole life insurance policy.

Like a whole life insurance policy, a universal life insurance policy offers an investment component; however, universal life insurance policies are generally less expensive than whole life insurance policies. This is a good thing for those of us who want the cash value accruement of a whole life policy but can not afford to purchase one. It should be noted, however, that earning a cash value isn’t guaranteed. Coverage can even end if your account gets low enough.

Like a term life insurance policy, a universal life insurance policy is usually not as expensive as a whole life insurance policy. However, even though an accumulation of cash value isn’t guaranteed with a universal life insurance policy, it is possible; it is not possible with a term life insurance policy.

If certain aspects of both a term life insurance policy and a whole life
insurance policy appeal to you, consider purchasing a universal life insurance
policy. Don’t purchase any life insurance policy, including a universal life
insurance policy, without first speaking with an agent of the life insurance
company. Your universal life insurance agent will be able to construct the life insurance policy that meets both your wants and needs.

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Life Insurance Advice

What might be some good life insurance advice? Well, you've probably received your fair share of life insurance advice from friend and family. And, it's probably no good at all. You should never follow their advice about life insurance unless they are a financial professional or they have been super successful financially in their lifetime.
The usual person's notions of how much life insurance is "too much", what kind of policy is best for you, whether or not you should meet with an agent, what companies to go with, and how valuable life insurance is and what it's good for are, sad to say, usually distorted at best. The problem is that life insurance seems simple on the surface, so everybody thinks s/he's an expert. But life insurance is not as simple as it's made out to be.

So, what should you really take into consideration?

*Do you really need life insurance? The short answer is, "probably", because most people do at some point and if you're thinking about it then the odds are high that you need it. But, you might not need it. Contrary to how it's so often sold today, life insurance was never meant to be "permanent". Be very suspicious of "whole life" policies.

*Don't wait until you're too old to get life insurance. You limit your options and the premiums can be unaffordable. If you're at least 35 years old and have at least one child but don't have any life insurance (of your own; don't just go with what you get through work, if you do get any), you need to look into getting some right away. You should buy it when you're even younger, assuming you have a child (if you don't have a child, you may not need it, although you still may want to protect your spouse).

*If you don't have a child but definitely, without any doubt, plan to, then you still may want to buy life insurance right away.

*You can use Variable Universal Life Insurance as a major part of your total financial plan--assuming you'd like financial independence some day. This is different than Whole Life, so don't get it confused with that one. You can build wealth and minimize taxes with VUL, so don't hesitate to talk to an agent or planner about it.

*Don't throw away your money on special "riders" on policies. If you do your planning right you'll have all the life insurance you need from the base policy.

*Most people with life insurance are under-insured. You need eight to 20 times your current income as the face amount(s). That might sound like "too much", but it most certainly isn't.

*You can use the Internet to price compare, but don't buy life insurance online (unless you already know that you cannot get anything but "guaranteed issue" policies). Talk to local insurance brokers, meet with agents from top rated local companies and let them do an FNA with you (it's free), and talk to local financial planners. You can meet for free with all of them, and they know what they're talking about.

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Life Insurance Settlements

Some people would go to life insurance settlements out of necessity. It is the only solution for their financial crisis. These people might unwillingly go through this process because they need the money right away. Though they get the short hand of the deal, they can't do anything about it as they need the cash to spend on more important things at present. They might be deprived of what is due to them but they had to do it. This is their last resort.
There are some instances that life insurance settlements are not only justified, but they are essential for the survival of the person. There are many reasons as to why they need the money immediately. One thing common about them is that they need the money right now. Life insurance owners might want to opt to get their hands on the proceeds of their policy when they are still alive than wait until they are dead.

Let us look at one clear example of someone who might want to go the settlement path. One case in point is an unfortunate person who is dying because of cancer. To stay alive, he must undergo treatment that involves expensive drugs and various medical procedures. This can drain his lifetime savings. To finance his treatment, he needs to cash out his life insurance.

Some fortunate ones have cash value life insurance in which can loan from. Others have a big savings account that they can get some money. Then there are people who don't have anything but their insurance policy. The only resort they can think of is to sell their life insurance policy to the highest bidder. Buyers of insurance policies typically pay around half of the policy's face value. The money they get from the sale would be used for their medical treatment. These people have the choice to use the money now for their treatment or use it for their funeral. Most would choose the former.

It is not only Cancer patients that need to go through life insurance settlements. People with AIDS, kidney, heart and liver conditions can cause a dent in their financial state. These are just the tip of the iceberg. There are more diseases and conditions out there that could complicate your financial statements. People that go through life insurance settlements do it reluctantly because it is necessary. These people must not be frown upon because of their action.

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