Permanent Life Insurance

From the Hoss's Mouth

The previous Hoss Cents Free Financial Money Magazine post explained term life insurance. Today's post outlines what is referred to as permanent life insurance.
There are three fundamental types of permanent life insurance: whole life insurance, universal life insurance and variable life insurance.



Whole Life Insurance: The policy is for the life of the insured. This type of policy has fixed premiums in exchange for a fixed benefit. A whole life insurance policy also permits the ensured to surrender the policy at any time for a cash amount which is usually less than the face value of the policy. In addition, surrender charges may apply.

Universal Life Insurance: For people who desire an investment avenue as well as a life insurance policy. Part of your premium goes towards life insurance (with a set benefit) and any portion over what is required as a life insurance premium is invested to provide an equity buildup. Premium payments above the cost of insurance are credited to the cash value, which overtime should increase. You do have a guaranteed minimum death benefit and a policyholder is allowed to accumulated interest to help pay premiums.

Variable Life Insurance: A type of cash-value insurance that permits the insurer to allocate a portion of their premium dollars to a separate account comprised of various investments, such as stocks, bonds, and/or mutual funds. Poor performance of these investments could cause the cash and/or death benefit to decline.

Remember, before you invest in a permanent life insurance policy, make sure you fully understand all the terms and conditions of the policy. Permanent life insurance policies can be extremely complex, and the small print must be read carefully.

The Hoss also says: pay your premiums on time. You do not want your policy to lapse.

Recommended sites:

Investopedia

Bankrate


Stay on track,

The Hoss

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Previous Post: Life Insurance

Life insurance

From the Hoss's Mouth

Life insurance, what exactly is life insurance and do I need it?

Hoss Cents Free Financial Money Magazine will provide you with information that will help you with your life insurance assessment.




There are two basic forms of life insurance: term life insurance and permanent life insurance.

Today's Hoss Cents Free Financial Money Magazine will concentrate on term life insurance with the next issue being devoted to permanent life insurance.

The first question you need to ask is do I need life insurance? If you are single with no dependents you, in all likelihood, do not require life insurance. What money you would pay in premiums could be utilized in other areas of your financial plans. Similarly, if you are a very wealth person, life insurance would be of little benefit. On the other hand, if you are married, with or without dependents, or have someone else who depends on you for financial support, you should purchase life insurance.

Term life insurance is the most fundamental form of life insurance.

Term life insurance is for a defined period of time. The insured pays a fixed premium annually. If you die during that period, the beneficiary or beneficiaries collects a certain agreed upon amount. Term life insurance provides the most coverage for the least cost. If you do not die, you may be wondering what happens to all that money you paid in in the form of premiums over the years...well, it belongs to the insurance company. Some of it is used to pay claims and expenses and some goes toward company profits. Makes you wonder how an insurance company can ever go broke and require a bail out package from the government.

The Hoss reminds you not to let your life insurance premiums lapse, as claims will only be paid if the premiums are fully paid up to date and the term has not expired.

How much life insurance do I need?

That is the million dollar question. There is no one answer. How much you need depends on an individual's situation. For example, will your dependents (spouse, children or others) have enough funds from your life insurance policy to maintain a good standard of living and satisfy debts and future financial needs? There are many formulas available to help calculate how much life insurance you should purchase, but one size does not fit all; and only you can determine the appropriate amount for your circumstances. Remember, the objective of life insurance is to provide your dependents with financial security if you should die. Do not under estimate your life insurance
needs.

Stay on track,

The Hoss

Next Hoss Cents Free Financial Money Magazine Post: Permanent Life Insurance
Previous Post: Insurance, Insurance, Insurance

Insurance, Insurance, Insurance

From the Hoss's Mouth

Why do I need to spend so much money on insurance? The current economic situation has caused this question to rise in the minds of many readers of Hoss Cents Free Financial Money Magazine. With this in mind, The Hoss has decided to dedicated several issues of Hoss Cents Free Financial Money Magazine to the insurance industry.

What is insurance?

Insurance is a means to provide you and your family protection for financial loss caused by such things as fire, automobile accidents, theft, personal injury, and possibly even death. The policy holder pays a premium (regular defined amounts) in exchange for protection against a large unknown future loss.

What type of insurance do I need?

If you own property, have children, have a mortgage, or own a car you need insurance.
Similarly, if you cannot support yourself, if you are disabled, or cannot afford to pay compensation if you injure someone, you need insurance.

Most people should have the following types of insurance:

• Life Insurance: To protect your family in the event of your death.

• Auto Insurance: Protects you from damage or theft of your car and/or from liability.

• Health Insurance: To provide payment for medical expenses.

• Homeowner Insurance: Coverage which will permit you to rebuild and refurnish your home. Also protects you if someone is injured on your property.

• Disability Income Insurance: To provide income if you become disabled and are unable to work for an extensive length of time.

Hoss Cents Free Financial Money Magazine will, in future posts, provide additional details concerning each of the basic insurance needs mentioned above. Details such as the difference between term and life insurance, information on auto insurance deductibles and homeowner insurance coverage.

Stay on track,

The Hoss

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