Free Term Life Insurance Quote~Texas Term Life Company
July 26, 2008
Term Life vs. Whole Life Insurance:
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In addition to offering whole life insurance, there are a number of life insurance companies that will also offer term life insurance. This leads to the inevitable discussion of the differences between the two types of insurances.
Whole life insurance does not expire. Unlike whole insurance, however, term life insurance does have a shelf life.
After a certain period of time, it will expire unless there is no renew procedure in terms of the policy by the term life insurance policy holder.
Wikipedia’s has a great article on Term life insurance.
http://en.wikipedia.org/wiki/Term_Life_Insurance
This can be a good thing or a bad thing, and it is based on the individual’s personal feelings. Some people do not want to invest for long periods of time, but other people are far more comfortable doing this than only investing for a little bit of time.
Additionally, a whole life insurance policy covers an investment as well. The term life insurance policy is one which will only cover the death of the individual. Life coverage only for the term life insurance is one reason that many people consider the alternative of whole insurance. However, term life insurance can be bought for set periods of time. This time frame can vary from as little as one year or as many as thirty years. The time period for the term life insurance can be determined by the policy holders when they take out the policy and apply for the term life insurance policy.
To decide if an individual would prefer whole life insurance or term life insurance, they need to consider the specifics of each policy. Once the specifics are determined a person can look at what would be best for them, in their particular situation. When this is decided, an individual can make sure that the whole life insurance policy or their term life insurance policy will be implemented into their life in an effective and efficient manner.
What is whole life insurance? and how is it different from Term Life Insurance (Texas company)
When an individual is looking for an insurance policy to have on their life, many people will consider the option of whole insurance. There are a number of different reasons that this type of life insurance is preferred and is considered by many to be advantageous. However, before an individual decides to commit to purchasing whole life insurance as opposed to term life insurance, variable insurance or universal insurance, it is important that the individual investor understand what whole life insurance is as compared to the other types that are mentioned. This can be explained in fairly simple ways that will leave the individual capable of making a decision that will be based on their best interest.
Considering whole life insurance is partly a way for the individual to invest in a type of savings program. This type of insurance policy is set up for the life of the individual. It does not expire or need to be renewed, which is the case with most term life insurance that is invested in by individuals. There is a growth to be considered by investors that is established within the whole life insurance policy when it comes to the cash value of the policy. There are two types of different whole life insurance policies that can be purchased. These can be considered by individuals thinking about getting whole life insurance policies, but it is important to note that the determination will be based on personal preference and not on medical or other reasoning by the company. This means that what is best for one person will not necessarily be best for the next person.
The first policy of whole life insurance is non-participating, or non-par. Participating policies are the second type of policies. The difference between the two is that non-participating policies cannot be altered or changed after they are issued. When it comes to participating policies, the company will share the dividends of the company with the policyholder. Non-Participating whole life insurance groups will make up the difference if the individual policy holder is short, but they will retain the difference if the policyholder is high. When it comes to a particular policy form, it is up to the individual that is deciding on a whole insurance policy. Personal preference and the preference of the individuals close to the policyholder will need to decide what would be best in the long run.
What is mortgage protection Insurance?
Mortgage protection insurance is as simple as this – you pay a non-changing premium for the duration of your life insurance policy, and if you die, the insurance pays off the rest of your mortgage. The lender becomes the beneficiary if and only if the loan gets defaulted from the borrower who is paying for coverage. Now the question is, is mortgage protection insurance for you?
How mortgage protection insurance works
Mortgage protection insurance can be purchased right when you buy a home, or later on if you feel the necessity to buy it. Your age, smoking status and value of your death benefits (the amount left on your mortgage) are taken into account when being reviewed by an insurance agency.
If your outstanding mortgage is high, your premium will be high as well, and even as you pay your mortgage down, your premium will remain the same. This is because your life insurance company is keeping your decreasing death benefits in mind.
One way to help your family receive a little extra in the event of your death is to make extra payments on your mortgage. By doing so, the death benefits will be the amount your mortgage would have been, had you been making the standard-required payments. This helps your family in that after the mortgage is paid off, they may receive the remainder of your death benefits.
Keep in mind when considering mortgage protection insurance that when your death benefits pay out, they only cover the cost of your mortgage (or maybe a little more if you paid ahead). If you want to give your beneficiaries a little more flexibility with your death benefits, it would be wise to look at a term-life insurance policy.
A couple things to look for
Depending on your insurance company, a joint mortgage protection insurance may be available that covers both you and your spouse and pays out when either of you die.
If you refinance, see if reissuing your policy will get you a better premium.
If you default on your mortgage, check with your life insurance company and see if they will extend your coverage.
Mortgage Protection Insurance vs. Private Mortgage Insurance (also known as PMI)
Though similar in names, these two insurances are different in features. Private mortgage insurance (PMI) is almost always required when you purchase a house and put less than 20% down. “Lenders take a risk when a buyer puts down less than 20%,”says David Roush, CEO of Insurance.com. “Private Mortgage Insurance is a way for lenders to protect themselves in case of a foreclosure.”
Though PMI makes it easier for you to get a loan and puts you in a house quicker, it only covers a portion of the loan if you default. It should not be viewed as a substitution for life insurance or mortgage protection insurance, which will pay off all or most of your mortgage in the event of your death, so you know your family will be covered.
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