Wednesday, April 25, 2007


You don't want to leave your family unprepared for what will happen to them financially if you do not get sufficient life insurance coverage. So planning today can provide the income your family will need if you are no longer here. Following are some reasons to consider life insurance from a company that will be there for your family. Every person and every family have their own reasons for life insurance, but the need for protection is at the base of all the needs.
Life Insurance To Replace Lost Income
People buy life insurance to replace income lost if something happens to them. It provides the capital which provides the income. Providing money for your family through life insurance is the most cost effective way even if you have substantial capital. You are buying protection for your family for pennies on the dollar.
Life Insurance Can Pay Off Debt
Debts can be difficult to pay , especially without a regular income. Life insurance capital can be used to provide income to pay off debts at the death of a loved one. If you die, the last thing you want is for your relatives to be hounded by debt collectors.
Life Insurance Pays Final Expenses
Final expenses can be large especially if there has been a long illness, along with legal, medical and funeral costs to pay. There is no real way to assess how much money will be needed but you should always plan on the maximum instead of the minimum.
Life Insurance Helps Pay For Education
Educating children is expensive and needs to be well thought out. Many people contribute funds each year but if something unexpectedly happens there may not be enough time to build up a bank for education. Life insurance helps create a cash fund that you can count on.
Finally remember that no widow or widower has ever been left too much capital through life insurance!
And Finally Life Insurance Can Provide A Pension
If you have a joint to die life insurance policy, the proceeds from such a policy or a single life policy could provide an income as a pension.
Suppose you had a joint first to die policy with your spouse. Your children grow up and leave and you are left wondering what to do with this large life insurance policy you bought to protect them. As neither of you died and the need for it has passed, you now have to make a decision.
But while thinking about this, your spouse dies and so you inherit the lump sum. It now provides you with an extra income from capital which can now be passed down the line at your death.
Considered wisely, there are not too many products as versatile as life insurance.

Wednesday, April 18, 2007


One financial product that is significantly cheaper than things like gas and food these days is term life insurance. It is estimated that term life premiums have fallen 30% or more in the past 10 years. Can you imagine buying gas at the same price you paid 5 years ago? It doesn't get any better than that.
Why Is Term Life Insurance Cheaper?
As people are living longer term life insurance companies will have fewer claims in any given period. Add in competition and you will see why you can get a great price for your term life insurance protection. Term life covers you for a specific period, normally 10 or 20 years, is simple to uinderstand and it is easy to compare the price of one company to another.
But Do You Need Term Life?
Children don't need life insurance, but parents with young children need a lot of term life insurance as the cost of bringing up and educating children mount every year. For 90% of people, term life is what they should buy. Term is simple and cheap and it provides coverage for a lot of personal needs that will fade away over time. Term life does not have lots of bells and whistles which is why it is cheap. If you die, your beneficiaries get the money.
How Much Term Life Insurance Do You Need?
Some brokers suggest 7 times annual earnings; others say 10 times. The best way is to look at your own family situation. Who do you want to protect in case you pass away early? Many people need term life insurance to cover the mortgage, college bills and other family needs. Then, how much annual income will your family need on a day to day basis?
What Sort Of Term Life Is Recommended?
Mostly recommended is level term life insurance where the premium remains constant. Most life insurance companies sell this level term life insurance and increase the premiums after the first 10 or 20 years has expired.
Term policies can run 10 or 20 years or to age 100, with the 10 and 20 year term being the most popular. If it turns out you don't need the policy for that length of time, you can drop some or all of it.
Finding a good online broker to do the shopping for you is more than half the battle in getting the best deal for your term life insurance coverage.

Tuesday, April 17, 2007

Life Insurance Is For Your Life

Life insurance should be a part of your overall financial planning. While some life insurance policies can be used to help you achieve your financial goals, others just provide protection. But whichever type you choose, it is important you understand your needs and the options available so you get the best value for your life insurance coverage.
How Much Life Insurance?
First, determine how much coverage you'll need and how much you can afford. Now these 2 items may not match. However, if you have a young family, you need to get the most coverage for the lowest price. That means term life insurance which indeed, meets the needs of most everyone.
What Type Of Life Insurance Do I Need?
Next choose a term or permanent life insurance policy. Term life insurance provides protection for a specific period of time, normally 10, 20 or to age 100 in Canada.
Permanent life insurance policies are whole life and universal life. These policies offer death benefits and a savings account (cash surrender value) so that you can get money back either by cashing in the policy or by borrowing against it. However it is my firm belief that you should only buy whole life insurance if the premium is about the same as the term life insurance. And that will only happen in your sixties or beyond. Otherwise you are paying a higher premium for the same coverage And then, if you want to borrow your own money out of the policy, the insurance company charges you interest! And if you don't pay it back, the coverage is reduced by the amount of the borrowing. And you still continue to pay the far higher premiums, though now for less life insurance coverage. Why would you do this?
Is Universal Life Insurance Same As Whole Life Insurance?
No. In whole life insurance the savings, so called, are in the premium itself. In universal life, the investment is added on if you so choose. But if you do not add any investment to a universal life insurance plan all you have is an expensive term to 100 life insurance policy.
Lesson: Be aware of what life insurance you buy.
Check the financial strength of the companies who will have to stand behind the policies you're considering.