Life Insurance Blog

in affordable life insurance

Though you can use your life insurance to pay off your debts, it is better to avoid using up your affordable life insurance in making the debt payments. You should first try other debt pay off or reduction methods to become free of your debts like the simple debt management plan, debt settlement or debt consolidation. However, the life insurance policy is generally used to pay off the debts of a person after his death. There are mainly three ways in which you can use your life insurance to pay off the debts.

Ways to pay off debt through life insurance

A life insurance policy can help you to pay off the unpaid debts through three main ways and these are:

1. Withdrawing money from your life insurance policy – You can use the cash from your life insurance to pay off your debts. However, you will have to use your cash value insurance policy to pay off your debts rather than using the term life insurance. In cash value insurance, the cash value grows year after year with the tax-deferred interest. Once you have been able to accumulate good cash value, you can use the amount to pay off your debts. However, while doing so, you will have to go on making the monthly premiums on the insurance in order to maintain your policy.

2. Borrowing from your life insurance account – other than withdrawing money from your life insurance, you can borrow from the policy to pay off your debts. Here borrowing is same as any other kind of borrowings. That is you can take out a loan against the built up cash value of your insurance policy. Thus, you will have to pay back the amount that you are going to borrow against your policy, otherwise the value of your policy can get reduced. However, in case the policyholder dies before paying back the amount he had borrowed, the balance is then deducted from the policy and then the remaining balance is handed over to the beneficiary(s) of the policy.

3. You can also consider life settlement option – Another way in which you can use your life insurance to pay off your debts is through life settlement. This can be your option if you either transfer or sell off the policy to a third party in lieu of a certain amount of money. If you do so, you as a policyholder may be able to get an amount more than that of the cash surrender value of your insurance policy. But, the fact is that this amount which you will receive will be less than the amount which you would have received as death benefit.

Another thing that you should know about life settlement is that the person who buys the policy becomes the policyholder. As a result, he will have to be responsible for making the premium payments. Other than this, you won’t be able to opt for life settlement unless you are a senior citizen (more than 65 years of age). The life settlement proceeds are also taxable.

Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like ‘Credit Score The Quintessential Therapy for a Happy Pocket’, Take Creditors and Collection Agencies to Small Claims Court’ and, My Story- From Depression To a Smile’.


November 22nd, 2010
in Life Insurance

Ponte Vedra Beach, Florida — As the name suggests, the coverage expenses in a term life insurance are meant for a particular period of time. After that duration, the policy expires. Then, it’s up to the policy holder to either renew the policy or let the coverage end. The beneficiary would receive the benefits if the policy holder dies within a set period or term. However, if the policy ends before his death, then the beneficiary receives nothing. As opposed to permanent life insurance, it does not provide saving components that could be used for wealth accumulation.


Since term insurance can be purchased in large amounts for a relatively small initial premium, it is well suited for short-range goals.  “The rates that are being offered by the many life insurance companies currently in the market place are highly competitive and affordable.  It pays for the consumer to make the carriers compete for their business,” according to Vince Bagni, managing partner of Paramount Life Insurance.  These include life insurance coverage to pay off a loan, or providing extra life insurance protection during the child-raising years, etc.

The duration of a term life insurance could range from the simplest one year to 10, 15, 20, and even 30 years. In a one year term, also referred to as the annual renewable term, the benefit is provided by the company only if the policy holder dies within that span. The amount of premium is according to the expected probability of the owner dying in the same year, whereas the level term life insurance has a fixed rate premium throughout the span of the contract. This is also a renewable term insurance, and the premium is based on the total cost of each year’s annual renewable term rates. The insurer makes the adjustment of rate along with the time value of money.



Initial affordability makes term life insurance convenient and an attractive option for the applicant.

Term life insurance policies have adjustable premiums. This means that the company may raise or lower premiums at some point specified in the policy. However, this is based on projected changes. These could include investment earnings, mortality experience, persistency and expenses. However, premiums may never be raised above the maximum premiums stated in the policy.

The level term policies allow the policyholder to continue coverage after the original coverage period of the policy. Every time the policy is renewed, the premium increases to the amount for the attained age of the insured at that time. This right is usually offered for a specific period, which varies depending on the type of policy.  Bagni states, “if you are coming to the renewal on your level term policy, you are not going to be happy with the renewal amount.  It makes a lot of sense to shop for a new level term.”

Term policies are convertible to age 75. This allows the policyholder to exchange a term affordable life insurance policy with a permanent insurance policy at any time while the policy is still in place

in Life Insurance

Did you know that you can convert your term life insurance to a permanent plan with no proof of insurability?  Many times clients will not be aware of this fact and are excited to hear about this valuable option.    Depending on the carrier, there is a period of time that all or part of the policy can be converted to a permanent plan offered by that carrier.   Just about every carrier will offer a whole life and or a universal life as a conversion option.   For example, if you have a 500,000 20 year term and decide to convert 100,000 to guaranteed universal life, you will then have 100k of guaranted universal life and 400k of 20 year term.  It is important to note that this conversion can be done with no proof of insurability.  Even if you are uninsurable, you can still do the conversion.

Some companies will actually allow you to convert another companies term to their permanent plan.  Usually to be able to exercise that option the company will require that the policy was issued within a certain number of years, with at least a standard non-smoker rate.    This can be a great option if the term carrier doesn’t have good permanent policies to convert to.  For example, we had a client who had term but wanted to convert part of his plan to dividend paying whole life.   The term carrier he was with didn’t offer a whole life product.  We were able to place the conversion to whole life with a highly respected mutual life insurance company.

As your needs change, it is important to understand this option.

in Life Insurance

You can apply for term life insurance with no obligation.  You go through the underwriting process with a carrier and see what the offer is after underwriting.  If it’s good then you can accept the offer and if it is not what you are looking for, then we can take it out and see if we can get a better offer with another carrier.  Most carriers underwrite in a similar fashion, but there can be a significant  difference in some instances.  

When we talk to clients we want them to understand the preliminary nature of a quote.   A quote is simply a guestimate, based upon whatever information the client has provided to the quoting agent.   If the client doesn’t reveal everything to the agent then the quote will probably be inaccurate.  If the client has medical problems that they are unaware of, then the quote will be off.  This is why we reinforce that applying for a policy in no way obligates you.  It simply takes the hypothetical quote and turns it into a real offer or a decline.  The one thing to keep in mind is that when you apply it will go into the medical information bureau (mib).   This will be something that can be seen in the future by other companies, etc.   The bottom line is that you have little to lose by applying for a policy and sometimes we will even apply for two carriers at the same time.     The chances that you will be healthier in the future than you are today are slim and you will certainly not be younger ever.


April 21st, 2010
in affordable life insurance

Cheap life insurance is what I want.  If that is what you want, this is a great time to get term life insurance.   With more companies than ever competing for your business and life expectancy increasing, the rates are at all time lows.  Obviously, some companies have had to adjust rates up  to deal with losses with the economic turbulence that we have experienced over the last couple of years.

Everybody has their idea of what cheap is, but term life allows you to buy a lot of death benefit with little money.   The variable here can be health.   If you are relatively healthy, the premiums will be more affordable than if you are unhealthy.

We will find out the amount that the client would like to shop and then we run an analysis with the major carriers.  In a matter of seconds the carriers rates will appear for comparison.    For a healthy male, non smoker, age 35 his two best rates for 1 million of 20 year term would be, Banner Life at $39.81 per month and ING at $40.95 per month.    That is pretty darn inexpensive for 1 million of coverage.   Another consideration is to look at the return of premium option.  While it is appealing to get the cheapest term, it may be a good option to get all your premiums back if you live through the term.   For that same 35 year old, he would be looking at a best rate of 117.03 with Assurity with return of premium.  Chances are he will live through the 20 year term and then have no coverage.  He might as well get all the premiums paid in to the policy, back.

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