Many companies now sell life insurance on the Internet, as well as give free quotes and advice.

The key to buying on the Internet is to shop by price and by the company’s rating. Several agencies, including Standard & Poor’s and A.M. Best, rate insurers on their claims-paying ability. Stick with companies with low prices, the term you want, and a top rating.

Here are some sites that sell the policies of multiple companies:

- Insure.com has quotes from over 90 companies and plenty of detail on the policies available. The site also supplies ratings for the insurers from the major rating agencies, such as A.M. Best.

- Insweb has some pretty good worksheets and advice, lets you save quotes for later retrieval, and lists an 800 number.

- Accuquote has over 1,600 policies in its database. But you need to fill out a lengthy form to get a quote. The site is an independent service.

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The cheapest rates, available in the business, go to those who are in good health and who have a family history of good health.

If you take heart medication or are grossly overweight, you may pay 50 percent more than preferred rates.

If you smoke, have a risky occupation, or engage in risky sports like skydiving, you’ll pay even more for life insurance.

If you fall into one of these more expensive categories, it pays to shop around. One company may charge much more than another, depending on how it estimates the risk of your condition (that’s called underwriting). This is where a knowledgeable agent may come in very handy. Internet and phone quote services aren’t set up to deal with nonstandard policies.

Why, some people might ask, should I tell the insurance company about negative information that will raise my rates? Well, even if you somehow get around the medical tests and other checks done before the policy is issued, it doesn’t pay to try to fool the insurer.

Insurers may investigate suspicious claims. If the company finds out you’ve lied, the claim may be denied, or your heirs could be tied up in court for years.

So there’s a good case to be made for getting a policy early in life while you are still in good health. However, it doesn’t make much sense to buy one until you have dependents.

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Agents like to talk about policies you can keep throughout your life. What they sometimes won’t tell you is that you don’t need life insurance coverage throughout your life.

The secret to buying a policy with the right term is figuring out how long you need to be insured. You start by estimating when your children will be out on their own and no longer in need of your financial support.

So if your children are 3 and 5 now, you’d probably want a policy that covers you at least until the youngest is 22, so that’s about a 20-year term. But this depends somewhat on your age as well.

Say you also want to cover your spouse for your lost income until what would be your normal retirement age, 65, and you’re only 35 now. Then you would want a 30-year policy.

Keep in mind that insurance gets very expensive once you leave your 50s. So you will pay more to cover yourself until 65, even if you lock in a level-premium 30-year policy when you are 35. Coverage past age 70 or so may be unattainable or extremely expensive.

Keep in mind, life insurance should not be a substitute for a retirement plan. You want to plan so that you’ll have enough to live on when you retire, and you won’t have to keep paying insurance premiums.

There are exceptions, however. People who start families late in life, or who have complex estate-planning issues, may well have a need for life insurance beyond the customary retirement age.

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Whole Life Insurance
Whole Life insurance provides protection as well as a cash value. Your premiums remain at a fixed level for the duration of the contract. Over time, the policy builds up cash value on a tax-deferred basis. It may also provide for dividends (which are not guaranteed), that can be used to add more coverage, can build a cash-value that you can use to supplement your retirement income or help provide for a child’s education—it’s your money to use as you need. But keep in mind life insurance should not be purchased solely for cash-value accumulation; its primary purpose is protection.

Universal Life Insurance
Universal Life Insurance is a flexible life insurance plan. These policies are interest-sensitive and permit you to adjust the death benefit and/or premium payments, within limits, to fit your situation. Your net premium payments are applied to the accumulation fund, which earns interest. The monthly cost of the death benefit and policy administration is deducted from the accumulation fund. As with Whole Life Insurance, the cash value is yours — you may withdraw it or borrow against it at any time. Or, you can use your cash value to pay premiums. Universal life rates are subject to change, but the rate will never fall below the minimum rate guaranteed in the contract.

Cash values can be accessed through loans and/or withdrawals, but these are likely to reduce death benefits. Loans reduce the cash value and death benefit by the amount of the loan outstanding plus interest. In addition, withdrawals from some policies may be subject to surrender charges and could have a permanent effect on the cash value and the death benefit.

Variable Universal Life Insurance
Variable Universal Life Insurance may be for you if you want to invest the cash value of your life insurance policy in various funding options that in turn invest in such things as stocks and bonds. You decide how your net policy values are to be invested—and you bear the investment risk. If market performance is poor, your death benefit may decrease, and you may have to pay higher premiums to keep the policy in effect. But your cash value also has the potential to grow more rapidly than with other cash-value policies if the market performs well. Like Universal Life Insurance, above, premiums and death benefits are adjustable within limits.

Variable Life Insurance is offered by prospectus only. The prospectus contains information about the product’s features, risks, charges and expenses, and the investment objectives, risks and policies of the underlying portfolios, as well as other information about the underlying funding choices. Read the prospectus and consider this information carefully before you invest. Product availability and features may vary by state. All product guarantees are based on the claims-paying ability of the issuing insurance company.

The amounts allocated to the variable investment options of your account balance are subject to market fluctuations so that, when withdrawn or surrendered it may be worth more or less than its original value.

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What is it?

Whole Life is the most basic type of permanent life insurance. Depending on your age and health, your premium will purchase a specific death benefit and produce a specific cash value, which are guaranteed for the life of the policy as long as your premiums are paid. Whole Life premiums, while higher than term premiums, are guaranteed not to increase. In addition, Whole Life policies can earn annual dividends which are based on MetLife’s investment, mortality, and expense experience. Dividends are not guaranteed.

Who’s it for?

People who:
- have a lifetime need for insurance protection
- prefer the high degree of safety provided by the policy’s guarantees
- are attracted by the policy’s ability to build tax-deferred cash values
- like to know that their premiums will never increase

Benefits:

Over time, whole life insurance may be more economical than term insurance since premiums do not increase with age and the policy builds a cash value.
- Earnings, and certain withdrawals and loans, may qualify for tax-favored treatment.
- Policy loans and withdrawals provide access to your cash value.
- If you cancel the policy, the accumulated cash value is yours to use as you wish. Taxes may apply.
- Dividends can be taken in cash or used to increase the policy’s cash value and death benefit. This means that certain “dividend options” may be used to purchase additional insurance coverage each year, regardless of your health.
- Premiums are guaranteed not to increase over the life of the policy.
- A minimum death benefit is guaranteed.
- The cash value is guaranteed to grow at a specified, minimum rate.

Some Drawbacks to Consider:
- Premiums are initially more costly than term premiums, although they remain level for the life of the policy.
- Unlike term insurance, whole life insurance offers no conversion option.
- Loans, withdrawals and any unpaid loan interest generally reduce the death benefit, which could leave beneficiaries inadequately protected.
- If accumulating funds is a goal, keep in mind that dividends are based on insurer’s investment, mortality, and expense experience, and are not guaranteed. Certain riders, when added to your policy, provide you the opportunity to pay more premiums into a number of professionally managed equity-based portfolios.

Variable insurance products, including variable annuities and variable life insurance, are offered by prospectus only. The prospectus contains information about the product’s features, risks, charges and expenses, and the investment objectives, risks and policies of the underlying portfolios, as well as other information about the underlying funding choices. Read the prospectus and consider this information carefully before you invest. Product availability and features may vary by state. All product guarantees are based on the claims-paying ability of the issuing insurance company.

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What Is It?

Permanent insurance, including Whole Life Insurance, Universal Life Insurance and Variable Universal Life Insurance, can provide protection for your entire lifetime, or in certain instances up to a specific age—at which point the insurer pays the policy owner the cash value. Permanent life insurance policies can build a cash value—money that you can borrow against and in some instances, withdraw to help meet future goals, such as paying for a child’s college education.1

Permanent life insurance policies enjoy favorable tax treatment. Cash value generally grows on an income-tax deferred basis; that means that you pay no taxes on any earnings in the policy so long as the policy remains in force. Withdrawals or loans against the cash value are, in many cases, tax-free.1

Who’s it for?

People who…
May need life insurance for a long term.
May be interested in accumulating policy cash value to provide funds for education, retirement or other future goals.
Want to take advantage of the tax-favored treatment of cash value life insurance policies.

Benefits:

Over time, permanent insurance may be more economical than term insurance since premiums do not increase with age and the policy can build a cash value.
Policy loans and withdrawals provide access to your cash value.
Earnings, and certain withdrawals and loans, may qualify for tax-favored treatment.
If you cancel the policy, the accumulated cash value, minus any surrender charges, is yours to use as you wish.

Things You Should Consider:

Permanent insurance is initially more expensive than term insurance.
Loans, including any unpaid loan interest, and cash-value withdrawals generally reduce the death benefit, which could leave beneficiaries inadequately protected.
If you cancel or surrender the policy, or it lapses, you may have taxable income to the extent that the total of cash value and/or distributions or withdrawals exceed your basis in the policy.

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What is Term Life Insurance?
Term life insurance is generally the least expensive and least complicated type of life insurance. It provides insurance protection for a specified period of time, such as 10, 20 or 30 years.1 If you die within the term period and the policy is in force, a death benefit is paid to your beneficiary. If you are still living at the end of the term, protection ceases unless your term life insurance policy is renewed. There is no “accumulation” element, or cash value with term life insurance.

Who’s it for?
People with a temporary need for life insurance protection.
Those who need a large amount of insurance protection but have limited budgets.
People with specific business needs (e.g., business owners who want to cover the life of a key employee who has a set number of years until retirement).
Benefits of Term Life Insurance:
It provides insurance protection for a low cost (at least initially).
If your needs change, most term life insurance policies allow you to convert to a permanent life insurance policy without having to take a medical exam or provide other information about your health.
Term life insurance is a good way to supplement other coverage when you have added financial responsibilities for a given period of time (e.g., mortgage, college expenses).
Death benefits are generally received free from income tax.
Things You Should Consider:

Premiums generally increase with age and they could become unaffordable later in life. There is no cash-value element with term life insurance, so you miss the tax-deferred growth of the cash value of permanent life insurance policies, such as Whole Life Insurance.
Once the term period expires, unless you renew your policy, the insurance coverage ceases and the policy has no further value.

Level Term Insurance
Level Term Insurance1 provides life insurance protection that remains level for the amount of time you select; either 10, 15, 20, or 30 years. Once the term period is selected, it cannot be changed.

Fully guaranteed with level premium payments and term periods of 10, 15, 20, or 30 years.
If you still need protection after your term period is over, you may renew your coverage each year up to age 95 (less in New York).
You may also convert this policy to one of our permanent policies. For issue ages less than 65, this policy is convertible in the level term period only (e.g., 10, 15, 20 or 30 years) or age 70, whichever is earlier. For issue ages 65 and over, the policy is convertible for 5 years.
Who’s it for?

People who know they need coverage for a certain number of years, such as a small business owner who has a short to moderate-term risk to cover; or people who are unsure of their long-term goals and want something affordable today, with the opportunity to change their minds tomorrow

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These days, protecting yourself for life is essential. It provides protection to us and to our loved ones. In the event of something untoward happening, we can rest assured that the benefits will go to the right persons. In the world of today, money is security, and an insurance plan goes far to supply us with this security. For some people, insuring life is also a great investment. Insurance plans that build cash value and offer tax benefits can be regarded as offering us some returns on our investment. However, insurance plans are primarily meant to build security. If one is looking for solely an investment option, it would be advisable to find a different mode.

These days, we are being spoilt for choice among a variety of life insurance options. At the fundamental level, we have a choice between term (which provides coverage for a specific number of years) and whole (which provides coverage for one’s entire life) life insurance. While both these have their own advantages and disadvantages, Many people favor the whole life insurance option. This offers quite a few features that are missing in the term option.

First of all, “whole” plans invest part of the premium amount that has been paid and help build cash value. After a period of time, it may so happen that the cash value itself starts paying for the policy. This is quite an advantage that is lacking in the term life option. Moreover, most whole life insurance plans require only a single medical examination. Thus, one can eliminate the headache of frequent medical check ups, unless one decides to alter one’s current plan. The tax savings that are incurred also work up to a fairly large sum in this case.

In addition to these advantages, one also has to select from among three basic kinds of whole life insurance. The first of these is the traditional whole life insurance. This makes the insurer a promise of a minimum rate of return on his/her cash value. Yet another type has to be the whole life policy that is interest-sensitive. In this case, the policy offers a variable rate on one’s cash value. The third type is one that involves a single premium. This is suitable for those who are ready with the money to buy an insurance policy. Thus, even after choosing between whole life and term life insurance, one still has far to go in deciding one’s insurance policy.
By: Ajeet Khurana

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Everyone needs life insurance, especially if you own a home or have a family. It’s a way to ensure that those who depend on you financially will have what they need in the event of your death.

Most people understand the need for life insurance; they just don’t know how much they need. The point of life insurance is to take care of your family after your death in the same manner you would if you were still alive. Most insurance experts recommend taking out a policy that is between 5 and 15 times greater than your annual gross income, or alternatively, an amount up to your annual salary times the number of years before your youngest child is out of college.

If that amount seems too high, consider how much your family would need to pay all of their expenses indefinitely if your salary were to suddenly stop.

Economic replacement is another way to calculate the amount of insurance you need. Instead of trying to “guesstimate” how much coverage you will need now and in the future (requiring you to change policies every few years), the “full economic replacement” concept encourages applicants to purchase the maximum coverage allowed by an insurance carrier. Although pricier than a need-based policy, it offers the most comprehensive protection for your family, no matter how your lifestyle changes in the future.

Term or Whole Life?
There are two basic types of life insurance available: term and whole life or permanent coverage. Term life insurance is the cheapest form of life insurance. But, it does have a downside. It is only in force for a specific time and once it expires, you lose the death benefit unless to take out a new policy, which tends to cost more as you age. Still, it remains a valuable asset for those who can’t afford a more expensive whole life policy.

In contrast, permanent life insurance is just that - permanent, providing coverage for your entire life as long as your premiums are kept up to date.

Another benefit to this type of policy is the ability to accumulate tax-deferred savings that can be borrowed in the future for such things as college costs, to buy a home, or to provide retirement income. Unlike term policies, which cost more with each policy turnover, permanent whole life policies allow the buyer to “lock in” the premium amount for the life of the policy.

Which type of life insurance policy you ultimately decide to purchase depends a great deal on your age, income, lifestyle and family situation. The key to finding the right policy is to take a good look at both your current and future needs in order to best protect your family in the event of your untimely death.
By: Matthew Hick

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Life insurance is a means for providing financial protection for your family in the event of your death. A life insurance contract is relatively straightforward; you agree to pay a premium at regular intervals, and the insurance company agrees to pay a certain sum of money to your beneficiary upon your death.

There are three parties to a life insurance contract. First, there is the insured. This is the person whose life is being insured under the policy. Next, there is the insurer. The insurer is the insurance company who underwrites the risk. And third, there is the owner. The owner and insured are not necessarily one and the same. Someone can buy a life insurance policy to insure the life of someone else, such as their spouse.

The person who buys the policy is the owner, and the person whose life the policy is based on is the insured. When the owner and the insured are different people, premium payments are the responsibility of the owner.

Every life insurance contract also has a beneficiary. This is the person who receives the proceeds from the policy in the event of the death of the insured, and is assigned by the owner. There are two types. An irrevocable beneficiary can not be changed unless the beneficiary gives his or her permission; if it is revocable, the owner can change it at any time.

The policy is subject to certain terms and conditions. There are usually certain exclusions that apply, depending on the person being insured. But with almost every policy, death as the result of suicide during the first two years of the policy term is excluded from coverage.

Also, during the first two years of the policy, often referred to as the contestable period, the insurance company retains the right to not immediately pay out, even if the death is caused by a condition that is covered in the policy. The company can order an investigation into the death of the insured, to make sure that the death was not deliberate or the result of homicide.

The amount paid to the beneficiary is called the face amount. The maturity date is reached upon either the date when the insured deceases or reaches a certain age. Life insurance is most often used to provide income protection to the spouse of the deceased.

Regardless of the reason for buying the insurance, the owner (if not the same person as the insured), must have an insurable interest. In other words, the owner of the contract must have a reason for wanting to insure the life of that person, otherwise the contract is void.

When the person covered by the policy dies, the insurance company requires proof of death before paying the claim. A notarized death certificate is the most commonly accepted form of proof. The benefit is paid out either as a lump sum or as an annuity that is paid out over time.

Any annuity can be a good way to receive the benefits. It is possible for the beneficiary to set up a lifetime annuity, which would guarantee that person a certain amount of monthly income for the rest of his or her life.

There are two basic types of life insurance, temporary and permanent. Temporary insurance is known as term life. An example of a term policy would be a 20-year term life, which means that the policy will pay a death benefit if the person dies within the next twenty years.

Permanent insurance includes whole life and universal life. Whole life provides for a payout no matter when the person dies, but premiums have to continue to be paid, usually right up until the insured reaches the age of 100. Universal policies are somewhat similar, but they allow for greater premium flexibility. Universal insurance is somewhat complicated; you should talk to an agent before buying it.

I hope this information has helped you become acquainted with life insurance. You should sit down with your spouse and talk about buying a policy. Then, call an agent who works for an insurance company with a strong financial rating and make an appointment to discuss your objectives. Use the information that was presented here to help you make intelligent choices so your family will be protected in the event that something happens to you.
By: Jim Pretin

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