What’s The Difference Between Whole, Universal, and Term Life Insurance?

Have you been talking to your friends about getting insured and you don’t know the difference between whole, universal, and term life insurance?

Have you been wondering which among these insurance packages is the right for your specific needs?

If you answered YES to at least one of these two questions, you’re definitely someone who’s come to a decision that you need to have a life insurance policy.

You may have arrived at that decision the first time after you had a child or maybe a life event happened that made you consider getting insured.

Whatever the reason, it’s time that you look at the options available for you so you can decide which is the best fit for you.

Let’s dive in and see their differences.

Term Life Insurance

Term life insurance is the easiest form of life insurance to comprehend. It is also the least expensive among the three.

When you’re planning to get a term life insurance policy, keep in mind that you’re only signing up for insurance that will cover you for a particular term or period of time. In other words, it’s only in play for a set number of years.

Over the duration of the term, you’ll pay an exact amount of money to the insurance company every year. It could be paid quarterly or monthly depending on your arrangement. The money is called the premium.

So, if you happen to die during the term, the beneficiaries listed on your policy will receive the benefits.

Let’s say, you have a 15-year term life insurance policy that provides a $250,000 benefit to your spouse or your children in the event of your death anytime during that 15-year period. In order for you to maintain that insurance, you have to regularly pay a certain amount.

The biggest disadvantage of having term insurance policies is that if you are alive when the term ends, you get nothing from it. Term policies only cover the number of years allocated in your agreement at the start. Once that term is over, the policy and payments end and you are now without life insurance.

Whole Life Insurance

Whole life insurance is a lifetime insurance package that offers a benefit to the ones listed on your policy once you die. It also offers a certain minimum benefit that can grow over time because it features an investment component.

As the years go by, your policy starts to grow its value in cash. You can actually borrow against this cash later on, if you wish.

There’s also an option for you to choose to begin receiving dividends from the investment portion as time goes on. The dividends are usually small but you can also get huge dividends if you got a large insurance package.

Some people eventually begin taking the cash value of the insurance and using it to pay the annual premium. It becomes a policy that lasts for the rest of their lives without them paying a single dime.

So what’s the catch? The monthly or yearly premiums are much higher compared to what you’d pay for term insurance with the same benefits.

Universal Life Insurance

Universal life insurance also lasts for a lifetime, but the difference is that it has a capacity for you to adjust the benefits later on.

It’s actually similar to whole life insurance but the good thing about this form of insurance is that you can make the benefits lower or higher as time goes on, depending on your ever-changing needs.

This comes with a cost, though. Depending on the current interest rates, the amount of premiums you pay will also adjust with universal life insurance.

Rates are usually much closer to the higher whole life rates than the term rates. As a matter of fact, rates for universal life insurance are sometimes even higher than rates for whole life insurance.

The investment portions of whole and universal life insurance can offer great benefits but you’ll end up paying a lot for it. Your premiums are going to be much higher compared to what you’d be paying for a term policy.

Things A Life Insurance Agent May Not Tell You

Are you sure that your life insurance agent is telling you everything you need to know before you have to make a coverage choice?

A life insurance agent will only explain the positives of the policy benefits and costs to you. This is because they’re in the business of selling policies and it is their goal to convince you to buy their prescribed insurance coverage.

You can protect yourself by doing your own research so you’ll be able to understand how the basics of life insurance works. It’s also necessary that you ask questions about all the things that aren’t clear to you.

Your needs are not the same as other people’s needs so it’s important that you ask relevant questions based on what your needs are.

Here are some of the things that your life insurance agent may not tell you:

Not A Necessity

A lot of people can definitely enjoy the benefits of protection that a life insurance policy provides, however, each person’s situation is different. Not everyone needs life insurance, it seems like that’s just not right, but it’s actually true.

If you die, life insurance coverage is there to serve as your income replacement so that your dependents will be provided for. That is the main purpose of a life insurance policy.

If you’re the breadwinner of the family and you have a spouse or children heavily relying on your income, purchasing a life insurance policy is definitely a wise decision.

But if you are someone who doesn’t have any dependents, getting a life insurance policy could be a total waste of money, unless you have a favorite charity and plan to add them as your beneficiary.

There are also some people who have enough financial capability to make sure that their dependents are well cared for should they die unexpectedly. You may not need life insurance if your savings and investments are enough to cover your primary expenses.

Agents Are Salespeople

Insurance agents can be super nice and sincere when they tell you that your life insurance coverage isn’t enough. But, keep in mind that life insurance agents are generally paid on a commission basis. It’s your responsibility to make the right choice for you, your family, and your needs.

It is an advantage for the agent if you buy a more expensive policy because they’ll earn more money from the sale. There are times when agents will urge you to replace your existing policies so they can generate more sales. Again it’s your responsibility to make sure you choose what’s right for your situation.

You shouldn’t be afraid to ask your agent about their commission on the different insurance products they sell. Also make sure that your agent can justify the cost if he or she asks you to upgrade to a more expensive policy.

Less Can Be More

It may seem like a great idea to purchase more than one life insurance policy even if you don’t need them. But your bank account will suffer from the unneeded strain of taking on that extra coverage.

It’s been pointed out that it’s a good idea to have just enough coverage for you to finish paying off your mortgage. After that, you should select the right coverage amount based on the necessity of your dependents.

If your children are grown and you’re widowed, you will less likely need life insurance. If you’re a breadwinner with a spouse and you also have three children, you’ll definitely need it for them.

Purchasing life insurance coverage should always depend on what your goals and needs are. Always remember to ask questions of your insurance agent and be sure you make the correct choice for your needs.

3 Things Life Insurance Agents Don't Tell You

5 Myths & Misconceptions About Life Insurance

Unlike science, math or geography, life insurance is not something that you can easily learn in school. It’s not like learning how to balance a check, baking lasagna, or doing car repairs.

Even if it is tricky to figure out all the rules and technicalities behind it, life insurance is something that most people should be familiar with.

One of the things that you should familiarize yourself with are the myths and misconceptions surrounding life insurance policies.

Not only do these these things make getting life insurance scary, they also prevent individuals and families from purchasing the life insurance that they need out of fear and confusion. Let’s take a look at a few of the myths and misconceptions you might have.

1. It Costs A Lot Of Money

Would you believe that 80% of Americans overestimate the costs when deciding whether to purchase a life insurance policy?

Many people think that a $250,000 term policy for a 30-year-old individual will cost around $400 to $1000 a year.

You might be surprised to find out that figure is actually pretty far off the mark. The actual price for this type of policy will most likely only cost you around $160 to $200 per year or $13 a month.

2. Single Non Parents Don’t Need Life Insurance

If you are single with no dependents, you still need to consider purchasing a life insurance policy.

Single individuals need a policy that is enough to cover their medical and funeral bills as well as any personal debt upon passing away.

If you do not have life insurance, you could end up leaving a lot of debt for your family members to deal with after your death

3. You Are Too Young To Get A Life Insurance Policy

Getting a life insurance policy makes the most sense while you are younger since the premiums are less expensive and you have fewer assets to pass on to your dependents.

The longer you wait to get a life insurance policy, the more expensive it will be. Plus, as you age you are more likely to develop a medical condition which can make the price of the policy go up.

4. It Is Recommended To Buy Term And Invest The Difference

This may be true for some people. Even though, term insurance is appropriate for many consumers, a permanent policy is a better deal if you need a life insurance for your entire life.

5. You Can Only Buy Life Insurance If You Are Healthy

Life insurance is more affordable if you are young and healthy this much is true. However, that does not mean that you can only get it if you are a young, healthy adult.

In fact, you can qualify for some policies even without undergoing a medical exam. You just need to shop around and get the best policy for you. You wouldn’t buy the first car you saw, in the same manner but with bigger stakes, you shouldn’t purchase the first policy you look at. Take some time and find the best policy to cover all of your needs and your family’s needs once you’re gone.

There are a lot of myths and misconceptions concerning life insurance policies. If you want to have peace of mind, never leave your life insurance policy out of your budget, so your bills may be covered after you’re gone.

11 Reasons You Get Denied For Life Insurance

Nobody likes rejections. Especially when it comes to your life insurance.

Being declined for a life insurance policy will make you worry about your family’s security in case of your death.

This is why it’s important to know the top reasons you might get denied for life insurance policies. Knowing what the reasons are will give you a better chance of getting accepted, once you make some changes and apply.

1. Obesity

Many people are surprised to have their life insurance application declined on grounds of obesity. People are also shocked to find out what obesity is defined as. For instance, if you are 5’5” and weigh 170 or more you are considered obese. Most would say overweight, but, that’s not the case.

Extreme obesity can result in high blood sugar which leads to Diabetes, high blood pressure, high cholesterol levels, and other high-risk health conditions.

2. High Blood Pressure

Having high blood pressure or hypertension is a risk factor for different health conditions including heart disease. Since it can lead to severe complications, it is considered a red flag for many life insurance companies.

3. Chronic Illness

If you are suffering from any chronic diseases during the time of your application, the life insurance company might decline your application.

The common health conditions that can cause you to be denied for life insurance include:

  • HIV
  • AIDS
  • Cancer
  • Obesity
  • Parkinson’s Disease
  • Diabetes
  • Heart Disease

4. Occupational Hazard

Being in optimal shape and with no diseases is sometimes not enough; if your job is hazardous, your application might get rejected as well.

Working in a dangerous field like truck driving, logging, construction, farming, and piloting airplanes might be a deciding factor for your application to get rejected.

5. Alcohol

If you are a casual drinker, that’s okay. But if you have a positive alcohol marker indicated when the liver functions are high, your application might get denied.

Alcoholism has a combination of damage to health and the potential for engaging in life-threatening activities.

6. Drug Use

Although many life insurance companies are slowly accepting marijuana use as it’s legal in some places, using stronger drugs will get you automatically declined when you apply for life insurance.

Like alcoholism, if you are engaged in drug use, it can lead to severe health conditions.

7. Age

The older you are, the more difficult it can be to get insured. If you get approved, chances are, it can be very expensive too.

After a certain age, many insurance products will be off-limits.

8. Low Income

Many insurance companies make decisions based on the applicant’s finances, as well.

If you fall below a certain income threshold, you might get an instant rejection.

9. Driving Record

Motor vehicle accidents can lead to death. An insurance company might access your driving records to establish these risks.

If you have multiple speeding fines or if you have been charged or arrested for DUI more than once, it can result in denial.

10. Risky Habits

Even if you are in good health and with a good paying job, you can still get denied for life insurance because of your habits and hobbies.

Bungee jumping, rock climbing, car racing, and skydiving all fall under grounds for immediate denial. Snowboarding and scuba diving are lower risk activities but might cause you getting denied too.

11. Mental Health

Some insurers might decline your life insurance application due to severe mental health conditions like schizophrenia.

They might also decline you for other conditions like Alzheimer’s Disease.

Making a lifestyle change and ensuring that you are free of or treating your high-risk health conditions can result in an approved life insurance policy. Looking for an insurance company that can provide a risk assessment can also lead to an approval.

Should Seniors Opt for Term or Permanent Life Insurance?

Life insurance policy strategy needs are normally unique at various phases of an individual’s life. When you’re quite recently beginning as a youthful, single grown-up, you may see little use in getting your life guaranteed.

As you develop more seasoned, so do your obligations. You may have wards who depend on your wage to subsist and you have to guarantee their money related security in the event that you’re no longer around to watch over them.

At that point you achieve a phase of more noteworthy monetary strength where your children have been through school, the house has been paid for, other purchaser obligations dealt with, and you likely have cash secured for retirement.

Right now in your life, your requirement for life coverage could be fundamentally unique and you could do well to return to your approach. The question you, as a senior, must ask yourself is whether it’s term life or entire extra security that you require now.

Term life coverage, as the name proposes, gives scope just to a particular timeframe. Term disaster protection is generally prescribed for youthful families that are beginning and have wards, contracts, and other monetary responsibilities, however restricted assets.

As it’s moderately cheap, it permits more youthful individuals to purchase impressive protection on their life at low premiums. The reason for term extra security is immaculate scope in case of the safeguarded’s unexpected passing and it has no “venture part”. The main way term disaster protection can be gotten the money for out is if the arrangement holder bites the dust.

The greatest advantage of term life coverage is its moderateness. In any case, the top notch rates continue ascending as you age. Subsequently, if seniors somehow managed to buy term life, they will miss out on its money saving advantage as the rates offered to them would be extensively higher particularly on the off chance that they are not in the best of wellbeing.

They would likewise require critical measure of investment funds to carry on with an agreeable life post retirement and meet any startling restorative costs connected with seniority. That is the reason entire life coverage approach is suggested for more seasoned individuals.

Entire life or lasting disaster protection, not at all like term life, offers scope for your whole life the length of the premiums are present. Notwithstanding giving scope, entire life approach additionally manufactures money esteem.

Since it gives ceaseless assurance and has an investment funds highlight, entire disaster protection approach is more costly than term life. All things being equal, entire extra security is accepted to be a superior wager for the resigned or nearing retirement society for a few reasons.

Term life coverage gives scope until the age of 75, where perpetual extra security stays in constrain for your entire life.

You need achieved a specific money related capacity to bear the cost of entire extra security. More seasoned individuals for the most part have lesser money related commitments and can bear the cost of higher premiums more effectively than the individuals who are beginning.

You can money the strategy out for the collected an incentive if there should arise an occurrence of an impromptu medicinal crisis or even utilize it as security for advance. To put it plainly, entire disaster protection acts like an advantage that can be utilized at the critical moment.

Dissimilar to renewable term life coverage premiums that by and large increment with age, the premiums on most entire extra security approaches continue as before throughout the years.

The safeguarded can have the genuine feelings of serenity that at whatever point their time comes, which is all the more a worry as you get more established, there will be ensured scope for their accomplice.

Most entire disaster protection strategies offer profits that can be added to the money esteem or demise benefits.

Continues from entire disaster protection can be utilized to pay for the burial service and other last costs when the safeguarded passes on.

Seniors can likewise purchase an entire extra security strategy as a bequest or legacy for their grandchildren.

A littler entire extra security strategy would by and large not oblige you to experience a wellbeing examination, which functions admirably if there should arise an occurrence of declining wellbeing.

Nonetheless, entire extra security is a long haul duty that one ought to consider obtaining just on the off chance that they are certain of staying aware of the installments. Letting your entire extra security strategy pass since you can’t pay the required premiums can spell catastrophe for your money related plans and ought to be kept away from at this vital point of your life!


Ways to Save on Life Insurance Costs

An intense economy combined with a maximized work showcase has changed the way Americans spend their cash. While the uplifting news is that an ever increasing number of individuals are presently sparing cash for a safe future, the not very great news is that they are notwithstanding rationing some basic costs all the while.

Life coverage is one such basic cost that any individual who has dependants that depend on his pay needs to bring about. While many individuals see it as a “cake” that they pay for, however never get the opportunity to eat, they neglect to see the greater reason in getting life coverage.

It gives you the solace of knowing your family will have a similar personal satisfaction regardless of the possibility that you are not around to accommodate them. Furthermore, the recipients of the approach or the ones who get the opportunity to “eat” the cake are your own – the general population you tend to the most in the whole world.

On the off chance that you can, requiring little to no effort, guarantee that they remain fiscally secure even after you’ve passed on, wouldn’t you need to get that possibility with both your hands? Yes, it is conceivable to save money on your disaster protection cost by taking after some straightforward rules.

To begin with thing you can do is consider term life coverage rather than perpetual or entire disaster protection. Term disaster protection gives scope to a particular term or timeframe, which could be 10, 15, 20 or even 30 years.

Since term extra security depends on the start that a great deal of strategies will slip by without the organization paying demise advantages, it’s the most reasonable kind of disaster protection. Moreover, term life coverage does not fabricate any money esteem, which makes it feasible for some youthful families to get it for shabby.

Protection operators will more often than not talk up entire life coverage as a result of its “speculation part,” yet you ought to know the ROI on life coverage items are not as high as other expense conceded venture vehicles. In this way, it’s ideal to get term disaster protection and put the distinction in other speculation plans.

Another approach to diminish the cost of life coverage is to purchase just as much disaster protection as you need. For that, it’s imperative to assess how much scope will be required to guarantee your family can keep up a similar way of life after you’re no longer around.

While it might be difficult to unequivocally ascertain your protection needs as your own conditions will continue changing, specialists opine that you ought to return to your strategy consistently or possibly every time there is an adjustment in your circumstance. A case of that would be on the off chance that you’ve quite recently purchased another home or had an infant as of late.

One of the greatest cost-sparing elements for any disaster protection strategy is to get it when you’re youthful. Premiums are by and large low for more youthful society in their 20’s and 30’s. The more seasoned you are at the season of purchasing an extra security strategy, the higher will be your exceptional rates.

Corpulence and medical problems additionally intensely affect the extra security rates you’re advertised. In the event that you need to save money on your extra security approach, it’s vital to get into shape. In the event that you have hypertension or cholesterol, attempt to bring it under control and demonstrate your safety net provider some proof of change in your wellbeing to get a lower cite. The individuals who are overweight will be cited a higher premium and they ought to practice and deal with their eating routine to fit the bill for lower premium rates.

Stopped smoking cigarettes and see your top notch rates fall. Utilizing tobacco and nicotine items can impact your superior rates and in the event that you quit expending these items, you can make impressive funds on your extra security arrangement.

What you can likewise do to decrease your extra security premium rates is cutoff your liquor utilization and keep away from other unfortunate propensities like driving under impact. Not exclusively can an insurance agency challenge claims for passings identified with liquor addiction, yet they can likewise utilize past frequencies DUI or DWI to increment premiums or deny scope.

One of the greatest slip-ups you can make when purchasing life coverage approach is not doing what’s needed research. In the event that you’ve chosen to purchase an extra security arrangement, it pays to search around and you can without much of a stretch do it online from the solace of your home. Search for arrangements that suit your individual prerequisites, chase for best rates, think about quotes from various organizations and do a through historical verification on the insurance agencies you’ve short recorded before focusing in on any one.

Like we’ve as of now specified, it’s vital to revaluate your strategies occasionally so your scope is upgraded to meet your present needs. For instance, if your home has been paid for, you can without much of a stretch do with a lower scope than some time recently. Same would be the situation if your kids have as of now been through school.

Thus, if there is an extreme change in a prior wellbeing condition or you’ve remained off cigarettes for over a year, you may meet all requirements for lower rates and along these lines, ought to approach your insurance agency for a reexamination.

You can likewise save money on your disaster protection cost by making yearly installments rather than month to month or week by week portions and by permitting cash to be straightforwardly charged from your record. This will bring down the authoritative and operational cost of the insurance agency and they might will to pass the advantage on to you!

On the off chance that both you and your mate are thinking about extra security, it might be justified regardless of your while to purchase a joint term life or first amazing than two individual strategies. This kind of approach spreads both the life partners and the advantages are paid when both of the safeguarded bites the dust. Frequently, the premiums are lower for such kind of approaches.

Last, however not the slightest, be honest on your protection application. The best foul play you can do to the general population you desert is giving false data on your application. In the event that your insurance agency discovers proof of deception of truth, it can drop your approach or more awful, withhold paying out death advantages to your recipients when they most need it!