1)The insurance you need to buy should be according to you debt, your family needs and your life-style. Most people think that 10 times your annual income should be enough.
2)Don´t buy permanent insurance (Universal Life o Whole life) if you are not completely sure you will be able to pay it in the future.
3)Make sure the term insurance prices are fixed and will not increase. It can be fixed to 10, 20 or 30 years.
4)Find out if you might be able to get a “premium return” policy, according to your budget.
5)Take the advantage that there are affordable policies to buy, so that your family is protected.
Welcome to our Life Insurance site. Life insurance protects against economic loss in the event of a death, by paying a death benefit to the beneficiaries of the policy once the policyholder dies. This death benefit provides financial security by replacing lost income or paying final expenses such as funeral costs. There are many types of Term Life Insurance for which you can receive a life insurance quote. We recomend you to ask an agent or call our office (800) 571 2088 to get assistance in the moment of selecting a plan.
When you buy Life Insurance you enter into a contract with an insurance company, which promises to provide your beneficiary(ies) a certain amount of money (commonly called a "Death Benefit") upon your death. In return, you make periodic payments, known as premiums. The amount of the premiums generally depends on factors such as age, gender, occupation, medical history and whether you intend to build up cash value in your policy. Life insurance can be a financial resource for your loved ones.
Life Insurance Basics
Why Should I Buy Life Insurance?
Many financial experts consider a term life insurance or whole life insurance policy to be the cornerstone of sound financial planning. A solid life insurance policy can be used to:
1. Help replace your income and provide financial security for your dependents. If you are the primary earner in your household and people depend on your income, life insurance can help replace that income if you die. The most commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, disabled relatives, siblings or adult children who continue to rely on you financially.
2. Help pay final expenses such as your funeral and burial costs, probate and other estate administration costs, debts, and medical expenses not covered by health insurance.
3. Create an inheritance for your heirs by buying a life insurance policy and naming them as beneficiaries.
4. Help pay federal and state inheritance and estate taxes. These are generally due within nine months of death and could absorb nearly half of your assets before a single dollar goes to your heirs. Life insurance benefits can pay estate taxes and settlement costs so that your heirs will not have to liquidate other assets or take a smaller inheritance. You can be secure in the knowledge that your loved ones will receive the legacy you have spent a lifetime creating, not just a piece of it.
5. Make significant charitable contributions. By making a charity the beneficiary of your life insurance, you can make a much larger contribution than if you donated the cash equivalent of the policy's premiums.
6. Create a source of savings. Some types of life insurance create a cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the owner's request. Since most people make paying their life insurance policy premiums a high priority, buying a cash-value type policy can create a kind of "forced" savings plan. Furthermore, the interest credited is tax deferred (and tax exempt if the money is paid as a death claim).
How Should I Choose What Type of Life Insurance to Buy?
Life insurance is a long-term commitment. Before getting a life insurance quote, ask yourself these very important questions:
• How much insurance do I need? If I were to die, what would my spouse and dependents need in order to live comfortably? • What am I trying to accomplish with life insurance? Am I accumulating funds for education costs? Providing a way to pay estate taxes? Do I need supplemental income for my retirement or emergencies? • How much can I afford to pay for a policy? After answering these questions and consulting with a life insurance agent, your next step is to choose which type of insurance best meets your needs.
- Types of Life Insurance:
Term Life Insurance You should consider Term Life Insurance if: • You need life insurance for a specific period of time. Term life insurance enables you to match the length of the policy term to the length of the need. For example, if you have young children and want to ensure that there will be funds to pay for their college education, you might buy 20-year term life insurance. Or if you want insurance to repay a debt that in a specified time period, buy a term policy for that period. • You need a large amount of life insurance, but have a limited budget. In general, term life insurance pays only if you die during the term of the policy, so the rate is lower than for permanent forms of life insurance. If you are still alive at the end of the term, coverage stops unless the policy is renewed. Unlike permanent insurance, you will not build equity in the form of cash savings. If you think your financial needs may change, you may also want to look into "convertible" term policies. These allow you to convert to permanent insurance without a medical examination in exchange for higher premiums. Keep in mind that premiums are lowest when you are young and increase upon renewal as you age. Some term insurance policies can be renewed when the policy ends, but the premium will generally increase. Some policies require a medical examination at renewal to qualify for the lowest rates. Term Life Insurance Advantages • Offers temporary life insurance protection at a very affordable price • May be converted to permanent policy • Income-tax-free death benefits
Permanent (or Whole) Life Insurance You should consider permanent (or whole) life insurance if: • You need life insurance for as long as you live. A permanent policy pays a death benefit whether you die tomorrow or 100 years from now. • You want to accumulate tax-deferred savings that could be a source of borrowed funds for a variety of purposes. The savings element can be used to pay premiums to keep the life insurance in force if you cannot pay them otherwise, or it can be used for any other purpose you choose. You can borrow these funds even if your credit is shaky. The death benefit is collateral for the loan, and if you die before it is repaid, the insurance company collects what is due before determining what goes to your beneficiary. Keep in mind that premiums for permanent policies are generally higher than for term life insurance. However, the premium in a permanent policy remains the same no matter how old you are, while term premiums can go up substantially every time you renew. Permanent Life Insurance Advantages: • Lifetime protection • Tax-deferred cash value • Access to your cash value to use however you wish • "Locked in" premiums • Income-tax-free death benefits
How Much Life Insurance Do I Need?
The amount of life insurance you decide to purchase depends on your anticipated final expenses and your family's projected monetary needs in the future. In most cases, if you have no dependents and enough money to pay your final expenses, you do not need any life insurance. However, once you have dependents you should buy enough life insurance so that, when combined with other sources of income, it will replace the income you now generate for them, plus enough to offset any additional expenses they will incur replacing services you currently provide (for example, if you do the taxes for your family, the survivors might have to hire a professional tax preparer). Your family might also need extra money to make some changes after you die. For example, they might want to relocate, or your spouse might need to go back to school to be in a better position to help support the family. Most families have some sources of post-death income besides life insurance. The most common source is Social Security survivors' benefits. Many also have life insurance through an employer plan, and some from other affiliations, such as an association they belong to or a credit card. Although these sources might provide a significant income, it is rarely enough.
What is a Beneficiary? A beneficiary is the person or entity you designate to receive the proceeds (death benefit) from your life insurance policy. You can name a single beneficiary or multiple beneficiaries: one person, two or more people, a business, a trustee, a charity or your estate. Should you elect to have multiple beneficiaries, you can decide how the proceeds will be split between them. When naming beneficiaries, you should identify them as clearly as possible and include their social security numbers. This will make it easier for the life insurance company to find them and make it less likely that disputes will arise. There are two kinds of beneficiaries: “primary” and “contingent.” The primary beneficiary receives the death benefit if he or she can be found after your death. Contingent beneficiaries receive the death benefit if the primary beneficiary is deceased or cannot be found. If no primary or contingent beneficiaries can be found, the death benefit will be paid to your estate. In this case, probate proceedings could delay distribution of the benefit, and the resultant costs could diminish the amount available to your heirs. It is therefore advisable to specify how the benefits are to be handled if one or more beneficiaries have died or cannot be located. As your life situation changes, so could your choice of beneficiary. Marriage, divorce or the birth or adoption of a child are all events that could cause you to change your initial selection. It is a good idea to regularly review your beneficiary designation in order to make sure your choice is still appropriate.
How Can I Save Money on Life Insurance? There are ways to save money when buying life insurance. As your top priority, look for a policy that meets your needs. Beyond that, here are some ways to maximize your life insurance dollars. Shop around for a good rate. Life insurance is a very competitive business. You will find differences of hundreds of dollars for annual premiums, even among financially sound companies, for essentially the same policy. Use online quote services, an agent or a broker to get multiple premium estimates. As part of your research, determine which rate class you’ll fit into. Most companies that sell individual life insurance have several different price classes?usually called "preferred (non-tobacco)," "standard (non-tobacco)," "preferred (tobacco)," and "standard (tobacco)." A small percentage of people have health conditions or histories that disqualify them for even "standard" rates. Many in this group will be offered insurance at "impaired risk" or "nonstandard" rates. Remember that the best policy is not necessarily the cheapest; you should also consider whether the policy addresses your overall goals. Look into group insurance. Consider participating in your employer-sponsored life insurance program, even if you have to contribute to it financially. Employers often subsidize their group insurance costs, so it can be less expensive than individual life insurance. You might obtain coverage up to a certain level without providing evidence of good health. You will likely be able to pay premiums through the convenience of payroll deduction. However, make sure to compare group and individual rates since, depending on your age and health status, group insurance may or may not provide a savings. In comparing group to individual life insurance, remember that if you have over $50,000 of group life insurance, IRS tables determine how much it costs your employer to provide the amount over $50,000 and adds that amount to your taxable income. Maintain a high credit score. Problems with your credit could result in you paying higher-than-average premiums or being denied coverage altogether. Insurance companies may place the credit-challenged in a higher risk class than those with a solid credit history. Stay healthy or get healthy. Find out into which rate class you’ll be grouped and, if necessary, consider making some lifestyle changes: don’t smoke, maintain a healthy weight and exercise regularly, for example: to qualify for a more favorable rate class. Look into no-load policies. A no-load (low-load, no-commission) policy is one with fewer administrative fees than traditional policies. This can result in lower premiums. Consider the net cost index. How can you compare two policies, one with premiums that start lower than the other but later are higher than the other? Or one with low premiums and a low cash value, the other with higher premiums and a higher cash value? Use a net cost index: a standard method for collapsing these variables into one number. The lower the number, the better, but ignore small differences (since the indexes are approximations based on assumptions, small differences might not signal true differences in values). The agent or broker with whom you’re dealing, or the company from which you’re considering buying a policy, will provide these index numbers. If you're buying a term policy, look for renewal guarantees. A renewal guarantee gives you the right to start a new term after the current one ends, likely at a higher premium based on your current age, but without requiring you to undergo a new health exam or submit any other evidence of insurability. Without the guarantee, you may have to shop around for life insurance, and if your health has deteriorated, you could pay more or not find affordable coverage at all. Focus on financially sound companies. Dozens of companies sell life insurance. Limit yourself to companies with high ratings from two or more independent rating agencies. A low premium from a shaky company is not a good buy. Options to avoid: Fractional Premiums. Typically, you can pay your life insurance premium once a year, twice a year, once a quarter, or once a month. Although paying quarterly or monthly might seem to be easier to fit into your budget, some companies levy high charges for paying premiums frequently. Others levy quite small charges to do this. If a company levies high charges for paying more frequently, try budgeting so that you can pay your premium only once or twice a year. Guaranteed-issue policies? if you are healthy. If you have been denied insurance because of increasing age and declining health, a guaranteed-issue policy could be a last-resort option. On the plus side, this type of policy can be obtained without a medical exam. This means that anybody can get coverage, no questions asked. On the downside, however, the premiums tend to be high and the face value low. If you are healthy, you may get better rates by taking a medical exam, as insurance companies often offer discounts for people in good health.
