A well-planned life insurance policy enables your loved ones to cover their immediate cash needs in the event of your death, but should also replace your income so that your family maintains their current standard of living. We believe in providing families with a benefit that can be invested conservatively, generating interest earnings sufficient to pay monthly expenses.

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Life Insurance Basics

life insurance quotesFounded in 1996, LifeInsurance.net makes it easier than ever to find the right insurance policy for your family. A nationally recognized life insurance agency, we bring our clients access to a large network of A and A+ rated life insurance companies. We strive every day to deliver value, financial security and peace of mind.

LifeInsurance.Net has been featured in YourMoney Magazine, Bests Review, Money Magazine, Forbes.com and elsewhere.

What type of Life Insurance Coverage do you really need?

Life Insurance comes in two basic flavors, Term Life Insurance and Permanent Life Insurance. If you are clear on WHY you need a life insurance policy, it is generally clear which kind of life insurance plan is appropriate for you.

Term Life Insurance Policies are disaster management tools.

Permanent Life Insurance Policies are inter-generational wealth transfer tools.

Term Insurance

If you are a parent, and have a spouse and children dependent on you for income it would be financially disastrous if you died prematurely. Term Life Insurance plans are designed as risk management tools to cover that financial loss. Term Life Insurance insures you against death for a specified number of years and then ends (the Life Insurance Policy Term).
e.g. If you buy a 10 year term life insurance policy and die in the eighth year, the carrier will pay the full life insurance benefit defined in the policy. If, however, you die in the eleventh year, the policy will have expired and you will have no life insurance coverage in force.
The cost of term life insurance is significantly lower than the cost of permanent life insurance policies, because statistically EVERYBODY OUTLIVES THEIR TERM LIFE INSURANCE POLICY. We often speak to clients who feel that they've wasted money if they don't die and collect on their term life policies.

We just remind them that Dying Is Bad.

Permanent Insurance

If you want to be sure that your life insurance is in force whether you live to 60 or to 90, then you need a permanent life insurance policy. You should never buy a term life insurance policy as part of an estate plan where you are counting on the cash becoming part of an inheritance. Often the least expensive option for pure insurance forever is a no lapse guaranteed universal life insurance policy.

At Life Insurance. Net we have years of experience working with families across the country on identifying their core life insurance requirements. We can provide competitive term life insurance quotes, or universal life insurance quotes from A and A+ rated life insurance companies in almost any state. Just fill out our online life insurance quote form or call us for a personal quote on life insurance for you and your family.

We believe that an educated consumer can ask the right questions and to find the best insurance solution. Our life insurance educational center will help you understand how insurance works, what carriers are looking for, and how you go about getting the life insurance policy that is right for you and your family.

Convertible Term Life Insurance

Many, but not all, term insurance policies are “convertible”. A convertible term policy guarantees the policy owner the right to convert the policy, regardless of the insured’s insurability, into a permanent policy. In simpler terms, an insured who is currently uninsurable because of some recent medical problem can nonetheless convert his convertible term life insurance coverage and make it permanent without having to prove that he is still insurable. Case Study:

Mike and Judy Rodgers are young professional parents in their mid thirties. They have three children in elementary school, two cars and a nice home in a leafy suburb. Mike is 6 years into a 10 year convertible term policy when he is diagnosed with lymphoma. Suddenly, Mike is facing the specter of early mortality, and the attendant financial risks to his family. With only a few years remaining on his life insurance policy, and no possibility of purchasing new coverage, the family faces a possible financial disaster. Fortunately, because Mike’s policy is convertible, his agent arranges to convert the policy to permanent coverage. The new policy is issued by the carrier priced based on Mike’s current age, but using his original preferred health class. Mike doesn’t have to re-qualify for the coverage, doesn’t have to prove insurability, and doesn’t even have to pay the higher premiums faced by those with health conditions. By putting in place a policy that was convertible, he has preserved his original preferred health status, and guaranteed that his coverage will remain in place. (Of course, in our case study, Mike has a full recovery and lives to 120 when his great grand children collect the full value of his policy)

Here’s how it works: Read more »

Return of Premium Life Insurance – MoneyBack LifeInsurance

Imagine getting a money-back guarantee on your Term Life Insurance: Your family receives a lump sum of money if you die, but if you live the company returns all of your premiums! Believe it or not, such a product now exists and is just one of the innovative solutions coming your way from some of the best insurers in the business. It’s called Return of Premium (ROP) and its aimed right at one of the greatest consumer objections to pure life insurance: “I’m probably not going to die, and my money will have been wasted.” Most life insurance policies sold are either Term Insurance and Cash Value or Permanent Insurance. Term Insurance is cheap and easy to understand. With Level Term Insurance, you know exactly what the premiums will be for a fixed number of years. It’s very affordable life insurance protection, but you get nothing if you outlive the policy. Permanent Insurance, on the other hand, includes pure insurance coverage – guaranteed renewable for your whole life – along with an investment component to build cash value. Building cash value, however, means paying higher premiums. While an unused term policy can feel like a waste, a cash value policy can often cost two or three times as much for the same coverage. Return of Premium (ROP) Term is an elegant and effective new solution that splits the problem up the middle. It starts out like Term Life Insurance with one extra promise from the insurer: If you pay your premiums and you live, we’ll give you your money back. On a typical 20 year Level Term Life Insurance policy the ROP feature could cost about 30% more, but that extra premium will effectively earn you a 6-7% return over the 20 years -– just enough to earn you back everything you’ve paid in. What’s in it for the carrier? LOYALTY. Carriers spend a lot of money to get your policy, and only start making a profit if you stick around more than five years or so. ROP guarantees that lots of customers stay for the full 20. And, for those that don’t, the carrier made an extra 30% on those guys -– and used some of it to pay you a solid return on your money. So if you know that you are going to be insured for the long haul, then think about tossing in a few extra dollars and getting it all back in the end.

Whole Life Insurance Policies

Whole life insurance is a traditional form of permanent life insurance. Whole life insurance plans are designed to provide insurance coverage for the whole life of the insured, whether he lives to age 50 or age 100. It provides lifelong coverage by having the insured overpay for the policy over many years. The excess funds earn a stable rate of return, and build significant cash value in the the insured’s account. In the later years of the policy, the carrier pays a rising portion of the underlying cost of the insurance from this excess cash value. Traditionally whole life policies have a premium that remains steady for the life of the policy. The amount of the over funding is targeted so that the policy’s cash value grows to match the death benefit at age 100 when the policy is said to endow. If the insured should die before age 100 the policy’s death benefit is paid to the beneficiaries. If the insured lives to age 100, the carrier will pay the accumulated cash value in a lump sum to the insured. Traditional fixed premium whole life is generally less flexible in its structure than other policy types. The primary alternative form of permanent life – flexible premium whole life- is generally called Universal Life, and is discussed in another article here. Traditional whole life insurance provides a fixed death benefit which remains available for the insured’s entire life. Premiums are structured to be paid until the insured’s death. A whole life insurance policy remains in effect as long as the policy owner pays the premium. However, if the premium is not paid, the insurance may lapse. During the time that the insured is alive, and the policy’s cash value is growing, that growth is tax-deferred. The policy’s cash value can be borrowed by the policy’s owner, and can even be used to pay the premiums if necessary. The policy can also be surrendered, and any remaining cash value in the policy will be paid to the owner. In the early years of the policy, it will have a surrender charge which is often greater than the cash value accumulated to that point. Mutual Companies (insurers owned by their policyholders rather than by stockholders) often issue “Participating policies”. When mutual companies are profitable, they often distribute those profits to their participating policyholders in the form of dividend payments. Because dividends are considered to be a return of unearned premium, they also receive favorable tax treatment. Until 30 years ago when universal life insurance was introduced whole life insurance was the primary product of most life insurance companies, and is still the most common form of life insurance sold today.

Life Insurance for Your Family

While family owned life insurance can have many goals, its primary use is to protect surviving dependents or a family from the financial burden of the early death of a breadwinner. Over 70% of American families have some form of life insurance – either individually owned or through their employers. Without a source of income, a family is unlikely to meet mortgage payments, to provide for college, or to prepare for retirement. A family can face tremendous financial difficulties as a result of an uninsured death. A properly designed life insurance plan can bring a variety of benefits to the beneficiaries:

  • provide income for surviving family members
  • pay debts
  • pay for children’s education
  • pay estate settlement costs such as probate costs
  • pay federal and state death taxes
  • meet the special financial demands of physically or mentally handicapped dependents
  • shift wealth from one generation to another in a cost-effective manner possible
  • avoid forced liquidation of a business or income property
  • provide a lifetime income for a surviving spouse

Personal life insurance policies can even be used to fund charitable objectives. A life insurance policy held for the benefit of a church, school or other favorite charity allows a family to make a substantial donation for the moderate cost of the premiums. Families with young children have a clear need for life insurance. If both spouses work outside the home the loss of even one income may cause the family immediate financial hardship. Even in a family with one spouse working in the home, the need to hire caretakers, child care etc. can present hundreds of thousands of dollars in unanticipated costs for the surviving family. These losses can make it more difficult to reach future goals, like sending kids to college. Even if a person is married without children or is single, there are often significant costs associated with his or her death. Funeral expenses, probate and fees, debts, and federal and state taxes are likely regardless of your marital status.

What is Life Insurance?

A life insurance policy is a binding contract between a policy owner and an insurance company. The company promises to pay a specified amount of money (The Death Benefit) to the Beneficiaries named in the policy upon death of the Insured person named in the policy. The Policy Owner is often the same as the Insured, but not in all cases. For example, it is common for adult children to own life insurance policies on their parents. Businesses often own policies on key employees, and couples often own policies on each other. A life insurance policy assures that a desired amount of liquid capital is available upon the insured’s death. In special circumstances, some life insurance policies also provide some funds during the insured’s lifetime, usually referred to as living benefits. Personal life insurance is most commonly used for one of two circumstances: 1. to replace lost income to survivors in the event of an untimely death, and 2. to provide liquidity to an estate to allow an orderly transfer of capital assets like real estate and stock from one generation to another within a family. As a general rule of thumb, term life insurance policies are designed to be available as income replacement for an untimely death, and permanent policies are designed to be available for estate planning no matter how long you live. When evaluating life insurance policies for suitability, the most important step is to determine what needs the family is trying to meet, and then identify the type of insurance policy designed to meet that goal. Check out our article Life Insurance Designed for Your Family for a discussion how to determine which is the right fit for your family.