Life Insurance

Life Insurance is literally a matter of life and death, since purchasing Life Insurance is basically planning for after the death. When healthy and well, people from all walks of life prefer not to think that one day they would pass away. However planning for after the death may be as important as planning other significant actions in life.

Have you ever wondered how your loved ones would manage when you are no longer with them? There are plenty of things they may be dependent on you for. While your love and personal assistance are invaluable and cannot be replaced, financial support and an opportunity to pay debts can be an important way to show you care even after your death. Obtaining Life Insurance, you ensure that in the event of your death your family is taken care of.

Life Insurance will be most helpful to your family when they have to pay off credit card debts, mortgages, car loans, estate taxes, checks funding your children's education, etc. If your family's savings are insufficient, Life Insurance can provide support for legal, medical and funeral costs. It can even create an estate for your heirs.

Life Insurance is a policy provided by an insurance company, according to which in exchange for your premium payments, the insurer is obliged to pay a certain sum (a lump sum or portions of smaller sums) to your beneficiary (persons you choose) in the event of your death.

There are several types of Permanent Life Insurance available. They differ in flexibility of premium payments, the way the cash value is invested and the death benefit guarantees. The following are major Permanent Life Insurance types:

Whole Life Insurance is a form of Permanent Insurance which covers you for your entire life, does not have to be renewed and does not expire provided you regularly pay premiums. The premiums for this type of policy remain level throughout the life of the insured. The amount of premiums in early years of the policy is considerably higher than in Term Life policies, which result in developing cash values. The cash value increases every year. You can take loans or withdrawals; however it will reduce the death benefit. Whole Life Insurance type is helpful to cover needs that do not tend to diminish with time, like paying taxes.

Universal Life Insurance has an advantage of more flexibility than Whole Life Insurance. It offers flexibility in premium payments and death benefits, as well as an opportunity to change both of them if circumstances change. The policy owner may pay premiums at any time in any amount. No matter whether you prefer to skip payments or to pay in lump sums, premiums must be sufficient to cover the cost of the policy and provide the death benefit.

Universal Life policies distinguish the protection element, the expense element, and the cash value element. You may also withdraw or borrow the cash value at any time. However, loans and withdrawals can reduce the death benefit and alter the performance of the policy.

Variable Life is a form of Life Insurance with a wider selection of investment products, including stock funds. The death benefit and the cash value are not predetermined or guaranteed, but fluctuate according to the investment performance of a separate account fund. The death benefit does not normally fall below a specified minimum. The policyholder pays a level premium for life.

Variable Universal Life Insurance has the premium and death benefit flexibility of Universal Life Insurance and the investment flexibility and risk of Variable Life Insurance. This policy type allows you to invest the cash value of the policy in some investment options and change the death benefit. Note that increases in death benefit may require evidence of your health.

Understanding your Life Insurance Needs

There are certain steps you should take when choosing Life Insurance policy. First off, you should determine your Life Insurance needs. They depend on such factors as your marital status, the number of your dependents, your financial obligations, your career, and basically the aims you pursue. Logically, the more responsibilities you have and the bigger your family grows, the more consideration you should give to Life Insurance purchase.

Life Insurance may be necessary as a part of your estate planning, as an essential means to support your dependents, as a way to pay debts, income taxes, or funeral expenses. How many people depend on you financially and what standard of living would you like to maintain for your survivors? Income replacement is the major reason why many Americans buy Life Insurance package. Long-term needs of your dependents have to be thoroughly considered: mortgage, debt pay offs, income for children, income for the surviving spouse, college education funds and probably some additional emergency fund.

If you are a single person with no dependents, the question of your Life Insurance needs may resolve itself to debts, credit cards or student loans, medical bills, funeral expenses, and supporting elderly parents depending on you for support. Purchasing Life Insurance at a young age is cheaper. If you are a single person with dependents, your Life Insurance consideration can be debts, expenses for your surviving dependents, education costs for surviving children, medical bills and funeral expenses. For couples with no children it is important to consider mortgage and car payments, as well as debts, medical bills and funeral expenses. Couples with children often need child-rearing expenses and their children education costs covered, let alone mortgage payments, debts, medical bills and funeral expenses.

After determining your Life Insurance needs, you should choose the most appropriate policy type for you. Since your needs may change as time passes, your Life Insurance program should also be regularly reassessed. You are recommended to review your policy every time there is a significant event in your life, for instance marriage, divorce, the birth or adoption of a child, a purchase of a house or business, income change, etc.

When it comes to purchasing Life Insurance, the choices are varied. It is important to make a research into insurance market, Life Insurance companies, types of coverage they offer and significant pricing differences. Your choice may be quite difficult as there over 1,500 Life Insurance companies in t

Permanent Life Insurance is a form of Life Insurance that is opposed to Term Life Insurance types due to its feature of accumulating cash value. The main Permanent Life Insurance types are Whole Life, Universal Life, Variable Life Insurance and Variable Universal Life Insurance.

Policy Fee is an administrative fee which is incorporated in your premium payment and is regularly subtracted from it to cover the company's expenses toward your policy.

Policyholder is the person who has purchased a Life Insurance policy and pays the premiums to keep it in effect. It is usually the insured, but in some cases it can also be a relative of the insured or a partner.

Premium is a regular payment to an insurance company needed to purchase a Life Insurance policy and to keep it in force.

Prospectus is a special document providing details about the coverage and the investment options and limitations to people who are interested in purchasing Variable Life Insurance or Variable Universal Life Insurance and investing in it.

Renewable Term Insurance is a type of Term Life Insurance which can be renewed at the end of its term.

Return of Premium Term Insurance (ROP Insurance) is a type of Term Life Insurance which allows the policyholder to receive a guaranteed return of premiums paid if you keep the policy for the term period.

Rider is a provision that can be added to your policy that limits or expands the policy's coverage (for example, coverage of family members or coverage of serious accidents). Riders can increase the premium payments.

Separate Accounts (also known as sub-accounts) are various investment funds (e.g. stocks, bonds, equity funds, money market funds and bond funds) within a company's portfolio you can make use of under Variable Life Insurance and Variable Universal life Insurance contracts.

Term Life Insurance is a Life Insurance coverage which is provided for a specified period of time without building up cash value and with increasing premiums. Terms can be for 1 year, 5, 10, 15, 20, 25 and even 30 years. The main types of Term Life Insurance are Renewable / Non-Renewable Term Insurance, Convertible / Non-Convertible, Increasing / Decreasing Term Insurance, Level Term Insurance and Return of Premium Term Insurance.

Universal Life Insurance (UL) is a type of Permanent Life Insurance with a feature that allows designing your own premiums. This type of Life Insurance procures lifelong protection.

Variable Life Insurance (VL) is a permanent Life Insurance plan that provides flexible premiums and death benefits dependent on the value of the separate accounts from the company's investment portfolio underlying the policy.

Variable Universal Life Insurance (VUL) is a permanent type of Life Insurance combining the essential features of Variable Life Insurance and Universal Life Insurance, thus allowing the policyholder to allocate premiums to different investment options, to build up cash value and to determine when and how much you invest in your policy.

Waiver of Premium is an additional provision (sometimes also called a rider) in most Life Insurance policies which allows to stop paying premiums after the insured person has been disabled for a given period of time (usually six months) due to an illness or an injury. In this case the six months premiums paid together with any future premium payments are waived until the insured resumes work.

Whole Life Insurance (WL) is a basic type of Permanent Life Insurance which can provide life-long protection for a level premium if it is paid throughout the whole term the policy is in force.

If you possess major assets that will provide an inheritance or will result in a high tax bill (e.g. you are liable to considerable taxes if you leave your estate to anyone other than your wife), Life Insurance is definitely for you as it can provide the funds to pay the taxes.

Besides taking care of your family, you may need Life Insurance if you want to protect your business. With an appropriate Life Insurance policy you may have the option that would ensure that the remaining business owners will be able to buy the company interests of the deceased's at a price previously agreed upon. Such a deal presupposes that the remaining owners will get the company and the family of the deceased will get the money. If you find this scenario suitable, you certainly need a Life Insurance policy providing this option.

You may also need Life Insurance if you want to accumulate your financial resources and create a source of savings. Permanent Life Insurance policies generally offer a special feature of building cash value. If the cash value is not paid out as a death benefit, it can be borrowed or withdrawn completely at any time you want. The cash value can be a convenient financial cushion for you as with it you can create your savings plan for the future. Of a great importance is the point stipulating that the interest credited this way is tax-deferred and it is absolutely tax-free if the money is paid out as a death benefit.

You may need Life Insurance if you are buying a house. It is one of the greatest and most expensive purchases one makes in life. But handling mortgage payments can be a lasting financial burden for you and your family. Purchasing a Life Insurance policy with a build-up of cash feature can help you put an end to your financial liability.

If we consider the categories of people who generally do not need Life Insurance, the first group to name is children. In most situations there is no need to purchase Life Insurance for children as they have no descendants depending on them. At the same time it is important to remember that the majority of cases may not reflect a particular situation and Life Insurance for a child may turn out to be a blessing. It must be your choice made with regard to your specific situation and financial opportunities. As general practice shows, if you want to protect your child or grandchild and to invest in your descendant's future, it is more effective to ensure yourself and make your offspring a beneficiary in your insurance program.

There is an opinion that your need for Life Insurance may lessen when your children are off the college and earn enough to provide their living, when your mortgage is paid off and you have no debts. It can be so, but one thing remains indisputable: for a caring person it is important to give a good thought to what might lie ahead and what difficulties his/her family might face in the future that would not let them maintain their usual lifestyle.

People who have no descendants may not need Life Insurance either. If there is no one depending on your earning capacity, there is no urgent need for Life Insurance. The same goes for single people. But again there are some exceptions you should be aware of. You may want to make sure your relatives will not incur your debts when you die. These may be student loans, or you may be tied up for years in court dealing with taxes, or you have to pay your mortgages and you do not want to pass it all on to your relatives in case of your premature death. In this case Life Insurance can be a convenient tool of financial planning. Or if you are single and have no descendants, you can provide financial support for other members of your family for whom it will be important. Thus you may want to help your aging parents, or put your siblings, your nieces and nephews through college.

All these categories of people and their specific conditions considered, it is natural if you take a look at the available options to protect the ones you love and to provide a relief from financial burdens for them.

The next step to take is to determine the monetary value that you bring to your family and compare it with your dependants' potential financial needs. The estimate will be rough, of course, but it will give you an idea of the gap you need to cover. The naturally expected outcome goes like this: your Life Insurance should be enough to preserve the quality of life for your family, if combined with other sources of income, as well as to offset extra costs they will incur to replace the services you currently provide for them.

In general, if you are wealthy enough and can afford purchasing a Permanent Life Insurance policy with a large package of services without getting financially straitened, you can be sure that it alone will be a substantial backup for your family. It will certainly spare your family the hardships conditioned by the fact that you did not have enough Life Insurance. Thus, if you tend to maximize your profit, if you are ready and solvent to make a major investment in your life, Permanent Life Insurance with a large package of services is definitely for you.

Having several financial goals when deciding how much Life Insurance to purchase is quite a natural thing, but you often have to bear in mind the financial constraints. If your income is modest, the emphasis shifts toward your capacity to pay the premiums for the chosen coverage. The required premiums for your insurance coverage can vary. The important factors determining the premium usually include your age and state of health, your gender (life span for males and females is different), smoking, your lifestyle and even the place you live in. A representative of the insurance company will examine you professionally and make a conclusion about your specific premium considering all the aspects mentioned.

Although the best way to determine the ultimate coverage level for you is a careful scrutiny and evaluation of personal financial information, there is a rough rule of thumb which suggests an amount equal to 6 to 8 times (in some sources 5 to 10 times) your current annual income. Experts often say that once you have this arrived at the amount of Life Insurance that seems appropriate for your particular situation, it is better to add 20% more, just to be on the safe side. This, however, often remains a virtual rather than practical consideration because the amount you find appropriate exceeds the allowable income bracket for you and you may simply fail to pay the premiums. As it often is, a virtually reliable and valid estimate does not prove applicable to an individual situation. Remember, these are very general and approximate numbers and they should be taken as they are.

Another popular approach to determining how much Life Insurance to purchase is known as the "the multiple salary". According to it, it is recommended to buy Term Life or Whole Life Insurance equal to 20 times your salary before taxes. If you have a 5% interest rate with your insurance policy, this investment would produce an amount equal to your salary at death. It must be noted that the major drawback of this estimate is that does not take into account inflation and other sources of income you might have.

Once you have calculated how much money you want to leave for your family, consider how much you have at the present moment in terms of your income, Life Insurance and other assets including savings accounts and your pension plans and then subtract that amount to know how much Life Insurance you currently need. Remember that your circumstances change and so do offerings from different insurance companies. Correspondingly, there are options allowing you to adjust your Life Insurance policy in accordance with the current circumstances. It is a common practice for young adults to purchase the minimum of Life Insurance and keep their monthly premiums to a bare minimum. With time if their life circumstances change favorably, they can afford more and they often increase the coverage making it a profitable investment.

The question of the appropriate amount of Life Insurance is very complicated. You should know that different insurance companies offer various rules about the lowest amount of Life Insurance that you may purchase. The amount you choose can range from a few thousand dollars to hundreds of thousands and to million dollars. Moreover, Life Insurance policies contain innumerable provisions stipulating options and conditions that predetermine the type and scope of the coverage. It is therefore probably better to seek a qualified advice of an insurance agent who will navigate various policies for you when you feel ready to review Life Insurance options and quotes with the purpose of purchasing a suitable Life Insurance policy.

You can also find assistance online if you address online Life Insurance calculators that will help you assess your needs taking into account all the deciding factors, and come up with the amount of insurance coverage that i

If you choose a policy with the term beyond one year, this type of Renewable Term Life Insurance also has its advantages. Your total multiyear premium will be spread over the policy term, which can make it easier for you to cover the cost of your insurance without noticeable losses in your budget. Besides, the rates for longer-term policies are normally more favorable to the insured. In general, if shorter-term policies provide more flexibility when it comes to the costs incurred at the renewal of the policy, the advantage of longer-term policies is that they offer a better price and may guarantee level premiums over a given period of time.

If you are not clear about your Life Insurance needs, it is better to choose Annual Term Life Insurance or a shorter-term policy until you determine your needs or until the situation clears up. This option will allow you to change or altogether drop the policy without extra expenses typically associated with dropping a longer-term policy.

Renewable Term Insurance policies, both annual and longer-term, are not deprived of disadvantages and potential extra expenses you should be aware of. The premiums in later years may be excessively high. With a longer-term policy you may pay level premiums, which is convenient, but as it appears, in most cases you still overpay even in early years. To illustrate it, if you decide to drop the policy and the term is only half through, the premiums you have paid so far are enough to cover the whole cost of your policy.

It may happen that at a certain point the price of the policy will grow too much for you. In such a case it is reasonable to check out the available alternatives. Among alternative Term Insurance types there are two which deserve particular attention - the Level Term and the Decreasing Term policies. Another option is to sign up for a Permanent Life Insurance policy. However, in comparison with Permanent Life Insurance rates, the premiums under Renewable Term Insurance contracts, especially in early years of coverage, are relatively low.

Some Renewable Term Insurance policies include a provision according to which your policy can be converted to a permanent type policy offered by the same insurance company without any additional evidence of insurability. This feature is another valuable contribution to other options provided by Renewable Term Insurance policies.

Renewable Term Insurance can be an optimal option for you, if you are young and you need a temporary protection. It has definite advantages over non-renewable policies. For example, if you have a Non-Renewable Term Life policy and your health problems become acute, your policy premiums will be likely to increase, or, what is worse, you may no longer qualify for Life Insurance at all. These problems can be avoided if you choose Renewable Term Insurance despite paying higher rates for it. It will pay off in the long run. Thus, this type of insurance provides a convenient and quite affordable opportunity to purchase quality, low-cost Term Life Insurance, if your need for this policy is temporary.

At present most insurance companies try to extend the coverage they offer, thus catering to the customers' needs. A natural effect is a viable combination of different types of coverage. For example, the level term provision can be an additional feature of Renewable Term policies or Convertible Term policies. Therefore, it is very important to check out all the options and the plan's designs available under the contract of this type before making your final choice.

Thus, many insurance companies nowadays offer their customers an opportunity to convert a Level Term Insurance policy into a cash value Life Insurance policy.

With a Level Term Insurance policy you may also have an opportunity to set up a joint policy - the policy that covers two people simultaneously. The death benefit is paid out if either of the two insured persons dies.

Another option that is possible with a Level Term Insurance policy is when it is combined with critical illness coverage. Under this provision the insured will be paid out the amount of the coverage if he/she is diagnosed as terminally ill with a life expectancy of less than a year.

One more option offered under Level Term Insurance contracts allows you to protect your monthly premium if you are unable to work due to an illness or an injury.

A Level Term Insurance plan is certainly for people who know that they need coverage for a limited period of time. You can also resort to this coverage if you are a small business owner and you realize you need to cover a short-term risk to save your business or to ensure that your partners will be in charge of your business, should you pass away, and your family will be provided for through your business share purchased by your partners.

A larger amount of coverage and affordable premiums which remain stable throughout the term of coverage are the two distinctive features of this type of Life Insurance that make it popular with people of different ages, occupations and social backgrounds. When choosing a Life Insurance policy, remember that with Level Term Insurance you can provide a solid term protection and ensure a secure future for your family. Yet it is important to check and double check everything before you take a decision as this plan may not be available in your state or may not have a rider you are interested in.

As was mentioned above, Decreasing Term Insurance is usually used to cover a mortgage, a loan or any other type of debt. Therefore, it is generally purchased by people who have financial obligations that decrease over time. In fact, as you pay back what you owe, portion by portion, you are paying for less coverage to protect it and to be through with your debts, if you were to die. Therefore, Decreasing Term Insurance is aimed at preventing you from passing your debts onto your beneficiaries. In line with it, Decreasing Term Insurance will give you peace of mind that the death benefit will be paid out to your family, should the worst happen to you.

At the same time there are limitations inherent to this plan and alternatives to it you should be aware of. Thus, you should know that your policy will pay out only in the event of your death or if you are diagnosed with a qualifying critical illness. In the latter case you are expected to add on the special additional option. If you survive beyond the plan's term, you receive no reimbursement as the policies of this type have no maturity value.

Decreasing Term Insurance is very convenient for insuring a liability that is gradually being paid off. Thus, it is right for you if paying off your mortgage is your primary concern. All the other concerns we are often faced with, such as education, health care, retirement, may remain financial burdens for a long period of time, whereas mortgage payments get smaller and smaller each year. If you do not need to cover your mortgage or liabilities of the kind, then you do not need Decreasing Term Insurance. Other types of Term Life Insurance will be more suitable for you. For example, you can do pretty well with Level Term Insurance and receive a wide scope of benefits at the level premiums throughout the term period. One more argument generally put forward against Decreasing Term Insurance is that the value of this insurance goes down as you pay down your mortgage.

Both Increasing Term Insurance and Decreasing Term Insurance do not enjoy great popularity nowadays because the effect they bring is not always tangible. Thus you should consider the options and determine what suits you more. Keep in mind that the terms and conditions of policies vary and it is important to understand the scope of the coverage. It is essential to look into the costs and conditions of different types of Life Insurance to understand which one is right for you and your personal situation.

Of course, the options to expand your policy are not limited to Whole Life Insurance only. You may choose from the types given in your policy as optional. At the same time any policy has underlying disadvantages and you should be aware of them. For example, under a Permanent Life Insurance contract a policyholder can be subject to increased premiums, decreased death benefits and decreased cash value. All the characteristic disadvantages are outlined in the corresponding sections of Permanent Life Insurance types. It is recommended to be familiar with them when you are choosing a Convertible Life policy to suit your needs and opportunities.

Convertible Term Insurance is sometimes offered as a supplement to a Renewable Term Insurance policy allowing you to upgrade to a permanent policy without any medical examination or increased premium payments when your regular term payments become too expensive if your health deteriorates.

On average, if Convertible Term Life Insurance is purchased and enacted at a young age, it can provide a good basis from which to build on in years to come due to its inherent ability to build up cash value and capitalize earned interest. This mixed type of Life Insurance turns out to be a cost-effective decision for an individual who purchases it with a perspective to turn it into an investment instrument under any of the available Permanent Life Insurance plans. In general, the conversion provision according to which your initial Term Life coverage can be changed for a Permanent Life Insurance policy is a significant contribution to the initial coverage, as in addition to a longer-term protection you receive, the number of benefits and options available also increases. For many people Convertible Term Insurance becomes a viable option as it provides enough flexibility with investment and ensures a decent future for your dearest and nearest.

A return of the premium feature can be offered in conjunction with different types of Term Life Insurance policies. Return of Premium Insurance in this case provides a refund for all or some of the premiums you paid for the Term Life Insurance at the end of the term if no death benefit was paid out during the coverage period. Term Life policies with the Return of the Premium feature are quite naturally more expensive than Term Life policies without this feature, but less expensive than Permanent Life policies. That's why taking into account your financial opportunities and the financial stability of your family you should consider whether the return of the premium benefit is worth its cost.

In accordance with the prime feature of this Life Insurance plan which is loyalty to the consumer, ROP Term Insurance will provide that you receive all your investment back, not a portion of it, like under Permanent Life Insurance contracts with the cash value feature. In comparison with the typical 20 year Level Term Insurance, for ROP Term Insurance you pay 30% more (according to the most general estimate, a common Return of Premium policy costs from 25% to 50% more a year than a regular Term Life insurance), which can be quite appreciable, but the extra premiums you pay will result in a higher return - about 7% over 20 years covering a large amount of the policy cost.

This Life Insurance plan is reported to enjoy great popularity with young people. They find this coverage appealing because they are not likely to think about leaving a beneficiary without support and this plan allows them to think not so much about their death, but about their future. Besides, most companies nowadays offer a continuance term after your original coverage term ends which allows policyholders to turn their insurance from just a convenient saving vehicle into an investment tool.

On the whole, Return of Premium Term Insurance can be an excellent proposition ensuring a solid protection and a full refund of premiums at the end of the term. Your choice of a Life Insurance policy fully depends on your needs and opportunities. But this plan certainly deserves your attention as it really makes sense to guarantee your future financial success when you do not lose anything at that.

Premiums are usually fixed when the policy comes into force and depend on the insured's age and medical condition. At first it may seem to you that the premiums for Whole Life Insurance are too high because the fees associated with setting up a policy are really great. This is because a portion of your premium goes to fund the cash value account. But compared with Term Insurance premiums, Whole Life premiums are relatively low because with Term Insurance your premiums grow as you get older and you have to pay substantial sums of money to renew your policy. According to the conventional rule, the younger you are when you purchase Whole Life Insurance, the easier it is for you to cover the costs of your insurance later. As years go by, you build the cash value and your savings account grows. At a certain point when your savings become significant, you simply need less insurance to hold down the cost of it. It is mere arithmetic.

There is one interesting detail you should know if you are considering purchasing a Whole Life Insurance policy. These policies do have a termination date. It is usually your 100th birthday. If you live up to your 100th birthday, your policy is automatically terminated and you are paid out the cash value.

There are several general types of Whole Life Insurance policies offered by insurance companies on the territory of the USA.

The first type is represented by non-participating policies. The peculiarity of this type is that all the values, such as the cash value, the death benefit and the premiums are determined in the event of the policy issue. The insurance company therefore bears the responsibility for potentially underestimated expenses.

The Whole Life Insurance policies of the second type, so-called participating policies, usually offer a non-guaranteed cash value element made up of dividends which the company shares with its policyholders. There is an evident relation: the greater the success of the company's performance, the greater the dividend. Dividends can be paid in cash or can be used to reduce your premium payments.

The following policies are in between participating and non-participating types, having elements of either type or sharing features of both. Some also have features of other Life Insurance policies.

Indeterminate premium policies are similar to non-participating policies with the exception of variable premiums. Premium payments are subject to a limit indicated in the policy.

Limited Payment Whole Life Insurance requires you to pay all your premiums within a limited period of time, either with an indication of a number of payments or an indication of the age up to which you are to pay the premiums. Because the premiums are paid out within a shorter period, they are likely to be higher than usual Whole Life Insurance premiums.

Another form of a Whole Life Insurance policy is Single Premium Life. You pay a policy premium only once to initiate the policy. The premium is a lump sum. The money is invested in a savings account and the cash value accumulates in this account. If you withdraw money from the savings account prematurely, you pay a special fee for it. But loans can be taken right away without any waiting period and without any loan interest credited.

The Economic Whole Life policies are essentially a blending of Participating Whole Life Insurance policies and Term Life Insurance policies due to the fact that the dividends are used to provide additional benefits within Term Life Insurance. This typically refers to a higher death benefit at the cost of a cash value provided by long-term policies.

The Interest Sensitive Whole Life Insurance is a relatively new type of policies. It is a blending of traditional Whole Life and Universal Life Insurance policies. Similar to Whole Life Insurance, the death benefit remains constant for life. Similar to Universal Life Insurance, the premium payment can vary under current market conditions but not above the set limit thus allowing more flexibility in premium payments.

Generally, when an individual is in two minds about the most suitable type of Life Insurance, the comparison is often drawn between Whole Life and Term policies. As is evident from the name, Whole Life Insurance is supposed to last for a long period of time. Therefore, the major difference between Whole Life Insurance policies and different types of Term Life Insurance policies lies in the fact that the former protect you against the inevitable - your death that can befall you at any time, whereas the latter protect you against the possibility of your death within the period when your coverage is in effect, be it one year, five years, or thirty years.

If you are not sure whether you are going to keep your insurance for a long time, it is advisable to double-check your choice. Whole Life may turn out to be the wrong type of insurance for you. Despite all its potential benefits which allure people into purchasing Whol

Attractive as Universal Life Insurance looks; it has certain limitations which are set in your policy. For example, withdrawals are normally subject to limitations. Thus, usually you are allowed to withdraw not less than $500 from your cash surrender value. And you are not allowed to withdraw money more than 4 times a year. If you decide to decrease the coverage, you must be aware of the fact that a decrease below the required minimum may lead to a surrender charge applied against the cash value.

Premiums for Universal Life Insurance are normally high, especially in the early years of the contract. For a comparison, Universal Life Insurance premiums are generally lower than Whole Life Insurance payments, but higher than payments for Term Life Insurance. The good news is that your policy premiums can be readjusted on a monthly basis and these changes are aimed at providing you with an opportunity to take advantage of rising interest rates. The interest rate is also liable to change and may decrease, though not below the 4% level.

If you are thinking about purchasing Universal Life Insurance, you should know that there are many financial expenses associated with this type of Life Insurance policies which result in deductions from your premiums. With most plans some administrative charges will be deducted from your premium. Besides, most Universal Life Insurance policies stipulate for a decreasing surrender charge which is deducted from your cash value if the policy is surrendered.

There are two general types of Universal Life Insurance policies. With Type A policies the cash amount is added to the face value and is paid out as the death benefit. With Type B policies your beneficiary will receive the face value of the policy and the best part of the cash account. Premiums for Type B policies are usually higher as they offer greater flexibility and serve as a profitable investment tool.

One more important feature of Universal Life Insurance deserves a special mention. Unlike Whole Life Insurance, with Universal Life Insurance all the financial operations are transparently disclosed to the policyholder. So, you can easily trace all the internal financial operations with different elements of the policy: the premiums, the cash value, the death benefit, interest credits, loans and different expenses.

On the whole, alongside the outlined potential benefits, Universal Life Insurance policies have a number of inherent limitations. Do not feel embarrassed to talk to an insurance company representative to get to know more about the details of the coverage the company offers. The simplest guidelines you can follow are simple. If you do not need or do not want to keep this insurance for the rest of your life and need coverage just for a short-time period, this type of insurance is, most likely, not for you. It takes time for the saving portion of your policy to transform into a profitable investment.

Universal Life Insurance is right for you if you are ready to commit for a long time - for example, if you are planning for your retirement years (70 and older). At the same time it may happen so that you will have to keep your policy for 15 years before you become eligible for the return of the policy. It may be reasonable to consider Term Life Insurance or Return of Premium Term Insurance in this case. But if the initial payments and further conditions of the coverage satisfy you, Universal Life Insurance can be a good investment vehicle allowing plenty of flexibility so that you can tailor your payments to the financial circumstances.

Ideally, Variable Life Insurance requires expert knowledge of the market situation and investment procedures to make a profit. Alongside the offered flexibility, this Life Insurance plan is fraught with losses if the investments you make do not prove to be profitable. As stated above, with a Variable Life policy, the death benefit and the cash value are mutually dependent and vary in relation to the value of the investments underlying the policy. If the value of the accounts increases, so do the benefits; if the value of the account decreases, so do the benefits. As neither the cash value nor the death benefit is predetermined or guaranteed, the policyholder bears the risk of a poor fund performance which results in the decreased amount of the death benefit and the cash value and the increased premiums the insured has to pay to keep the policy in effect.

Generally, the death benefit is subject to a specified minimum limit and does not fall below it. Some companies allow the policyholder to pay an extra premium to be liable to a guaranteed death benefit. When it comes to premium payments, there is another convenient option sometimes offered under Variable Life contracts - a policy with a fixed premium, which justifies the feature of flexibility attributed to Variable Life Insurance.

One more detail deserving your attention is that with Variable Life insurance you cannot increase or decrease the face amount of your policy. Any additional coverage you may be interested in entails purchasing another policy and, therefore, additional expenses and sometimes evidence of insurability.

Variable Life Insurance is fraught with more risks for the policyholder than any other types of insurance with a buildup of cash value feature because both the cash value and the amount of the death benefit may fluctuate up or down depending on the performance of the investment funds selected by the policyholder to underlie the policy. Due to inherent investment risks, Variable Life policies are deemed securities contracts and are regulated under the federal securities laws. That is why they are normally sold with a prospectus that details the policy's investment objectives, charges, risks, fees, and other expenses.

Together with the risks involved, Variable Life Insurance offers an opportunity of greater returns. If the cash value amount exceeds a fixed threshold, the death benefit will automatically increase. Moreover, with a Variable Life Insurance policy you can redirect the earned interest toward the premiums thus decreasing your expenses needed to cover the cost of the policy.

On average, Variable Life policies are more expensive than the majority of Life Insurance policies. However, they give more control and flexibility with a potential of making large profits and leaving lump sums to the beneficiaries.

Before purchasing a Variable Life policy you must be aware of the risks involved in investing. It is recommended to acquaint yourself with the basic investment principles. If you have a good sense of the market and are well aware of the investment funds and operations, then Variable Life Insurance is truly for you and your reasonable investments will allow you to achieve sizeable investment profits for your beneficiaries. Otherwise, it is advisable to have a professional investment manager, a financial or tax advisor who will supervise your investments, advise you on preferable investment decisions specific to your circumstances and help you decrease investment risks involved, if not eliminate them altogether.

Variable Universal Life Insurance proves a convenient saving strategy for those in high tax brackets. Because of its tax-deferred feature Variable Universal Life Insurance offers an attractive tax advantage and if your policy is highly funded, tax advantages can and generally do reimburse the cost of the policy.

Variable Universal Life Insurance can procure protection against inflation. And it takes into account that your insurance needs may change over time. Therefore, before going in for Variable Universal Life Insurance you should consider your individual circumstances and the standard of living you want your family to maintain. You should also make sure that your insurance company enjoys high ratings from major rating services. Rates and coverage vary from state to state and from company to company. In case you plan your coverage carefully and in accordance with your needs, the chances are that your policy will work for you.

Alongside evident advantages of this type of Life Insurance policies, there are disadvantages you should be aware of if you are thinking about purchasing this plan. Variable Universal Life policies are usually more expensive than any other type of Permanent Life Insurance. Moreover, the cost of the insurance can fluctuate as it depends on the current term rates which may increase or decrease. On average, the cash required to keep a VUL policy in force is much higher than with other types of insurance policies.

Besides, VUL is a complex financial product and you should have at least some basic knowledge of securities, stocks and bonds to make this insurance profitable. Otherwise you will hardly be able to manage your policy successfully on your own.

So, Variable Universal Life Insurance can provide you with a choice of underlying investment accounts, flexible premiums and adjustable death benefit. This type of Life Insurance can provide you and your dearest and nearest with financial protection and the element of long-term investment, but you must have a fundamental knowledge and understanding of stocks, bonds and securities.

In general, Variable Universal Life Insurance is characterized by a high level of financial protection despite the potential risks involved. As a permanent policy, Variable Universal Life Insurance will not lapse if it is funded correctly. And it will safeguard the family in case of a premature death of the insured. What is more important, the advantage of Variable Universal Life Insurance is that it is not the type of insurance that pays off only after you are gone. It can help protect your family now and improve your financial status during your lifetime.

One more factor that can predetermine your choice of a Life Insurance company is the customer service it provides. Of course, it is easier to deal with a representative who caters to your needs, who is attentive and knowledgeable, whom you can trust and with whom you can easily communicate. And just on the contrary, if the company you are going to apply to is said to have many complaints from the customers about its poor service, it is a sign for you to check out the alternatives. That is why it is always better to make your final choice of a Life Insurance company only after scrutinizing the reputation and the services of the company in question.

When choosing a Life Insurance Company you can resort to many sources to get assistance. For example, you can either purchase a Life Insurance policy directly from an insurance company or through financial representatives or brokers. In the latter case your financial representative can give you a helping hand and outline the most reliable options suitable for your individual needs. Then, do not forget that we are living in the multi-media environment and you can use the Internet resources to educate yourself about Life Insurance basics and find out what different companies have to offer. You can always find a database of top Life Insurance companies online. And filing in some personal information you can easily get quotes from certain companies and compare them.

There are many opportunities for you to become informed about the options among which you choose the company that is right for you. One thing is indisputable: it is worth thoroughly investigating what is offered on the market with regard to your individual situation and your needs

The most accessible way to get Life and Disability coverage for HIV-positive people is to obtain Group Life Insurance as part of an employee group at their full-time work. According to the Federal law, individuals with HIV have the right to access the same insurance coverage which is provided to healthy employees. Unlike Insurance plans, Large Group Plans rarely exclude people with serious illnesses. Most employers with over 15 employees offer a basic amount of Life Insurance, but in case you are HIV positive, they are likely to refuse to provide you with extra insurance.

In case you fail to obtain insurance through work, you can opt for an individual policy. Most insurance companies will ask you questions about your health; have you examined or even take your blood sample. However, in some states, HIV positive individuals can purchase small amounts on a "guaranteed issue" basis from "special risk" or "impaired risk" brokers. Private disability policies tend to be more liberal in giving the disability benefits to HIV-positive people. In many states, you will find special high-risk pools for uninsurable individuals. Check with your state insurance department and ask an insurance broker for a referral to such type of Life Insurance in your state. Remember that you may be subject to a waiting period for coverage of your pre-existing conditions.

Travel Insurance may also be difficult to obtain for individuals with a pre-existing medical condition such as HIV. Travel Insurance policies often withdraw certain medical and emergency benefits or exclude people with AIDS and HIV altogether. It is necessary to examine the terms and conditions of your policy, paying special attention to any pre-existing condition clauses. In case the conditions are declared in advance and thoroughly discussed with the insurer, a few Travel policies may provide specific HIV/AIDS inclusion clauses. Such policies cost more than standard premium rates. Depending on the situation, potential policyholders with HIV may be offered single trip coverage or annual trip insurance to have medical cover while they are abroad. It is important to include the needs of people with HIV in insurance coverage plans as one of the steps towards a more tolerant society.

Ethical conduct is one more important factor you should pay attention to while choosing a good Life Insurance provider. You are recommended to purchase Life Insurance from providers who subscribe to a set of ethical codes through the Insurance Marketplace Standards Association.

Many consumers would prefer to work with an insurance agent to be able to ask questions and select the best possible options for their financial situation and coverage needs. Ask your relatives, friends and co-workers about the insurance agents they used. You need a licensed agent who will carefully assess your Life Insurance needs, answer your questions about their product, clarify all the details and never pressure you to purchase before you know that this policy is right for you.

Most insurance providers have their websites on which you can find all the necessary information on policies and compare quotes. You may save money in case you also purchase or have already purchased Homeowner's, Health or some other kind of insurance from the same provider you are going to buy your Life Insurance from.

Life Insurance providers assess risks taking into account your record history and your state of health. There are actuarial tables which are designed to provide an estimation of how long a person will live a natural life. The estimates are based on the person's age, medical conditions, occupation, lifestyle, weight, medication a person uses, etc. Things like whether you smoke and how much alcohol you drink will also play an important role in assessing health risks for a Life Insurance provider. Remember that if you fail to mention anything like your smoking habit, this could void your insurance policy. The cost of the insurance basically depends on whether the person is likely to be living the full length of the insurance plan or at least until the provider has received a profit from the premiums.

The older you get, the higher your premiums will be as you will present greater risk for the insurance provider. The best time to obtain Life Insurance at a lower premium is when you are still young: newly married or have just had your first kid.

As a matter of fact, Life Insurance providers want agents to sell more of Universal and Whole Life policies, as they are more expensive and produce more revenue for the company. However, financial experts agree that Term Insurance, accompanied with a smart personal savings plan may be a much better option for many consumers.