What is Term Life Insurance?

Ok here it is the definition of Term Life Insurance.
Term Life Insurance is A plan of insurance that covers the insured for a specified period of time (term) and not for his or her entire life. The policy pays a death benefit only if the insured dies during the term and if the policy has not lapsed for nonpayment of the premiums due. Just a quick definition of what term life insurance is.

What if i don’t need Life Insurance anymore?

Life insurance used to be a contract strictly between an individual and an insurance company. You paid your premiums. Your beneficiaries were paid a lump sum when you died. If you felt you no longer needed the life insurance or the premium was no longer affordable, you had just three options. You either continued to pay the premiums, gave up all value on a term policy or settled for the “cash value”. Now you may have a fourth alternative called a life settlement. In certain circumstances, your policy may have significant value to independent investors and you may have an asset that you never realized was there.

About Life Settlements

A life settlement transaction involves selling a life insurance policy that’s no longer wanted or needed to a third party - a person or business other than the insurance company that issued the policy — typically for more than the policy’s cash surrender value but less than its net death benefit.

Generally, the purchasers of life insurance policies are institutions called life settlement companies. They may hold the policies to maturity (that is, the death of the insured person) and collect the net death benefits, or they may resell the policies, or they may sell interests in multiple policies to hedge funds or other investors. The person selling his or her policy receives a lump sum payment. The amount of that payment will depend on a range of factors including his or her age, health and the terms and conditions of the life insurance policy. The purchaser agrees to pay any additional premiums required to keep the policy in effect and receives the death benefit when the investor dies.

What type of policies?

What are the most likely situations when a life settlement could make sense for a consumer? First, the face amount of your policy should be $250,000 or more.

Many term life insurance policies provide a right to convert the coverage to permanent life insurance for an additional premium. While you might not need life insurance coverage beyond the original term, it may have long term value, depending on your life expectancy. If you have encountered an adverse health condition since the time you purchased the original policy, it is even more likely to be the case.

Some older policies may have had a very slow increase in cash value. However, unlike term insurance, you have the right to keep it in force as long as you pay the annual premium. Again, an independent investor may calculate that it is worth paying an owner more than the insurance company’s scheduled cash value plus continue to pay the premiums.

Certain businesses may have purchased “key man” insurance to provide financial assistance to a business in the event of the death of an important executive. However, circumstances may have changed as the company management expanded or the executive prepared to retire.

How it works

You contact an insurance agency who has a relationship with the specialized brokers. You will need to provide information on the specific policy form and current financial status of the policy. You will also be asked to provide basic information on your health. A preliminary estimate can be provided in a few days. If it looks like it is worth pursuing, more detailed information will need to be compiled and you will have to release your medical records but you will not be asked to take a physical. Once the information package is complete, the specialty insurance broker can solicit firm quotes.

The Financial Industry Regulatory Authority (FINRA) recommends these five factors to consider before agreeing to a life settlement include:

• Ongoing
  Life Insurance Needs. If you’re considering buying a new policy with the proceeds of the life settlement, you will need to determine whether you can get a new policy - and at what cost. Once sold, the old policy will still be in force and may affect your ability to get additional coverage.


• Determining
  a Fair Price. The best way to make sure you’re getting a fair price is to shop around — by contacting multiple life settlement companies yourself or using a licensed life settlement broker who will shop your policy around on your behalf.


• Financial
  Impact. The lump sum payment you receive can be taxable, depending on your circumstances. If you currently receive state or federal public assistance such as Medicaid, a life settlement can negatively impact your ability to participate in those programs.


• Transaction Costs. Commissions paid by life settlement companies to life settlement brokers and other financial professionals involved in the transaction can be as high as 30 percent. Ask your broker or other financial advisor how they are being compensated and what other parties are receiving commissions.


• Privacy Concerns. When you sell your life insurance policy, you will have to authorize the release of medical and other personal information so the buyer can determine how much to offer for your policy. Before accepting any offer from a life settlement company, make sure it has procedures in place to protect the confidentiality of your information.

How should I think about this?

First, focus on the value of the life insurance arrangement and whether it suits your circumstances better to accept a lump sum or to continue to pay the premiums and have your beneficiaries receive the full death benefit. Do not allow someone to confuse you by talking about what you might be able to use the money for. The financial world is filled with seemingly magic solutions like, “sell your life insurance and get a long term care policy”. One doesn’t necessarily have anything to do with the other. the proceeds can be used for most anything. Keep focused on the issue of your life insurance policy.

Secondly, work with an organization that you feel you can trust. Specifically, you should be assured:

• That the information will be held confidential and used only for purposes of evaluating your policy for a life settlement transaction;


• That you will receive more than one bid and the broker will disclose all bids to you; and,


• That the broker is acting as a broker and not buying your policy for resale.

Be wary of firms who promise “special deals” or preferred access to markets. Take your time and insist on complete understanding of you life insurance policy. Discuss it with your advisors and your family.

Which Type of Life Insurance is Right For Me Whole Insurance or Term Life Insurance

When most people think of life insurance they have no idea there are two types whole and term life insurance. There is definitely some important things you should know before shopping for term life insurance. CNN has a great informative series about life insurance. To see this series click here. They cover all the basics of Life insurance. If you are more serious about getting information on term life insurance you can call 1-800-972-1104 to speak with a term life insurance specialist who can help guide you through your purchase.

how do i pick my term life insurance company

Great question to ask "How do i pick my term life insurance company". Well there are many factors that can go into this decision. Product, identity, market ethics and Premium and cost are just a few. These factors and much more term life insurance information is covered at www.iquote.com. You can also get freelife insurance quotes from multiple companies. So come on down and take a look all the free information and quotes you can handle.

India...... term life insurance ..... huh?

Looks like the big news in term life insurance is a possible alliance between Nomura Asset a Japenese co. and the UILP a India based co. Sorry nothing to crazy going on with term life insurance closer to home. That probably isn't a bad thing at this point in time. Need a free quote www.iquote.com is quick and easy. By the way if insurance is your thing U.S Congress met today regarding medicare you can check it out by viewing our medicare blogs

Can my job affect my term life insurance?

Excellent question about term life insurance. Yes your occupation does affect your eligibility and rates for term life insurance. However it is definitely not the end all for you crab fisherman and fire fighters. Many top rated companies take this into consideration when determining the rate but rarely is anyone excluded for just there job.

Term life insurance and you

Looking for term life insurance? There are a number of helpful sites on this crazy place called the internet. At www.iquote.com we try and give you the information about term life insurance that will help you make the best decision. Many sites offer free quotes but when it comes to getting them they tell you they are going to call you. Whats that about????? at www.iquote.com you can get comparisons of all the top rated companies. There is also loads of information like articles on how to Choose a life insurance policy. Take a peek if your just starting to look for term life or you have a policy and are thinking of changing it. You wont be disapointed it.