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    Life Insurance Types
    The Two Main Types Of Life Insurance
     
    When you start shopping for life insurance you will quickly discover that there are two main policy types.  These are Universal, sometimes referred to as Whole or Permanent life insurance, and Term.  There are some key differences between them, and each has pros and cons.  Understanding these two policy types will make it easier to select the one that's right for you.
     
    Universal Life Policies
     
    These are also presented as whole or permanent life insurance policies.  This type of life insurance covers you as long as you live, or until you hit a predetermined age-usually around 99 years-in which case the policy will pay out.  In most cases, this policy will last until your death.  This type of policy is more expensive because the company expects that they will definitely pay out on it at some point, since it does not expire. As long as you continue to pay your premiums, this policy remains in force no matter what happens regarding your health.
     
    A Universal policy also has the feature of a cash accumulation account, which allows you to save money in a tax-deferred account on which you will earn interest.  This account allows you to withdraw funds either as a loan or as a surrender.  When the policy pays out, all funds in the accumulation account will be paid to the beneficiaries as well.
     
    Term Life Policies
     
    A term life policy mainly differs from a Universal policy in that it expires.  This type of policy is in force for a set number of years, and then the coverage ends.  Because the company has a lower risk of paying out on this type of policy, the premiums are generally more affordable, allowing you to take out a higher amount of coverage.  Common terms for these policies are 10, 20, and 30 years, although different companies may offer numbers in between.  The longer the term, the higher the premium is likely to be due to the higher risk of death occurring during that time period.
     
    Term policies do not offer cash accumulation accounts.  At the end of the term, the premiums you have paid do not come back to you in any way.  If you want to take out a new term policy after the term ends, your age and any changes in your health may result in a higher premium or even a denial.
     
    Both of these types of life insurance have their place and are useful in different situations.  The best type of policy for you depends on how much coverage you need, how long you need the coverage, and what you can afford to pay for your premiums.  In many cases, a combination of two policies, one from each type, offers the best coverage.
    Childrens Life Insurance
    Should You Buy Life Insurance For Your Child?
     
    Life insurance for a child may sound like a strange concept, and one that is even disturbing to many people.  But the purpose of taking out a life insurance policy on a child is not a morbid expectation of an early passing.  There are some very good reasons why taking out a life insurance policy for your child early in life is a good idea.
     
    The Premiums Stay Low
     
    When your child is young and healthy they will qualify for the best possible life insurance rates, and if you take out a Universal life policy those premiums won't change as the child ages.  Once the child reaches the age of majority, they can take over paying the premiums and continue to have the policy available as they grow older, with no increase in premiums.  Even if they develop health problems later in life that might prevent them from qualifying for a life insurance policy, the existing one can't be taken away.  Your child will have a life insurance policy that is good for a lifetime no matter what happens.
     
    Cash Starts Accumulating
     
    The sooner you start the policy, the sooner cash will start accumulate in the account.  This can serve as a savings account that your child can contribute to as they grow older, or that they can draw on whenever it might be needed.  By the time your child reaches the age of 18, a cash accumulation account started at birth can contain a sizeable amount of money.
     
    If The Worst Should Happen
     
    No parent wants to think about it, but if a tragedy should occur, a life insurance policy can offer you the time that you need away from work to deal with the emotional and mental wellbeing of yourself and your family.  While this isn't the main reason to take out a life insurance policy for your child, in the event of the worst case scenario, you will be grateful for the extra help.
     
    If you are considering a life insurance policy for your child, don't be dissuaded by the feeling that it is morbid or frightening to think about.  The main reasons for taking out the policy are not morbid, they are simply smart planning and thinking ahead for your child's future.
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