Garden State Life Insurance Blog

What is a Life Insurance Beneficiary?

2008-05-12T10:32:00.003-05:00

A life insurance beneficiary is essentially the person or persons that receive the benefit when the insured dies. For example, if you have a $100,000 life insurance policy, then the person you name as your beneficiary will receive the $100,000 when you die.

If a beneficiary is not named on your policy, then the money is paid to your estate. The money will be distributed according to how the rest of the estate is to be divided according to your will.

You will usually name your beneficiary on your application for life insurance. You can change it in the future by contacting your life insurance company or your life insurance agent. You also have the option of naming more than one beneficiary and can even give each beneficiary a specified percentage of the benefit. For instance you could leave 20% to each of 4 children and 5% to each of 4 grandchildren.

There are several benefits to naming your beneficiaries in your policy versus just leaving the policy to your estate:

1) Speed. In most instances, life insurance companies will pay the life insurance to the beneficiaries as soon as a claim is filed. Often times estate situations can take a while to resolve if there is a lot of property involved or disputes involving the estate.

2) Taxes. Life insurance benefits are usually paid to the individual beneficiaries without any taxes being owed by the beneficiaries. In some situations estate taxes are paid based on the size of the total estate before those benefits are paid out to those named in the will. Life insurance would just add to the estate and require more estate taxes to be paid.

3) Debts. If the insured dies with outstanding debts, then their life insurance beneficiaries receive the benefits and creditors do not have access to the money. If the money is left to an estate, then often times creditors and bill collectors will need to be paid before the estate is paid out to those named in the will.

As always, I recommend that you seek the advice of a trusted tax professional on issues involving income taxes and an estate attorney on issues involving wills. Please see my disclaimer at the bottom of the page for more information.

Can I Buy Life Insurance for Someone Else?

2008-04-30T10:03:00.004-05:00

Can I buy life insurance for someone else? Or here is the one that really scares people. Can someone else buy life insurance on me and then collect the money if I die? I hear people asking these questions all the time and wanted to address both issues.

Can I buy life insurance for someone else?

The simple answer is, "yes". You are allowed to pay the premiums and collect the benefits on a life insurance policy that insures a life that is not your own. For example, many people have life insurance on their children. Another example is that companies sometimes buy life insurance on their key employees so that they can recover from the negative financial effect that losing that employee might cause.

There are two things that you need to consider. One, you are going to need to have the consent and participation of the person whose life is being insured. Two, you are going to need to provide a reason to the insurance company that you will be affected financially if the insured dies. The only exception to this is life insurance on children. Usually the parent of a minor can purchase life insurance on the child without any additional reasons. If you have nothing to lose from the death of the person, then you don't really have an "insurable interest" and really only will gain from the death of the insured. Just being a relative does not necessarily create an insurable interest. You will have to prove that you are somehow financially affected by the death of that particular relative.

Can someone else buy life insurance on me and then collect the money if I die?

As you can tell from my comments in the previous paragraph it is going to be very difficult for someone to buy life insurance on you without you knowing about it. First of all they are going to need your consent and participation. Most life insurance policies require medical tests on the insured and I think you'll notice the person coming over to your house to take your blood and to strap the EKG on your chest.

If a person purchases some kind of simplified issue or guaranteed issue policy without you knowing about it, then they are committing insurance fraud, which is a felony and would cause the policy to be voided.

Also if the person can't prove insurable interest the insurance company is not going to let them buy the policy. The company will let anybody willing to give them the money pay the premiums, but the company is going to need to know that the person who is named the beneficiary of the policy has the insurable interest. Now if you originally purchase a policy you can usually transfer the ownership of the policy or change the beneficiary to whoever you want, but you will have to prove that the initial beneficiary has insurable interest.

How do I Decide What Life Insurance Company to Buy From? (Part 3 - Customer Service)

2008-04-15T10:39:00.003-05:00

Just buy your life insurance from Garden State Life Insurance of course. End of article.

Just kidding.

I realize this is a weird article coming from a blog sponsored by a life insurance company, but try and hear me out. This is part three in a series of articles that has a few points to consider when reviewing your options whether you are interested in buying insurance from Garden State Life or not.

I have bad news and good news on the topic of finding a company with good customer service and one that will treat you fairly. The bad news is that unlike consumer products it is really difficult to find reliable third party reviews of customer service experiences with life insurance. I love it that when I'm shopping for a new electronic gadget, I can easily go to Amazon.com or Cnet.com and get an indepth product description, pictures and reviews of the products and companies that make the products. Unfortunately, I have not come across a life insurance company equivalent. Let me know if you have a good source and I'll link to it or write about it.

Since there is not really an unbiased location that I'm aware of for life insurance company reviews, I would recommend running a query on the company name in one of the major search engines (e.g. Google or Yahoo). If you run just a regular web query, you can see not only the company's website, but you may also run across articles that may have been written about the company or other information that you might find useful. I would also recommend running a query in the "News" search section of either Google or Yahoo to see if you can find any recent news involving the company.

The good news is that life insurance companies and agents are highly regulated by state governments so they are all forced to deal fairly with both prospective and current policyholders. This does not mean that all insurance companies are equal in how they treat their customers, but you can be assured that if you choose a life insurance company that has good financial ratings and has been in business for a while, then you will be treated fairly.

How do I Decide What Life Insurance Company to Buy From? (Part 1 - Ratings)
How do I Decide What Life Insurance Company to Buy From? (Part 2 - Price)

Garden State Life Video Contest Video of the Week #3

2008-04-03T13:46:00.002-05:00

Garden State Life's first video contest has only a few more weeks to go and the votes are starting to really pile up. A big thanks goes out to all of you who have already entered a video or registered to vote. Good luck to all the contestants. There's still time to get a video uploaded to enter the contest so bust out those cameras this weekend.

Here is a link to my favorite video this past week:

http://memelabs.com/gardenstate/index.php?play=2313

Great video, Garden State Zack. I loved the background scenery. Maybe he should make the name change official.

Past weeks:
Week #2 Video of the Week
Week #1 Video of the Week

How do I Decide What Life Insurance Company to Buy From? (Part 2 - Price)

2008-03-27T09:49:00.004-05:00

Just buy your life insurance from Garden State Life Insurance of course. End of article.

Just kidding.

I realize this is a weird article coming from a blog sponsored by a life insurance company, but try and hear me out. This is part two in a series of articles that has a few points to consider when reviewing your options whether you are interested in buying insurance from Garden State Life or not.

Price

While price may be the most important or only factor for most people, I purposefully did not talk about price in part one of this series. I wanted you consider other factors before you tune me out. Just because a company is offering the cheapest product you can find there are other factors to consider.

For the most part, this is going to come down to how much work you want to put into finding the lowest price. There is not a source or company that is always going to provide the lowest price for everyone. For example, some companies have more favorable rates for people who smoke and some may place more emphasis on a prior medical condition you had and charge higher rates. Just because you use a quote website or an agent that can quote multiple companies does not mean that you are getting the best deal. Most agents can only sell products for the companies that they have licenses to represent so you may have to talk to multiple agents or visit multiple sites before you find the best deal.

Also, when you are comparing rate quotes you need to make sure that you will actually qualify for the product. Many quote services will quote you the super preferred class of rates, but in the end you may only qualify for the standard class based on your personal or health history, which will have much higher rates than what they quoted you originally.

Also, be sure to only compare prices between similar products. A whole life product or a simplified issue product may have a higher price than a fully underwritten term life insurance product, but they both offer additional features for that price in return (e.g. whole life insurance has cash value and simplified issue life insurance is more convenient and does not require a medical exam.) Find the type of life insurance product with the features that you want and then search for the company that has that product at the price you want to pay.

How do I Decide What Life Insurance Company to Buy From? (Part 1 - Ratings)

Garden State Life Video Contest Video of the Week #2

2008-03-17T15:28:00.002-05:00

Garden State Life's first video contest has about one month to go and the best video of the week is getting harder and harder to choose. A big thanks goes out to all of you who have already entered a video or registered to vote. Good luck.

Here is a link to my favorite video this past week:

http://memelabs.com/gardenstate/index.php?play=2203

The dad and all three kids did a great job!

Past weeks:
Week #1 Video of the Week

How do I Decide What Life Insurance Company to Buy From? (Part 1 - Ratings)

2008-03-14T13:39:00.005-05:00

Just buy your life insurance from Garden State Life Insurance of course. End of article.

Just kidding.

I realize this is a weird article coming from a blog sponsored by a life insurance company, but try and hear me out. My next series of articles has a few points to consider when reviewing your options whether you are interested in buying insurance from Garden State Life or not.

Ratings

One thing you definitely want to know about a company before you buy from them is their ratings. Every life insurance company is reviewed on a regular basis by multiple ratings agencies. Their job is to look at the financial strength of the companies and give investors an idea as to whether it would be wise to conduct business with a particular company. This is especially important for one considering the purchase of life insurance, as you may need the company to pay benefits well into the future. You definitely want to know that they are going to be there when you need them. Also, if your life insurance company goes out of business and your health has deteriorated, then you may have to pay a substantially higher premium or may not qualify for life insurance at all. This becomes even more important if you have any type of product with cash value. Unlike banks that have FDIC insured balances, the U.S. government does not guarantee insurance company deposits.

An example of a common ratings agency used for insurance companies is A.M. Best. A.M. Best ratings are similar to the letter grades that you get in school. They go from A++ to F (for more details see http://www.ambest.com/ratings/guide.asp). I would advise that you purchase with a company that has an “A-“ rating or higher. This does not guarantee that the life insurance company will not become insolvent, as even an “A++” company can deteriorate over time, but your life insurance premiums should be about as safe as they can get.

Most life insurance companies with an “A” in their A.M. Best rating publish the rating on their sales materials and use it as a selling feature so you probably will not have to go through too much effort to find the rating of a highly rated company. If the A.M. Best rating does not appear in the sales material, you should be able to get the rating off of the insurance company’s website or from the agent or quote service trying to sell you the policy. You can also look the life insurance company up directly on A.M. Best's website to find their current rating.

Garden State Life Video Contest Video of the Week

2008-02-29T15:01:00.004-06:00

Garden State's video contest still has about another month and a half to go. We have some cute entries competing for the $10,000 prize and hope to get a lot more. Here is one of my favorite videos so far (especially her last line about the glass houses). Good luck everyone.

http://memelabs.com/gardenstate/index.php?play=1466

Joint Life Insurance Explanation

2008-02-22T11:30:00.006-06:00

This is part ten in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Joint life insurance allows two or more people to combine what would equate to two individual life insurance policies into one policy. There will be one premium paid, one set of fees, and one death benefit, but there will be two lives insured. These types of policies are usually used by spouses or business partners who have combined interests and finances.

There are two main types of joint life insurance: first-to-die life insurance and second-to-die life insurance. With a first-to-die life insurance policy, the insured group of people has only one policy, and a life insurance benefit is paid when the first of the insureds dies.

This type of policy can be great for businesses with partnership arrangements. The business can pay the premiums as a cost of doing business. If one of the partners dies, then the remaining partners can use the life insurance benefit to buy the deceased partner’s share of the business from the family or estate that inherits it. Here is a link to an interesting article in the New York Times that addresses the subject of partnerships and how to go about protecting your interests and it even specifically mentions this type of joint life insurance arrangement (Click here to read the article).

A first-to-die policy can also be good for a married couple that wants to have a similar life insurance policy on both partners. This allows the couple to essentially combine two separate policies into one and save on some of the administration charges from the life insurance company.

You need to be careful when shopping for first-to-die life insurance policies. They are not very common and so the rates may be less competitive. You may end up finding that it is cheaper to buy two single life policies than one first-to-die policy. You also need to assess the life insurance needs that the surviving partner will have. If the surviving partner will need to keep the life insurance after the death of the first partner, then individual policies may be the way to go. Another alternative is that some first-to-die policies have optional riders that allow you to convert the policy into a single life policy for the surviving partner upon the first death.

With a second-to-die life insurance policy the life insurance company pays the benefit amount after both insured lives have passed away. These plans are usually purchased by spouses and are usually used for estate planning purposes. Second-to-die life insurance premiums are much lower than similar individual life insurance products since it requires the death of two people instead of just one. If you think that you need a second-to-die life insurance policy, then I suggest that you consult with a trusted, professional financial advisor.

Guaranteed Life Insurance Explanation

2008-02-13T09:18:00.007-06:00

This is part nine in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Guaranteed issue life insurance is exactly what it sounds like. A guaranteed life insurance policy usually has more of a streamlined signup process and applicants are guaranteed to qualify for life insurance. The trade-off for universal acceptance is that these are usually low face amount whole life insurance policies with very high premiums. These products are usually very expensive relative to other life insurance policies. Most of guaranteed life insurance policies have an initial waiting period of one or two years during which you pay premiums, but the insurance company does not have to pay a claim if you die during that period. Also the face amount maximums for this type of product are usually no more than $20,000.

Pros:

Instant and guaranteed approval regardless of health, no health exam, short application

Cons:

Low face amount limits, higher premiums, waiting periods

Simplified Issue Life Insurance (No Exam Life Insurance)

2008-02-01T16:10:00.001-06:00

This is part eight in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Underwriting is the process that life insurance companies go through when you apply for a policy. An underwriter is a trained professional that reviews your medical, family and personal history to determine how low of a life insurance rate that you should pay. Also, as part of the underwriting process, the life insurance company will take blood and urine samples and run physical tests to determine your current health and try to find out whether you have any factors that may lead to health problems in the future.

Some life insurance companies offer products at lower face amounts that skip many of the physical underwriting steps. These products are usually referred to as simplified issue life insurance (other names include no exam life insurance, no medical life insurance, no physical life insurance). There is also usually a shorter application and the policy usually takes less time to issue.

There are many people that try to take advantage of simplified issue life insurance by lying on their application and trying to hide their health problems. I would strongly urge you to avoid doing this. Of course there is the moral issue. Also, just because the life insurance company does not complete a full examination before they issue the policy, it does not mean that they will not dig through your medical history and verify the accuracy of your answers on your application after you die. In most states, life insurance companies have the right to investigate the accuracy of your application if you die within two years of purchasing the policy. When you sign the policy, you give the company the right to investigate all of your personal records (medical, government, employment, etc). Just because they streamline things upfront doesn’t mean they aren’t going to do everything in their power to avoid paying a $100,000 life insurance claim. It would be a terrible thing if your family is counting on life insurance benefits that aren't paid because you lied on the application just to get a lower rate.

Pros for Simplified Issue Life Insurance:

No medical exam, convenience, shorter application, instant approval for qualified applicants

Cons for Simplified Issue Life Insurance:

Higher rates, lower face amount restrictions ($150,000 is the maximum for most companies with $300,000 being the highest I’ve seen).

Expect the Unexpected Video Contest Launches

2008-01-21T13:43:00.001-06:00

This week Garden State Life Insurance launched its Expect the Unexpected Video Contest. Garden State Life Insurance has partnered with video contest site Memelabs.com on this contest which encourages parents to film their children finishing famous sayings and proverbs in order to compete for a $10,000 U.S. Savings Bond or $5,000 cash. It should be an exciting few months so check the video contest site often to see what types of crazy videos the kids and parents create.

The URL for the contest is http://www.memelabs.com/gardenstatelife.

Check the blog each week or subscribe to the blog as I plan to post one of my favorite videos on the blog each week. There won't be a prize for blog video of the week, but I'm sure that the glory that comes with this honor will mean more than a monetary prize....Ok, maybe not, but it will still make my weekly pick feel really good about themselves. Good luck!

Accidental Death Life Insurance Explanation

2008-01-16T09:08:00.000-06:00

This is part seven in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Accidental death life insurance only pays the death benefit when the insured dies from accidental causes. The causes of death that the company covers and excludes are listed in the policy. The life insurance company is also supposed to list the covered and excluded causes of death in the marketing materials, but companies have gotten in trouble in the past for not being very upfront. Some companies have even tried to hide that their insurance only pays for accidental deaths so be sure and read the fine print when reading through marketing materials.

Accidental death life insurance is sold both as a stand-alone product and as a rider attached to regular life insurance policy. It is much cheaper than regular life insurance. This is partially because the chances of you dying in an accident are much lower. Also the insurance company has very little underwriting cost because your health status does not really affect your likelihood of getting in an accident. You should easily be able to get $100,000 of accidental death life insurance for only a few dollars per month if it is attached as a rider to another policy.

I am not really convinced one way or the other as to whether accidental death life insurance is a good purchase. I think it is a bad idea to only own accidental death insurance when your family is counting on that income when you die. Just because you are in good health now and you feel that the only way you could possibly die is by accident does not mean that you won’t get sick in the coming years. Actually, if you feel really healthy, then you should be buying regular life insurance because your premiums will be lower.

There is an argument to be made for attaching some accidental death coverage to your regular life insurance policy. If you die suddenly and unexpectedly rather than from an extended illness, then the extra insurance may be necessary since you will have less time to get your affairs in order. Also, since you are attaching it to another policy, there is very little additional marketing cost to the life insurance company and so it should be relatively inexpensive.

Variable Universal Life Insurance Explanation

2008-01-11T14:45:00.000-06:00

This is part six in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Variable universal life insurance works exactly like fixed universal life insurance with the exception that the investment performance of the cash value in the policy is tied to mutual funds instead of the fixed assets of the company. Usually the company provides the policy owner a list of mutual funds that they can split their cash value across. This is similar to how most employers allow you to divide up your 401K retirement accounts.

As with fixed universal life insurance, there are some estate planning reasons that may make variable universal life insurance a wise purchase, but you should be seeking advice from a trusted, professional financial advisor before you purchase a variable universal life insurance product.

Universal Life Insurance Explanation

2008-01-04T09:37:00.000-06:00

This is part five in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Universal life insurance was created back in the 1980s to take advantage of the preferred tax treatment that life insurance policies receive from the IRS. As with whole life insurance, the life insurance company will offer death benefit coverage for the rest of your life. Unlike whole life insurance, the premiums are not guaranteed to be level.

The easiest way that I can think of to describe universal life insurance is that you are basically setting up a savings account to pay your life insurance premiums. A premium is paid to the life insurance company. The company then takes out any administrative fees and deducts the cost of the life insurance (COI) and the rest of the premium is credited to an account. The balance in your account is then credited an interest rate by the insurance company. There is usually a minimum guaranteed rate for the policy, but the actual rate credited usually fluctuates above that amount based on how well the insurance company’s investments are doing. As long as there is a cash value balance above zero the life insurance policy does not terminate. This makes universal life insurance more flexible than term or whole life insurance. A universal life insurance policyholder can usually make premium payments whenever and for whatever amount they choose as long as the balance stays above zero.

One benefit to a universal life insurance policy is that the balance or cash value in the policy earns interest tax free, unlike other investment vehicles like money market accounts or certificates of deposit. Despite this tax favorable tax treatment, it is usually not a good idea to buy universal life insurance just for the tax-free investment since you also have to pay for life insurance. There are some legitimate estate planning reasons to buy universal life insurance, but it is usually not the best option for someone either needing only life insurance protection or only an investment vehicle.

Return of Premium Life Insurance Explanation

2008-01-02T09:59:00.000-06:00

This is part four in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Return of premium term life insurance is a fairly new concept. A return of premium term life insurance policy works exactly like a term life insurance policy with one exception. If you live to the end of the policy term, the insurance company returns your premiums in a lump sum (see my explanation of term life insurance). If you die within the level term period, then the death benefit is paid in full and the premiums are not returned.

Insurance companies developed this product due to the fact that policyholders or potential policyholders did not like the fact that they would pay into a life insurance product for the length of the policy and have nothing to show for it if they lived. Personally, I'd be happy just to still be alive when my term policy ends, but I guess I'm just a glass is half-full kind of guy.

The premiums for a return of premium product are much higher than the comparable regular term product from the same company. This is to pay for the return of premium benefit at the end of the level term period. On the other hand, premiums for a return of premium product are usually less than the comparable whole life product. This is due to the fact that the insurance company only has to insure your life for a fixed period of time and also due to the fact that you only get your premiums returned in full if you persist until the end of the term period. With most whole life products you can access the cash value at any time and if you lapse the policy the cash value that has built up is yours to keep.

Whole Life Insurance Explanation

2007-12-31T12:59:00.000-06:00

This is part three in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Whole life insurance or permanent life insurance is pretty much what it sounds like. Typically the customer pays the life insurance company a regular, level premium and in return, the life insurance company will pay the customer’s designated beneficiary the death benefit or face amount. As long as the customer continues to make premium payments the policy will not expire. You need to be careful as some companies offer whole life insurance that only guarantee coverage for your lifetime, but do not guarantee that the premiums or death benefit will remain level.

The advantage over term life insurance is that your policy does not expire after a set time period. This means that if your health deteriorates, then you won’t have to worry about qualifying for life insurance in the future. The disadvantage to buying whole life insurance is the cost. It is usually much more expensive than term life insurance. This is mainly due to the fact that the life insurance company is certain to have to pay you a death benefit at some point in the future as long as you continue making premium payments since your coverage lasts the rest of your life.

Whole life insurance premiums are also higher than similar term life insurance premiums because most whole life insurance policies have some sort of cash value. This is like a savings account that builds up inside the policy that you can take loans against or receive if you cancel the policy. Since whole life insurance usually has level premiums the life insurance company is overcharging you in the early years when you are healthier and have less chance of dying. The life insurance company is required by legislation to credit you part of this extra amount you pay in the early years in the form of cash value. In the later years, when your chance of dying increases, the life insurance company is actually undercharging you for the death benefit protection since you are still paying the same premium. The insurance company then uses the early gains to pay for the losses in the later years.

Example of reason to buy whole life insurance:

Pay for funeral or burial expenses.

Whole life insurance is a good way to make sure that your final expenses are not left for your family when you eventually die. You can purchase a death benefit amount equal to the cost of the funeral and burial options that you want or you can purchase based on the premium you can afford. The whole life insurance policy should only be kept until you save enough money outside of the policy to pay for your final expenses on your own. Once you have enough money saved up to pay for your own funeral you will not need the whole life policy anymore.

Term Life Insurance Explanation

2007-12-28T10:39:00.000-06:00

This is part two in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Term life insurance is generally the simplest form of life insurance. I say generally because life insurance companies have come up with different product features and riders that both customize and complicate term life insurance.

With term life insurance, the customer pays the life insurance company a level premium for the agreed upon number of years, the “term” of the policy. In return the company will pay the customer’s designated beneficiary the death benefit or face amount if the customer dies within the term of the policy. If the customer lives to the end of the term, then the policy terminates and the company keeps the premiums paid. Sometimes term life policies have conversion options that allow the customer to convert to a whole life policy before the end of the term period or renewal options at the end of the term.

Term life insurance premiums are usually lower than other types of life insurance because (a) you are only paying for the death benefit coverage because there is not any kind of savings element and you do not receive any benefits if you live to the end of the term and (b) the insurance company only has to worry about your health for a certain number of years. Usually as the length of term life insurance increases the premiums also increase. This is because your health and thus the probability of you dying is likely to increase more in twenty or thirty years than it would in only five or ten years.

Common lengths for term policies are usually in five-year increments from five-year term policies up to thirty-year term policies. There are also term products that renew every year with a higher rate. These are typically referred to as annually renewable term life insurance or an ART product.

Examples of reasons to buy term life insurance:

1. Replace lost income caused by the death of a working family member.

The reason term insurance works well in this situation is that you can easily and efficiently customize the term length and death benefit amount. You can customize the term length of the policy to last until you plan on not having any income to replace (e.g. retirement) or you plan to have enough savings outside of the policy that you wouldn’t need life insurance.

Another reason it works well is that you can customize the death benefit amount to the amount of income that will need to be replaced. For example, if the working husband dies and his non-working wife has a career that she can easily resume, then the husband may only need a
death benefit equal to one or two times his salary. This would give the wife a transition period to find a job and resume her career. If the wife would need five years to get a degree and develop a new career, then it might make more sense to purchase a death benefit equal to 5 or 6 times the husband’s salary.

2. Pay financial obligations.

Term life insurance is also an efficient means to make sure that unpaid debts are not left behind for our families. An example of this would include home mortgages and large credit balances. You can match the length of the policy to the time you expect to repay the debt and you can match the amount of the death benefit to the amount of the debt. Some term policies even give the policyholder the option to reduce the death amount and premiums over time as the amount of debt decreases.

Types of Life Insurance Products

2007-12-21T10:11:00.001-06:00

This is the first part in a series of articles explaining the various types of life insurance products.

Insurance companies have come up with many different types of life insurance products in a never-ending attempt to gather a larger share of the market. This has lead to a lot of confusion among consumers as an increasingly long list of products and terminology is constantly being presented. Sadly instead of increasing their market share and increasing value to their customers, I think life insurance companies have driven away prospective life insurance purchasers by presenting them with too many options without proper education.

In the coming weeks, I plan on venturing through the following list of products and product descriptions in an attempt to give you an explanation of the most common types of life insurance products. Within each product description, I also try to give examples of circumstances that may warrant purchasing one of these types of life insurance products. My product list and descriptions are ordered starting with the most common products and flow towards the more obscure specialty products.

Types of Life Insurance:

Term Life Insurance
Return of Premium Term Life Insurance
Whole Life Insurance
Universal Life Insurance
Variable Universal Life Insurance
Accidental Death Life Insurance
Simplified Issue Life Insurance
Guaranteed Issue Life Insurance
Joint Life Insurance

If you come across any other types of products that you want me to explain then feel free to post a comment, and I will see if can add it to the list.