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Permanent Life Insurance: Payout Basics

Posted in Life Insurance , Permanent Insurance

October 1st, 2009
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Are you thinking about getting life insurance? If so, you’re probably aware that you have several options. There’s term life insurance, and then there’s permanent life insurance. Many people like to get permanent life insurance because it builds up in cash value over time, and when they get to be a certain age – usually 65, which is the average age of retirement – they can start getting their investment back in the form of annuities. Should the holder of a permanent life insurance policy forgo any annuities, all the cash value in the permanent life insurance policy will go to the beneficiaries. When it comes to the payout amount for the beneficiaries, the maximum dollar amount will be determined by the stipulations of the permanent life insurance policy itself.

Cash Value Benefits

People who get term life insurance will be covered up to the amount that their policy stipulates. If you get coverage for $1 million, the people you’ve named as beneficiaries will split the money. If you get permanent life insurance, it works the same way, but there is also the cash value component involved. With a permanent life insurance plan, whether it’s whole life insurance, universal life insurance or variable life insurance, you are accumulating money that will either earn interest or be invested in order to make more money. So, let’s say you get a permanent life insurance policy with a death benefit of $5 million dollars. Your beneficiaries will get that money plus the total cash value that you put into the permanent life insurance policy. The maximum payout for permanent life insurance, therefore, will be the maximum amount stipulated by the policy you chose, plus its cash value.

To learn more about maximum payouts for permanent life insurance, whole life insurance, term life insurance, universal life insurance, variable universal life insurance, or any other aspect of life insurance, be sure to consult with an industry professional.

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FAQ: Is There a Limit on Permanent Insurance Payouts?

Posted in Life Insurance , Permanent Insurance

September 27th, 2009
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Permanent life insurance is a cash-value type of life insurance policy, and there is usually no limit on the amount companies pay out. “Cash value” means that permanent life insurance takes the money you put into it and sets it aside for you to have later. The money you accrue in your permanent life insurance policy will either earn interest at a rate determined by the insurance issuer, or it can be invested for you in the stock market or other vehicles. Many people like permanent life insurance for this very reason, because it means that they can use this money for when they retire, or for an emergency that requires a cash solution. Permanent life insurance policies aren’t just about their cash-value advantage. When you buy a permanent life insurance policy, you select a death benefit that you want paid to your loved ones should you die. This means that the payout of your permanent life insurance policy could be as high as the death benefit you selected, plus all the money you put into it (minus any that you spent).

Realistic Payouts

When it comes to selecting the total amount of the death benefit you want paid to your beneficiaries in the event of your death, many people try to gauge their needs based upon the value of their current assets as well as what kind of debt load they are carrying. You may decide that you want a policy that will leave your beneficiaries $1 million, for example, or $500,000. Regardless of the amount of the death benefit, with permanent life insurance the money you pay in premiums will also be a factor in the payout.

Limits Can Vary by Company

Different permanent life insurance companies have different rules and stipulations when it comes to their payouts, and different things can conceivably affect the total pay out. Before you commit to a life insurance policy, be sure to consult with an insurance expert so that you don’t make any costly mistakes.

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FAQ: Who Benefits from Permanent Life Insurance?

Posted in Life Insurance , Permanent Insurance

September 27th, 2009
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It’s important that you plan for your retirement, and it’s important that you make contingency plans for your loved ones should you suddenly die. No one with a spouse or domestic partner and children – especially young ones – likes to think of them as financially unprepared if we pass away. One strategy that covers your concerns regarding retirement and the fate of your loved ones without you is permanent life insurance. Permanent life insurance, also known as whole life insurance, benefits you, the policyholder, by giving you peace of mind knowing that your loved ones will be provided for. It also gives you peace of mind knowing that you are putting money aside, in the form of permanent life insurance premiums, for your retirement.

Benefits Everyone

Fortunately, in most instances permanent life insurance benefits you the policyholder, the most. That’s because statistics show that you will most likely live to your retirement age. Once you get there, you can start accessing the cash value component of your permanent life insurance policy. Now that you are no longer working, you need to have some other form of income, and permanent life insurance payments, called annuities, do just that. You can access the money you put into your permanent life insurance policy earlier than your retirement, but whether you can or not will depend on your individual policy.

Beneficiaries

Of course, other parties who benefit from permanent life insurance are the people you name as beneficiaries. If you are married to a wonderful person and the two of you have three young children, and you suffer a fatal accident, they will all receive the death benefit from your permanent life insurance policy. In general, the bigger the death benefit payout, the more you pay in premiums.

To learn more about who benefits from permanent life insurance, death benefits, annuities, pay outs, premiums or any other aspect of permanent life insurance, be sure to consult with a life insurance expert.

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FAQ: Why is Permanent Life Insurance Popular?

Posted in Life Insurance , Permanent Insurance

September 27th, 2009
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If you are thinking about your future, you are quite possibly thinking about life insurance too. You’re going to get life insurance coverage in order to protect your loved ones and your dependents should you die suddenly. No one who is a primary financial provider likes to think about their loved ones suffering financially without them. One kind of life insurance that might interest you is permanent life insurance. Permanent life insurance is a kind of life insurance that you pay for the rest of your life (although you have the option of making one large, lump-sum payment for it at the beginning). With permanent life insurance, you are building up a cash-value policy which you can access whenever you want to, which might be the reason this type of insurance is so popular.

Extra Retirement Income

Permanent life insurance is popular with people who are thinking about their futures because while it promises a financial benefit to loved ones should you die suddenly, it also is a means for building up a healthy source of retirement income. Let’s say you get a permanent life insurance policy that starts on the first day of next month. You will pay your monthly premium on the first of the month, and on the first of every month after that for as long as you continue working. When you retire, all that money you’ve been paying every month is waiting for you to spend. You can also take out loans against this money, or not touch it at all, and have it be added – along with your permanent life insurance policy’s death benefit – to whoever it is you have named as a beneficiary. So, many people like to get permanent life insurance as a way to save money for their retirement, and in return they get guaranteed income when there are no more paychecks coming in.

To further explore why you should choose permanent life insurance, be sure to consult with a permanent life insurance specialist.

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FAQ: Can I Withdraw from a Permanent Insurance Policy?

Posted in Life Insurance , Permanent Insurance

September 26th, 2009
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There are many ways to plan for your retirement, and one way to do it that also covers your life insurance needs is by taking out a permanent life insurance policy, which you can withdraw cash from once it builds a cash value. Permanent life insurance is a cash-value form of life insurance because all the money you put into it builds up and you can access it when you want to, or not touch it and let it all go to your permanent life insurance beneficiaries.

Retirement Benefits

It’s critical that we put money aside for our retirement, because when we stop working we stop collecting income, and that could really be a problem if there’s no money around to replace it. If you decide to get permanent life insurance, you will be setting money aside for your retirement every time you make a premium payment. The money that you pay every month is set aside and earns interest, or it can be invested in the stock market, for example. When you want to access that money, you can withdraw cash from your permanent life insurance policy. By contrast, if you choose to get term life insurance, you don’t get any money back at the end. Like car insurance, you are simply paying for risk avoidance, and when your term life insurance comes to an end, everyone just walks away from the table with no further ties.

Double Check Cash Withdrawal Options

With permanent life insurance, you are putting money aside that is put to work for you through earning interest. You can withdraw this cash when you retire, or you can withdraw it whenever you need to. Bear in mind that permanent life insurance stipulations will vary from issuer to issuer, so be sure to check the fine print before you sign anything. You don’t want to make any mistakes when it comes to your financial future.

To learn more about withdrawing cash from a permanent life insurance policy, permanent life insurance, term life insurance, or any other aspect of life insurance, be sure to consult with a life insurance professional.

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How to: Withdraw Cash from a Permanent Life Insurance Policy

Posted in Life Insurance , Permanent Insurance

September 25th, 2009
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Permanent life insurance is an excellent tool for not only protecting those you love after you pass, but for building an investment tool while you are still alive! Permanent life insurance is a twofold type of life insurance where financial benefits are left to those you choose that also gives you returns over time. With a permanent life insurance policy, policyholders have the option of tapping into the cash reserves they have built during their lifetime.

Withdrawing Cash

Cash can be withdrawn from a permanent life insurance policy after some conditions have been met. The first years of paying into a permanent life insurance policy typically go towards the cost of the coverage, but later can start adding up as a cash value. After several years of contributions, the policyholder will become “paid up” on their contract and can withdraw cash from their policy.

Once a policy becomes paid up, there are several ways to withdrawal cash from a permanent life insurance. Once such way is by choosing to have the cash value of your account pay your remaining premium dues. If this strategy is combined by a cash withdrawal from a permanent life insurance policy, then the policyholder must start making premium payments again.
Another way of withdrawing cash from a permanent life insurance policy is in the form of a loan. Taking a loan against a permanent life insurance policy is generally cheaper than borrowing from a bank as the interest rates on the loan against your own policy is less than the bank would charge you. Additionally, you can decide not to repay the loan to yourself at all! If that is the case then the amount borrowed plus the loan interest would be deducted from the benefit that would be to the beneficiary of your policy, thus providing them with less money in inheritance.
The final way to withdraw cash from a permanent life insurance policy is by making a partial withdrawal of the policy’s cash value. This process can also reduce the total amount of the death benefit and in some rare cases, by opting to make a partial withdrawal of your cash value can partially withdrawing your cash value could completely obliterate your death benefits.

To learn more about permanent life insurance policies, be sure to check with an insurance expert who is qualified in helping you to plan out your retirement goals.

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Advantages / Disadvantages of Permanent Life Insurance

Posted in Life Insurance , Permanent Insurance

September 25th, 2009
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People who are thinking about getting permanent life insurance need to do a thorough evaluation of its advantages and disadvantages. If you have a spouse or domestic partner, and children, then there is no question that you need to get some form of life insurance: your loved ones need to be protected financially in the event that you suddenly die. Permanent life insurance is one type of life insurance plan that addresses that need, and while it may be the perfect solution for some people, that may not be the case for everyone.

Advantages of Permanent Life Insurance

Permanent life insurance is a policy that will be on-going for the rest of your life
Flexible payments means you will be putting money into it either all at once, in a single lump payment, or every month
The money you put into a permanent life insurance policy accrues and earns interest, either through a rate offered by your insurance provider, or from interest earned by the cash value of your permanent life insurance being invested in something like the stock market
You can start accessing the cash value of your permanent life insurance policy once it builds value
A great way to plan for retirement

Disadvantages of Permanent Life Insurance

The biggest disadvantage to a permanent life insurance policy is the cost
You may already have outside retirement investments linked to the stock market

To learn more about the advantages and disadvantages of permanent life insurance, be sure to consult with a life insurance professional.

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How am I Billed for Permanent Life Insurance?

Posted in Life Insurance , Permanent Insurance

September 22nd, 2009
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Permanent life insurance is kind of like the superhero of life insurance options. By day a permanent life insurance policy is a mild-mannered plan that will provide death benefits to beneficiaries upon the passing of the policyholder. By night, permanent life insurance doubles as an investment strategy allowing the policy to build up a cash-value that the policyholder can take advantage of while they are still living. The billing portion for permanent life insurance is also multifaceted as based on the preference of the account holder, the premiums can be paidannually, semi-annually, quarterly or monthly.

Billing Choices

Your bottom line cost may be affected by the way you choose to be billed for permanent life insurance. Insurance companies typically build in a financial cushion to handle the costs of processing the billing. This cushion is called a “factor,” and the amounts for paying an annual life insurance bill will be less than opting to have your insurance premiums billed monthly. The greater the quantity of premiums, the more you will be paying in factors that are added to mitigate the costs of billing administration that the insurance company may incur.

Selecting a Billing Cycle

If you are in the process of selecting a permanent life insurance policy and are trying to decide on the billing cycle you want to apply to your permanent life insurance policy, it is important to analyze your financial responsibilities.Some people may think the additional fees required in monthly billing for permanent life insurance may be worth the cost as they do not need to pay off one lump sum and can keep their cash flow rolling smoothly. Others may opt for a quarterly permanent life insurance billing system as they may get large dividends paid at the same time, and may want to just roll over that amount directly into their next investment strategy.

The choice ofannual, semi-annual, quarterly or monthly billing for permanent life insurance is up to the policyholder. Laying out your complete annual budget of income versus expenses on a spreadsheet may help highlight how you want to pay your permanent life insurance premiums.

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Permanent Life Insurance: Premiums Ever Change?

Posted in Life Insurance , Permanent Insurance

September 22nd, 2009
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Once a policyholder researches, plans and then commits to a permanent life insurance policy, the premiums will not change during the course of the contract.

Permanent Life Insurance Basics

A permanent life insurance policy is a great way for policyholders to provide their heirs with some financial comfort upon their worldly expiration, and can serve as a tool that can be used to build a tidy nest egg. During the initial stages of setting up the permanent life insurance policy, investment options and benefit amounts are determined. Based on that information, a monthly premium is determined and part of the money goes towards the insurance while a fraction is applied toward the investment portion. The permanent life insurance premium will never change.

The reason why this type of life insurance is called “permanent” is because some of the features to maintain the policy will remain constant for the entire life of the arrangement. For example, not only will the premiums for permanent life insurance never change, a permanent life insurance policy cannot expire. It is important to make sure to pay the fixed premium charges of your permanent life insurance policy consistently as lack of payment is the one thing that can convert permanent life insurance into a temporary policy.

Permanent life insurance was launched in the 1970′s as a way for insurance companies to diversify their business into the world of investments. Some types of permanent life insurance may pay off monthly dividends that can be applied to pay the premiums due during that time period. Although the premium rate for permanent life insurance is fixed, the dividends can be used to offset the cash amount due for a premium.

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FAQ: Is There a Term Limit for Universal Life Insurance?

Posted in Life Insurance , Permanent Insurance , Universal Life Insurance

September 16th, 2009
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Universal life insurance is a type of life insurance policy that you put your money into that builds up a cash value that you can withdraw should you need to, as long as there is money left in the account to pay for your universal life insurance needs. Universal life insurance is a kind of permanent life insurance, as opposed to term insurance. Term insurance has time limits – one year, two years, five years, etc. – that you can pick and choose depending on your needs. With universal life insurance, you are committing to an open-ended life insurance policy that will last for the rest of your life. The money you accrue in your universal life insurance plan is sensitive to market rates.

Life Insurance Necessary

It may not be the most exciting thing in the world, but nevertheless, you have to have insurance. The risk you take by going without certain types of coverage are just too great. If, for example, you get into a car accident while not covered, you could easily be in for high bills that could cause bankruptcy. The same goes for health insurance, only more so. If you are uninsured and are involved a bad accident, you’re going to have to pay out of your own pocket for a night in a hospital room that can cost thousands of dollars. The bottom line is, if you experience an emergency and don’t have insurance, life could become even more complicated for you. In that spirit, you want to have life insurance for the people you love, especially if they include a spouse or partner and children.

To learn more about universal life insurance rates, term insurance, permanent insurance, and other kinds of life insurance, be sure to consult with a life insurance specialist. He or she can advise you as to whether universal life insurance is the right kind of policy for your needs.