Universal life insurance provides flexibility to policyholders. It’s similar to whole life, in that you have a cash value that grows, and it encompasses a term life policy, where you decide the terms and renew the policy annually. However, universal life isn’t simple like term insurance — or even like whole life. In fact, balancing the options can be quite complicated. So in this chapter, I discuss the basics of universal life insurance, the elements that you get to compare for your particularneeds, and your options in designing the right policy for you.
Friday, May 13, 2011
Thursday, May 12, 2011
Term insurance is the most basic form of life insurance and, therefore, the easiest to understand. At its simplest level, term insurance provides life insurance for a defined period (usually a one-, five-, or ten-year term). For that insurance, you pay a monthly, quarterly, annual, or semiannual premium that remains constant during the specified term.
Wednesday, May 11, 2011
After you understand the purposes of life insurance (see Chapter 1) and decide that you need a life insurance policy, the next step is determining how much protection you should buy. This chapter shows you how to determine how much life insurance you need by explaining how to judge the economic value of your life and your survivors’ needs. This chapter also includes a worksheet so that you can make your Calculations.
Life insurance is simple, right? You buy a policy to protect your family, you die, your family gets some money. Simple. Direct. Easy.
Not so fast. Life insurance is much more complicated than that. This chapter describes some of the myths that surround life insurance and takes a look at the main purposes of having a life insurance policy — not just as income for your survivors, but also as part of your investment portfolio, as a tax shelter, and as part of your estate planning. The following sections work to dispel the three main myths about life insurance.