Before we get into a full discussion of the cost or price of life insurance, let’s identify and correctly define some terms. “Cost” and “price” are not accurate terms to describe the amount paid to an insurance company for life insurance or for any other kind of insurance. The correct word is “premium.” A “rate” […]
Any kind of insurance is fundamentally about risk. Risk can be defined as the chance of financial loss due to an unexpected event. Insurance involves the transfer of risk from an individual or from an entity to an insurance company. The insurance company pays compensation for the loss. It is important to recognize that any […]
There are essentially two types of life insurance policies: Term life insurance Cash value life insurance Term insurance is pure insurance protection and lacks a “saving” or “investment” element. Cash value insurance, on the other hand, blends term insurance with a savings or investment component. Cash value insurance policies are sold as whole life insurance, […]
Many life insurance policies now contain a provision enabling a person who is terminally ill to essentially receive an advance, during his or her lifetime, of the “death benefit” that would otherwise have been paid to the designated beneficiaries at the time of his or her death. “Living benefit” provisions are very different from – […]
As Benjamin Franklin’s said – “Nothing is certain except death and taxes.” If you own a life insurance policy, and continue to make premium payments on time, the life insurance company will be expected to pay out the face value of the policy, less any liens or advances paid. This only applies to cash value […]