Life Insurance Policies Tips

Cashing in Your Life Insurance Policy

Unless you are under a term life insurance policy, you probably have the option of cashing in your life insurance policy for a cash settlement. However, it is important to know when is a good time to cash in your life insurance policy and when is not. Ask yourself the following questions: - Does anyone depend on my income besides myself? – Am I old enough that marriage and children are likely not in my future? – Do I have enough money saved to cover my own final expenses? – Do I have enough money to pay for a lengthy nursing home stay? – Do I have enough money to pay for any health conditions that may arise? If you can answer yes to all of these questions, then you may benefit from cashing in your policy and saving yourself the monthly premium expenses.

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Appointing The Life Insurance Beneficiary

When you take out a life insurance policy, if appointing a guardian that is not your spouse, you may want to choose a third party as the life insurance policy beneficiary. Although whoever you leave you children with will love them and care for them as much as you do, it is wise to have two people making the financial decisions, rather than one. This will ensure that each decision is a good one since it has to be approved by two separate individuals.

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Life Insurance Policies vs. Savings Account

Some may wonder why they should give their money to an insurance company when they can set up a saving account to put away money for their spouse and children, especially since they will be able to keep every penny if the money goes unused. Although that is a feasible solution, life insurance policies are to protect your loved ones; however, money from a savings account will not protect your loved ones from the Tax Man. The money that your loved ones would receive from a life insurance policy payout is usually tax deductible, unlike money they would withdraw from a savings account. Furthermore, if something happens to you sooner than anticipated, the appropriate amount of money might not be available in a savings account. These are just two of the many reasons why most opt for a life insurance policy, rather than saving the money on their own.

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The Best Gift That You Can Give Your Children

Getting yourself insured under a good life insurance policy is one of the best gifts you can give your children. A life insurance policy ensures that your children are adequately taken care of by leaving behind the funds necessary to care for them until they are legal adults. Additionally, leaving behind extra funds for their college years could help ensure that they get the right education necessary to financially care for their own children.

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Getting the Most out of Your Life Insurance Policy

To get the most out of your life insurance policy, it is important to pick the right one. This means not only looking at your life as it is now (especially if you are relatively young), but looking at the future as well. It can be expensive to switch life insurance policies later on down the road and you could end up losing out on some of the money you have invested (such as if you switch from a term life insurance policy to a whole life insurance policy). There are life insurance policies that have the flexibility to change when your life changes, so make sure you examine the possibilities thoroughly before settling on one.

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Quality Policies For Your Children

If you plan to take out a life insurance policy for your child, then you may want to give whole life insurance policies a second look. With most whole life insurance policies, you should be able to get your child a low rate that they can carry throughout life. Keep in mind that your child's death benefit needs will change as they grow older and create a family of their own, so getting a large policy may be in their best interest.

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Life Insurance Policy Tips

When you purchase life insurance there are a couple of basic things you can do to be sure your family gets the financial protection you intended.

Tip 1. Make Timely Premium Payments

• If payments are not current the policy may not be in force. In other words there may be no payment to your beneficiaries.
• When choosing among life insurance policies learn what, if any, coverage is available after the payments have lapsed. For example, on policies with unpaid premiums some companies may convert whole life plans to extended term plans. Payments are covered by any cash value that has accrued on the policy. Another option, depending upon how long the policy was held is the beneficiary may still receive the death benefit, but it will be significantly reduced.

• Talk with loved ones about:
  • The amount of coverage
  • Your insurance carrier
  • Where the policy is stored
  • Where your financial records are stored – these may be needed if the policy is lost, or to prove premium payment history

• If the beneficiary is unaware of a life insurance policy, but discovers it even 20 years later the death benefit will still be paid.

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A Stable & Predictable Life Insurance Choice

Having a stable and predictable life insurance policy throughout life can be reassuring to some. This is what whole life insurance policies offer. With most whole life insurance policies, ones rate will stay the same throughout their entire life, as will their beneficiary payout. This can help to keep surprises and mishaps at bay, plus you still have the option of a cash settlement later on down the road.

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Multiple Life Insurance Policies For One Life

Sometimes having multiple resources for your family upon your death is not only great for them, but can be easy on your wallet as well. For example, having a whole life insurance policy of $1,000,000 to help your family pay the mortgage & other monthly expenses will be more costly than having a $500,000 whole life insurance policy and a $500,000 mortgage life insurance policy. By discovering the different ways that you can provide for your family upon your death, you may be able to afford more protection for them.

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Considering A Life Insurance Policy For Your Child

Although you know you could handle the expenses if something were to happen to your child, there are other reasons why getting a child life insurance policy is beneficial. For instance, it can be something that they can borrow from during their college years if need be. Also, if it is a whole life insurance policy, it may set them up for smaller premium payments for the rest of their life. One of the most popular children's life insurance policies even offers to double your child's benefit when they turn 21, at no additional cost. This type of life insurance policy can lay a foundation for your child, which they can then take over once they become an adult.

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