Joint life Insurance
Joint life, is an insurance policy that covers 2 lives in one policy for one premium, usually Husband and Wife or 2 business partners etc., there are 2 types of joint life insurance.
Joint life first to die, the insurance company will pay out the dead benefit at the first dead of the 2 insured’s, this type of joint life policy FIRST TO DIE although not available in the U.S.A. is available in Canada by all major insurance companies. this is a very good product for people who need the insurance security for both but can not afford to pay 2 times the premium, so the insurance company offers for one premium which is usually around 1.45% of what a single life premium would have been, a one dead benefit payout in the case of the death of one of the insured’s, which is significantly less from what the premiums would have been when buying 2 separate policies, so you get security for 2 people’s lives for the price of around one and a half. On the other side of the coin, some one who has the money and can afford to pay for 2 separate polices and buys the insurance mainly for estate planning purposes may benefit more by buying 2 separate policies, so the estate will receive twice a dead benefit at each dead of the insured’s instead of one benefit only at the first dead.
Joint life second to die, the insurance company will only pay the dead benefit at the last dead of the 2 insured’s, meaning when both insured’s are already not alive, this is a good product for someone who buys the insurance mainly for estate planning purposes and can not afford to pay the premium 2 times, this policy should be even less expensive of a regular single life insured as the risk of an early dead to both of the insured’s is less likely.
Permanent joint life insurance policies pay only one benefit, either at the first dead or at the second dead.
Single Premium Whole Life Insurance
Single premium life is a form of whole life insurance. In exchange for a lump sum, an insurance company provides an insurance contract that requires no future payments in order to remain valid. The death benefit paid by this contract depends on the same factors that determine Whole life rates (age, health, etc.) as well as the amount paid for the contract. The money is invested in a savings account, and interest accumulates in the account. Fees are charged when money is removed from the account prematurely, but loans may be taken out against the saved equity, all its features are more less identical to a regular whole life policy.
Limited Premium Whole Life Insurance
Limited premium whole life insurance is a form of whole life insurance where the insurance premium is calculated in such way that the policy should be paid up or be able to pay itself after 10 or 20 years or at age 65 from the money paid in these years plus the interest accrued, the idea of it mainly is, that because the premium is higher in the beginning of the policy it accrues more interest and at a faster pace, which makes it in fact cheaper in the long run.
For instance for a 25 year old person, a 20 year premium pay policy for a premium of $10,000 per year for 20 years is still more expensive in the total premiums for the same policy and coverage’s, but as a 10 year premium pay for a premium of $15,000 for 10 years, because in the first scenario he paid for the same policy a total of $200,000 and in the later he only paid a total of $150,000 but the first scenario is still be much cheaper in the total life span of the policy from a regular whole life policy with a life time pay premium of $5,000.
This decision depends on the financial situation of the policy owner and on his preferences on paying off the policy fast with higher current yearly premiums but for less premium in total, or in paying less per year etc. and of course there is usually more cash value and earlier, the faster the policy is paid off
Term to 100
Term to 100 Insurance is frequently used when all you want is a basic permanent insurance policy that you pay for until you die and then the beneficiary collects the money. It is usually the cheapest solution for this need.
Basically this product is instead of paying a very low premium for a term 10 and then buy again a term 10 for much more and then again for even a few times the previous premium until it becomes so expensive that it is very hard to afford it, plus bearing the risk that you may become one day uninsurable, and of course at a certain age you can not renew any more a term policy, so instead you pay for the term to 100 a higher but reasonable premium right at the beginning so the saving and accrued interest of the unneeded portion of the premiums in the first years pays the access insurance cost of the later years, plus you are covered for a lifetime.
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