The basics of life insurance

2011-09-11T14:13:00.000-07:00

It's thought Level Term Life Assurance is one of the cheapest ways to protect your family's income if the worst happens.

The sobering statistic is nearly one child in 20 loses a parent before they've finished full time education. This step-by-step guide will show you how to save £1,000s and often beat even the published best buys by 40%.

What is level term life assurance? In a nutshell this is a life insurance policy that pays out to your dependents if you die, but there are two keys words: Term: This means you only get a payout if you die within a fixed term e.g. 18 years. Level: This means because the payout you get doesn't vary, it's always at a set amount. Therefore all in all, level term assurance guarantees a lump sum payout upon death within a fixed time e.g. £150,000 if you die within the next 18 years. It's the one policy you hope won't pay out! Don't confuse it with...

It's easy to confuse with other similar policies. So here's a quick list of things it isn't: Mortgage Term Assurance This is bought to pay off your mortgage in case you die. It's also sometimes called 'decreasing term assurance' as the amount it pays out decreases as your mortgage decreases. Whole of Life Insurance This is an open ended investment based policy mainly used for inheritance tax planning that runs out when you die, rather than after a fixed time.

Is it worth having? That depends on you. If you're a single person with no dependents, then you're far better off to focus on your own finances. For everyone else, ask yourself "What would happen financially to the people around me if I died?" If the answer is there'd be little financial impact, then you probably don't need a policy - but if paying the bills, the mortgage, bringing up kids, food shopping and more would be a struggle, this is a cheap way to solve that.

Why is it assurance not insurance?

If you are wondering why it is life ‘assurance' not ‘insurance', that's because assurance is for something that is certain to happen, insurance is where there is only a risk of it happening... and death is assured. Though some do call this ‘insurance' too as there's no guarantee you'll die within the term. The Key Decisions The cover and ensuring cost depends on a range of factors. It's also worth noting prices can change daily, so if you're comparing a range of companies it's worth doing all at the same time.

Higher payouts cost more The payout should aim to pay-off any outstanding debts and provide your dependants with a reasonable standard of living. Check whether your work place already offers you ‘death in service' benefit. If it does, deduct from the total cover you need. Cover may also be needed for a non-working spouse, especially when children are young, as if they died the main earner may need to stop working. A very rough rule of thumb for either parent is ten times the highest earner's income. Therefore the cost has to be balance against the impact on your pocket. If covering the full 'rule of thumb' amount is prohibitive; try working out what the most you can afford is (the budget planner should help) and then see what that gets you. If you're wanting to provide a regular income for your family, rather than a lump sum, the Family Income Benefit is an alternative.

This provides an annual tax free payment for a set period. Some of the best buy brokers below offer quotes for a FIB but if you're not sure if it's for you read the Getting Advice section. Shorter terms cost less A policy covering children should last until they no longer need to be reliant on you, so at least until they finish full time education. To cover a partner it should last until the earner reaches pensionable age. Don't feel obliged to cover a round number of years e.g. policies may be for 17 years. The less risk you'll die, the cheaper The amount paid increases with the likelihood of death within the term - age, health, being a smoker, having a risky occupation, can increase the price. So 98 year old, tobacco chewing racing drivers who like to go cageless shark diving, may struggle to get a good deal, even after reading this. The fact pricing radically changes depending on who you are leads to an important rule... Disclose everything; all past conditions and any risks.

If not they can use 'non-disclosure' as an excuse not to pay out. If you're over 50 and have several health issues (or you don't want to disclose them) an Over 50 Life Policy is an alternative as they don't require you to answer any health questions and there's guaranteed acceptance up to age 80 or 85. Yet to compensate they are MUCH more expensive and you can't claim in the first one or two years. Companies offering these include Aviva, Direct Line, Engage Mutual*, L&G*, Post Office, Scottish Friendly*. Get a quote from as many as possible. Do it as a couple? Couples can go for either separate or joint policies which pay out on the first death. However a joint policy would only be suitable if you need to pay out the same amount for both partners. Even if a joint policy does look suitable, it's worth getting quotes for standalone policies anyway, as it's often cheaper. Quit smoking or planning to? Non-smokers pay a lot less cash than smokers, simply because they're a lot less likely to die during the term. To count as a 'non-smoker' you need to have been genuinely smoke free for at least a year. Therefore one year after the date you quit, you should go through this process to get a new deal and you should save enormously. Don't be tempted to lie though... if you were to die and it was discovered you had been a smoker it could invalidate the policy. See other saving in the Stop Smoking MoneySaving guide. Already got mortgage life assurance? Many already have life insurance policies specifically designated to pay off your mortgage in case you die within that term - it's called Mortgage Term Assurance. Many mistakenly believe this is all the cover they need. Yet if you remember it all that does is mean your home would be repaid, it wouldn't provide any income to live on. If you have a mortgage assurance policy, then simply delete the mortgage debt from the 'outstanding debts' you'd need to repay if you died when working out how much level term cover you need. However, do also note it may be cheaper to use a level term instead of a mortgage policy to cover both your home and family. More details in the Mortgage Life Insurance article. Does this logic apply to critical illness policies too? We're not big fans of critical illness policies. Many believe they will pay out if you get any serious illness and can't work. Yet that isn't true, critical or serious illness policies pay out a lump sum if you get a specific illness as defined by the terms of the policy; for example losing one leg isn't critical, but two legs is! So don't think "I'm covered for cancer", most policies only cover a limited range of cancers. Picking a good critical or serious illness policy would take a doctor and financial nerd combined; so one option is to get the level term cover and an income protection policy - which does just that - protects your income from a range of eventualities. If you want critical illness though, speak to an advisor. Am I protected if the broker or insurer goes bust? The only payment you're likely to make to a broker will be any fees and charges, the bulk of your money will go straight to the insurance provider. These are covered by the same government-backed Financial Services Compensation Scheme (FSCS) as banks, meaning if they go into default, you’re protected. In the unlikely event it happened, the FSCS will try and find another provider to take over or issue a substitute policy. However, if you’ve ongoing claims, or need to claim before a new insurer is found, the FSCS should ensure you're covered. For more see the Insurance section of the Savings Safety guide. Already got cover? Is it worth switching If you have a level term policy, this guide should enable you to cut the cost. However if you've an existing policy you bought many years ago or have experienced health problems, the savings from buying a cheaper way may be cancelled out by the fact your risk level has increased. If when you get a quote it shows you can save (check the cover is at the same level though), all you need to do is set up the new cover and once you've got confirmation, end your existing policy; though a quick check of its terms and conditions first never goes amiss. What is writing in trust? If you die the life assurance forms part of your estate which could mean it's hit with a huge whack of Inheritance Tax. In many cases it's possible to avoid this by writing the policy in trust, as long as this is done at the time the policy is taken out. Do this and the insurance pays out directly to your dependents, so it never becomes part of your estate, avoiding inheritance tax and speeding up the payout. This is relatively easy to do. When you get most insurance policies they include the option (and papers) about writing in trust directly at no extra charge. Although do note that once a trust has been set up it is very difficult to cancel, even if all your beneficiaries agree, so think carefully about who a policy is designed to go to. If you decide to do this you will most likely need to get advice. Feb 2011: Prices rises imminent! In Feb 2011 the EU Court ruled that from Dec 2012 gender can't be factored into insurance costs (see the MSE News story EU insurance ban) meaning life cover prices could rise sharply. Before now men pay more as the risk of dying within the term's higher. So price equality means women's costs will likely rise and even though the rules don't change yet, as life insurance policies often last 20 years with guaranteed prices, according to broker Lifesearch, price hikes are expected soon adding possibly 10% to the cost over the term. Finding the cheapest policy While some may be worried that 'cheaper isn't better', with level term assurance there's no investment element as the payout is fixed; and there's no argument over whether someone is dead so this is a truly simple policy in fact in most cases, provided you've disclosed adequately..

"It's simply a case of the cheaper the better!" Cheapest policies Life assurance prices change every day, therefore there's no single '‘best-buy insurer'; yet there are 'best buy brokers'. This may surprise you, as a broker's job is to trawl through life insurers to find the lowest priced policy for you, so you may think they'll all find the same policy... yet some brokers get HUGE commissions from policy providers when they flog you a policy. Brokers aren't all the same. Commission levels and commercial relationships can massively impact what you pay. The way to get policies even cheaper than going direct is to use the niche 'execution only' brokers that give you the commission, and instead you just pay a small fee, and as such you get identical policies but at a much, much lower price.

Quick broker warnings... There are a few warnings that go with using an 'execution only' broker: Premiums: Check the premiums (monthly payments) are guaranteed and not reviewable. No advice: The fact they're 'execution only' means they just find you the price without giving any advice. If you'd like advice, to ensure you have the right cover (or have some come back if it's not), read the Getting Advice section. Health: Remember all quotes are based on a healthy person so your price may go up if you have any health issues. T&Cs: Always check the full terms of the policy meet your needs before you buy. Reputation: Is the company is reputable? If you haven't had feedback from elsewhere.

For more information visit: Debenhams Life insurance

Debenhams Life insurance is a great way to ensure your family and dependants will be financially secure when you're gone. By paying as little as £5** each month, you can provide financial protection in the form of a lump sum payment when you die. Choose a Debenhams policy and not only will you be covered against the following financial responsibilities, you'll receive a £50* Debenhams giftcard to use in store or online too. Life Insurance provides invaluable peace of mind and can be used for the following: •Pay off your mortgage •Help finance dependants' present and future education •Provide finance to help your family maintain their lifestyle •Pay off credit card or personal loan debts •Cover funeral costs We offer the following Life Insurance products: •Life Level Term Insurance •Life Level Term Insurance with Critical Illness Cover •Mortgage Life Insurance •Mortgage Life Insurance with Critical Illness Cover •Critical Illness Cover How Debenhams Life Insurance compares: We work with theidol.com (UK Life Insurance specialists). The service compares quotes from leading UK life insurers online in seconds.

For more information visit: Debenhams Life insurance

Guide to Life Insurance

2011-09-06T03:48:00.000-07:00

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What is Life Insurance Cover?

Life insurance, also known as Life assurance, is an insurance policy which pays out to the beneficiary when the insured person passes away. Although it is not compulsory, it is a wise decision to have for anyone who is relied upon for financial support.

In the short term, your loved ones may need to adjust to a new lifestyle, covered by the benefit, as well as to pay for funeral costs, outstanding debts, mortgages etc. In the long term it could pay for the care and maintenance of an elderly parent or a disabled child. It could also cover university expenses and generally keep your loved ones living to the standards they had become accustomed to before your death.

For many people the first time that they come across life insurance cover is when applying for a mortgage. Most mortgage providers insist that the borrower is insured to cover the remainder of the loan should anything go wrong.

In business, life insurance gives you the means to ensure that a key person could be replaced by covering the costs of recruiting and training a replacement. It could also provide collateral for business loans and fund buy/sales agreements, to keep the company’s equity in the right hands.

Life insurance is one of the purest forms of insurance, in that ideally, you really would not want to have to claim, as to claim means that something bad has happened.

A Guide to different types of Life Insurance Cover - Life Insurance Comparison

Perhaps the two most important levels of cover to compare are the term insurance policies and the whole of life assurance policies, which specifically cover you in case of your death. See below for a comparison on the different types of life insurance policies.

Life Insurance Cover	Comments
Term Insurance	Provides cover for a fixed term and will only pay out if the person who is insured dies during that fixed term and the premiums have been paid throughout the contract term. Usually, a high level of cover available for low premiums.
Whole Life	Provides cover for the life of the insured person as long as the monthly premiums are paid. Premiums are usually higher than those of term Insurance.
Key Person / Key Man	Provides cover for vital business people should they not be able to work. A variety of this is where a major shareholder or partner’s equity is covered should they die and the remaining partner or shareholders want to keep hold of the equity.

The above table shows the basic categories of life insurance. Each of them, have different features which make them attractive to different people.

Ensure you understand the difference between Term insurance &
Whole of life insurance.

Term insurance provides protection against death during a specified period and whole of life insurance provides protection against death at any time. This is a very important distinction to make. Term insurance will last for between one and about 30 years. Should you die during this term, you will receive a benefit. Whole of life insurance will always result in a payment. How much that payment is depends on what type of policy it is and the performance of any investments within the policy.

If you have Term insurance, the policy will only pay out if the life assured ends during the term of the policy. After this term, the beneficiary will not receive any payment.

Level Term Life Insurance

Level term life insurance is where cover is provided for a fixed term, usually between 10 to 40 years, however the term cannot usually exceed age 85. The sum assured will only be payable on death, with no investment benefits or payment on survival. It is important to understand this concept.

You may be required to attend a medical in
order for your insurance policy to commence.

Should you survive past the end of the term, you will not receive any payment as your policy will have expired. Should you stop paying the premiums at any time, cover will stop, and there is no surrender value. This is unless you pay extra on your premiums to have a waiver of premium so you can get a break from premiums should you lose your job.

Within Term Insurance there are other choices which you can make to tailor your policy to suit you and your requirements.

Type of Term Insurance	What does that mean?	Comments
Level Term	Premiums are set at an agreed level and do not increase or decrease. The same applies to the sum assured, it remains the same throughout the term.	This plan is great from the budgeting point of view, but its main downfall is that it does not allow for inflation.
Increasing Term	This fixed term policy increases the sum assured by either a set percentage or by the Retail Price Index throughout the term.	Whenever there is an increase in the sum assured there is an increase in the monthly premiums.
Decreasing Term	The sum assured decreases over time, hence premiums also reduce.	This policy is commonly used in conjunction with a mortgage, it is designed to pay off the outstanding amount in the event of death.
Renewable Term	The term tends to be for a shorter period ie 5 years, and can be renewed without any further medical evidence.	The sum assured cannot be increased, although premiums will increase with age.
Convertible Term	Provides the option to convert some parts of the insurance to whole of life policy without any further medical evidence required.	Even if the insured person develops a health issue, the policy can still be renewed and benefit unaffected, also provides flexibility to upgrade to a whole of life policy later.
Family Income Benefit	A tax free regular income will be paid to the beneficiary, as opposed to a lump sum.	The regular income is paid from the date of the death of the insured until the end of the term.

Whole of Life Insurance

Whole of life insurance policies see premiums being paid which provide for a lump sum to be paid at any time death occurs to the assured life. Depending on the policy, an investment element is sometimes incorporated along with the permanent life cover.

The type of cover determines the amount of the lump sum.

Type of Whole of Life Policy	What does that mean?	Comments
Non-profit	Your premiums pay towards the sum assured which remains the same throughout the policy.	Unfortunately this does not take into account inflation.
With-profits	Premiums will go towards both the insurance cover and an investment. The sum assured increases with a bonus which is paid yearly and a final bonus at the end of the policy.	The bonus is not guaranteed.
Unit Linked	Throughout the life of the policy, you are provided with a choice of the level of death cover. Once you have made this choice, your premium buys units in a fund, which you can select at the offer price. These units are then cancelled in order to buy death cover. Periodically, a premium review will be undertaken in order to enable the death cover to continue at the same level by keeping a sufficient reserve.	The unitised whole of life policy provides the greater of the value of the with profits units or the death benefit.

The type of policy you choose will determine
the amount of the lump sum paid on your death.

In summary, a non-profit policy sees the sum assured staying the same. A with-profits policy sees the sum assured increasing by a bonus being paid at the end of each year and a final bonus at the end – although none of these are guaranteed.

A unit-linked policy sees the sum assured being linked to the investment’s valued.

Shopping Around for a UK Life Insurance Rates

Before you begin to shop around for Life Insurance rates in the UK, check what cover you already have. Often, some Life insurance is provided within pensions and endowment policies.

Whilst looking at the different policies available it is also worth considering Critical Illness Insurance. A critical illness is a specified medical condition such as cancer which would stop a person receiving an income, and is unlikely to result in the person being able to work again. Critical illness insurance cover will insure you should you suffer from any of these specified illnesses, and will pay out a lump sum, payable at the time of diagnosis.

You can take out a critical illness insurance policy in two ways. The first is as a 'stand alone' policy, taken out by itself. The second method is to add it to whole of life, or term insurance policies. The reason why you may do this is that it offers you a way of getting hold of the value of your policy not just on death, but also on diagnosis of critical illness, which has the same effect as death on your ability to support your dependents.

As the insurance market is a very competitive one, you can buy life insurance policies from many different outlets...

Online, this is a good way to compare prices.
High Street Lenders, usually offer insurance at the time of applying for a mortgage, loan, or a pension.
Large supermarket chains, many have booklets in store informing you of the vast array of insurance policies that they offer.
Yellow Pages, have lists of insurance companies, many of which will be able to provide a quote over the telephone.

Insurance Broker, it is useful to use an independent Broker and let them shop around for you. Check if they are tied to using a particular company’s products, ideally they should be able to access the whole market for quotes on policies which will suit your needs. Before proceeding with a Broker check their fees.

When searching for the right policy make sure you understand all the benefits you'll receive, also any exemptions and the cost of the premiums.

Shopping around for the right policy at the right price is essential as premiums can vary dramatically between insurers. There is a basic criteria that will impact the cost of the insurance you buy, but basically the most important factor is your health! Should you have a clean bill of health, you will find that your life policy will cost a great deal less to protect your family.

Other factors that Insurers will need to know about, other than your past medical history, are as follows:

Your age
If you have ever smoked
Certain health problems which may run in your family and could be hereditary
Length of the term you wish to take the policy out for
The amount you want to insure.

Life Insurance Application

You may be required to undergo a medical examination before the insurance policy commences.

So once you have decided which type of life cover is suitable to you and your family, and you have found the right policy, you need to submit the life insurance application. Depending on the company you may do this over the phone, on-line, face to face, or by post. Whichever way you apply for your insurance it is of utmost importance that the information you give is accurate and complete.

Amongst other questions, you will be asked to provide some detailed personal information.

Required Information	Comments
Name of insured	This is the name of the life to be insured, this maybe two names if the policy is to be a joint policy. A joint policy will cover the two lives but only pays out on the first death.
Age	Obviously the younger you are the lower the premiums.
Amount of benefit	The more benefit you want to insure the higher the premiums will be.
Health	Your medical history will be required and certain questions regarding the health of parents will usually be asked to obtain information regarding any hereditary illnesses.
Weight	Your weight will also contribute to how healthy you are generally and also highlights any possible health issues you may have in the future.
Smoker	Smokers are generally considered to have higher premiums as they are at higher risk of certain life threatening illnesses. Some companies will charge 3-4 times as much on the premiums to that of a non-smoker.

It may also be worth talking to your chosen insurance company about the possibility of placing the insurance policy in trust.

Placing the policy in trust means that the beneficiary will receive the money much quicker and the benefit will not be classed as being part of your estate, in which case the benefit may become affected by inheritance tax.

Life Insurance Claims

Should there be a death in the family, and you know that there is a relevant life insurance in place, you should be provided with cash immediately to meet your pressing needs. However, you can't get access to the funds without filing a Life Insurance claim. With the amount of money involved, you need to follow certain guidelines to make sure the claim is filed properly.

Firstly, you should call the agent or broker that helped with the application for the insurance policy in the first place. The life insurance agent can help you with the details of how to fill out the claims form. The agent should also act as an intermediary with the insurance company to help move the claim along.

If you have the paperwork to hand, but you do not know who the deceased's agent was, you should deal with the life insurance company directly. This is as simple as calling or writing to their nearest office to you and asking what procedure should be followed. One of the things you may have to do is to secure some certified copies of the death certificate from the funeral director. You'll need a certificate for each life insurance claim. You should submit the death certificate along with your claim form and the policy itself.

It is advisable to seek specialist advice from a financial advisor to make sure you are selecting
the best option.

Should you have no information at all relating to the claim, don't know the name of the company, and don't know who the deceased's agent is, you can still write to the missing policy service, including a self-addressed business size envelope. This inquiry would be passed to about 100 of the largest life insurance companies to try and locate your lost policy. You will be charged a nominal fee for this service to cover administration costs.

You should receive a settlement in fairly short order once you have submitted the claim. This could be in many forms, depending on your choice or that of the original policyholder.

UK Life Insurance FAQ

Q. What do I need to know about a UK Financial Advisor to ensure they are qualified to give me professional advice?

Good financial advice can really help you achieve your goals. Should you want to plan for a comfortable retirement, need to take out a mortgage to buy a house or maybe protect yourself and your family's finances should you lose your job or become ill. A financial advisor should be able to prioritise and understand your financial needs, and recommend any products or actions you can buy or take to help you.

There are three types of advisor, tied, multi-tied or independent. Tied advisors are only able to sell products to you from one company. A development of this is the multi-tied advisor, who can only choose from a panel of providers, but still don't give you the full benefit of the market. An independent financial advisor can advise you on products from the full range of companies on the market. The independent financial advisor should give you the best advice for. Under the FSA Act 2000, the FSA regulates all advisors. The FSA keeps a Central Register, which you can use to check up on a firm.

Q. How do I complain about a Financial Advisor?

The first step you should take should you feel there is cause for complaint, is to contact the company. Before you even use a financial advisor, you should check that they are actually regulated by the FSA. If they are not, then don't use them. If they are regulated by the FSA then they will need to have a complaints procedure.

The company must perform their investigation within 2 months, after which you can take it to the Ombudsman. Should the investigation complete and you are not happy with the outcome, you can go to the Ombudsman, making sure you've supplied the correct documentation. The Ombudsman will check your complaint for relevance, and then will investigate and adjudicate. Their decision is binding on the firm but not you. So if you don't agree you could still go to the courts.

Q. What does it mean when they say they are "loading" a life assurance policy?

Premium loading is where the UK life insurance company takes the basic premium that they wish to charge for a certain level of cover, and adds an amount. The amount that is added to the premium is aimed at covering the expenses that the company incurs selling the policy, the profit that the company wish to make on selling the policy, and a margin created for contingencies.

Q. Who are the Financial Services Authority?

The Financial Services Authority (FSA) is a non-governmental, independent organisation that was awarded statutory powers by the Financial Services and Markets Act 2000 (FSMA). They are a company that is limited by guarantee and have been financed by the financial services industry. The first aim is to maintain the UK public's confidence in the financial system in the UK. The FSA supervise settlement houses, exchanges and other market infrastructure providers, surveying markets and monitoring transactions.

The second aim is to increase the public's understanding of how the financial system works, which in turn will increase confidence in it. People can become informed consumers if they can gain knowledge, aptitude and skills which will help them to manage their financial affairs effectively.

The third aim is to secure the correct degree of protection for consumers. Firms and individuals who wish to engage in regulated activity need to satisfy some necessary criteria, such as competence, honesty and financial security. The FSA vet all entries to ensure this. www.fsa.gov.uk/

Life Insurance

For more information visit at Debenhams Life insurance

Just the facts on life insurance

2011-09-05T20:57:00.000-07:00

When buying insurance, you can be overwhelmed by an information avalanche. To protect your future from poor choices today, organize your insurance search by reaching back to grade school and employing the use of the 5 W's: Who? What? Where? When? Why? and How much?

Who?

The classic argument to avoid life insurance runs, "If I die, why do I need money?" You don't -- but your family, your business or your favorite charity might. So anyone with dependents, human or otherwise, might need life insurance.Of course, if you don't need to protect anyone else, insurance is not a wise way to spend money.
According to Steve Kramer, who has served on the members' insurance and benefits committee of the California Society of Certified Public Accountants for 27 years, this group not needing insurance includes people who have raised and educated children now living independently, folks who have accumulated sufficient assets to support a surviving spouse and the single elderly (and not-so-elderly) population.

What?

People approach life insurance with predisposed notions, says Rory Roniger, CLU, ChFC, head of the financial services arm of the Eustis Insurance Group in Metairie, La."They might be oriented to term insurance, yet don't have a good argument as to why," he says.
"Any kind of insurance is a contract with requirements on both sides," says Dave Evans, CFP. "Unfortunately, too many people think life insurance is a commodity, like going to the grocery store and picking up a piece of fruit to judge."
"Term" insurance forms the base of every life insurance policy. Think of it as renting a safety net: The owner pays a fixed premium toward a concrete payoff over a specific time. If you die during this period, the insurance company pays the promised amount. When the policy reaches its deadline, the coverage vanishes.
Lawrence Wentz, who owns the Kindt, Kaye and Wentz agency near Philadelphia, says that contracts aren't that cut and dry. Many companies sell term policies that guarantee a rate for only 10 years of the protection. A few providers guarantee just a year at the starter rate.
After the secured period ends, the company can charge one of several rates filed with the state insurance commissions.
Speaking of rates, start by assuming the initial quoted rate for your age and life circumstances is too low.
"I've placed people of all age ranges, and not many get this thoroughbred rate after the physical exam and application submission," Wentz says.
The good news: Changing health status during your term limits doesn't affect premiums or payoff. The rub comes when that contract ends. Many companies allow you to buy another policy, but at higher rates to balance your changed health status.
Some insurers offer convertible policies that allow a return client to take out another policy at the rate of a healthy person, but you pay a higher premium for the privilege.
Insurance companies also offer three variations of permanent life insurance -- that is, insurance that covers you for your entire life.
Whole life offers term insurance's set payoff for a set premium, except this policy doesn't come with an ending date. You'll pay the premium for the rest of your life, unless you decide to cash in and receive the cash value as a lump sum.
According to the Life and Health Insurance Foundation for Education, "the cash value of a policy is different from the policy's face amount. The face amount is the money that will be paid at death or policy maturity. Cash value is the amount available if you surrender a policy before its maturity or your death."

Get a Quote today Adviser Financial life insurance