LIFE INSURANCE
Types of Life Insurance:
- Whole Life
- Whole-life policies, a type of permanent insurance, combine life coverage with an investment fund. Here, you're buying a policy that pays a stated, fixed amount on your death, and part of your premium goes toward building cash value from investments made by the insurance company. Cash value builds tax-deferred each year that you keep the policy, and you can borrow against the cash accumulation fund without being taxed. The amount you pay usually doesn't change throughout the life of the policy.
- Universal life
- Universal life is a type of permanent insurance policy that combines term insurance with a money market-type investment that pays a market rate of return. To get a higher return, these policies generally don't guarantee a certain rate.
- Variable life
- Variable life and variable universal life are permanent policies with an investment fund tied to a stock or bond mutual-fund investment. Returns are not guaranteed.
- Term life
- A term policy is straight insurance with no investment component. You're buying life coverage that lasts for a set period of time provided you pay the monthly premium. Annual-renewable term is purchased year-by-year, although you don't have to requalify by showing evidence of good health each year.
LIFE INSURANCE
Life insurance can be an important part of your personal safety net, especially if you have financial dependents. Aluxe Insurance Services, a leading provider of life insurance can work with you to find easy and affordable life insurance solutions-so you know your loved ones will be taken care of now and in future.
Reasons one must consider before buying:
- Family protection to provide financial security to surviving family members on the death of the insured person.
- To pay for children's education.
- Insurance to cover a particular need such as paying off a mortgage or consumer debt upon the insured's death.
- Business insurance to compensate a company on the death of a key employee or to provide a surviving partner the resources to buy out the deceased partner's share of the business.
- To provide the funds necessary for the deceased person's burial expenses.
- Accumulation of funds to supplement retirement income.
When you're young, premiums for annual-renewable term insurance are dirt cheap -- as low as a few hundred dollars per year for $250,000 worth of coverage. As you get older, premiums steadily increase. Level-premium term has somewhat higher -- but fixed -- premiums for longer periods, anywhere from five to 30 years.
