A life insurance policy can help ensure your loved ones are taken care of in the event of your absence.
It can also help cover expenses such as a funeral or memorial and/or other debts. Trust Alchemy life insurance maryland to find you an affordable policy from one of our many trusted brands.
There are many reasons why you should think about buying at least a minimum amount of life insurance, whether it’s whole life, term life, or senior life. Life policies can help cover lost wages for a worker who has dependents. At other times, a policy on a person’s life can pay directly for final expenses, which can be high.
The most common reason people purchase a life insurance policy is to replace their income or care for families with children who may be put in a financial bind upon the death of one of the parents. Because the cost of such coverage is not high, it’s a good idea for adults to buy life insurance policies. And, the younger you are when you purchase a policy, the lower the cost for coverage should be.
There are multiple types of policies for life insurance coverage depending on a person’s specific situation. Most include whole life insurance, term life insurance, and senior life insurance.
Whole life coverage is a smart way for the insured to accumulate cash value for a policy as they pay on it throughout their productive lives. As long as you make regular payments on the policy, your coverage is intact and you get lifetime protection. The accumulation of cash value occurs on a tax-deferred basis, so there are no higher tax expenses for the duration of the policy.
Term life policies are different. They are for a set period of time at fixed rates. It’s a low-cost way to get a designated, dollar-amount death benefit for a specific period of time, usually 10 or more years.
Senior policies are created with older people in mind. They cover funeral costs, burial costs, and other debts that the estate might owe when a person dies.
Alchemy Insurance professionals can explain how you can get a whole life, term life insurance or a senior life policy even if you have certain medical problems. It’s true that the younger and healthier you are, the lower your premium payments will be. However, even people with medical problems can obtain a life policy if they are willing to pay higher rates for coverage that’s similar to what a healthy person would pay.
Insurance underwriters usually set premiums based on expected life spans. While someone with a medical problem like high blood pressure might not live as long as someone without high blood pressure, it’s not impossible to obtain a life policy.
People who have searched for life insurance quotes know there’s a lot that goes into the calculation. A professional can explain the specific factors that might affect your particular rates, but in general, quotes are based on dozens of factors. Some factors include age, weight, general health, the amount of insurance the individual wants, and medical history.
A professional insurance agent will gather all of the information from an applicant and then send it to the Underwriting Department. The underwriters use actuarial formulas and various calculations to determine the applicant’s life expectancy based on all of the information provided.
There are multiple advantages for a person who owns a whole life, term life, or senior life insurance policy. An Alchemy Insurance professional can explain particular benefits for any applicant, but usually, the benefits of having insurance coverage on your life can involve some (or all) of the following items:
-The potential to increase cash value in a whole life policy, on a tax-deferred basis, is a big benefit. It lets you save money without concern about current taxes and lets you enjoy insurance protection while also increasing savings.
-Most policy holders think the best part of life insurance coverage is peace of mind, knowing their family members are taken care of in the event of the death of the person who supports the family.
-Financial protection. The death benefit is usually the sole thing that a beneficiary has after the insured dies. The main advantage of insurance is the possibility of receiving a substantial death benefit for a reasonable monthly premium.
-Policy options are another one of the reasons for deciding to buy life coverage. People can choose the exact length of time (with term policies), the company, the kind of coverage, the amount, any number of beneficiaries, and more.
It's vital that a person who has a life insurance policy check the details of it with a life insurance agent annually, at a minimum. In fact, that suggestion applies to any type of insurance policies but life policies in particular due to the death benefit, which is sometimes a very large dollar amount.
Anyone who faces a major life change should think about adjusting a life policy at the time of the event in question. All you need to do is contact the insurance company or the agent you work with and ask about what needs to be done given the circumstances. Different events have a vast range of effect on the policy’s provisions. However, there are some typical life events that routinely require a change in life policies. Those include events like divorce, separation, a first or subsequent marriage, or when a grandchild or child is born.
Other situations that might call for a closer look at the provisions of a life insurance policy following life events or changes such as:
-Any major changes in the health or daily routine of the insured or the life partner or spouse of the insured.
-Taking on the primary responsibility for a disabled or elderly spouse or family member.
-Purchasing a first or subsequent home.
-A relative who becomes disabled and requires long-term care.
-Standard home refinancing situations.
-Getting a large inheritance, lottery winning or game-show prize.
There are usually 4 common tax benefits for the holders of life policies, though not everyone is able to get of all the benefits in every case. Maybe the most common advantage of a whole life policy is the potential for the policy holder to get tax-deferred growth. That means that the monetary value of the whole life policy goes up with each passing year, the increased amount is not taxed until the money is finally withdrawn, which might not happen for many years.
This is just one of the dozens of ways in which a life policy can be an extremely safe, tax-advantageous way for anyone to create a long-term savings resource for post-retirement needs.
The second benefit is the payment of dividends. If the money from the dividend payments does not go over the net amount of the paid-in premiums, then the amounts are not taxable. Most of the time, those dividends are not taxable to the person who receives them.
Third, policy holders can get tax-free loans against the total amount of the policy. If those loans are paid back according to the agreed-upon schedule, the policy and the coverage remain in place. Additionally, the loan is not considered a “taxable event” to the policy holder. Finally, most of the time a policy holder can take out the cash value as a tax-free withdrawal whenever desired. The policy needs to have enough cash value and the amount taken out cannot be more than the insured's basis in the policy.
If you live in a community property state within the U.S., the beneficiary on a life policy is your spouse, unless that person gives written permission for someone else to be the beneficiary. In the huge majority of cases, people name their spouse, their child, another family member, a friend or business partner as a policy beneficiary.
Remember that it is 100 percent legal to name an organization as a beneficiary. People often name a non-profit or charitable organization as the primary beneficiary on a policy.
It’s also common practice for policy holders to name multiple beneficiaries. Parents often name several children, other family members, and charitable entities as beneficiaries on very large life policies. While it’s possible to name multiple beneficiaries on any life policy, there is a requirement that policy holders name at least one beneficiary on any insurance policy
Term life insurance policies have their own set of advantages, one of which is a minimal cost for a given amount of insurance. Because term policies don't accumulate cash value during the policy’s duration, and pay out nothing but a death benefit, the premiums are much lower than for other kinds of life policies, especially whole life.
An additional benefit of term insurance is the wide range of terms available. Buyers can get whatever number of years of coverage they desire, based on the amount they wish to pay, how big of a death benefit they want, and other factors. For mature people who have never had life policies before, term insurance is often the ideal way to get adequate death benefits at a very reasonable, and sometimes quite low, price.
It’s usually easy to renew a term policy. For younger people, this option is simply a matter of filling out a short renewal form and deciding whether to increase the amount of coverage or change anything else in the policy.