Why People Buy Life Insurance by Donald Lusan

Have you ever considered why people buy life insurance? I know the salesmen and the creators of the policies themselves have thought about it because if they didn't these policies simply wouldn't sell. Probably the greatest life insurance salesman ever once said that "selling is 98% understanding human beings and 2% product knowledge". Another question that is worth exploring is why do some people not own any life insurance at all. Why would you buy life insurance?

• Love of Family
More often than not the reason people buy life insurance is because they care about what their loved ones will experience if they should die suddenly. This caring can be expressed in different ways. The Hawaiian people, I am told, have such a deep passion for the well being of their families that they will go to extreme limits to protect them. They tend to buy lots of life insurance as a result.
There are others who buy life insurance through a deep sense of responsibility. They love their families but they are driven more by the fact that the family relies on them so they have to live up to what is expected of them.
• Tax Advantages
Some people, especially the business minded, buy life insurance for the tax advantages the purchase provides. The death benefit of the policy is paid free of Federal Income Taxes more often than not. If the policy is part of your estate the proceeds are taxable.
If you own cash value life insurance the cash value and dividends accumulate tax free. When you cash in the policy you will need to pay the taxes on the interest earned. The reason this is advantage is that these policies are usually cashed in round and about retirement time. Your income is likely to be less than when you were working so you would be in a lower tax bracket.
• Tax Shelters
The most highly paid life insurance salesmen are the ones who know the tax laws inside out. Here is how they do it. They are usually qualified Financial Planners. Some are Attorneys or Accountants. What they do is to show well off people legal ways of sheltering their income from Income Taxes. They save them a lot of money. As a result these clients think nothing of putting some of the money in a life insurance policy that they need anyway. They need to buy life insurance to protect their families. A large portion of an estate can easily go to pay estate taxes. These people buy life insurance policies sufficient to pay the taxes upon death.
The reasons we buy life insurance may vastly differ but everyone needs to buy some sort of a policy...if it is even just to take care of final expenses.
Here are some things that everyone should consider:
http://www.lifeinsurancehub.net/estateplanning.html
And for the person who owns a business:
http://www.lifeinsurancehub.net/businesslifeinsurance.html
About the Author
For more than 40 years Donald has been known for his extensive knowledge of the life insurance business. He has represented some of the largest and most admired life insurance companies in the United States as well as Canada. His advice is invaluable.
Donald's website is: http://www.lifeinsurancehub.net

Read More......

Life Insurance for Business Owners or Key Executives by Sharon Taylor

Starting a business is a stressful endeavor. There is so much to consider regarding basic operations and so many forms to fill out and papers to file. It is truly a wonder that businesses are able to get off the ground at all. If you are a new business owner, you know that insurance of all types is very much part of the equation in the development and opening of your business. However busy you are with the basic operations of business, you must take time out to implement a strategy to keep your business secure. To be sure, an essential ingredient to this security is taking out "key person" insurance (also known as Business Life Insurance).

Key person term life insurance is taken out on the life of the key executive or the business owner. All firms or small businesses depend on the key people or business owner to manage and keep the business running. These head people are critical for the success of the business and therefore the insurance is actually taken out for the benefit of the business. Businesses take out the policy on the key individuals and so the business also pays for the policy premiums. The monies that are paid to the business upon the death of the key executive or business owner allows that firm or business the time to figure out what direction to take. Those left to run the business can strategize as to how they can save the business. Will they hire a new head executive? Will they restructure operations? Will they need to eventually sell off assets or sell of the business altogether? What debts need to be paid? No matter the case, the monies paid out by the term life insurance buys a business much needed time to make the important decisions that need to be made.
What Value to Place on a Key Person
To be sure, any business operation would feel displaced upon losing its key person -- especially when considering how to replace him/her with someone just as competent. In small firms, it is usually the founder who holds responsibility for keeping the books, managing employees, handling key customers and running all basic operations. Losing the key person leaves any company with much uncertainty and instability. There is no easy formula for determining the value of a key employee as each circumstance is unique. The company must consider anticipated profit losses, replacement costs and a compensation-multiple formula. These are typical methods of estimating a loss and subsequent policy value. The best thing to do is to shop for rates from several different life insurance agents as they can help you estimate how much of a policy to buy. You may also get term life insurance quotes online. Most agents agree that buying term life insurance instead of a whole or variable life is better as the premiums will be much lower.

Sole Proprietorships
Keep in mind that one-man operations do not need to take out key person term life insurance. If you are a business with zero employees there is no need to worry as your assets transfer to your family (family employees do not count). If your family depends on the income from your business, it is advisable that you take out personal life insurance.
You do not want to overlook the importance of an investment such as key person term life insurance. It can mean the survival or closure of your business legacy.
About the Author
Sharon Taylor writes articles on life insurance related topics for eQUOTE Life Insurance , a premier Internet resource for term life insurance rates, quotes and useful resource information.

Read More......

What is a Life Insurance Policy Rider by Barry Waxler

A Life Insurance Policy Rider is aptly named. It is not an integral part of the policy, but it is just along for the ride.
A Life Insurance Policy is often more flexible than people realize. What gives them flexibility is the ability to add just about anything legal and allowed by regulations to them in the form of a rider. A rider is an addition that is made to the policy that refers to a circumstance not covered in the basic policy. The rider will have three basic conditions.
First, it is attached to the regular policy and becomes a part of it. It is therefore subject to the same general conditions of the regular policy. It is not a separate policy. Second, it usually refers to a special circumstance that is not covered in the basic policy. Lastly, it is paid for by an addition to the basic premium.

An example of a common rider is an Accidental death benefit. This has become so common that some policies include it in the basic coverage, but if they do not, it can be added as a rider. An Accidental death benefit might provide for a double death benefit in case of accidental death. The rationale behind this rider is that death that comes as the result of illness and is anticipated is usually less disruptive to a person's dependents from a financial point of view. The deceased person usually had some time to put his affairs in order. Accidental death can be catastrophic since it is not anticipated.
There are many other types of riders common to Life Insurance Policies. Some deal with how the policy might be renewed, or else provide premium insurance for cases of disability or other unforeseen conditions. These insurance within insurance types of riders are quite common. They are generally inexpensive and do not add substantially to the premium, but protect the insured person in any number of situations that can not be controlled.
The best way to equip your Life Insurance Policy with the riders that are best suited to your own situation is to do a little homework before you sit down with your insurance agent. You can make a list of those items or conditions that you are most concerned about and that are a part of your risk management agenda. Then, you can match this list with the provisions of the policy, and discuss possible riders for what is uncovered.
About the Author
Get online term life insurance quotes at UFCAmerica.com.

Read More......

How to Convert Your Retirement into Comfortable Wealth Years of Your Life by Nathalie Fiset

It's quite sad how a lot of people view retirement age as a phase in their lives that they have to live simply and frugally so as not to completely use up their retirement pensions. This doesn't have to be true in anyone's case, and no matter how old you are now, it's not too late to turn your life around and ensure that your retirement allows you to enjoy your wealth for the rest of the years of your life.
How to Convert Your Retirement into Comfortable Wealth Years of Your Life
HAVING A JOB IS NOT ENOUGH. No matter how much salary you're earning or how much you love your job, your salary won't be enough to build yourself a comfortable foundation of wealth for your retirement. It's alright to stay in your job for the rest of your life, but it's important that you invest the money you're earning as well.

MAKE YOUR MONEY WORK FOR YOU. This is one of the essential maxims advocated by bestselling Rich Dad, Poor Dad author Robert Kiyosaki. If you want to have a comfortable retirement in the future, you should start making your money work for you right now. Investing in the stock market or buying and selling real estate are some of the best ways for making your money work for you.
To properly identify whether the opportunity makes your money work for you and not vice versa, ask yourself the following questions. Do you have to work or exert a lot of effort just to avail of the opportunity? Will the money you're earning be a great deal more than what you feel you've worked for?
MAKE YOUR RETIREMENT GOALS SMART. Whatever you want to achieve for your future retirement, make sure it adheres to the following standards: specific, measurable, attainable, realistic, and time-bound.
For a goal to be specific, you must know exactly what you want. If you want to be rich, how rich do you want to be? How do you plan on attaining your goal? A goal must be measurable so that you'll be able to know whether you've fully or partially achieved your goals. If you want to be rich, exactly how much are you aiming for? Thirdly, a goal must be attainable: you must have the means or resources to attain it. Fourthly, your goal must be realistic. It must not defy the odds of reality such as searching for a magiv plan to turn garbage into dollars. Lastly, your goal must be time-bound: if you want to be rich, exactly when do you plan to achieve your goal?
GET INSURANCE AND RETIREMENT PLANS. Insurance plans are a better way of using your money than just letting it remain in your bank. Choose the one that will give you maximum return depending on your initial payment and situation. As for your retirement plan, speak with your employer or review the company's retirement plan procedures. Think of what you can do now to increase its returns.
START CUTTING COSTS. It's never too early to start leading a practical lifestyle. And the good news is that more often than not, frugal alternatives are often the healthier alternatives as well. Quitting smoking, for instance, is not only good for your health but good for your pockets as well. The same goes for indulging in too many snacks and junk food.
EVALUATE AND MONITOR YOUR SUCCESS ANNUALLY. At year's end, evaluate how well you've done or how far you've succeeded in attaining your goal. Has it been too easy or difficult for you? If so, make the necessary changes to ensure that you'll do better the next year. Constant monitoring and evaluation will ensure that you won't lose sight of your goal!
LEARN NEW SKILLS. If you know that your present job or business isn't suitable for applicable for you when you reach retirement age, it's best that you start learning now new skills that could give you a secondary source of income in the future. Your new set of skills may not just give you profitable returns but also serves as a means of entertaining yourself and giving your life purpose even if you're retired.
About the Author
For more complete information on retirement please go to: http://www.accessibleretirement.com/index.html http://www.accessibleretirement.com www.drnathaliefiset.com

Read More......

Introduction to Variable Life Insurance by Barry Waxler

Sometimes when you are considering Life Insurance you are reminded of the old saying, "you can't tell the players without a scorecard!" Variable Life Insurance is a good example of a confusion causer, but it is really a rather simple one to understand.
Variable Life Insurance is simply a policy that grows cash value. What is different about Variable Life is that you are allowed to select the investments for the cash value as it grows. You are usually given a wide variety of investment options and can move your investments between options several times a year. This is usually very satisfying to a person as many people feel better when they are controlling their own fate.

A Variable Life Insurance policy is considered a security instrument in much the same way as a mutual fund. It is therefore subject to regulation by the SEC as well as the Internal Revenue Service. Despite this, it is first and foremost an Insurance policy. This is the important point to remember. As such, it has a set amount that is payable to a designated beneficiary upon your death. The amount of this death benefit should be set depending on your own personal financial situation and the impact your death would have on your dependents.
With a Variable Life Insurance Policy, once you have determined the amount of protection you need and determine the amount that should be paid in the event of death, you are then able to determine a premium payment amount. The premium amount will actually be more than just the cost of the insurance coverage. This is the whole point of the Variable Life type policies. The excess premium is what is going to be invested and will earn income.
The way to view this is to see the Variable Policy as a multiple purpose financial tool. It provides a savings vehicle whereby a certain portion of your funds are set aside for use later or in emergencies. This is possible because it is possible to borrow against the cash value of your policy. As long as you pay back the borrowed funds in a timely manner, the insurance aspect of the policy remains in force. At the same time, the policy is an investment vehicle. The Variable Life is an investment vehicle with you behind the wheel which is an added advantage.
But, underneath it all, it is an Insurance Policy with the primary goal of risk management against the uncertainty of mortality. This is the prime purpose of insurance. Some people ask why not just get Term Insurance, pay a lower premium, and be done with it. The wise financial planner realizes that the process calls for a coordinated plan. Yes, you need Life Insurance. Why not let it work for you so you are a winner if you are lucky enough to live a long life.
About the Author
Get online term life insurance quotes at UFCAmerica.com.

Read More......

Introduction to Endowment Life Insurance Policies by Barry Waxler

Endowment Life Insurance Policies pay the full cash amount to your beneficiary should you happen to die unexpectedly. The good news is that they pay the full cash amount to you if you should happen to live.
The Endowment Life Insurance Policy was developed as a method of combining two different and important functions of sound personal financial management. The two functions are savings and risk management. Both functions are considered essential elements of a good financial plan, so it was rather natural to find a way to combine them.

The Endowment Life Insurance Policy works by requiring a rather larger than normal premium payment. This premium payment can be paid in many different ways including a single lump sum payment although it is normally paid much the same as a regular insurance premium. The premium payments are invested and during the duration of the policy continue to build cash value. The cash value continues to grow until a specified maturity date when the entire cash value is paid to the policy holder.
If the policy holder should happen to die during the life of the policy, the final value of the endowment, or the target value that would have been paid at maturity, is paid as a death benefit to the policy holder's beneficiary. This makes Endowment Life Insurance Policies savings accounts that double as Life Insurance.
It is possible in certain Endowment Life Insurance Policies to exercise control over the investment choices. It is also possible to withdraw funds from the policy before the maturity date. Of course, the early withdrawals, called surrender values, may be much less than the true value of the policy should it be held to maturity. However, it is still possible to take the surrender value if economic necessity requires it. Another option is to sell the Endowment Policy to a third party.
There is a market for Endowment Life Insurance Policies. The market is made possible by the fact that surrender values are often so much less than the maturity values. The purchaser pays a bit more than the surrender value and assumes the premium payments and beneficiary rights of the policy. The purchaser's investment will be recouped when the Endowment reaches maturity. Endowment Life Insurance Policies suffered a decline during the 1970's and 1980's as other forms of savings and investment became more popular and profitable. Today, the interest rates have made them attractive again and worth investigating as an Insurance option.
About the Author
Get more life insurance information at UFCAmerica.com.

Read More......