LIFE INSURANCE SERVICES

Life Insurance policy is a contract that is made between an individual and an insurance provider, in which the policyholder pays a monthly fee which is called the premium and the company provides a lump sum to the person or his family incase policyholder dies prematurely or if the policy matures.

Your Financial Advisor will ask you a few questions about your lifestyle & health. A standardized medical exam is also part of this process. Once the test is complete, your financial advisor will confirm your rate and lock in your savings. If life is what happens when you’re busy making other plans, then life insurance is there for when those things don’t go as planned. This commonly misunderstood type of insurance provides payment to your beneficiaries upon your untimely death.

There are different types of life insurance policies in the market suitable for the individual demands and needs of the policy buyer.

Since no one’s circumstances are the same, their insurance protection shouldn’t be either. Generally speaking, insurance is a good idea if someone depends on you financially.

• Financial protection in the event of death
• Buying a home
• Education for children
• Marriage of children
• Pension or regular income after retirement

You can achieve your financial goals with  the help of life insurance plans. Life insurance plans are different types. You can plan for your set of life goals and include your insurance to help achieve them.

Term life insurance is the purest form of life insurance. It provides you a life cover with no saving or profit elements. Term life insurance plan is the most economical type of life insurance as its premiums are quite cheap as compared to other life insurance plans. It is the purest form of life insurance. Your premium payments are guaranteed for the term you select: 5, 10, 15 20, 25, 30, 35, 40, up to 100 years.

Term insurance is a great choice for:

• Funding buy-sell agreements
• Pay off a mortgage
• Provide for dependents’ care
• Provide for your children’s education
• Protect small business owners with key employees

Most of the term policies have a renewable and convertibility feature that allow you to convert all or part of the coverage to permanent insurance, without further evidence of insurability.

There are three types of term insurance products:

1. Yearly Renewable Term Insurance
2. Level Term Insurance
3. Mortgage Insurance or Decreasing Term Insurance

Yearly Renewable Term Insurance

In this form, the premium is paid for one year of coverage. As the insured ages. premiums increase with each renewal period, but becomes very expensive at a later age.

Level Term Insurance

This is the most popular form of term insurance as the premium paid each year is guaranteed and remains the same for the duration of the contract. The common terms are 10, 15, 20, 25, 30 and 100 years. Most level term plans include a renewal option and allow the insured to renew for a maximum period, if the policy needs to be extended. The renewal may or may not be guaranteed and the insured should review their contract to see if evidence of insurability is required to renew the policy.

Mortgage Insurance

Mortgage insurance is an insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan. Mortgage insurance can be either public or private, depending upon the insurer.

The underlying concept of mortgage insurance is that if you die or are incapacitated, mortgage insurance will pay off the rest of your mortgage.

There are two types of the permanent life insurance:

1. Whole Life
   • Participating whole life
   • Non-participating whole life
2. Universal Life

1) Whole Life

This is permanent life insurance, which provides guaranteed lifetime protection. It also builds a tax-advantaged cash surrender value, as well as a death benefit. The premiums tend to be higher than term insurance at a younger age but will be lower at an older age. At the time of purchasing a whole life insurance plan, the sum assured is determined. A beneficiary is added during the purchase. In case of any unfortunate event, they are paid Death Claim and Bonus (Growth), if applicable.

A) Participating Whole Life Insurance

This is permanent life insurance protection with a tax advantage savings component and has the potential to pay out policyholder dividends. The premiums are credited into the participating account. You can choose how you want your dividends to be applied from the available options. The most popular options are to use dividends either to buy additional permanent life insurance each year or to buy a combination of term and permanent life insurance.

The insurer manages the investment portion of the participating policy. The assets are invested and managed in a diversified portfolio – primarily in bonds, mortgages, equities and real estate.

Participating insurance is a great choice for

• Young children, who want to get a benefit of their age for lower affordable rates
• Families who are averse to unsteady swings in the investment market
• Small business with short- and long-term protection needs
• Individuals looking for tax-advantaged savings

B) Non-Participating Whole Life Insurance

Non-participating whole life plans are designed to provide guaranteed lifetime financial security, which matches the needs of clients seeking financial stability and security, in the event of premature death.

Insurance premiums will never increase while clients keep the same coverage. Non-participating whole life policies do not declare dividends and future cash values are not projected. They can have graduated premiums over the first several years of the policy, which then level out for the remainder of the premium paying period. The shorter the payment period, the higher the premium cost. The guaranteed cash surrender value of whole life policies varies by the amount of coverage, time paid and age.

It is a great choice for seniors looking to protect the estate for their heirs.

1) Universal Life

Universal life is a highly flexible permanent form of life insurance offering the low-cost protection of term life, as well as a savings element. A portion of the premium paid for universal life is used as a risk (insurance) cover and a portion is invested in various funds.

Depending on the risk tolerance (risk appetite) of the policyholder, they can invest in various funds offered by the insurance provider. The insurance providers then invest the money collected in various money market instruments such as shares and equities.

DIFFERENCE BETWEEN TERM AND WHOLE LIFE INSURANCE

After knowing what is life insurance plans and how it works, you should know about the 3 main benefits of taking a life insurance policy. The 3 main benefits of a life insurance policy are:

1) Security

Life is unpredictable and can be full of uncertainties. It is difficult to reduce the likelihood of an unfortunate event like death. In such situations, the family has to face financial troubles due to a continuous income deficiency.

Investing in a life insurance policy from the very beginning in life acts as a protective shield in the event of such a possible event. The Life Insurance Provider is obliged to pay the Sum Assured in advance to the beneficiary. As a result, his family is protected even if the policyholder is not there.

2) Long Term Saving

If someone wants to make a long term investment, then it is important to consider life insurance. Such insurance plans help you in performing systemic savings and creating a corpus that can be used for many reasons such as building a new home, good education for your children and the expenses of the child’s wedding

3) Investment Options

Life insurance companies offer universal and participating policies which are primarily investment instruments.

These life insurance products provide significant benefits during maturity, hence making these plans a reliable investment tool.

Experts suggest getting life insurance coverage that’s 10-15 times your income, but your financial circumstances will determine how much life insurance you really need. Please CONTACT US for getting a quote.

When you have understood what life insurance is and have identified the need of life insurance, then you should know about these easy steps to choose the best life insurance policy. Choose the best life insurance plan available with these steps:

1) Call to Financial Advisor

Though it is not important at the initial stage, it is very important to include a reliable and knowledgeable Financial Advisor while taking life insurance. Many people are not able to make their own decisions and require the expertise of a Financial Advisor.

2) Financial Need Analysis and Life Insurance Coverage

Financial Advisor can help you calculate the Life Coverage Amount. They calculate the preferred life cover by evaluating your financial need analysis and the source of your income, number of dependents, any liabilities and your expenses.

Financial Advisor also helps in choosing the best insurance among the different types of life insurance plans available in the market. This ensures that you get the best life insurance.

3) Compare Life Insurance Plans

Many insurance companies present in the market offer different types of life insurance policies. You need to make sure that you carefully choose the life insurance that is most important and suitable for you from the available options. To get the best life insurance policy available according to the financial requirements, you should compare different life insurance plans. For getting the best quotes, please CONTACT US.

A Financial Advisor is responsible for asking you about the risk factors that will determine your category involved in taking a particular policy. These questions involve your family’s medical history and your health, in addition to your lifestyle habits or that might affect your health in the future. For example, smoking and some dangerous hobby changes your risk category.

Answer the question with all honesty; if you are not true, this could negatively affect your family’s right to collect on your benefits if the insurance company finds that you lied on your application. Once you’ve been accepted and acknowledged the life insurance policy tell your family members about the insurance policy. It is a way of protecting your family’s financial structure. It provides a hefty payment in the event of your death or on the diagnosis of a terminal illness where death is likely to occur within 12 months.