Tampa Bay Bloggers Message Board › Protect your income and your family- Life Insurance Information
|A former member||
Kel Morris Life insurance
Life insurance is about providing some financial security for people who depend on you financially. There are different types depending on your circumstances.
What it does
Life insurance will pay out a lump sum or fixed regular income either when you die (if a whole of life policy) or if you die within a specified term (term insurance). Some whole-of-life policies also contain an investment element to them, but such investment-type policies cost a lot more than protection-only insurance.
If you want investments, consider the full range of products (not just life insurance) which might meet your circumstances and needs
Term insurance (or assurance)
This is the simplest and cheapest type of life insurance, and is known as term insurance because you choose how long you're covered for, say, 10, 15, or 20 years (the term). Primerica is only company that does 35 year term.
It only pays out if you die within the term you've agreed. If you live longer than the term, you get nothing. As a couple, you can also take out term cover in both your names, with the policy paying out on the first death only during the term.
There are different types of policy you can have:
•family income benefit (a policy which pays out income rather than a lump sum);
•increasing policy (where cover and premium rise over the years);
•decreasing policy (where cover and premium fall over the years); or
•renewable policy (which lets you extend the original term).
Decreasing term insurance is often linked to a repayment mortgage (where the amount you owe decreases over time) and may, in this instance, be called mortgage term insurance or mortgage protection life insurance.
The premiums you pay are usually fixed for the whole term. There are also contracts where premiums are reviewable after a certain period, usually five years.
Whole-of-life insurance pays out an agreed sum when you die, whenever that is, as long as you are still paying the premiums.
Whole of life policies will cost more than term insurance policies, partly because they will pay out whenever you die, but also because of the various charges that come with them. The cost of either type depends mainly of the likelihood of the insurer having to pay out – so if you're a smoker and do a dangerous job, you'll pay more than a non-smoking office worker. Life insurance also costs more for men because, on average, they don't live as long as women.
Always compare what's covered by a policy, not just the price. Some might be cheaper than others, but they may not offer the same level of protection.
--Primerica term insurance as great key features and benefits.
Key things to think about
•Check for exclusions – in other words when the policy won't pay out. For example, most do not cover death due to alcohol or drug abuse. You might not be covered while taking part in risky sports. If your health is poor when the policy starts, some causes of death might be excluded or you might be refused cover altogether.
•How flexible is the contract? Can you reduce or increase cover easily as your circumstances change? Are there extra charges for doing this? Does cover stop immediately if you miss a payment or is there a period of grace?
•By paying extra, you can usually include a waiver of premium. It pays the premiums if you can't work because of a long-term illness so that your cover is not interrupted.
•If you want to change insurer, check the level of premiums for the new contract before switching (premiums may have gone up because of older age or because you have developed medical conditions). Also check the new level of cover compared to the previous one. Different benefits may be available, and different exclusions may be applied, for example you may not be covered for medical conditions that have developed before the switch even if these were covered under the previous contract. If you do decide to change, make sure you do not cancel your original cover until you are fully covered by the new contract.
•The policy can be set up under trust. This means that in the event of death, proceeds of the policy are paid directly to dependant(s) of your choice. Provided a trust is set up properly, there may be benefits to doing this. However, using a trust may not be suitable for everyone and because of the complexities we recommend you seek financial and legal advice.
For more information see Getting financial advice. for further advice and information please email at 813 4463562 or post a topic and I will post you information on your questions.