Whole life is a great product to buy and the younger you are when you buy it, the better off you are.  When you buy whole life insurance you lock into the mortality of the age of purchase.   In other words, the younger you are, the lower the mortality of the policy and the lower the premium is you lock into.  The premium of whole life never increases, so it will remain level until age 100.  

On top of locking into the mortality of whole life, it is also beneficial to get the policy going early from a cash value perspective.   The earlier you start the more time you have to accumulate a very significant amount of cash value inside of the policy.   The cash value can be used for policy loans to buy things during the course of your life, make investments, etc.    The cash value also can grow into a substantial amount of money and can be used as a source of retirement income.    The money grows inside of the policy on a tax-deferred basis and can be drawn out in retirement on a tax free basis.   The way that you would do this is to take withdrawals from the policy until you reached your cost basis.   The withdrawals wouldn’t be considered taxable as it is return of the money you have contributed.   Once you reach the cost basis, then you start taking money out with preferred policy loans.   Some interest will be charged, but you will avoid paying taxes on the loans.

It is great to have a permanent whole life policy when you reach retirement.  Many folks will be ending their terms and have no insurance.   It will allow you to have insurance into your retirement years and have a very reasonable premium.

Is it a good idea to by  whole life insurance for my child?  The answer would be a resounding yes!!!!!!!!!!!!

It will be an incredible asset for your child to have as they enter childhood.   It will also guarantee them insurability, even they become uninsurable during their adult years.

Whatever age the policy is purchased, it locks in that mortality and it never changes.   In other words, the sooner you buy it the more beneficial it is to the policy and the premium will never go up.   The lower the mortality, the lower the cost of insurance.  Also, the earlier it is purchased, the more time the policy has to accumulate cash value.   This cash accumulation can be used to borrow against for the life of the policy.  These loans can be used to buy cars, help fund college, down payment on a house, etc.   On top of that it is a great start for the childs retirement and a nest egg that they will be able to draw upon at some point.   Locking in the insurability is important, so they can guarantee  they have life insurance when they have their own kids.   It may not be enough to cover their whole need as a parent, but it will be a great start that nobody can ever take away from them.

I wish that someone had bought one of these policies for me when I was a child as they are an incredible gift.   It has protection, accumulation, and tax free growth going for it.

Jacksonville, Florida — Most consumers understand that term life insurance is a very basic form of insurance that offers coverage over a certain period of time. These specific periods can be in 10, 15, 20, or 30 year increments, but this can really vary on carrier or product.  You can make premium payments monthly, quarterly or yearly.

Once your policy term period ends, no premium payments are made because you are now out of coverage and no death benefit (American General Life Insurance) will be paid in the event of someone passing. If you wish to maintain your policy coverage after the term period ends than you must either convert that policy into a permanent policy or purchase another term life insurance policy for another a specified period of time. Term life insurance is often viewed as one of the cheapest ways to purchase coverage.

Many consumers are trained to purchase term insurance policies because they are less expensive and invest the rest in the stock market. If you are looking for a safe way to earn interest on your money you may want to look at a whole life policy rather than a term.  Either way you will always get some payout on death benefit, while under a term life insurance policy, the possibility always exists that the policyholder will outlive their policy, and lose all of the money the paid in. A great deal of statistics show that payments that are made under a term life insurance policy are lost, which makes it much easier for life insurance carriers to offer this coverage at a cheaper price.

Article Source:  Life Insurance Article

Are your family members depending on your income? You can purchase a whole life insurance policy and secure the future of your family members. It is basically a contract between the policyholder and the insurance company. The policyholder purchases the policy and pays the premiums; in turn, the insurance company promises to pay the beneficiary a certain amount of money in the event of the policyholder’s death. 

How it differs from term life insurance 

A whole life insurance policy covers the policyholder for his/her entire life. There is no expiry date and the death benefits are received by the beneficiary only in the event of death of the policyholder. In case of term life insurance, the beneficiary is eligible to get the death benefits for a specific period. You may or may not renew the term life insurance policy after the term expires. 

When to purchase a whole life insurance 

Whole life insurance is a good choice when you want to get the coverage for your entire life. In addition to this, you may also opt for this insurance if you want to build up a cash value of your policy. 

Benefits offered by whole life insurance 

A whole life insurance policy offers a number of benefits that are listed below.

Interest accumulated on this life insurance policy is tax deferred until you withdraw from it.
You can take out a loan from a whole life insurance policy.
The premiums remain fixed throughout the policy term.
You can use the cash value of your policy to pay the premiums.
The beneficiary receives death benefits regardless of when the insured dies.
 
However, you need to pay a higher premium in order to insure your life through a whole life insurance policy. Therefore, before purchasing this insurance, it is advisable that you assess your financial condition and check whether or not you’ll be able to afford the premiums. If required, take help of an insurance agent to decide what type of life insurance is best suitable for you.

Ponte Vedra Beach, Florida — Many Florida life insurance companies really look at an applicant’s age upon evaluating an individual’s term life insurance premium.  Checking into the mortality rate of a person is the focus when underwriting a new life insurance policy.  Furthermore, mortality can be affected by many things other than just age.  Math experts called actuaries look at many facets of an individuals health and behavior and apply statistical concepts to attempt to predict the future of an applicants potential.  Aside from age, your individual characteristics will play an important role in the cost of you whole life insurance or term life insurance policy.  Your quote for term life insurance may be higher than for another person of the same age due to the following factors:  Read more today about the following factors that contribute to your life insurance premium rate. 

Jacksonville, Florida — Please make sure you stop and check out what to do if you have lost a whole or term life insurance policy.  If you have misplaced or lost records it can create havoc in the event of a persons death. Many family members may not be aware that any wills or term life or whole life insurance policies even exist after that passing of a loved one, leaving them to sort out the assets and liabilities left behind.  Read more today.

“Unfortunately, there are no public records relating to life insurance transactions.  If a database existed it might be easier to determine if a deceased family member has obtained whole  life insurance, but no such database exists”, said Vince Bagni of Paramount Life Insurance.

When faced with such a dilemma, some basic detective work may have to be employed in order to find missing policy information.  One of the first places to search is the deceased person’s bank.  Find out every bank that the person may have conducted business with, and you will first want to review all of their past bank account records.  Cancelled checks or automatic withdrawals for premium payments to an insurance company may have policy information on them.  Next, check out any safe deposit boxes as many people will keep life insurance policies in them. 

Often times when we talk to clients they will be able to get all of the benefits that they are seeking, but they simply need to move around the money on their model.   For example, they want to optimize their life insurance protection, but don’t have a lot of additional money to spend.  We can often find lost dollars that can be moved towards the protection with no additional out of pocket costs.

One of our clients recently was in need of additional life insurance protection, but didn’t want to change their monthly outlay.  On top of that, they were very concerned about asset protection.   They had been sued in the past and wanted to make sure that they were as protected as they possibly could be.   We recommended that they visit with a good estate planning/asset protection attorney, but also to move part of a non exempt asset into life insurance.  They had over 200,000 in a money market and we suggested that they simply move a small amount of that money each month into a whole life insurance policy.  Not only was it going to purchase them permanent death benefit, but the policy would be overfunded.  Overfunding the policy would create immediate cash value and money that was into an exempt asset from creditors.     Obviously, if they were to be sued that 200k in the money market would be susceptible.  I asked them why they had that much in a money market and they said they wanted to have good liquidity.  Liquidity is a great thing and we explained that they would have that inside the life insurance cash value too.

Universal life was created for the flexibility that it provides customers.  It is a form of permanent insurance along with whole life, but it provides flexible aspects.  Whole life insurance is pretty straight forward and requires that the same premium always be paid to keep the policy in force.   If the premium is not paid the policy will lapse, unless the dividend is large enough at that point to cover the premium.  This is know as premium offset on whole life.  Universal life allows for a flexible premium to be paid.  There is a range that can be paid to keep the policy in force.

For a client who wants to emphasize and grow the cash value, they should fund the policy near the MEC level.  The MEC level is the maximum you can put in a life insurance policy and  still qualify for favorable tax treatment.    Others may only care about the permanent death benefit.  For clients who just want the death benefit, we suggest they fund it at the very minimal level and this is called guaranteed universal life.   Of course, a lot of clients fund the policy in between the bottom and the top level.  If there is enough money in the cash value, premium payments can be skipped.   This option would obviously not be there on the guaranteed UL as there is little if no cash value.  The amount you pay can vary and you can start by funding it at the highest level and you can always fund it less later.

On top of that a level death benefit or increasing death benefit can be selected.    You can start off with increasing and level it out later if you want.   Universal life is truly a flexible product that can meet many different objectives.

Should you wait to buy your life insurance until later?  That is a good question and gets to the fundamental purpose of the death benefit.   Of course, if you know that you will be healthy and/or still alive and able to qualify down the road than you certainly can wait.   The problem with that approach is that you never know what the future holds.    It can possible save you a few dollars in premiums for the few months that you wait, but it is not worth your families future.   The insured rights the small premium check and the client’s family would stand to get a big check.

The natural inclination is to put insurance off and sometimes buy it in a more reactive way.  For example, I hear from clients all the time that they decided to finally move on buying it because a friend died or got sick.  Another benefit to buying it is the benefit of locking in to your current age.    This is important for term insurance and tremendously important with permanent insurance.  With whole life insurance you buy in at whatever age you are and the premium remains level for the life of the contract.  Besides that, the sooner the policy gets started the more opportunity for the cash value to build up.

To receive a free quote go to www.paramountlifeinsurance.com.  Take advantage of your health if you have it.

Life insurance can be used for college funding and can be a great resource for families.    The way that this type of plan is set up typically is through whole life insurance or universal life insurance.   It is a great tool for this as it sets up very flexibly and provides a good outcome no matter what happens.  I will compare below to a 529 plan, which is a very popular education funding tool

Client 1-  Decides to use  a 529 savings plan to fund his childs education.   His child is 2 at the time and therefore is invested in a fairly aggresive mutual fund allocation.  The idea with 529’s is that as the child gets closer to going to school, the investments are migrated to more conservative investments.

Money from a 529 plan can be used for tuition, fees, books, supplies and equipment required for study at any accredited college, university or vocational school in the United States and at some foreign universities.  They place restrictions on how the funds can be used.  The money can be accessed income tax free for college if all the rules are followed.   If the money is not used for college, then the money is income taxable and subject to 10% early withdrawal fees.  The money can be accessed without penalties under certain hardships.

What if the 529 funds don’t perform well and are down 20% when the child goes to school?  What if the child gets a full scholarship to school?  What if the client passes away after funding the plan for only 2 years?

Client 2- Is using a whole life insurance policy for his 2 year old’s college funding.   He will overfund the policy to the MEC level to allow him to have a larger pool of money in play that can grow tax-deferred.   The policy will have guaranteed cash values and will never go down.  He has no market risk with the life insurance.   If the child gets a full scholarship, he has created a fund that will be great to provide extra spending money for his child, an emergency fund for him for living or for investing, and/or a huge pool of money that can help supplement his retirement.  All of these options are not dictated by the government and all the options are available to him with no penalty and no taxation.   If he were to pass away, he has a great leverage tool with the insurance, which will provide a windfall to his family.  The death benefit will be much bigger than the cash value and will be more than enough to cover college and income to the family.  With a 529, his family would receive only whats in the account at that time.

A 529 plan can be a good planning tool for a college education, but whole life insurance provides much more flexibility.    For a free analysis of your situation please email vince@paramountlifeinsurance.com.