Online Finance Solution and Tips for all

Tag: Term insurance

Prepare for the Unexpected: Why Buying Life Insurance Early is a Smart Decision

Thinking about life insurance makes most people cringe. Nobody likes to plan, let alone pay, for something completely dependent on their death.

Though that time seems far away for most of us, in many cases, getting accidental life insurance quotes and then choosing a plan is the best way to protect your family in case something happens to you.

Who should get life insurance?
The easy answer here is that anyone with a family or loved ones who depend on them should get life insurance, but it is also beneficial for those with large debts or loans.

If you were to pass away and you have someone else depending on your income such as a spouse or children, it’s a good idea to invest in life insurance so they would have money to live on after your death.

The other reason life insurance may be a good idea is if you have a home mortgage or a significant amount of student loan or even credit card debt. In this case, if you were to die, you don’t want to leave your loved ones with a massive debt to pay, so life insurance is a good option.

What types of life insurance are available?
Generally speaking, life insurance can be broken down into term and whole life insurance. The main breakdown goes like this:

Term life insurance: This is the most affordable option. You pay a premium each month, and your beneficiaries get paid if you die within the term of the plan. Most plans are about 10 to 30 years, and if you outlive the plan, you can renew it year by year or start another plan.
Whole life insurance: This plan extends until you die, and it has a cash value. As long as you pay your premiums, your premium rate and the death benefit don’t change. You won’t have increases in your premium as you get older, but this is countered by a base level of higher premiums compared to term life insurance.

When looking at these two types of plans, the next step then becomes how to decide between them and which type is the most affordable in the long term.
How to Choose the Type of Life Insurance

The general recommendation is that term life insurance is the way to go for good coverage at a reasonable price. Because whole life plans are far more likely to need to pay out (because they span all the way until death), the premiums are much higher.

As far as spending the extra money on whole life insurance, though, these have a cash value and are meant to be a form of investment. However, there are better ways to invest your money.

Rather than spending more on life insurance, it’s typically better to put that extra money toward a 401(k), a Roth IRA, and other investments.

The purpose of life insurance is to replace your income, not to be an investment. So find the most affordable term life insurance plan and put the rest of your money in sound investments.

When should you buy a life insurance policy?
The younger you start your policy, the better. If you are single, you should probably wait until you have a spouse or some dependents. But after that, youth is in your favor.

With term life insurance, if you are young, you can find a variety of relatively low-cost life insurance plans. For example, Allstate has a 20-year, $250,000 plan for a healthy 25-year-old that costs $11 per month. A similar plan at State Farm is just over $15 per month.

The other point to consider is that the earlier you start your term policy, the lower your rates. If you are 25 years old and you get a 30-year plan, you can keep the same low rates until you get a new plan at age 55.

As you age, rates go up, as you are more likely to die when you get older, statistically speaking. Thus, expect the plan you get at 55 years old to have a higher rate than the one you got in your 20s.

What happens when the insurance term ends?
With term life insurance, there is a fixed term. This can range based on the company and plan you choose, but let’s say you have a 30-year plan. At the end of those 30 years, you’re still alive, so what comes next?

There is no cash value to term life insurance, so you don’t cash out any money if your term expires and you are still living. Your family only gets money if you die within that 30-year term.

So if you have outlived your plan, the next step is to talk to your company about options for getting a new plan. Price competitors for life insurance quotes to see who can give you the best rate. Make sure to go with a reputable, reliable insurance company.

Luke Williams writes and researches for the insurance comparison site, Clearsurance.com. His passions include writing about personal finance, insurance, and other ways people can save and invest their money.

July 30, 2022
Why You Should Buy Term Insurance If You Are an Entrepreneur

An entrepreneur is responsible for managing the finances of the enterprise’s administration and employees. An entrepreneur should, therefore, have efficient financial management skills. They should know where to put the right funds and where to withhold them. As an entrepreneur then, it is vital to utilize your funds the right way by opting for a term insurance. The purpose of any insurance plan is to safeguard you against a variety of risks. As an entrepreneur, one is fraught with risks on a regular basis.

What is the meaning of term insurance?

Term insurance is a kind of insurance policy wherein the insurance company provides financial compensation to the chosen nominee/s if the policyholder passes away during the policy duration. One can ensure the validity of their policy by paying the premiums when required. Term insurance is a pure protection plan, meaning that it is concerned only with providing financial protection to your loved ones in your absence. It is not related to market-linked instruments.

Why entrepreneurs should have term insurance

Increased liabilities

When you are a businessperson responsible for running the establishment, you may end up taking on more debts than the average person. These debts may be a part of a strategic business plan aimed to foster growth or expansion for your organisation. However, if anything were to happen to you, then there is a high chance that your family may be liable to handle these debts on their own. This may put a large dent in their already precarious finances. A term insurance plan with a high sum assured can eliminate such unpleasant situations and ensure that your loved ones have funds to pay off any debts.

Unstable income

Unlike the salaried employee, an entrepreneur may not have a regular income. Their income usually depends on how well their business is performing. This is more likely to occur if the company has been newly established. This could lead to their personal savings bearing the brunt. And if anything unfortunate were to happen to them, their loved ones would be left without adequate funds. Therefore, having a term insurance plan becomes paramount; it ensures a financial cushion for the family no matter the company’s performance at the time of the policyholder’s passing away.

Long-term life cover at affordable premiums

Entrepreneurs are often very particular about where they are spending their money. A term insurance plan may also be quite suitable for an entrepreneur because their premiums are considerably low.

What’s more, there are many term insurance plans that offer coverage up to 80 to 90-year-olds. As an entrepreneur, you may be working for a longer number of years than the average employee. So, you may also need coverage that extends for the long-term duration; and if you choose the return to premium feature, then you even get the total premiums returned to you if you survive the maturity of the policy. All this at a relatively lower premium!

Points to keep in mind when purchasing term insurance as an entrepreneur

Now that you know the meaning of term insurance and why you need it, let’s take a look at the points one should keep in mind when buying it:

Opt for a high sum assured

Get a thorough understanding of your liabilities, domestic expenses, family’s financial goals, and so on, before you choose the sum assured. The sum assured should ideally be high to fulfil all these funding needs.

Use a term insurance calculator

A term calculator is an AI tool in which you can enter variables such as your age, gender, coverage requirements, sum assured, chosen term, and so on. You then receive an estimated premium. As an entrepreneur, you can utilize the term insurance calculator to plan out your finances. You will get a better awareness of how much you will have to spend to get the sum assured you want.

Consider selecting the lumpsum premium payment mode

As someone who may or may not have a regular income, paying premiums on a regular basis can become difficult. Instead, you can opt to pay your premiums in a lump sum at once, ideally when the revenues of your establishment are good, and your personal finances are stable.

Ensure to read the terms and conditions thoroughly before you sign any term insurance contract.

March 29, 2022
Why do I need Term Life Insurance and how much does it cost?
Term Insurance comes in handy when one has a family, debts or even mortgage plans. Unlike, Life Insurance, term Insurance has an expiry date set to it. It has to be renewed or canceled if the contract expires at any point. Insurance companies encourage individuals who have financial problems to get it since it is affordable to acquire it and so is it to maintain it. Despite its affordability, term insurance has a disadvantage, as it does not come with as it does not offer any tax benefits or cash value. What makes it different from other types of insurance is the term element as it lies between 10 -30 years. The terms also have a variance in the way premiums are paid. For example, premiums can; stay the same throughout the policy, decrease or increase. There are different types of term insurance hat one can choose from; level term insurance, annual renewable term life insurance, decreasing term life insurance and no medical term insurance.

Worth of Term Insurance
1. Affordability
Term Insurance is a pocket-friendly type of insurance as the premiums paid are flexible depending on the type of life insurance. Also, the fact that term insurance makes it possible for one to acquire life insurance without necessarily going through medical checks, Medical checks, can be costly or rather other types of insurance cannot accept to give you the cover if, in the process, they establish that you have a chronic disease. This type of no medical checks is known as no medical checks term insurance policy. Its affordability allows one to pay up premiums at any time as long as at the end of the year the calculation of the premiums yearly adds up to the minimum amount that is supposed to be paid.
1. Best on employees
Yes, those you have employed in the company also need to feel some sort of security in their life while working for you. This is only possible if the employer opts to get the group term life, as the whole life insurance cannot work in this particular type of situation. It is common in the workplace and does not have portability benefits. This type of term insurance is worth it since; it is affordable, it covers everyone and the possession remains to the employer. Insurance companies offer group insurance that includes mass mutual, Cigna, bright house financial and principal.
1. Death Benefits
If the policyholder of the insurance dies, the immediate family becomes the immediate beneficiaries. Of which the money can be paid all of it then or during the course of their lives. Therefore, the immediate family can enjoy payment of children’s expenses, debt payment of hose rent payment just like any type of life insurance. Depending on the value of the insurance burial expenses or hospital, bills can be taken care of by the term insurance.
1. Maturity benefits
Although not all term insurance has a maturity benefit, Return on Premiums is a type of term insurance, which makes this possible. Whereby, the insurance gives out maturity benefits in terms of returning the premiums. If only the individual during the time of taking the cover to the time the cover ends does not come across any form of financial insecurity that has to be insured. In other words, a return on premiums life insurance allows one to save up for whatever shortly and thus protection of your money.
1. Mortgage protection
Payment of mortgage can be stressful especially if one is sick, dead or unemployed. That is now where term insurance comes into play. Through, Mortgage Payment Protection (MPPI) will only start paying off the mortgage 31 days or 60 days after the incident or accident, that makes it impossible for one to work anymore. The payments are only made on the borders on one’s income. If one’s mortgage is more than the income then one will have to take care of his /her on surplus, as the insurance cover is not responsible for that. Mortgage protection is only possible if one acquires term insurance and not whole life insurance.

Insurance Cost

Although term insurance is much cheaper as compared to whole life insurance, the cost has to be determined. The insurance cost has a variance depending on various reasons. Health, age, coverage amount, riders and time can be one of the variables that determine the cost of insurance.
1. AGE
The older one is the more expensive the premiums are ought to be paid. This also argues based on delaying to get the term insurance policy. For example, when one is young the premiums paid are ought to be the same throughout the year because the individual is still young, strong and in good health. However, when one delays and decides to acquire the cover when they are around 40 years or 50 years, payment will be around a 12% increase annually. So it is better to acquire term insurance earlier enough to prevent the extra costs.
1. HEALTH
Individuals who suffer from chronic diseases such as heart attack, high cholesterol, high blood pressure, nicotine use, drug abuse, HIV/AID and hepatitis. Before this, an insurance medical exam will be done; this is to provide any health information about you and your family’s medical history. Most Insurance companies also ask the doctors to report on one’s health status.
1. TERM LENGTH
The longer the period of coverage of term insurance the more expensive. The reason being one is pushed to pay premiums for many more months and this makes the insurance cost relatively expensive. Of course, consultation has to be done in various insurance companies to determine the cost of the insurance policy. The cover ranges from 10 to 30 years.

Insurance Calculator

This gives the rough amount of premiums that are to be paid monthly to obtain the insurance. As seen above there are different types of variables that determine the cost of insurance. The following steps represent how term insurance is calculated.

STEP 1

Give out personal information such as date of birth, income, marital status, number of children, gender and some habits or hobbies

STEP 2

Objectives according to the sum assured and the period one sets out. Also, establish how the beneficiaries will be able to acquire the money either one time or every month.

STEP 3

This is the final and the last step as the number of premiums set to be paid will be established. The individual will be able to choose from the different types of insurance suggested.

Conclusion

Term Insurance still stands out compared to whole life insurance. This is because of its affordability in terms of the insurance cost. Also because the term insurance calculator gives accurate or close to approximate the number of premiums as most of the variables are included during the calculation.

Author’s Bio

My name is Norman Frisky, I’m currently working as an editor at the Insurance Hotline. We offer Online Insurance, Term Insurance, and Online Term Insurance. Our mission is to build a secure future for our Members by providing best products and benefits.
April 5, 2020
Staying Healthy and Safe: 7 Things to Keep in Mind Before Getting a Health Insurance for Individuals

If you’re in the market for a new health insurance policy, then you’re in the right place. In this article, we’re going to look at a few key issues you need to consider if you’re trying to find the right health insurance plan for you. Sometimes, the choices you make at this point could make a big difference to the level of care you might receive and how much it might cost, so it’s important that you don’t rush and that you take care in making the right decision. If you’re not sure about the term life insurance or regular health insurance, there are a few different’ tips you might want to know.

So, what are the tips?

Make sure you’re covered for the right things
Not all health insurance policies cover all sorts of incidents and hospital costs. If you’ve got specific needs, you might need to consider a niche alternative. Simply make sure that your covered for everything you want to be – as some policies might be cheaper and have a lower up-front cost, but won’t actually provide the level of care you’re looking for. Whether you’re looking for online health insurance of a policy in your local area, you need to make sure you’ve got the right coverage.

Compare alternatives
Try doing a few comparison searches online, there are tons of different places to help you these days. Get an idea for the different costs and alternatives that are available, along with what level of care they provide. Make sure you’ve looked at different options before you put your money into one. Don’t just go for the first policy you find without doing the right research.

Get quotes
While it shouldn’t be the only thing you look at when comparing alternatives, cost is still an important factor. You might want to pay a little more for the full coverage you’re looking for, but it’s still important that you get quotes from different insurers. You might be able to get special introductory offers from some, or others might want to offer you something competitive when they know you’re shopping around.

Check the small print
Make sure you know exactly what the coverage provides for and if there are any additional costs in certain circumstances. Some people get stung with their insurance plans because they didn’t check the small print carefully enough, so don’t make that mistake as well.

Check the excess
Many insurers will have excess policies whereby you are liable for the first small amount of expenditure before the insurer steps in to pay. This might be the first 15,000 INR or so. Make sure you can afford this excess amount, or that you go for a policy without one if it’s a problem. You can also get excess insurance to cover that if you want extra peace of mind.

Look for reviews
When you do your research, check review sites and make sure you’ve got a plan that comes highly recommended.

Get a comprehensive check-up
Some insurers will want to you have a comprehensive health check before insuring you – so this might be a step you want to take so you can know a bit more about what insurance options are available to you.

February 25, 2019