This article explores the five most harmful life insurance myths that still prevail. Even educated professional often find they have to debunk persistent insurance myths that have been the root of many poor and even harmful consumer decisions. Listed below is an examination of some of these myths and misconceptions we face every day.Read More →
Each Universal Life insurance policy has two parts; the first part is the cost of insurance. This is the cost of term insurance for the current year of the policy. The second part is the cash value. When you make a payment to your Universal Life policy, the amount you pay that is in excess to the term insurance cost is credited to your cash value. That cash value grows tax free and can be accessed at any time for any reason you choose.
There is one particular type of fixed Universal Life policy that has become the life insurance product most in demand in the United States; the Indexed Universal Life insurance policy.
With the indexed Universal Life policy, the cash value has two growth components; a minimum growth rate and a growth rate pegged to the positive years of an index. The most common index used is the S&P 500. There are other indexes available, but for the sake of brevity we will only use the S&P 500 equity index as an example. The Indexed Universal Life policy is in such demand that it accounts for 38% of the entire life insurance market in 2013.Read More →
Every life insurance we know of that also offers living benefits will have some conditions that require a loss of two or more activities of daily living to receive benefits for chronic illness. (There is no such requirment for critical illness) Every Long-term Care policy we know of includes these loss of activities of daily living as a condition for benefit. It is important that consumers understand the concept of activities of daily living so that they understand the benefits of long-term care insurance and long-term care riders within some life insurance policies.
Because of the advent of living benefit life insurance, consumers no longer need to purchase two separate policies to protect themselves and their families. In some cases, the long-term care benefits within a life insurance policy do not require a higher premium than the old life insurance, no other cases the premium is nominal.
This means that we can now own a life insurance policy that also acts as a long-term care policy without paying extra! This substantial cost savings means more families can protect themselves from life events that can destroy their next-egg and severely disrupt their quality of life.Read More →
While term (or temporary) life insurance offers insurance coverage with the lowest monthly outlay when we are young, permanent (or cash value) life insurance is usually the lowest cost over our lifetime. In addition, cash value life insurance can be an important part of your retirement plan as you can use that insurance for retirement income.
Cash value life insurance comes in several forms, but they all have common features; the insurance will not expire as long as you pay your premiums and they build up a cash value on a tax deferred basis that can be accessed during your life time. In fact, you can access that cash value tax free, for any reason, by “borrowing” the cash from your policy. In this case, you become the banker. You must charge yourself a reasonable interest for borrowing the funds. If you choose not to pay back the borrowed funds, then the amount borrowed plus the interest is deducted from your death benefit when you die. Either way, you can use the cash value in your insurance for retirement income.Read More →