Whole life insurance is the most prominent of the insurance products on the market and the oldest. Whole life literally means whole life. Term life is simply a life insurance policy that will last for a specific amount of time, i.e. 5 years, 10 years etc. After that date, the policy will expire. Universal life is what is called a participating policy with many extra provisions included such as: earning interest on the cash value accumulated, ability to change premium payment schedules ,and many other features for the owner.

Term Life Insurance

For the many who are just beginning their working years, buying a home, or starting a family, term insurance would be a great choice. This product is much more affordable for higher amounts of coverage. This would mean that you can purchase enough to cover the payoff of a current mortgage and preferably enough for the surviving spouse to live on until they are able to join the working force once again. Decreasing term would be another great idea. This could follow your mortgage year by year until the home is paid off. If that inevitable event happens before that time, the policy would have enough coverage in it to cover the existing payoff of the family home. The down side to term life insurance is that it does not build any cash value as you pay your premiums. This means no built in savings account.

Whole Life Insurance

Whole life is a product that has been around for more than 100 years. Whole life covers the policy holder for their whole life as long as premiums are made. The only true advantage to this plan is that you are covered for life and the cash value savings account built inside. The cash value is a portion of the premium payments made into the policy. This account can be cashed in or borrowed against. Of course borrowing against will lower the face amount by the borrowed amount, plus any and all interest until payed back. Never borrow unless it is an emergency. Whole life insurance should be purchased to pay for all final expenses and burial costs. Funerals are not getting any cheaper, the average cost across America is nearly 7000 dollars. Of course the older an individual is, the more they will pay per 1000 of coverage. When individuals reach retirement, this should be looked into, and this should be the only life insurance you carry.

Universal Life Insurance

Eventually, younger consumers became wise to how much they were paying over their life for whole life protection. Companies turned to Universal life as the answer. Universal life has many unique qualities that the policyowner can take advantage of. Some earn a decent interest rate in the cash value account. Some are allowed to set their own payment schedule and even skip payments from time to time without penalty. Universal life would be an alternative for the younger generation just starting out. For the price of premium, universal life has the bang for the buck. In this day and age, saving money is important! So is saving the family homestead.

Life insurance is not just something our grandparents used to purchase. Life insurance is protection for our families. It is true that we do not know when that day will come for us, but we do know that day will come. It will always be a shock, it will always bring sadness, but with the right coverage, it will not be the end to your families way of life. Get a free life insurance quote today to compare multiple policies from highly rated carriers.

Cash value life insurance is different than most policies so it is important to understand how it works and why it may be beneficial for you. First you should know that there are two main types of life insurance- term life and whole life. Term life insurance is temporary insurance that will last for a certain amount of time, or term. Whole life is permanent insurance that builds cash value.

How does whole life insurance build cash value?

Whole life insurance will last for your entire lifetime, as long as you continue to pay your premiums. The fixed premiums are higher than a term life policy and that’s because a portion of your premiums are invested by the carrier. You can look at it as a built in savings element or, as some people refer to it, “forced savings.”As you pay your premiums, your policy will build cash value. This cash value is tax deferred until you decide to withdraw or borrow against it. If you die, your beneficiaries receive the death benefit, which is the face amount of the policy.

What if I borrow from cash value life insurance?

If you withdraw your cash value without surrendering the policy, then you are essentially borrowing against your life insurance policy. The carrier will charge you a specified interest rate until the money is returned to the policy. Any money that is owed at the time of the insured’s death is subtracted from the death benefit.

Cash value life insurance pros and cons

Cash value life insurance has advantages and disadvantages. One advantage is that the premiums are level for life. A whole life policy also has the ability to build cash value, tax-deferred. A disadvantage is that it costs much more than term life insurance. You should weigh the pros and cons of whole life insurance for your particular situation. Be sure to speak with an experienced agent to determine which type of life insurance is best for you. Get some free quotes for term life and cash value life insurance to compare the difference in cost.

If you are currently shopping for life insurance then you have inevitably come to the part where you need to decide whether term life insurance of whole life insurance (permanent coverage) is right for you. You first need to decide how much life insurance you need, what your budget is, and whether you want coverage for the rest of your life, or for a specific term. Here are some of the difference between term life and permanent life insurance.

Price: Permanent life insurance costs more. In most cases, it’s a lot more. See below for reasons why it’s more expensive.

Coverage: Permanent life insurance is coverage that will last for your entire lifetime. Your premiums will never increase and your policy will never be canceled, as long as you continue to make your payments. Term life is insurance that lasts for a certain time period, or term, and then the policy will end or it can be renewed at the current (higher) rates.

Cash Value: Permanent life insurance costs more because a portion of your premium is set aside and invested. Over time, cash value builds up and grows on a tax-deferred basis. Term life insurance premiums pay for a death benefit only so there is no cash value.

I can comfortably say that term life insurance is adequate coverage 95% of the time. It is affordable and you can get more insurance coverage for your money. However, if you want permanent insurance coverage and you like the idea of “forced savings” then whole life insurance might be right for you. Make sure you know all of the ins and outs of your permanent life insurance policy because these policies can be complex and expensive. Get a free quote today and compare the difference in cost for whole life insurance and term life.

Whole life insurance is permanent life insurance that builds cash value. The premium payments are level for life so you don’t have to worry about a rate increase as you get older. Your policy will last your entire lifetime as long as you continue to make your premium payments. When shopping for whole life insurance, it may seem a little daunting because there are dozens of carriers to choose from. You might be wondering where you can find the cheapest whole life insurance, but you want to also make sure that you choose a financially sound company. This is important because a portion of your premiums will be invested by the carrier and the returns that they make is what builds the cash value in your policy.

Here are some simple tips on how to find the cheapest whole life insurance rates as well as a financially strong company.

Work with an experienced agent. This is one of the most important parts of shopping for life insurance because the rates and underwriting requirements of life insurance carriers can vary greatly. The difference in premium from one carrier to the next can vary by as much as 30% to 40% for the same amount of insurance. There are so many places where you can find life insurance quotes so you want to make sure you choose a reputable company with a short and easy quote form.

Be upfront about your health and your needs. If you have high blood pressure or cholesterol or any other health issues, it is to your benefit to disclose it so your agent can steer you towards the carrier with the best rates for those conditions. By withholding information, you run the risk of being rated up or declined. This may not seem like a big deal and many people think they can just go apply to the next company, but a decline or a “rate up” will leave a permanent mark on your medical information bureau record and other insurance companies will be leary when they see it.

Choose a company with a solid financial rating and a good history of returns. With whole life insurance, the cash value that builds up in your policy is based on the returns made by the life insurance carrier. So it is important that you choose a company that is financially sound. Life insurance companies are given ratings based on their financial strength so be sure to ask your agent about the ratings for carriers that he or she recommends to you. Get a free quote today to compare multiple rates.

When you are looking to buy life insurance you first have to decide if you need term life or whole life. If you want permanent coverage with premiums that will never go up and a policy that will never be canceled (as long as you continue to pay), then permanent life insurance is best for you. Before you compare permanent insurance rates, you should learn a little bit more about what life insurance companies look at when they rate you.

Insurance carriers base your permanent insurance rates on a number of factors. The most obvious is your age. The older you are, the higher your premium is. Another factor that is heavily considered is whether or not you smoke. If you are a smoker, then expect to pay 3 to 4 times more for life insurance than a non-smoker. A third category that plays a major role in what premium you pay is your health status. This can mean a lot of things. Life insurance carriers want to know your height and weight, your blood pressure readings and cholesterol levels, as well as any health history you have. We’re talking about a history of cancer, heart attack, stroke, diabetes, and many other health conditions. If you have no health issues then you will most likely receive a preferred plus rating, while someone with high blood pressure or a history of diabetes might receive a standard rating or less.

One last thing that you should consider when you compare permanent insurance rates is the strength and rating of the life insurance carrier. A highly rated carrier is more likely to be around in the long run, which means your beneficiaries won’t have to worry about getting a death benefit if something happens to you. Get a free quote to compare multiple rates today.

Whole life is permanent life insurance that builds up cash value and it can also pay dividends. This means that you’ll have life insurance coverage for your entire life, as long as you continue to pay your premiums. Your policy will never be canceled so it is a good choice if you want life insurance coverage for the long-term (longer than a 30 year term policy, for example).

There are two main types of whole life insurance policies- non-participating and participating. The difference between the two is that participating whole life policies pay dividends. These dividends come from successful investments made by the life insurance carrier, as well as favorable mortality rates. You can choose to take your dividends in several ways.

Cash. Your dividends can paid be paid to you in the form of cash and you can use that cash in any way you choose. Life insurance carriers will typically mail these dividend payments to you in the form of a check.

Reduce your premiums. Your dividends can be used to pay a portion or all of your premium payments. For example, if you have a $200 dividend payment that is due to you and your premium payment is $1200 annually, you can choose to have your dividend be paid towards the premium due. So you’ll end up paying $1000 for the difference. In some cases, if the dividends are large enough, it can pay the premium entirely.

Pay off a policy loan. If you have borrowed from your whole life insurance policy, then you can choose to have the dividends be used as payment towards the loan balance or towards the interest due.

Once you decide on how you want your dividends to be paid, you’ll have to contact your life insurance carrier so they can update your policy with the correct mode of payment.

Get a free quote for dividend paying life insurance today to compare multiple rates from the nation’s top carriers.

I’ve had four people call me this week and tell me that they were shopping for term life because they can no longer afford whole life insurance in this down economy. One gentlemen borrowed from his cash value. His policy is about to lapse because he can’t afford the interest payments on the loan. Another gentlemen was laid off from his job as a marketing manager. One woman in her 40’s said that she just doesn’t want to make the payments anymore now that she knows how much more she can get  if she had term life. And one last young man simply said he didn’t know what he was doing when he bought whole life and now that he has 2 children, his expenses have gone up, and the cost is no longer affordable.

Four different people who have all been affected by this down economy. They all want to make sure that their families are financially protected, but they can no longer afford their expensive whole life insurance premiums. Let’s take a closer look at what options are available if you can no longer maintain your whole life premiums.

Cash out your policy. Take out whatever cash value is available and stop paying your premiums. You will owe taxes on the cash value withdrawal if it is more than the premiums that you paid into the policy. You can use that cash value to purchase a single premium whole life or term life insurance policy or you can get a more affordable term life policy and make the payments annually or monthly.

Reduce your death benefit. Some carriers will allow you to reduce your death benefit based on the cash value in the policy. You can stop paying premiums and you will still have life insurance coverage, though a smaller policy.

Let your cash value pay your premiums. If you think you’ll be out of a job temporarily then you might be able to allow the cash value in your policy pay your premiums. This all depends on if you have the necessary rider on your policy. The premiums paid from the cash value would be considered a loan and will have to be paid back in the future.

These are just a few of the options that you have. Before you decide to cash out or let your life insurance policy lapse, you should consider your current financial situation. Is the inability to make your premiums payments temporary? Will you be able to make the premium payments again once you are back on your feet? You also have to consider your life insurance needs. If you don’t have enough coverage with a whole life insurance policy, then you should probably consider term life instead, because you’ll be able to get more insurance coverage for less money.

One last thing to consider is your health. If you have some health issues such as cancer or heart disease then it might be difficult to qualify for an affordable term life policy. Be sure to speak with an experienced agent about your situation before you let your current policy go. You can also get free quotes to compare other types of policies.