How to Find Life Insurance Agent Near Me

 


Many people have been approached about using Life Insurance as an investment vehicle. Do you believe that life insurance is an asset or a liability? I will discuss a life insurance policy that I believe is one of the best ways to protect your family. Do you buy term life insurance or permanent insurance is the most important question people should think about?


Many people choose term life insurance because it is the cheapest and offers the most coverage for a period of time, such as 5, 10, 15, 20 or 30 years. People are living longer, so term life insurance isn't always the best investment for everyone. If a person chooses the 30 year option they will have the longest coverage period but that would not be the best for a person in their 20s because if a 25 year old chooses the 30 year policy then the term ends at the age of 55. When the person who is 55 years old and still in good health but still needs life insurance, the insurance costs for a 55 year old can become extremely high. Do you buy term and invest the difference? If you are a disciplined investor this may work for you, but is it the best way to pass assets on to your heirs tax free? If an individual dies during the 30-year period, the beneficiaries get the nominal amount tax-free. If your investments other than life insurance are passed on to beneficiaries, in most cases the investments are not transferred to the beneficiaries tax-free. Term life insurance is considered a temporary insurance policy and can be beneficial when a person is starting out at the beginning of their life. Most of the term, policies have a conversion to a permanent policy if the insured person feels the need in the near future,


The next type of policy is full life insurance. As the policy states, it's good for a lifetime, usually up to age 100. This type of policy is being phased out at many life insurance companies. Whole life insurance is called permanent life insurance because as long as the premiums are paid, the insured has a life insurance policy until the age of 100. These policies are the most expensive time, it builds up cash value that can be borrowed by the owner. Whole life insurance policies, but they have a guaranteed cash value. When the whole life policy accumulates over can have significant cash value after a 15 to 20 year period and many investors have taken note of this. Over time, (usually 20 years), the entire life insurance policy can be paid off, meaning that you are now insured and no longer have to pay and the cash value continues to increase. This is a unique part of life insurance that other types of insurance cannot be designed for. Life insurance should not be sold due to the accumulation of cash value, but in times of extreme cash needs you don't need to borrow from a third party as you can borrow from your life insurance in an emergency.



In the late 80s and 90s, insurance companies sold products called universal life insurance, which were intended to provide life insurance for your entire life. The reality is that these types of insurance policies were poorly designed and many expired because the policies did not perform well as interest rates fell and customers has been forcefully asked to send additional premiums or the policy expired. Universal life insurance was a hybrid of term life insurance and life insurance. Majority of these policies were been tied to the stock market and were called variable universal life insurance policies. My view is that variable policies should only be bought by investors with a high risk tolerance. When the stock market falls, the policyholder can lose a lot and is forced to send in additional premiums to cover the losses, otherwise your policy would expire or end.



The design of the universal life policy has undergone a major change in recent years. Universal life insurance policies are permanent policies that range in ages up to 120 years. Many life insurers now mainly sell term and universal life insurance. Universal Life policies now have a target premium with a guarantee as long as the premiums are paid the policy will not expire. The newest form of universal life insurance is indexed universal life insurance whose performance is linkeThe newest form of universal life insurance is indexed universal life insurance whose performance is linked to the S&P Index, Russell Index and the Dow Jones. In a down market you usually have no profit, bd to the S&P Index, Russell Index and the Dow Jones. In a down market you usually have no profit, but you also have no losses for the policy. When the market is up, you can make a profit, but it is limited.


 If the index market takes a loss of 30%, you have what we call the bottom, which is 0, meaning you have no loss but no gain. Some insurers still give as much as 3% profit added to your policy, even in a down market. If the market rises 30% you can share in the profits but you are capped so you may only get 6% of the profits and it depends on the cap rate and participation rate. The cap rate helps the insurer because they take the risk that if the market falls, the insured will not suffer and if the market rises, the insured can share in a percentage of the profit. Indexed universal life insurance policies also have cash values   that can be borrowed. The best way to look at the cash value difference is to have your insurance agent show you illustrations so you can see what fits your investment profile. The Index Universal Life policy is designed to be beneficial to the consumer and insurer and can be a viable aid to your overall investment.

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