LIFE IN

SURANCE

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WHAT IS LIFE INSURANCE ?

Definition: Insurance that pays out a sum of money either on the death of the insured person or after a set period.

Top 6 Reasons

1 To pay funeral expenses.

2 College funding

3 Replaces spouse income

4 To pay off debts

5 To pay off estate taxes

6 Buy out business partner

PEOPLE PURCHASE LIFE INSURANCE BECAUSE….

WHAT IS A BENEFICIARY ?

- A person who derives advantage for something; esp. a trust, will, or life insurance policy{Wikipedia}

The beneficiaries are usually children, charities or businesses, and parents

TERM LIFE INSURANCE IS….

(Also known as term assistance) is life insurance that provides coverage at a fixed rate of payments for a limited period of time, the relevant term. {Wikipedia}

TERM LIFE INSURANCE

A D V A N T A G E S

• guarantee that your estate is not depleted by estate taxes if you have large land.

• Finance your funeral

• Term life insurance offers death benefits for a specific number of years.

• Term policies usually offers converting the policy within a set amount of time.

D I S A D V A N T A G E S

You have to die to get money.

WHAT IS WHOLE LIFE INSURANCE?

Whole Life Insurance- is a life insurance policy that remains in force for the insured's whole life. (Wikipedia)

Also known as whole life assistance, ordinary life insurance, and straight life insurance

UNIVERSAL LIFE INSURANCE

•  Type of permanent life insurance, primarily in the United States of America.• Under the terms of this policy, the excess of premium payments above the current cost of insurance are credited to the cash value of the policy. (Wikipedia)

PERMANENT LIFE INSURANCE

A D V A N T A G E S

• Ensures that you have coverage for your entire lifetime

• Useful for high earners who max out other tax-deferred savings

D I S A D V A N T A G E S

• Premiums are high

• It can take a decade or so before a permanent policy's cash value catches up to the premiums you've paid

http://money.cnn.com/2010/03/15/pf/insurance/permanent_life_insurance.moneymag/

*DIFFERENCES* Term Life Whole Life Universal Life

provides coverage at a fixed rate of payments for a limited period of time

For the individuals whole life

More of a permanent life insurance

Whole has a fixed premium and guaranteed minimum

growth.

Allows you to raise or lower your premiums and resulting cash balance

WHAT ARE THE DIFFERENT TYPES OF PERMANENT POLICIES?

• Whole Life insurance has death benefits and a savings component.

• Universal Life insurance is less expensive than whole life insurance because it guarantees less but it is more aggressive. They can also use savings towards paying other insurance coverage.

• Variable life insurance offers life insurance protection for the duration of your life including equities. The value of ones policy rises or falls with the value of underlying investment choices.

WHAT IS THE DEATH BENEFIT/FACE VALUE OF A LIFE INSURANCE POLICY?

• It is the amount of money the benefiter get from the death benefits.

1. A portion of each premium pays for the insurance costs.

2. The insurance companies operating costs and profits is paid by another portion.

3. Last the remaining money goes toward the policy’s cash value.

HOW DOES CASH VALUE WORK?

• Improperly cancelled life insurance policy leads to taxable income.

VALUE UPON CANCELATION OF POLICY

FACTORS TO CONSIDER IN DETERMINING THE AMOUNT OF LIFE INSURANCE COVERAGE NEEDED

• The value of your belongings

• The value of your house and how big it is.

• If you can afford life insurance. (you need a job)

• Who are your benefactors.