Life Insurance Quote Reviews

Times have changed and the reasons why people buy life insurance have grown from the original purpose. Let’s have a look at the causes:

Income Replacement

Life insurance is used to protect the premature death of a spouse or parent so that the loss of income is not devastating to the family.

Payment of Outstanding Debts

Life insurance can as well be useful to protect mortgages, car payments and credit cards, etc.

Final Expenses

The benefits obtained from life insurance can cover funeral and other administrative expenses, etc.

Education Funding

The death of a parent may mean that the quality of education, intended for a child, may be out of reach.

Emergency Fund

Any adjustment expenses, such as time off work, medical and counselling expenses can be covered by life insurance.

Special Needs Child

The use of life insurance provides a guarantee that the funds will be there to care for those special needs.

Business Continuation

To provide funding to assist in orderly transfer of business ownership, in the case of owner’s death, life insurance guarantees that the business is transferred as intended.

Business Insurance

Key Person, Executive Bonus, Split Dollar and Deferred Compensation funded with life insurance.

Estate Taxes

Under current tax law life insurance can provide liquidity at death to pre-fund the estate tax liability. This may not be necessary if the Estate Tax is permanently replaced.

Charitable Giving

A charitable minded client may leave a gift to a favourite organisation, without significantly reducing the size of the estate by using the death benefit to replace the value of the property gifted to heirs.

Equalising Inheritance

Life insurance provides additional liquidity to assist in providing each child with equal shares of their parents’ assets.

Income in Respect of a Decedent

People die owning assets that have not yet been taxed; these taxes then become the obligation of the beneficiary. Life insurance provides liquidity to assist in the payment of these taxes.

Second Marriages

There can be conflict when a parent with children remarries. Life insurance provides the children with enough financial security.

It is fairly easy to economic and financial loss due to death of an income earner. If, due to death of a person, a loss of five thousand dollars arises without replacement for the usual recurrent expenses of a household, a life insurance would generally replace the five thousand dollars and ensure that the amount increases in order to cater for the inflation costs and children’s needs as they get older. It is certain that the five thousand dollars will be adjusted: the family need not worry about Social Security or other employment taxes, but is fairly certain that the family will incur increased costs due to a missing pair of hands in the house.

It is unfortunate that this straightforward calculation cannot be simply transformed into a capital sum and eventually into life insurance needs. A simplistic calculation would be to say that a regular monthly income of five thousand dollars increasing by three percent yearly for a wife that could live for another sixty years would generate a capital sum of nearly two millions and seven thousand dollars (a four percent return is assumed here) with no principle left at the end of that period. With an additional calculation taking into consideration income and expenses due to existing assets and expenses at death, this is the process used to calculate how much life insurance I need.

The issue is that nobody can imagine ever having a gain of two million dollars, even more buying that much worth of life insurance to replace five thousand dollars a month. Consequently, most of us will compromise buy insuring only a fraction of their human life value and buy a life insurance policy of two hundred and fifty thousand dollars for an income of five thousand dollars per month. But a policy like that would only cover family expenses for less than four years.

The covers which are available to you are Life Cover, Critical Illness Cover, Life or Earlier Critical Illness Cover, Income Protection Cover, Mortgage Income Protection Cover, Accident Sickness Cover, Unemployment Cover and Payment Protection Cover.

With regards more specifically to Life Insurance you can make changes to your policy even after the policy has started. You could do this by increasing or decreasing the sum assured agreed at the start of taking out your Life Insurance policy. However if you were to increase the sum assured you would then typically on a monthly basis pay extra than the premium first agreed or if you were to decrease the sum assured you would then typically pay less on a monthly basis. Any changes that are made to the policy are subject to term and conditions specified at that moment in time. Changes can be made where there is no need for any further information which are called Guaranteed Options such as if you get married, adopt or child or have a baby, move house or change doctors, or have a change in career. Guaranteed option can only typically be applied if the person taking out the policy is aged 50 or under at the commencement of the policy and was accepted on standard terms.

When applying for Life insurance some providers will give you what they call Free Cover if you are a UK Resident and under the age of 60 before the application have been received. Free Cover is only given on a temporary basis whilst the application is in process and only starts once the provider has been given Direct Debit Instructions.

If you have any liaiblity then it is important to protect this when ever possible. A mortgage or loan should you die would be passed to your next of kin. It would not be a nice situation if a loved one was greiving for you and have the added issue of having your debts passed to them also.

So when asking do I need life insurance then the answer is yes. Life insurance is designed to offer protection and give just a little bit of peice of mind. The policy will pay a lump sum if you die or suffer a terminal illness this will pay off any liabilities immediately and give peace of mind.

In the past mortgage lenders have asked for the polices to be assigned to the mortgages but no longer is this common practice. The money when it is paid out is yours to do what you like with, so you dont have to pay off all the debt if you do not wish only partial debts can be paid.