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It is the primary way that you will help take care of your loved ones after you’re gone. The truth is that there are many reasons people use when they purchase life insurance.

Dependents Need Life Insurance

One of the most obvious ones is to help take care of your dependents. If you support people—a spouse, children, dependent parents, and so forth—with your income or daily caretaking functions, then life insurance can help them support themselves if you die. If you are worried that those you care about may not be able to take care of themselves due to their health, their age, or any other number of factors, purchasing life insurance policies that name them as beneficiaries can help you provide for them when you are gone.

Additionally, it can provide an inheritance of sorts. If you do not have much more to leave your heirs, you know that you are leaving them with something. Beneficiaries do not need to pay taxes on any proceeds they get from life insurance policies. The monies will, however, be subject to estate taxes unless you set up an Irrevocable Life Insurance Trust, or an ILIT.

Final Expenses

Life insurance can also pay such final expenses as:

• Funeral costs
• Burial costs
• Costs associated with estate administration
• Medical expenses your health insurance will not cover

Without these funds, many families are further distressed in dealing with the financial requirements of those costs. Funds from life insurance policies can also be used to pay federal and state inheritance taxes (or “death taxes”) which can take up to half of your assets. This can be a way to alleviate stress for your family during a terrible time, or can help you keep them from having to liquidate other assets to help pay the taxes. You can help insure they get a larger inheritance.

You can also make charities the beneficiaries of life insurance policies. This allows you to donate larger amounts of money. Even if you sent a check for the same amount as the policy, the charity will get more from the policy itself.

Life Insurance as Savings

And, if you are not currently worried about protecting for others after your death, life insurance policies can also help you create a kind of savings for yourself. Whole life insurance policies accrue cash values that the owner can borrow against or withdraw altogether.

Maybe you are trying to figure out an amount that you, yourself, can retire on. Purchasing whole life insurance can end up being a forced savings account, of sorts. And, if you purchase a permanent life insurance policy, there will be an additional cash savings value to the policy.

Frankly, if you don’t have dependents there are other, more lucrative ways, to invest your money. Life insurance is for those you leave behind. Some folks without dependents will carry a life insurance policy simply because they don’t want their parents to have to pay for a funeral in the event of death. This is something you’ll want to consider when you sit down to speak with an insurance agent, or a financial advisor.

If you need to obtain life insurance then the first thing is to determine how much you will need. There are several different calculators out there that will help you determine this. You will want to consider factors such as your (and your spouse’s, should you have one) current salary, what you have in savings, when you plan on retiring, how many children you have and their ages, what inflation will be when you retire, and so on and so forth.

Online tools that will help you calculate what you will need; just as easily, you can find other tools that offer you free quotes from many life insurance companies that will give you an idea how much it will cost you to purchase the amount of life insurance you have just determined you need.

Then you’ll want to figure out what kind of insurance to get—whole or term? Whole life insurance, as stated earlier, has a cash value component to it. Its rate (or premium) does not change as long as you have the policy (which is for life). A term policy is for a set amount of years; after the end of the term, the conditions of the policy can be changed.

The best way to determine all this is to just sit down and spend some time with it. Think about what, or who, you are saving for.

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The proceeds from a life insurance policy are paid to the beneficiary on a tax-free basis, which provides a lump sum that can be used for a number of purposes. Depending on the type of policy chosen, life insurance can also provide a savings component for the policyholder.

How does life insurance provide financial security?

The main reason people consider buying life insurance is to protect the people they leave behind. Having coverage in place is especially important during the policyholder’s main earning years. During this time, he or she may have major expenses such as a mortgage, car payments and the like.

He or she may have young children that need to be cared for, and/or aging parents that require assistance. In the case of a stay at home parent or spouse the funds may be used to pay someone else to perform the tasks, like cooking, housekeeping and child care, that the deceased once provided.

The death benefit that an insurance policy provides is meant to replace income so that the policyholder’s family is less likely to have to face a major lifestyle change in addition to dealing with the loss of someone who is very important to them. Most people are underinsured, as opposed to having enough coverage.

Ideally, the level of protection chosen should be enough to replace the policyholder’s gross income for a number of years. Where the policyholder has a young family, it’s not unrealistic to look a plan that will pay out an amount that is equal 10 years of earnings or more.

What can a death benefit be used for?

The death benefit that is paid out under a life insurance policy can be used for any purpose the beneficiary deems appropriate. It’s very common for the proceeds from the policy to be used to pay bills and debts the deceased has left behind. That way, his or her survivors are not required to pay them on the deceased’s behalf.

The cost of final arrangements is something that can be pricey, even for a very simple cremation or burial. An insurance policy can also be used to pay for funeral expenses and take that pressure off the family.

Proceeds from a life insurance policy can also be used to pay off a mortgage or for general living expenses. If the policyholder has young children, the money may be used for childcare expenses or to hire a housekeeper or nanny. The funds can also be used to pay for post-secondary education for the insured’s children, if desired.

Anything that the policyholder’s salary was used for when he or she was alive can be paid for with the death benefit that an insurance policy provides. The funds can also be invested to provide a source of income for the surviving spouse or partner in retirement.

How can life insurance provide savings?

Some types of life insurance plans have a savings component as well as provide protection if the policyholder dies. When the person chooses a permanent, universal or whole life insurance policy, part of the money that he or she pays in premiums is used to fund an investment savings plan. The money grows over time and the policyholder can use the money as collateral for a loan from the insurer if he or she needs to get access to cash in a hurry.

The policyholder also has the option of canceling the policy and gaining access to the pool of funds if he or she wishes to do so. This is not a move that should be taken lightly and the policyholder should contact his or her agent or insurance company to discuss options before taking this step.

The individual may also choose to cancel the existing policy and replace it with a term life policy that still provides a level of financial protection but does not include the savings component.

Life insurance is a product that should be included in a plan to protect the policyholder and his or her family from financial disaster. Life insurance is important because it can be used to pay bills and expenses on behalf of the deceased. The funds from a death benefit replace the policyholder’s income and can be used to help to maintain a lifestyle similar to the one the policyholder’s family had before disaster struck. It is one of the most loving things that a person can do for his or her family, since the person who is insured will not be benefiting from the coverage – the ones he or she loves the most will instead.

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At the end of this article we will tell you about a handy way to go about finding quotes. Understanding the basics of what you need will help you in your search. To begin, let’s discuss some of the essentials of life insurance.

What is life insurance?

Life insurance is a contract between insurance company and policyholder that says the company will pay a sum of money to a beneficiary upon an insured person’s death. Some life insurance policies can specify conditions other than death, such as a terminal illness.

A contract can be arranged for regular intervals of payments or a lump sum. The insured event is usually illness or a work injury. Insurance becomes more complicated when you consider the options of permanent life insurance as well as term life insurance.

Permanent insurance is a contract designed to last a lifetime. The insured pays agreed upon premiums that increase steadily with age, but can save or accrue money over a lifetime.

Term life insurance is designed to last for a specific period of time. When the insured reaches that age the term is served and no more payments are needed, unless the two parties agree to a new contract. By the time a new contract is issued, the insured is older and thus more of an insurance risk.

Whole life insurance and universal life insurance policies are both types of permanent life insurance. Whole life insurance is a policy in which premium payments are used to create an investment line or a cash value.

Universal life insurance is similarly based on a cash value plan, and still resembles a permanent life insurance policy, but is more flexible in nature.

How much insurance do I really need?

The next step in buying life insurance is to determine how much insurance you need. The traditional way to figure this out is to base your insured amount on your income replacement. Therefore, a husband might figure out that his surviving stay at home wife would require 5-10 times the annual salary he currently makes to provide for her needs one decade. In some marriages, this would not be the practical formula.

Some individuals prefer to base the figure on individual needs (counted expenses) and general preferences. Replacement needs have to be figured into the sum, as do taxes, lifestyle expenses, personal expenses, transportation expenses and bill payments. You also have to figure in one-time costs like funeral expenses, estate expenses and medical bills.

You must also calculate how much the premiums are and if you can realistically afford to make payments every month or every year. Will it be worth your investment? A voided policy is not worth anything, so make sure your job is secure and you can afford such a contract. Some policies might even have special insurance provisions for the loss of job.

When Life Changes, Your Insurance Coverage Changes

People’s circumstances change in life. Sometimes older persons and retirees feel the need to reevaluate their circumstances. Younger adults often need life insurance to cover the cost of raising children and providing income.

However, older parents may find that since their children have left home, and mortgages have been paid off, they no longer need a high sum in return. It is also worth noting that the mortality expense of cash value policies does increase after the age of 60.

Before deciding on a policy, research the insurance company you are considering. Check their rating with noted standards like A.M. Best, Moody’s, and Standard and Poor’s.

These ratings measure not only reputation and claims paid but also financial stability. Investigate any customer complaints online. Always take a careful look at a contract and verify that the documented information is the same as was discussed previously.

The most challenging feat will be finding an insurance provider that works in your area (these companies are tightly regulated by the state and may not be available in every region). The insurance provider has to open, honest and fair in their coverage. Not all insurance companies will offer the same price.

Understanding the major risk factors in life insurance (preexisting conditions, smoking, lifestyle, job) can help you make informed decisions.
One of the simplest ways to get started is with a web chaser tool, which is an online tool that helps you view comparisons between top insurance policies in your local area.

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Knowing what life insurance doesn’t cover is a crucial step when reviewing and purchasing a policy. The answer is simple, life insurance doesn’t cover anything that is listed as an exclusion on the policy. This is different from company to company and person to person. The following article will provide additional information concerning life insurance exclusions.

A life insurance policy exclusion is any incident or circumstance surrounding a policy holder’s death that excludes the beneficiary from receiving the payout of the life insurance policy. As stated before, exclusions will vary depending under different circumstances or different companies; however, there are some typical life insurance exclusions that exist with virtually every life insurance company. Though these are the most common, many others may be included as well, so be sure to understand all exclusions before purchasing your policy.

Four Typical Life Insurance Exclusions

• Suicide exclusion. This type of exclusion prevents the policy from being paid out in the event of the policy holder’s suicide. This exclusion only exists for the first two years of the policy. It is meant to prevent someone from taking out a life insurance policy when intending to commit suicide. If a questionable death occurs within the first two years and suicide is suspected, it is the life insurance company’s responsibility to prove suicide as the cause of death.
• Aviation exclusion. This excludes the policy from being paid out if the policy holder dies on a private plane whether piloting or as a passenger. This may seem like an odd exclusion but, because private plan regulation is monitored a lot less than commercial airlines, insurance companies are very cautious when it comes to private planes and circumstances surrounding crashes.
• Dangerous activity exclusion is another typical type of exclusion. This exclusion stops the payout to the beneficiary if the policy holder dies while engaged in a dangerous activity. Dangerous activities vary from company to company but the most common are bungee jumping, rock climbing, hang gliding, scuba diving, and racing. Some sports are also included on the dangerous activity list such as rugby and lacrosse. Be sure to let your insurance company know, if you participate in a dangerous activity, so you can find out if you will be covered.
• War exclusion. This prevents the insurance company from paying out if the policy holder dies because of an act of war. This includes both death in a foreign country or death on home soil as the result of war. Obviously, this is a very important exclusion to consider if the policy holder is a solider, military contracted worker, or will be in a war zone for other reasons.

What options are there to get around these life insurance exclusions?

For all of these exclusions, except the suicide exclusion, there are other ways to get coverage.

• For aviation, dangerous activities and acts of war, there are insurance companies that specialize solely in these types of coverage.
• For acts of war, the US military typically offers a special type of life insurance to its members.

It is important to note that should you choose to get a specialized policy, your monthly premium rates will be much higher so you need to weigh the risks versus the benefits.

Most insurance companies will also allow you to add a rider to a traditional plan. A rider is a special circumstance that overrides an exclusion. As with specialized insurance policies, riders cause premium rates to rise. However, it is important to add the riders that apply to your life, so you are covered no matter what the circumstances are. Ask the insurance company you are working with what riders they accept and which ones they do not accept.

To find a life insurance company that covers everything that needs to be covered in your life including typical exclusions, you should compare what different life insurance companies have to offer. By doing this, you can be assured that you are getting the best deal for your money.

Shopping around is a proven way to save money on life insurance. Try using the free life insurance comparison tool to compare rates and quotes from several top companies.

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Read on to learn when you may have to pay taxes and what to do to ensure that when you die your life insurance beneficiaries won’t have to pay taxes on their insurance benefit.

You Will Pay Taxes If…

As mentioned above, if you are named a beneficiary on a life insurance policy you won’t have to pay taxes on the insurance benefit. If, however, the insured person names their estate as the beneficiary then the money becomes taxable under inheritance taxes.

How does that work exactly? Let’s say your uncle decides that it would be easier to name his estate as the beneficiary of his life benefit and then list those that will inherit his estate in his will. Two things will happen.

• First of all, the money will be ‘given’ to the estate; in other words, the value of the estate increases by the amount of the insurance policy.
• Then the money can be used to pay off the debts of the insured person, which can reduce your overall benefits.

You see, when a life insurance policy names a beneficiary, that person is not legally obligated to pay off any of the insured person’s debts unless their name is attached to the debt, such as a co owner, co signer, etc. Companies that are owed a debt, however, can petition the state for the estate to be used to pay off the insured persons debts. When the insurance policy becomes part of the estate it can be used for this purpose.

You can expect to pay up to 47% in inheritance tax depending on how much you inherit.

Give the Most to Your Beneficiaries

While there is no guarantee that the government won’t take it upon themselves to someday tax life insurance beneficiaries, until that time you can ensure that your beneficiary get the most from their benefits by naming them specifically on your life insurance policy. You can only name one prime beneficiary on your life insurance policy and as many secondary beneficiaries as you want. If you want more than one person, such as your children, then you should consider designating a trust as a beneficiary so that the money can be distributed among several people without tax concerns.

In addition, you can name your business or your favorite charity as your life insurance beneficiary and still maintain the tax benefit. The only time the tax free benefit is forfeited is if you name your estate as the beneficiary for the reasons mentioned above.

You should also be aware that you can change your beneficiary or beneficiaries at any time for any reason; this isn’t like health insurance where you have to wait until enrollment time to add or remove someone from your policy. Simply contact your insurance agent and have them prepare the paperwork for your signature to make the change.

Getting the Best Insurance Policy

The best reason for you to purchase a life insurance policy is to prepare for the future. A life insurance policy provides protection to your family or business if you should unexpectedly die. When you purchase insurance, however, you want to ensure that you get the very best rate in addition to purchasing the right amount of coverage.

The first thing that you want to do is determine just how much of a benefit you want to purchase for your life insurance policy. There are varying opinions about this with some people suggesting that you should provide enough money to pay off all debts and allow your loved ones to live for one year without having to work while other suggest that you purchase three times more than your annual income.

Another train of thought is that you should provide a sufficient amount to cover your children’s education as well as paying off debts and leaving your loved ones comfortable. What they don’t talk about is the cost of buying policies that cover so many contingencies.

The bottom line is that only you can determine how much insurance is best for your situation. You should consider, however, your debt, your family’s ability to pay off any debt without additional money, future debts and quality of living for your family. With that being said, you could be looking at a policy that exceeds $500,000, which can equal a high premium payment each month. If you are concerned about these issues, especially if you have dependents, then you can choose term life insurance instead of whole life insurance.

Term Life versus Whole Life

Term life insurance allows you to purchase a much higher life insurance policy at a reasonable rate; however, once the term expires you have no cash equity in the policy. This means that if you survive for the life of the policy then there is no benefit paid to your beneficiary. This isn’t necessarily a bad thing, especially if you have a real concern about your family if you should die; many people benefit from this type of policy as it ensures that every contingency is covered in case of death.

A whole life policy offers cash equity, which means that after a certain amount of time you can cash in your policy if you have paid enough in. In addition, there is a guaranteed payout when the insured dies, no matter how old the policy is. It is, however, two to three times more costly to purchase a whole life policy versus a term life policy. Many people simply find that they cannot purchase the amount of insurance that they desire when choosing a whole life policy.

Some people do choose to carry both types of policies at one time; a small whole life policy that will be sufficient, should the insured live a very long time, to pay off existing debt and provide for their spouse (if applicable) and a term life policy that could cover everything should an unexpected death occur or the insured die young. Others choose to carry a term life policy until they are in their 50s or 60s and then switch to a small whole life policy when the term life policy expires. The choice is up to you.

In any case, you want to ensure that you get the best price on your monthly premiums. To do this you will want to shop around to different insurance companies. The fastest way to do this is by using a free quote tool. These tools are easy to use and will provide you with quotes for your different coverage options so that you know what you can expect to pay for different types of life insurance.

If you start now, in just a few minutes you will have quotes from several companies for you to compare. Why not give it a try?

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By looking closely at different types of life insurance and the different factors, you will be able to determine what is the best kind of life insurance policy for you.

Term Life Insurance Policies

Term life insurance policies are for a pre-set period of time only. When you take out such policies, you decide whether you want that life insurance coverage for 5 years, 30 years or somewhere in between. Some truths about term:

1. This type of policy pays benefits only if you pass away.
2. There is no cash value to this type of coverage.
3.  It does not have an investment option or pay dividends.
4. It is the most affordable type of life insurance coverage to carry.

If you need life insurance coverage because you have young children and want to provide for their care and education should you die before they are grown, this is a good type of coverage to carry. If you own a home that is mortgaged, it is a good idea to take out a term loan for the value of your marriage so that, if you die, your loved ones will be able to pay off the mortgage and take unencumbered possession of your home. If you have any other types of financial obligations that you foresee no longer having after a certain point in your life, taking out term life coverage to provide for these obligations is a good idea. Term life insurance policies are often good choices for younger people.

Whole Life Insurance Policies

Whole life insurance policies are just what they sound like. They are for your entire life and can be paid monthly, yearly or in one payment. Such policies are significantly more expensive than term life coverage because they will definitely pay out benefits, as long as the policy is still in effect when you die.

Even though the cost is higher for such policies, whole life coverage is very beneficial in a variety of ways.

1. Your loved ones will receive money upon your death regardless of when you pass away.
2. Whole life policies also have a cash value and can often be used as collateral for a loan.
3. You can also opt to take out the cash value of whole life policies while you are still alive, so that you can also benefit from the policy.
4. The investment option with some policies allows people to even use such policies as a form of retirement income.

There are a number of different types of whole life insurance policies. Some have premiums that remain steady throughout the life of your policy, while others can fluctuate up or down. Certain policies can earn you dividends, increasing the investment value of the policy. Others have a decreasing level of coverage in order to adapt to diminishing needs for life insurance as we age.

Take the time to review the different whole life insurance options before you take out a policy. Whole life insurance policies are good for people of any age, but especially older people who want to make sure those they leave behind are taken care of.

A Combined Approach To Life Insurance

For many people the way to approach life insurance is to take out at least two policies: one term life insurance and one whole life insurance. With this approach you have the best of both worlds. You can plan to have the extra life insurance you need during the period of your life when your obligations are highest. You will also have the necessary long term coverage that provides guaranteed benefits no matter when you die to cover final expenses.

Whether you are shopping for term life insurance or whole life insurance, you can do so any time of day or night from the convenience of your home by using a free online quote tool. You simply input your zip code to begin and the tool will present you with a list of questions concerning your health, your age, height, weight, gender, the type of insurance you want and the level of coverage you desire.

The data collected from these questions is submitted to a variety of life insurance companies serving your area. In a matter of moments you will begin to receive the quotes you need to make the right choice for your life insurance coverage.

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Life insurance premiums are typically priced based on how old are you when the policy goes into effect because the older you are the more high risk you become. Gender is also a factor that affects your life insurance rate.

The average price of life insurance for term life insurance can range anywhere from as low as $10 a month to $50 a month and whole life insurance can start at $25 or $30 a month and go all the way up to as much as $80 a month or even more. One of the best ways to reduce your life insurance costs is to determine which plan is right for you and then shop around for different rates.

The Average Price of Life Insurance for Term Life Coverage

Term life insurance is one of the most affordable life insurance plans. It is usually much cheaper than whole life insurance, but it is also much more limited on the length of the contract. Unlike whole life insurance that is in effect for the insured person’s entire life, term life insurance is only available for the period of time that is selected when the policy is purchased. The length of the term can be 5 years, 10 years, 20 years, or 30 years; although some insurance companies may have other terms as well.

When you buy term life insurance, you are buying a policy that is only good for that term. So, if you buy a 10 year term life insurance plan, then you are buying life insurance for a period of 10 years. If you die during that 10 year term, then your life insurance company will pay out your death benefit to your beneficiaries as instructed in the policy.

However, if you do not die during that 10 year term then there is no death benefit payout and your insurance policy simply terminates. Some insurance companies will allow you to renew your term life policy or convert it to a whole life policy, but if you do not do take of these options, or if you do not buy a new term life insurance policy, then you will simply no longer have any life insurance.

The reason many people like term life insurance is because you can buy it for as low as $10 a month for a 5 year term. However, the majority of people who purchase term life insurance buy a policy for 20 or 30 years and average $30 to $40 per month for middle aged females or males respectively.

The Average Price of Life Insurance for Whole Life

There are many people who prefer whole life insurance over term life insurance because whole life insurance builds cash value and does not terminate before death occurs. When you buy whole life insurance you are buying a policy that is in effect for life provided that you always pay your premiums and don’t let the policy lapse. Whole life does not have a length of term associated with it. The policy goes into effect the day you buy it and it lasts until the day you die, at which point it pays out your death benefit to your beneficiaries per the policy.

Whole life insurance also appeals to many people because it builds cash value, giving you retirement money or a financial nest egg should you ever need it prior to your own death. Many times the cash value that gets built up in your policy can be used to pay your premiums or it can reward you with dividend checks.

The big concern with whole life insurance is the cost of it. The older you are the more expensive life insurance becomes, which means a middle aged person looking to buy whole life insurance could spend an average of $75 per month on premiums. As with most life insurance policies, the male gender typically pays approximately $5 to $10 more every month over his female counterpart.

Reducing the Cost of Life Insurance

There are ways to reduce the price of life insurance, although most of it requires forethought and lifestyle choices to a degree. If you think about buying life insurance when you are young, you will be able to lock in a much lower premium for life. Some parents will buy life insurance for their child and secure a $10,000 policy for as little as $2 per month. If that child continues to pay his premiums into adulthood and the remainder of his life, he will always have that life insurance policy for that low rate.

While you do not have control over your gender, you do have control over your lifestyle. The healthier you are the cheaper your life insurance will be. Smokers will almost always pay a higher premium for their life insurance. If you are planning on buying life insurance and you are a former smoker, you may get a reprieve so it could be beneficial to quit smoking before buying your policy.

Another way to reduce the price of life insurance is to shop around for different rates. Decide on how much coverage you would like to obtain, and then price out the difference between term life insurance and whole life insurance. Requesting quotes online from different carriers is confidential and convenient and can help you find the best offer for your life insurance needs.

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This is to ensure that the third party in question will be able to make a profit from the purchase upon the policy holder’s death.

Who buys life insurance policies?

There are two ways that you can sell a life insurance policy. Firstly, you can sell directly to what is called a provider. A provider is a company that has to be licensed by the state where you live if they want to purchase your life insurance policy. They work much like an insurance agency, only in reverse. They will usually hire a company to assess your health and make a determination of how long you will live after you sell the policy. This may sound morbid, but you have to remember that for this company this is an investment. Much like an insurance company, a provider uses something like an underwriter to get the money to pay the policyholder.

The next option is to use a broker to find a buyer for you. The benefit to using a broker is that they can actually get companies bidding on your life insurance policy, which means you may get a better deal. Of course, you have to pay your broker a percentage of the profits, so it is in their best interest to get you as much money as possible.

Who sells life insurance policies?

While anyone with a policy can attempt to sell it, the truth is that, in most cases, only the elderly will be able to get a good amount of cash for their policy. Companies that purchase life insurance policies don’t want to wait 40 or 50 years to profit from their investment so they are going to choose high risk individuals to purchase from; high risk meaning those with a risk of dying soon.

People over the age of 65 and the terminally ill are typically the only people that these companies will purchase life insurance policies from.

How do I decide if I should sell my life insurance policy?

There are two things that you have to consider before you attempt to sell your life insurance police.

• The first thing is that you need to ensure that you have the right kind of life insurance policy. While some companies will purchase term life insurance policies if the criteria are right, (meaning the person has received the bad news that they will die well before the term policy expires), in most cases they require the policyholder to have a whole life insurance policy.
• A whole life insurance policy doesn’t expire so if you are 75 and you manage to live until you are 101, the policy will still pay out; it’s guaranteed.

The other catch is that, unlike the company that purchases your life insurance policy, you are going to have to pay taxes on the money that they give you. Why is that? Well, the government is going to consider the cash you receive as income. As the beneficiaries of your policy, the company that purchases it gets the money tax free, even if the pay out is a million dollars.

Lastly, once you sell the policy it doesn’t belong to you in any way, shape or form. If you become uncomfortable with the idea that strangers are going to benefit from your death, too bad, legally they own the policy and can name any beneficiary that they want; namely themselves. You can’t petition the insurance commission to remove your name or ask the insurance company to. It just isn’t possible; this is a permanent transaction.

The bottom line is that if you find yourself with an insurance policy that you no longer need, you don’t have to shrug off the money you have spent. If you are under the age of 65, talk to your insurance agent about cashing in your policy. If you’ve had it for more than 10 years then it probably has some value for you. If you are over 65 find a company or a broker to help you to get the best deal for your life insurance policy.

You can use the money to travel, pay bills, buy a boat, a car, a home, whatever it is you want; the choice is yours. If you are in the market for life insurance you can compare rates from multiple companies side by side and get the best options for you.

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Before you run out and try to get cash for your life insurance policy, there are a few things that you need to know first.

Who’s Paying and Why

The first place you will probably go in an effort to get cash for your life insurance policy is the company you purchased the policy from in the first place. There are a couple of things that you need to be aware of though.

• In most cases, your policy won’t have any cash value outside of the premiums you have paid until 10 or more years after you have opened the policy. If you need the cash and the policy is only 5 years old, then you won’t get anymore than what you have paid into the policy.
• The second thing is that if you cash out on your policy early, then the total benefit will be decreased when you die. If you have family members who will need that benefit if you should die suddenly then consider you reasons for getting cash for the policy. You may want to consider borrowing against the policy rather than taking cash as this provides you with the opportunity to pay back what you have taken. Whatever balance is left over when you die is deducted from the total benefit.

Another option it to sell your policy to a private source, typically companies that purchase life insurance policies, not individuals. You can find these sources online or you can use companies that specialize in helping you find companies that are willing to bid on your policy.

Why do companies by life insurance policies?

There are many businesses that pay cash for life insurance policies, settlements and lottery winnings. The reason for this is that they are willing to wait until you die to make money off of the deal. (In terms of settlements and lottery winnings, they pay a portion of total payoff to the person in question and then collect the monthly or annual payments over the years).

As you have probably guessed, there is a catch. In most cases, you have to be age 65 or older to sell your life insurance policy to one of these companies. If you are terminally ill, you will have no problem selling your policy to a company like this. In fact, if you have a term life insurance policy with a number of years left on it and you are over the age of 65 or terminally ill, you can sell that policy as well. Considering that a term life policy has no value, you can’t even cash it in for the premiums, this is an excellent option if you want to use the money for something.

Why do people sell or cash in life insurance policies?

The truth is, there are a number of reasons why you might want to sell or cash in on your life insurance policy. One common reason is that money is needed for an emergency such as medical bills, job loss, have to replace a vehicle, etc. Some people, however, simply find that they don’t need the policy anymore. Someone with a large policy that no longer has people depending on them financially may find that they can do something else with the money. There are those that receive a policy from another source and they don’t need to carry two policies.

There are those people, such as terminally ill individuals, who feel that they would rather use the money to complete a bucket list or travel with friends or simply give the money away while they are alive to enjoy gifting other people. Perhaps you have other reasons; regardless, you aren’t alone and many people take this route.

What type of life insurance policies offer cash payouts?

In general, only whole life insurance policies with cash value will offer a benefit to you. However, as mentioned before, if you are terminally ill or elderly with a term life insurance company, some private companies will probably be willing to purchase the policy from you and take the chance that you will die before the term policy expires.

You will not be able to cash in a term life policy with your insurance company; it simply has no cash value and is useless in this case.

If you are reading this article because you are in the market for life insurance but weren’t sure if you were going to take a loss if you didn’t need the policy anymore, then it is time for you to take the next step and use a free quote tool. The life insurance quote tool above is easy to use and you will quickly find the best price for your life insurance today!

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Traditional whole life insurance policies charge annual fees for an agent’s commission, advertising fees, and other costs to the life insurance company. While some no load life insurance policies have an initial fee for the start-up, there will not be annual fees attached to the policy like other traditional whole life insurance companies.

Often times this type of insurance is also referred to as low load insurance (in instances where there is a small fee associated), but they are inherently the same type of life insurance policy.

So how do no load life insurance policies work?

It almost sounds too good to be true. It is a similar concept as some of the factory direct furniture stores or even other types of direct insurance companies; this cuts out the “middleman”. The downside to this type of policy is that you will not have the expertise or care of an insurance agent. You will have to do the research and make certain that you understand the benefits of the policy without the assistance of an insurance agent.

What are the advantages?

The advantages to no load or low load life insurance are mainly monetary:

• This type of life insurance will obviously end up saving you money on your life insurance premiums.
• No load life insurance allows your cash value to accumulate faster than a traditional whole life policy would, since more of your premiums are going towards that cash value rather than paying into commission.
• Premiums are applied directly to the cash value.
• Allows you to pull from the cash value to apply it to premiums, if problems arise with your ability to make your payments.
• Easily accessible online. Due to the upfront fee structure, it can be purchased online and ends up being a quicker process to get the coverage that you and your family need.

What are the disadvantages?

The disadvantage to no load life insurance is that the lower premiums come at a cost, although not monetarily. As previously mentioned, you will be responsible for doing your own research to understand the different types of life insurance policies.

Further, you will need to read through your policy carefully and make certain that you thoroughly understand the coverage, terms, and how the cash value of your policy works. The worst case scenario is that you purchase the wrong amount of coverage, even if it is for a lower premium. This could leave your family with a gap in their insurance needs.

Not all life insurance companies offer this type of no load/low load life insurance. The main reason is that it provides less of an incentive for the insurance sales agents, since this type of policy does not include commission.

It is crucial that you do research not only on the type of policy, but the company as well. A lower premium policy with a company that is not financially stable is not a good investment. Make sure that you are looking at the financial rating of the company, as well as customer reviews if those are available online.

Finally, once the no load life insurance has been purchased another disadvantage to this type of policy is that you will not receive the personal customer attention that you might with an agent managing your life insurance policy. If you need to make changes to your policy such as an address change or even a policy change, this will either have to be done by calling a 1-800 number or online.

If you require personal attention for your policy, this is not going to be the right policy for you. However, if you are searching for a basic life insurance policy for a reasonably lower insurance premium than the agent-based companies offer, the no load life insurance policy could be the right type of policy for you and your family’s needs.

To begin protecting your loved ones with a whole life policy but at a lower cost, start comparing no load life insurance policies with the life insurance comparison tool on this page. It’s easy and free.

Just input your zip code and start comparing life insurance quotes today!