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...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 will not have to pay taxes on it. You will not have to pay taxes on the returns you get either, as...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 returns that add to the value of your life insurance. For example, you can invest part of your premium into a mutual fund or stocks. When the fund or stock does well, any return you earn will be added to the cash value of your variable life insurance policy.This is the most defining characteristic of this type of insurance policy. Another characteristic is it's similarity to universal life insurance when it comes to the payment of premiums. Policy holders have the flexibility each month to choose whether to pay the minimum premium for that month, pay the maximum amount allowed by the Internal Revenue Code for insurance policies or to not make a payment at all and instead let the interest they earned during that month pay for the premium. You have to be careful here, however. Consistently paying the minimum or not paying the premium at all...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...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 are paid out and each has an accompanying tax situation that must be handled. The policy itself has...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 life insurance needs so that they have enough coverage. There are many things to take into consideration when determining what kind and how much insurance you need. It starts by figuring out if life insurance is needed in the first place. The primary purpose of life insurance is to replace the income lost due to your death. Therefore, if you have a spouse, children, or other people who are dependent on you to survive, then you need life insurance.To determine how much you should purchase, first evaluate the cost of living for your family. Although the goal is to replace the income lost when you pass away, basing the amount of insurance you purchase on your yearly income often leads to buying too little insurance. You will need to buy enough insurance to cover your family's short term needs and long term obligations. This includes making sure there is enough money to pay for funeral, medical, and legal expenses as well as debts that are...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
Investment Through Life Insurance - The Basics A life insurance policy can go well beyond simply providing for the beneficiaries of the policyholder after their passing. The right type of policy can actually act as a vehicle for...more
Is Term Life Insurance a Good Investment? - The Facts Trying to decide what type of life insurance is best going to suit your needs can be a daunting and confusing task. There are a myriad of options available and you must consider not...more