Term Life InsuranceLife-Insurance.insure offers residents term life insurance from many A-rated life insurance companies. Term life insurance is very easy to understand in its basic form. You choose the term (how many years you would like the policy to be in force, which is typically 10 years, 20 years, or 30 years), answer a few questions about your general health and living habits, then your provided a quote for the premium, which is usually a fixed amount paid monthly or annually. There is typically no cash value associated with Term Life Insurance policies and the premiums usually are fixed for the entire term and do not raise or lower over time.
Prescott, AZ Term life insurance is life insurance which provides coverage at a fixed rate of payments for a limited period of time, the applicable designated term. After that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments or conditions. If the life insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.
Term life insurance is a "pure" death benefit; its primary use is to provide coverage of financial responsibilities for the insured or his or her beneficiaries. Such responsibilities may include consumer debt, dependent care, education expenses for dependents, funeral costs, and mortgage assistance or payoff. Term life insurance may be chosen in favor of permanent life insurance because term insurance is usually much less expensive.
The simplest form of term life insurance is for a term of one year, but more commonly ten year, twenty year, or even thirty years (depending on applicants age and general health at the time of application). The death benefit would be paid by the insurance company if the insured died during the term, while no benefit is paid if the insured dies one day after the last day of the term. The premium paid is then based on the expected probability of the insured dying in that term period. Because the likelihood of dying in one year is low for anyone, purchase of only one year of coverage is rare.
The most common term insurance is guaranteed level premium term life insurance, where the premium is guaranteed to be the same for a given period of years. In this form, the premium paid each year remains the same for the duration of the contract. This cost is based on the summed cost of each year's annual renewable term rates, with a time value of money adjustment made by the insurer. Thus, the longer the term the premium is level for, the higher the premium, because the older, more expensive to insure years are averaged into the premium.
Most level term programs include a renewal option and allow the insured to renew if the insured period needs to be extended. It is important to note that the renewal may or may not be guaranteed and the insured should review their contract to see if evidence of insurability is required to renew the policy. Large life insurance companies, such as MetLife, usually have some type of guaranteed renewability rider or built in coverage. Typically this clause is invoked only if the health of the insured deteriorates significantly during the term, and poor health would prevent them from being able to provide proof of insurability.
Most term life policies include an option to convert the term life policy to a Universal Life or Whole Life policy. This option can be useful to a person who acquired the term life policy with a preferred rating class and later is diagnosed with a condition that would make it difficult to qualify for a new term policy. The new policy is issued at the rate class of the original term policy. Note that this right to convert may not extend to the end of the Term Life policy. It may extend a fixed number of years or to a specified age, such as convertible to age 70. Please check with your life insurance agent or life insurance company for details and policy specific coverages.
Prescott, AZ Permanent Life Insurance
Whole Life InsuranceWhole life insurance provides lifetime death benefit coverage for a level premium. For young people, whole life premiums are usually much higher than term insurance premiums. Part of the whole life insurance contract mandates that the policyholder is entitled to a cash value reserve that is part of the policy and is guaranteed by the insurance company. This cash value can be accessed at any time through policy loans that are received income tax-free and paid back according to the loan payment schedules. These policy loans are available until the insured's death. If any loans amounts are outstanding (not yet paid back), upon the insured's death, the insurer subtracts those amounts from the policy's death benefit/face value and pays the remainder to the policy's beneficiary.
The advantages of whole life insurance in include guaranteed cash values; guaranteed death benefits; guaranteed cash values; fixed and predictable premiums; and mortality and expense charges that do not reduce the policy's cash value. Death benefit amounts of whole life policies can also be increased through accumulation and/or reinvestment of policy dividends, though these dividends are not guaranteed and may be higher or lower than earnings at existing interest rates over time.
Prescott, AZ Universal Life InsuranceUniversal life insurance is intended to combine permanent insurance coverage with greater flexibility in premium payments, along with the potential for greater growth of cash values. There are several forms of universal life insurance policies, including variable universal life (VUL), interest- sensitive (also known as "traditional fixed universal life insurance"), guaranteed death benefit, and an equity-indexed universal life insurance. All universal life insurance policies have cash value.
Paid-in premiums increase UL cash values. With universal life, both the premiums and death benefit are flexible. With the exception of guaranteed-death-benefit universal life policies, universal life policies trade their greater flexibility off for fewer guarantees. "Flexible death benefit" means the policy owner can choose to decrease the death benefit. The death benefit can also be increased by the policy owner, usually requiring new underwriting. Another feature of flexible death benefit is the ability to choose option A or option B death benefits and to change those options over the course of the life of the insured. Option A is often referred to as a "level death benefit"; death benefits remain level for the life of the insured, and premiums are lower than policies with Option B death benefits, which pay the policy's cash value (face amount plus earnings/interest). If the cash value grows over time, the death benefits do too. If the cash value declines, the death benefit also declines.