Life Insurance
What is a life insurance dividend?
Many life insurers advertise dividends to promote life insurance policies, especially whole life insurance. It all sounds great, but most people don't fully understand what a dividend is. There are many types and options of dividends, but the most basic condition is that dividends (at least for life insurance) are refunds paid to life policyholders. It is a refund as it is usually paid with excess premium.
Since policyholder premium calculations are based on actual monetary claims from life insurers, dividends can be paid and premium calculations are often less optimistic than they look. I have. Life insurance dividends are usually paid in cash or stock on a regular basis. Policyholders have the option of receiving dividends or depositing them in a special savings account. The latter case is often referred to as dividend generation.
Dividends are one of the most useful fringe benefits of life insurance and are usually best if the life insurer offers the option. However, like most financial issues, the situation is not that simple and straightforward. Except for the general vague idea of what dividends are, most life policyholders don't really know about the different dividend and benefit options they may have.
There are several types of dividends. The two most relevant from a life insurance policy perspective are: Additional term life insurance (also known as 5th dividend option / additional insurance option)
Additional term life insurance (or, as is generally known, a fifth dividend, or additional insurance option) is a dividend option that allows life policyholders to use the value of the dividend to purchase coverage. am. Additional term life insurance.
Automatic life insurance dividend option
This life insurance option applies if the life policyholder has not previously specified another dividend option. In most cases, the most frequently used automatic life insurance dividend option is pay-as-you-go insurance.
Obviously, the above list has been shortened and simplified for brevity. We hope that keeping the point and conciseness will make it easier to read, understand, and help. Most of the data available in life insurance tends to be long and confusing, especially when it comes to advanced options such as dividends. We hope this article will help you choose the right life insurance policy and manage your life insurance policy. .. Efficient. Most life policyholders are primarily interested in providing some security and financial security after the death of their loved one, but what about making a small amount of money in the process? There is no problem. At the very least, it can be used as a buffer to assist in unexpected situations. Hopefully, understanding the role and importance of dividends will make you much more comfortable and reassuring.
Life insurance or Disability insurance?
Did you ever stop to think about what life insurance is really used for? Sure, protection in case the worst happens is the logical answer, but it’s not completely accurate. Most insurance experts will tell you that life insurance is a type of insurance that’s best used for asset and income protection.
On the other hand, life insurance is not the only type of insurance that can be used to protect our loved ones from unforeseen circumstances. Disability insurance is another popular type of insurance, and our friendly insurance experts from the previous example would tell you that it’s used for – you’ve guessed it – asset and income protection, just like life insurance is. But this doesn’t mean that life insurance and disability insurance are essentially the same.
Still, there are certain similarities, especially in terms of function. They are both used to provide financial security in circumstances when the insured person is no longer able to produce income. However, once you’ve truly understood disability and life insurance, their differences will become clear.
One of the main differences between life insurance and disability insurance is certainly the definition of event that triggers the benefit payouts. In the case of life insurance, the event that triggers the benefit is the death of the policy holder. Depending of the terms of the policy, the benefit can be payed out to the beneficiaries as a one time, lump sum payment, or it can be payed out monthly, over a longer time period. The second option is commonly used in case the beneficiaries are under aged. For instance, the policy holder may specify that the benefits from the life insurance policy be payed out to his children until they become of age, ensuring that they are taken care of until they are able to provide for themselves.
While expenses related to life insurance are usually final, expenses arising from disability, even though they can be substantial, often last for a limited period of time. According to data released by the American Disability Awareness Council, the average duration of what is considered to be a long term disability is just over two years.
People who’ve had the bad fortune to become disabled and unable to work still need to provide for themselves. Not only do disabled people have expenses just like anyone else – they still need shelter, food and transportation – but they often have special needs, medical bills, and a number of expenses that healthy people will never have to deal with. For instance, just retrofitting their vehicle or home can cost thousands of dollars, and a person who’s no longer able to work will have a hard time coming up with that kind of money, unless they are insured.
So from one perspective, disability insurance is just as important as life insurance. While disability is often only temporary, from a strictly financial perspective, becoming disabled can have just as serious and disruptive consequences on one’s family as death.
Life insurance policy – basic facts and information
Once a person come in the certain age, it starts to think about life insurance.
If you are in this stage of your life and you would like to know more about your option considering life insurance, and more about insurance company, this article will help you.
There are many different insurance policies, but let us stop for now on the life insurance policy. First you have to make a decision do you want your policy to be just in case of the death or you want to include some other situation. If you want you can include insurance in case of accidence, insurance in case of sudden illness or some other insurance.
After you managed to form an appropriate life insurance policy you have to put a price on it. Price will depends from many different factors. Insurance seller will consider all of these factors and then set the price. You can pay the price or you can pay it even more. If you pay more you are raising a potential premium insurance company have to pay if something happen to you.
Let us go back on the factors that will affect the price of the life insurance. One of the important factors is your age, risk is increasing with number of age. Some other factors like your overall health condition, do you have any chronic illness, have you ever been hospitalized, do you have any problems with heart, what is your daily routine, what are you doing for life, how big is your daily dose of stress, are you a smoker, do you work out, are you a professional athletes, and many other factor will affect overall life insurance price. In some cases your monthly income, and your credit history can influence on the life insurance policy price.
After assessment insurance company can deny your application for life insurance policy. If the people from the insurance company estimate you live highly risk life they have rights to decline your application. If you have money to pay, insurance company will find you a proper life insurance policy. There are special packages of the life insurance for the people working on the high risk jobs. There are also special programs of the life insurance for the elderly people. If you decide to take life insurance on a longer period, more than ten years, and sign committing document you will lower the price of the life insurance policy.
There is one more serious assignment for you to do, you have to find a proper insurance company. There are many insurance company all around, but when you start to look for a right one you will have a problem to find it. You should go with company with large experience in this field of the insurance. Once you have find a proper insurance company you set the price for the life insurance policy you want, you should sign documents. Before you sign read it twice, double check everything, you don’t want to have problems later. Once you are sure everything is fine you can sign papers.
What is important when you are making life insurance policy?
Life insurance policies can be pretty tricky since here are so many options that many men are confused with them. There is the whole palette of the products offered and they all cover different cases and have different prices. The most important thing to anyone who is making life insurance policy is to take one adjusted to its needs. So, the first thing you should consider is what is it that you actually need to be covered.
If you have children, it is pretty natural that you will be looking for policy that will cover their tuitions or their marriage. If you have big mortgage because you have bought your home through loan, you will be looking for the policy that will cover your loan in case of your death. If your spouse is unemployed, then the most logical solution would be to take the policy that will provide the monthly instalments for him or her.
When you have finally figured out which kind of policy you need, then you have to decide which company to take. They are pretty different in terms they are offering. So, it would be great to compare their pricelists for the service you are interested in. When this part is done as well and when you have decided what you need and which companies have the best offers, you have to do some research on them. It is not of much use to take the policy of the company which isn’t in stable financial position or with company that is making problems when paying off.
The data about them can be pretty easily found on the internet since there are numerous forums which are treating these issues. You can have first hand testimonies there and they are pretty reliable so they will help you choose the right companies. When you have narrowed down the list to the best companies available, you have to do one more step before concluding the policy.
Namely, you should check the quotas these companies are using. The amount of your premium depends directly on these quotas and you should study them well before choosing the one you will make policy with. Quotas depend mostly of several conditions. First of all, they are considering your age. It is less likely that they will have to pay it off if you are young and in your prime so this factor is favouring young people.
Second important factor is your medical history. If you are healthy and there is no history of chronic diseases, you will pay much less than those who are suffering from various conditions. Also, if your family doesn’t have record of cancer, heart diseases or other problems transferred by genes, you will be less risky customer and you will be paying less money. Also, one of the most important things is your occupation. The less risky and dangerous occupation you have, the cheaper your life insurance policy will be.
Some hot tips on life insurance policies
Whether to get a life insurance or not is a tough decision to begin with, but if you want to choose the right policy it might give you an even bigger headache. Once you decide you want the kind of security that comes along with life insurance, you’ve just made the first step.
Every insurance company has their set of policies besides the regular ones and so many riders that will make your head spin, especially once they start bombing you with legal terms and different rates. Many insurance agents won’t prove helpful at all, especially if they’re getting paid on commission. We’re not saying that most agents will try to rip you off or scam you, but be aware that they’re most likely offer you something you don’t need, just to get you to get a more expensive life insurance plan.
One of the first things to take into account is the amount of protection you need. Two main factors are the number of debts and the number of persons that are financially dependent on you. You get the logic – the more debts and dependents there are, more insurance you need. They say that the general rule of thumb is to multiply your yearly salary by 5 to 7, but that’s just a rough estimate. No one knows your needs better than you, so take some time to think it through.
The next big question is whether to go for term life or whole life insurance. While term might sound like a good idea for younger people who can’t assume their future needs, if you already have a stable job and a family and can predict your future expenses like your kids’ education, it would be a better plan to go with whole life insurance.
If you’re a senior, you have to know that many insurance companies refuse to give you term life insurance if you’re over a certain age, or you might end up paying sky high premiums that don’t pay off. Some advocate going for whole life insurance because of the investment component it includes, but you shouldn’t think of your insurance as of an investment. Things might change greatly over the years and you can’t rely on your life insurance money.
Why not benefit from internet and save money? It takes some extra time to check out online offers, but it might save you up to a couple hundred dollars. There are even some websites that offer to do the comparison for you, and that’s definitely worth checking out. Another helpful tool is software that calculates the estimated level of coverage you need based on a set of questions about your financial situation.
These life insurance calculators can really come in handy when trying to make a rough estimate. While most people are just too lazy or busy to go browse different offers and just go for the first that sounds okay, do yourself a big favor and shop around. You’ll be surprised to learn that there are big differences in rates and health requirements, and it pays off to do some research first.
Useful advice on life insurance policies
Getting a life insurance doesn’t have to be an unpleasant task if you know which questions to ask and which things to take into account when choosing the right policy for you. You don’t have to be an expert or know any legal terms, but by following the advice we got from the people who are in the business for years you can save yourself a lot of time and money. Here’s some of the experts’ tips on choosing the best life insurance…
Don’t be afraid to ask
You have the right to know all about the policies to be able to understand them better and pick the one that meets your needs best. Ask the advisor the things about policy exclusions, the duration of premiums guarantee, whether the policy is renewable or not and everything else you are not sure about. By asking all these questions you’ll appear like the person who knows what they want, and will save yourself some time not hearing the usual talk made to convince you into going for whole life insurance.
Never go for the first thing you run into
No matter how affordable a policy plan might sound, be sure to check out other companies and compare similar policies. Shopping around is a smart thing whether you’re buying food, clothes or car insurance. Make your pick just after you’ve made sure you’re getting the best deal possible. It might take a little bit more time, but the money you can save is definitely worth the trouble.
Don’t replace old whole life insurance policies
This is one of the worst moves you could possibly make. If you still have a whole life policy, by replacing it with a new one you’re risking losing all premiums, plus there could be unexpected fees and other unpredicted costs. In case your life situation has changed and you need to improve your insurance, just buy more instead of replacing the policy completely.
Stay clear of the pricey riders
Most advisors will try to sell you one of the expensive riders as that’s one of the first things they are taught in training, and one of the last things you actually need. Unless you’re 100% sure you fully understand and need a certain rider, don’t get it because chances are you won’t get any benefits from it.
Use the free 30 day look
During the first 30 days, you are entitled to look at the life insurance policy and learn all about it. If you change your mind during the 30 day trial, you can return and cancel the policy and you won’t lose any premiums. It’s all about your satisfaction and there is nothing wrong with returning it if you change your mind.
Be wary of know-it-all agents
If the advisor appears to know the answer to all your questions straight away, they might be faking it. There are too many complicated policies and no matter how experienced the agents are, it’s hardly likely they could know all the details without having to look things up.
Life insurance – questions and answers
Looking for a way to insure your dear ones if something happens to you?
Looking for more facts about the life insurance?
Looking for a proper insurance company?
Thinking about what kind of insurance policy you should take?
Wondering how much is it going to cost you?
Let us help you as much as we can. In this article we will help you answer some of these questions about the life insurance.
How to choose a suitable life insurance policy?
There are many life insurance policies for you to choose. You can take insurance just for the case of death. You can add insurance in case of sudden illness, accidents, etc. It’s up to you to choose the proper life insurance for you. Make your life insurance on the behalf of the person who you trust the most.
How much does it cast to buy life insurance?
Life insurance price is not fixed. After you have decided what kind of insurance policy you would like, you can start calculating with your insurance agent. Price will depend on the many factors. First of all there is a question of your health condition, do you have any chronic diseases, have or had problems with heart, have or had problems with any other vital organ, had some serious accident, are you a professional athlete, smoker or not smoker, etc. Beside that, there is a question of your age. it isn’t the same if you are young or if you are an older person.
There is a special group of insurance for the senior people. Price will depend on your professional occupation, is there a high level of stress or low. Is there in your job description any life risking included. Policeman and similar professional occupations are considered as professions of high risk, and for them it’s quite hard to find a proper life insurance. Your life style will also affect on your life insurance price. If you like jumping from the plain with parachute now and then you will hardly find a life insurance, at least you will hardly find the cheap one. If your daily job is wine tasting you shouldn’t have any problem in finding a proper life insurance.
Finding a proper life insurance company…
This is the hardest part. There are many insurance companies on the market. Your task is to find the insurance company that is right for you. Seek for the companies with the experience. Don’t fall for the promises and extremely cheep insurances. Be sure to understand everything written in your life insurance policy.
Few life insurance facts…
Once you have established a price of your life insurance, find out how high are the premiums. High price doesn’t men your premiums will be high. Premium amounts are combination of the price you pay and all already mentioned risks and factors. Life insurance is not valid in the cases of war, suicide or attempt of suicide, riots, etc. If you are not sure where to buy it, you should ask for recommendation. If you have any doubts about your life insurance ask for a legal help.
