Life Insurance Protects New Mother & Baby – realLIFEstories
Life insurance is great for individuals that have a family, dependents and earn the most income to support their family. Life is unpredictable and it is important to ensure your family and loved ones are taken care of financially in case anything happens to you.
When shopping for life insurance in South Carolina, searching online and using the internet’s resources are a great way to educate yourself on life insurance basics, shop and compare quotes for the best life insurance policy for you. There are three different types of life insurance policies – universal life insurance, cheap whole life insurance and cheap term life insurance.
- Universal Life Insurance – combines life insurance with savings. Insurers are able to have the benefits of term life insurance and combine that with tax-deferred interest accumulating savings account. Sometimes you may not even have to pay premiums during the entire policy. If your money to pay the death benefit and other costs accumulates in the tax-deferred savings portion of your policy, then premiums may not be required to keep the policy in force.
- Cheap Whole Life Insurance – this type of policy will cover you for your entire life. Your death benefit and premium generally remain the same. Whole life insurance also builds cash value, which could enable you to earn a return on a portion of your premiums that the insurance company invests. Your cash value is tax-deferred until you withdraw it and you are also able to borrow against that money.
- Cheap Term Life Insurance – this type of life insurance is low cost and great for young healthy individuals who are healthy and may not be able to afford cash-value life insurance premiums and want to ensure their dependents are taken care of in the event of death. Your policy will cover a pre-determined “term” which is normally one, five or ten years. Your premium payment and death benefits are only during that term. After the term you will have options to continue coverage and have the opportunity to convert to a cash-value life insurance policy.
Universal Life Insurance
Universal life insurance combines cheap term life insurance with a tax-deferred interest accumulating savings account. This life insurance plan provides insurers with death benefit as well as incorporating savings abilities.
Investing
Universal life insurance is also known as “flexible premium adjustable life insurance,” and gets this term because it is somewhat of a flexible version of cheap whole life insurance. Your insurance company will take a portion of your premiums and invest them in bonds, mortgages and money market funds. You earn the return on said investments which is credited to your policy tax-deferred. You usually receive a guaranteed minimum interest rate which is not dependent upon the performance of your investments so you will always get a certain minimum return on your money. When your investments do well, normally the insurance company will increase your interest rate return.
Death Benefit
You generally have two options when setting-up your universal life insurance policy. One option will pay your death benefit out of your policies accumulated cash value. This policy costs less in premiums, but it can take a while to build up sufficient benefit. The other option will pay you a face value that you agree upon in the contract plus your accumulated cash value. This option cost more in premiums, but you are guaranteed at least a specific amount of money in your death benefit. Most life insurance companies can set your policy up so you will have a no-lapse guarantee as long as you pay your minimum designated premium. The policy could stay in force to age 100 or above. Universal life provides you the flexibility to adjust your death benefit according to your needs allowing you to pay smaller or larger amounts depending on your finances.
Cheap Whole Life Insurance
Cheap whole life insurance policies cover you for life. Generally your death benefit and premium will always stay the same. Cheap whole life insurance builds cash value which is tax-deferred until you decide to withdraw it or borrow against it.
There are different types of cheap whole life insurance. These include traditional, interest-sensitive and single-premium whole life insurance policies.
- Traditional whole life insurance – this policy gives you a guaranteed minimum rate of return on your cash value segment.
- Interest-sensitive whole life insurance – provides a variable rate on your cash value portion which is comparable to an adjustable rate mortgage. This gives you the flexibility with your cheap whole life insurance policy such as increasing your death benefit without increasing your premiums depending on the economy.
- Single-premium whole life insurance – this is great for individuals who have a large sum of money who would like to purchase their policy up front. This cheap whole life insurance policy also accrues tax-deferred cash value.
One of the features that make cheap whole life insurance popular is that a portion of your premium money goes toward your cash value which could pay off your entire policy after a few years. Another advantage is unless you make a change to your cheap whole life insurance policy, you will be covered for life with no future medical exams.
Cheap Term Life Insurance
Cheap term life insurance is great for those individuals who want to protect their family in the event of their death. Cheap term life insurance is often referred to as “pure insurance protection” because there is no cash value like cheap whole life insurance or universal life insurance. Cheap term life insurance also expires at a certain time after either a set number of years or when you reach a certain age.
A medical exam will most likely be required when you are buying cheap term life insurance. Most exams cover height, weight and medical history. Sometimes test results can hinder your ability to get approved for term life insurance or it could potentially increase your rates, but if you are healthy you should be fine.
Watch the video related to life insurance
Being a financial services professional, Mark Wandall understood the importance of insurance and the need to protect himself and his wife, Melissa. Sadly, at age 30, Mark was killed in an auto accident by someone who ran a red light. The life insurance has allowed Melissa to remain in their home and be a full-time mom to their daughter, who was born two weeks after the accident. Melissa has kept Mark’s spirit alive by creating two important causes, The Mark Wandall Foundation that raises …
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What is the most affordable life insurance and health insurance?What is the most affordable life insurance and health insurance?
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Posted by American Car Insurance on September 9th, 2008 filed in life insurance | 10 Comments »
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10 Responses to “Life Insurance Protects New Mother & Baby – realLIFEstories”
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September 9th, 2008 at 3:44 am
Beautiful … Melissa is a friend. I so respect her and what she’s doin in Mark’s name!
(Also widowed — but no life insurance), Wendy
September 9th, 2008 at 3:38 am
You cannot buy life insurance on her without her consent.
September 9th, 2008 at 3:48 am
This is not something that is usually addressed in a child support order. Your child would be entitled to social security benefits if he dies. You should consult an attorney about what your child might be entitled to receive from the estate. If he has nothing, there is nothing to worry about.
September 9th, 2008 at 10:22 am
Disability- obvious
A protection policy- lower premiums and once she gets "established in a career" she can contribute to other types of savings
September 9th, 2008 at 12:09 pm
September 10th, 2008 at 1:46 pm
September 11th, 2008 at 12:38 am
I recommend a 30 or 35 year term insurance. Term insurance lets you decide where you want to save your money, while other types of life policies such as whole life or universal life doesn't. Premiums are very low too, so you can afford the right amount of coverage needed.
While she has term insurance, I recommend she also invest into mutual funds (a mixture of large growth and large blend funds). She should open an IRA first and then invest into a mutual funds so that her investments grow tax-deferred.
I have a 30 year term and I invest $100/month into my Roth IRA. My portfolio has an average rate of return of 14%. In 20 years, I can potentially have $132k. In 30 years, $556k.
Lets say the average over 30 years is only 10%. In 30 years, my IRA may worth only $228k.
But truthfully, I don't know how the stock market will perform in the next 30 years. In 30 years, I may or may not need life insurance. If I do, I can renew it, but premiums will be higher and stay level for 5 years and then go up again. I can exchange it for another term policy such as a 10 year term. I can lower my coverage. Right now, I'm not worried about my options in 30 years. I'm only concern with building enough retirement savings that I can comfortably live on.
September 11th, 2008 at 10:27 am
Let me just say this, Sherry. Parents are ultimately responsible for the well-being of their kids. I see more parents in southern California that are not protecting their kids than I can count. Everything from letting them run unattended into crosswalks, parking lots, and other places where cars drive through, to letting them go swimming in public pools by themselves, to not buckling them in the car, and everything in between. The first thing they always do is blame everyone else when something goes wrong. There is a major trend in this country where people do not want to take responsibility for their own actions. Not only that, but they want to blame someone else. I cannot tell you how many times some senior citizen drives through a store front or into a bank lobby or into a swimming pool or into a crowd of people and uses the time-worn "the gas pedal stuck" story. Did you ever notice that gas pedals stick only on these old fart's cars? I hate that. I just sat in traffic school all day today because I got a speeding ticket. I have no one to blame but me, so I get the blame. And yet I hear all kinds of lame excuses for all kinds of tickets. You're right to be mad, Sher, but the best you can do is not be like them. And if you have kids, try to teach them.
September 11th, 2008 at 2:33 pm
One way to protect Assets is by developing a Trust, giving all the assets she owns to the Trust and then assigning the beneficiaries to the Trust. That way, when she dies she won't lose lots of money due to taxation and her children will still receive everything she owns.
Also, ask the annuity agent to add a rider (option) that allows the annuity to keep paying the children after she dies.
Obviously what I just said seems simple, but is really more difficult when done. Feel free to contact me regarding any questions.
September 11th, 2008 at 11:15 pm