This article is resolved to those of you whom own whole life insurance insurance purchased many years ago or perhaps are looking for lower cost permanent protection today.
First a little bit of background up until the actual late 1970s life insurance coverage insurance was the only sort of permanent life insurance readily available. It was designed to endow at the age of 100 which means the money value and the dying benefit would be equivalent at that age. The sole alternative was insurance coverage which is designed to last a specific period of time and customarily had much lower costs.
Whole life policies allow the operator to borrow part or all of the cash inside a policy at low interest rates. However most people who own whole life policies dont understand that borrowing money from a policy cuts down on death benefit with that amount. In addition a lot of whole life policies presently in force do NOT pay this death benefit as well as the cash value at death. The cash price stays with the insurance corporation and reduces their own risk as the protected gets older.
In the late 1970s inflation along with other factors caused rates to skyrocket. Term life insurance no medical exam Visualize being able to borrow from you insurance company at 2- 3 in addition to transfer that money to a relatively risk free money market account yielding 15-17 Suddenly the insurance companies had a issue. Their answer seemed to be universal life insurance. This new type of insurance is much more flexible and pays higher attention on accumulated resources. Today universal daily life insurance accounts for the majority of long term life insurance policies.
Now the news you can use
With regards to five years ago the insurance industry developed a definitely consumer friendly style of permanent insurance and within months it had become the choice of most people and even for good reason. This policy warranties both premium cost and death benefit for the insureds lifetime.
This specific accomplishes some really positive things. Initial it lowers a policy premium because only pure protection has been purchased. There typically is no cash accumulation. Secondly it makes it possible for the consumer to compare rates between policies without resorting to an advanced degree with mathematics.
Now here are how this policy can be used as your benefit even when you already own more than one whole life policies.
When you have a policy with money value you can move those funds from one coverage to another without paying just about any current tax. This is whats called an IRS sec. 1035 exchange and has the effects of reducing the stage premiums on the new policy for the life in the insured.
As with any improvements to your life insurance specific circumstances should determine a course of action best suited on your needs. This information is designed to inform you of one likely benefit of guaranteed high quality universal life insurance.
Take into account contacting an independent broker one that represents a lot of top rated life insurance companies and insist on visiting a comparison of service providers and premiums if thats appropriate in your circumstances.
Leonard Robbins is a California life insurance agent and has composed additional articles that will help you choose the best insurance policy for your current and foreseeable future needs.
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