Survivorship Life Insurance - What Are Its Uses? The primary purpose of just about any type of life insurance policy is to provide for the beneficiaries of the policyholder once they have passed away. Whether the money is intended to be used to help the surviving members of the policyholder's family continue to live standard they have become accustomed to or to cover the debts left behind by the insured individual, each person must...more
Markets and Uses for Universal Life Insurance When people think of life insurance, they generally automatically assume it is only for end of life monetary benefits to their loved ones in the event of their passing. Although the primary purpose of life insurance is to pay out a death benefit to your family, it can be used for other things. In fact, when set up correctly, life insurance can be an investment vehicle that provides...more
Characteristics of Single Premium Life Insurance When people think of life insurance, they typically do so in terms of the monthly payments they have to pay over the time frame relevant to the type of insurance they want to purchase. This is generally because most people do not have significant savings, especially the young, and must rely on their monthly income to finance such a large investment. But like many other large purchases, it is possible to buy insurance and only pay one lump sum for it. It is called Single Premium life coverage, and there are benefits and disadvantages to securing this type of life policy.The process of purchasing single premium life insurance is the same as any other type of insurance. You must still select a plan and qualify. However, when it comes to paying for it, you would just make one upfront payment instead of smaller payments over a longer period of time. For example, a person may purchase a $100,000 life insurance policy and pay $30,000 up front. This guarantees the benefits of the policy for the entire time the policy is in effect. It also changes the way the cash benefit of the policy accumulates allowing policy holders to...more
Defining Life Insurance for Taxation Purposes Life insurance is not only a great idea for future planning. It is not only a great idea for investment purposes. It is one of the best ways to shelter yourself from taxes. The money inside a life insurance policy is not taxable. Even if you use the money inside the policy to invest, you...more
Characteristics of Variable Life Insurance Products Although variable life insurance products pay out a death penalty when the policy holder dies, it can actually be looked at as more of an investment vehicle for your cash. Part of the premiums you pay for your insurance can be reallocated to other accounts that allow you to earn...more
Corporate-Owned Life Insurance The death of a key employee in a business represents a terrible loss to the corporate family. It can also cause considerable financial loss particularly if the person was a significant owner in the business or was in a position that requires considerable time, effort, and expense to recruit a replacement for. Although it may seem callous to some, taking out a corporate owned life insurance policy on key employees is a good way to ensure that the company is able to recover financial from the unexpected death of highly trained and valued personnel. This type of insurance is also known as key man or key person insurance and is used by corporations and partnerships around the world.Corporate owned life insurance (COLI) is an insurance policy that the corporation takes out on a specific person or, in some instances, a group of people. The company is named as the beneficiary and if the person dies while they are insured, the company receives the death benefit. Typically, this is a variable life insurance policy that allows the company to invest a portion of its premiums into investments accounts such stocks or bonds as well as to allow...more
Life Insurance Tax Treatment No matter what you do, you can't get away from having to pay taxes. This even includes the payout from a life insurance policy. There are a few different ways that the proceeds from a life insurance policy...more
Evaluating Life Insurance Needs People tend to put off buying life insurance. The main reason may be that they do not want to think about their death. More often than not, though, it is also that they do not know how to evaluate their...more
Term Life Insurance - The Pros and Cons A life insurance policy means that an individual has an immediately established estate to leave to their beneficiaries once they pass away. It is of particular importance for the person in a...more
Types of Life Insurance - Are They All The Same? Life insurance is a tool that many people use to provide a healthier or more robust estate for their beneficiaries. There are a number of different types of life policies available but...more
Death Benefit Proceeds of Life Insurance - Distribution and Taxation! The taxable nature of death benefit proceeds from life insurance is something that most people do not have a clear understanding of. Most people believe that the...more
Choosing the Right Life Insurance - Making the Best Decision Choosing the right type of insurance policy to meet your needs requires you to have a clear purpose in mind for the policy. If you are interested in simply covering whatever...more