LIFE INSURANCE INFORMATION

7 Life Insurance Myths That Can Cost You

2009-08-14T20:57:00.000-07:00

from : usaa.com

Discussion around laptop

Life insurance is an important part of a well-rounded financial plan. But let's face it — it can also be confusing. In fact, misunderstandings about life insurance cause many people to skip the coverage altogether, putting their families at great risk for financial hardship. Here, we set the record straight on seven common myths about life insurance.

Myth 1: Single and young people don't need life insurance.
Truth: Your key question should be: Will anyone be worse off financially if I die? Even if you have no dependents, you might leave behind credit card debt, student loans, a car payment or funeral expenses.

A small life insurance policy would cover these costs. Moreover, buying while you're young can help you lock in lower rates and guarantee coverage if you develop health problems later in life.

Myth 2: Only people with kids need life insurance.
Truth: Chances are your spouse depends on your income, regardless of whether you have children. Could he or she manage to pay the mortgage and all other household bills and debts alone? A life insurance policy could help your partner keep the house and maintain the same standard of living.

Myth 3: If your employer provides coverage, there's no need for more.
Truth: Many corporations provide their employees with free life insurance worth once or twice their annual salary. Similarly, the military's Servicemembers Group Life Insurance (SGLI) offers great rates on policies up to $400,000. These are nice benefits, but if you leave your company or the military without a separate policy in place, it may be difficult or even too late to purchase one when you need it most.

Myth 4: Life insurance is too expensive.
Truth: It probably costs less than you think. For example, a healthy 30-year-old male can get $250,000 of 20-year term coverage for less than $15 per month.1 And as average life expectancies continue to increase, life insurance prices keep going down.

Myth 5: Insurance policies are all the same.
Truth: Policies that have similar names may differ substantially in what they cover. So before you buy based on price alone, it pays to read the fine print.

Myth 6: There's no reason to insure a stay-at-home spouse.
Truth: Your stay-at-home spouse may not earn an income, but think of the services he or she may provide for free: child care, meal preparation, housekeeping and more. With that spouse gone, life suddenly gets a lot more expensive. Life insurance can defray the cost of hiring help in your partner's absence.

Myth 7: Buying life insurance is a hassle.
Truth: Today, you can use simple online tools to determine your life insurance needs, compare options and apply on the spot. Explore at your own pace with no high-pressure sales tactics. And if you have questions, call us.

Life Insurance Information: Whole Life and Term Life Insurance Policies

2008-08-25T17:01:00.000-07:00

There are two basic forms of life insurance: whole life and term life insurance. In addition to these there is a form of life insurance that pays your mortgage should you die during the period of the policy. The form of life insurance that you need depends very much upon your reason for insuring yourself against your death.

Term Life Policies

The common reason for a policy is to pay for the funeral expenses, and both types of policy will achieve this. Term life insurance provides you with protection for a set period of time: you can insure your life for one year, five years, ten or whatever period you chose, and your estate or beneficiary will be paid the value of the policy should you die during that period.

If you stay alive for the period, then you receive nothing. The policy has no value unless you die, and this is the cheapest form of life insurance policy. There is no investment involved, as with an annuity or endowment policy, just the face value of the amount you are insuring against. The older you are, and the longer the period insured, the more expensive the policy will be.

When you want to renew the policy, this can be done with or without a medical check-up, and you have to decide which when you purchase the original policy. If you want the option of extending the period without any further check-ups then it will cost you more. However, it benefits you if you contract a serious or terminal illness during the period insured. IT is also possible to convert some term life insurance policies to a permanent policy without a physical examination.

Decreasing Term Life Insurance

In Decreasing Term Life Insurance, your premiums don't change, but the amount for which you are insured reduces. This is contrary to what most people would wish, but is an option that suits some who have other insurance protection. Generally, you would want the amount you are insured for to increase rather than drop due to inflation. Many older people find that when they die the value of their policy benefits is low in comparison with today's prices.

Credit and Mortgage Life Policies

Another form of life insurance is Credit Life or Mortgage Protection, that is sold together with a loan or mortgage, and that pays the loan if you die before you clear it. This can be expensive, and you might find that a term life policy, purchased for the term of your mortgage or loan, will be less expensive than a Credit Life policy.

Whole Life Insurance Policies

Whole Life insurance offers you insurance for all your life, with a premium based upon the age at which you purchase the policy. Although the risk to your insurance company increases as you age, they offset this by charging you more in the early years of your policy, and less in the later years than for term insurance. The premium payments are based upon life expectancy statistics and current investment income forecasts.

A Whole Life policy accrues a cash value the longer you stay alive, which is based upon your premium payment and the interest it has accrued. You can cash the policy in for a cash sum or an annuity after a certain period of time, although this is not the major objective of a Whole Life policy, and the cash value is often way below the sum of the premium payments you have made.
Universal Life Insurance Policies

If you want a better investment pay-out from your policy, certain form of whole life policies have been designed to achieve this. This is the popular Endowment or Universal Life Policy, where you pay the policy not for your whole life, but over a specific term such as 10 or 20 years. Such policies cost more in premiums, since the insurer is expected to pay out more than for a Whole Life policy. It is a combination of life insurance and longer term investment.

American insurance companies that offer all of these options to you include American General, ING and Lincoln National. Each of these is in the top 10 list of life insurance companies. However if you check out the offers made by each of them you will find little overall differences, although some might specialize in certain forms of life insurance.

Hence, you might find that you get a better Universal Life Insurance Policy deal from one company and a lower premium for your Term Life Policy from another. Life insurance companies can specialize, so if you have a specific life insurance need, then check out a range of insurers and opt for that which is best for the type of policy you need.

For information about what jobs are dangerous and you need life insurance for, check my other posts.

Life Insurance - About Your Job

2008-07-28T20:56:00.000-07:00

Following is some interesting life insurance information related to jobs. Do you work in a dangerous occupation? According to the Bureau of Labor Statistics, the top 10 most dangerous jobs are:

1. Timber cutters
2. Airplane pilots
3. Construction laborers
4. Truck drivers
5. Farm occupations
6. Groundskeepers
7. Laborers
8. Police and detectives
9. Carpenters
10. Sales occupations

Do you have the life insurance protection you need?

It's a fact that some occupations are riskier than others. But no matter what you do for a living, take a look at your life insurance needs. Life insurance can help you financially protect your loved ones after you die. If you're single, and no one is depending upon your income for support, you probably don't need life insurance. But if any of the following is true, consider buying life insurance:

• You're married and your spouse depends on your income
• You have children
• You have an aging parent or disabled relative who depends on your income
• Your retirement savings, pension, or other cash accounts won't adequately support your loved ones after you die
• You have a large estate and expect to owe estate taxes
• You own a business

Calculators and worksheets are available online to help you determine how much life insurance you need. You may want to contact an insurance agent or broker who can help you determine what type of life insurance is best for you and the amount of coverage you need.

Do you have the disability insurance you need?

If you work in a high-risk occupation, you probably know how important it is to have disability insurance coverage. But don't rely on government programs such as Social Security and workers' compensation as your main source of protection. In reality, government programs pay only limited benefits under restrictive terms (e.g. you must meet a strict definition of disability to qualify).

Your employer may offer group disability insurance at low or no cost to you. But you may also want to consider purchasing an individual disability insurance policy. Although you'll pay more for individual coverage than for a group policy, you often get more benefits. And keep in mind that if you leave your job or otherwise terminate your relationship with a group, you can't take your disability policy with you, and you usually can't convert it to an individual disability policy. This means that you may be left without disability coverage when you need it most.

Shop around for coverage

Since many different types of life and disability policies are available, it's important to shop around for coverage to find a life insurance policythat meets your individual needs. Since premium costs vary widely, get quotes from several insurance companies. Just make sure you're comparing policies that offer similar benefits.
Please note that this description/explanation is intended only as a guideline. Credit to: insurance.com

For info. about different types of life insurance check by other posts.

Life Insurance Information

2008-07-25T22:17:00.000-07:00

Welcome to Life Insurance Information online. This site provides informative life insurance information to consumers of life, and in the future, health insurance, and annuity products sold by insurance companies. If you have questions not covered in Life Insurance Information please feel free to email your question to info@wesleylynx.com

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2008-07-25T22:08:00.000-07:00

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