Definition of whole life insurance

Whole life insurance, also known as “cash-value” insurance is a basic and consistent type of permanent life insurance which remains in effect your entire life at a level premium. This life insurance is a good choice got you if you do not expect your life insurance needs to diminish over time. A portion of your premium goes into a reserve fund called ‘cash value’ that builds up over the years your policy is in affect. Your reserve fund is tax-deferred and you can borrow against it, until you withdraw it.

The premiums must generally remain constant over the life of the policy and must be paid periodically according to the amount indicated in the policy. You may also have the option of a single premium -- paying all of the premiums at once with a single lump sum. Your cash values will grow to equal the amount of the death benefit when you turn to age 100.

Although, whole life insurance is very expensive, and if you're on a limited budget, you may not be able to afford all the insurance coverage you actually need. But the plus point is that the death

benefit is guaranteed as long as premiums are met. Also death benefit will never decrease if you don't borrow against it.

Whole life insurance policy's returns will fluctuate with the markets and will usually follow returns

available from other investments like equity mutual funds. However, if you decide to quit your policy, your cash value can be paid in cash or paid-up insurance.

Whole life insurance is most suitable for you, if you want to:

• use it as a tax and estate planning vehicle,

• accumulate cash value for a child's education or retirement,

• pay final expenses,

• provide money for a favorite charity,

• fund a business buy/sell agreement,

• provide key person protection.

Before buying the whole life insurance, you need to think carefully about choosing your level of

coverage. Too often people make the mistake of insufficiently covering or even worse, financially

overextending themselves. This would be a tragic error with whole life insurance policy because

defaulting on premium payments can mean policy cancellation and the loss of your entire investment. So be careful and make sure you:

• pick a life insurance policy that has a guaranteed cash value starting at the very first year,

• choose the one with the highest cash value in the very first year,

• consider "participating" insurance policies which can pay dividends, increasing your policy's value by boosting both the total cash value and the death benefits,

• beware of any insurance policy that levies "surrender charges" when you cancel.

• if you ever need to stop paying premiums, your policy lets you use the accumulated cash value of the life insurance policy to pay the premiums, thus keeping your coverage current.

Life insurance. bargain life insurance when you take out a pension policy

At last, a real life insurance bargain – but as always there are strings attached!

If you take out a new pension policy after 6 th April 2006 and within the same premium pay for life insurance cover, then you can use your pension contribution tax allowance to reduce the cost of your life insurance. This means if you're a standard rate taxpayer, you'll receive 22% tax relief on your life insurance premiums and relief at 40% if you're a higher rate taxpayer.

The combined premium you pay for your pension and life insurance will automatically be reduced by 22% by the pension provider. But if you're a higher rate taxpayer, you'll need to claim the balance to bring your relief up to 40%, on your year-end self-assessment tax return.

But there are three strings attached:

• The pension company must also provide your life insurance and be paid as one combined premium.

• The current value of your pension fund plus the sum insured by your life insurance policy must not exceed Ј1.5 million.

• Your combined annual premium for your pension and life insurance must not exceed Ј215,000.

In practice the savings on your life insurance will not be quite as big as you might otherwise expect. Its because the underlying premium for the life insurance cover will be a bit more expensive than a stand-a-lone policy with the same company and, in all probability, the insurance company providing your pension policy won't be the cheapest on the life insurance market. Furthermore, you can't buy a combined pension and life insurance policy online - so you'll miss out on the Internet's discounted life insurance prices.

Nevertheless, if you're a higher rate taxpayer, your tax savings are bound to guarantee that your life cover is a real bargain! If you're a standard rate taxpayer you'd be wise to do a little homework. Before you buy, you should get an online quote for life insurance to compare against the price you'd pay if you bought it alongside your new pension.

There are some other points you also need to know. Firstly we know you'll ask whether you can convert your existing life insurance policy into a combined pension purchase. The answer is no! The tax relief is only available if from the outset, you take a pension and life insurance policy as one combined purchase.

Secondly, the life insurance cover can only apply to the owner of the pension policy - you can't add in anyone else on the life insurance policy. Joint policies aren't available as a pension/life insurance package.

And whilst many people also add critical illness cover to their life insurance, this is not possible when you have a pension/life insurance package. Critical illness cover pays out a tax-free lump sum if you are diagnosed with a specified serious illness which is listed on your policy. If you want critical illness cover, you'll have to buy a normal stand-a-lone policy.

Finally, if you're going to buy a pension life insurance package and replace your existing life cover, a few words of warning. You'll obviously be older now than when you first took out your existing life insurance policy. This means that the premium rate on your new cover will be higher.

Furthermore, the premium for your new policy could be loaded if you've developed any medical conditions since taking out your original life insurance. Remember, even if you've simply put on weight, your premium could be loaded. In extreme medical cases, the proposed insurer might even totally refuse to provide life cover. To avoid the possibility of being caught without life insurance cover or being forced to accept a more expensive premium, you should obtain written confirmation from your pension company that they will insure you. You then need to compare their proposed cost, net of tax, with your existing premium.

Health insurance

Health insurance is designed to offer financial protection against losses experienced due to illness, accidents, or injury. This type of insurance comes in many forms that offer differing levels of coverage. It can be purchased as part of a group policy or may be purchased by an individual.

Group policies are generally purchased through an employer, associations, or unions. They may be less expensive because the costs associated with administration are reduced. In addition, the employees or association may pay part of the premium.

Group health insurance has become an incentive for potential employees who are trying to cover their or their families' health care expenses. Some policies offer managed care. Depending on the policies of a managed care provider, preventative health care may be part of the plan. Preventative measures may include regular checkups.

Individuals may purchase individual health insurance polices in the absence of company provided benefits or if they are self-employed. Generally individual health plans can be more expensive, however, they also have some benefits.

For example, individual policies can be customized for your specific needs. Shopping around for health insurance can be helpful by allowing you to compare the benefits and cost of different types of coverage. Consulting with caring agents will help you determine the policy that is best for you and what level of coverage you'll need.

You may be able to save money on the premium of your policy if you carry a higher deductible. The deductible is the amount of out of pocket expenses you pay before your coverage begins.

Health insurance can cover a variety of expenses. For example, it may pay for the cost of hospitalization or surgery. It may also pay other hospital expenses such as the cost of the hospital room.

All health insurance policies are not equal in this regard. Some policies will pay a flat rate daily for the cost of a room. Other types may pay everything after the deductible for the room.

Health insurance may also cover expenses due to a disability, and may cover rehabilitation such as physical therapy, or aftercare. Disability insurance, a type of health insurance, may pay expenses for loss of income in addition to health care expenses.

Some policies also provide benefits for medication or necessary medical devices such as a pacemaker. Also, some contemporary health insurance policies provide some dental coverage. However, it's important to note that levels of coverage will vary between policies, sometimes significantly.

Health insurance may also cover you for existing conditions; however there may be up to a year delay before coverage begins for policies of people with pre-existing conditions.

Health insurance may seem like an undue expense when you are young and healthy, but it's invaluable when you need it most. Consult with a health insurance agent to make sure you have a good understanding of the benefits of your plan. They can help you answer any questions you may have about the conditions and benefits of your policy.

It can also be helpful to compare a number of health insurance companies, so you can get the best policy for your individual needs at the lowest rate.

Becoming educated about your policy from enrollment on can help reduce stress levels during a medical emergency. In this way you can also be more proactive with your own care. And you can have peace of mind knowing that if an unexpected situation happens, you will be covered.

For more information, see Make-Getting-Insurance-Easy. com/health-insurance

Life insurance - money saving top tips

More and more people are buying life insurance online and the numbers seem to be doubling every two years. The reasons are clear. Prices are lower on the Internet and life insurance is fundamentally a simple insurance product.

Despite the underlying simplicity of life insurance, most web sites channel their online clients through a telephone based help and advice service manned by experienced personnel. They represent your safety net so if a little technical knowledge is called for, help is at hand.

But it’s always a good idea to have a few Top Tips in your back pocket when you’re shopping online for life insurance. They’ll help you ask the right questions and find the best policy.

1. Always have your Life Insurance policy “Written in Trust”.

This means that in the event of a claim, the money goes directly and immediately to the person(s) you nominate when you first take the policy out. It also avoids all possibility of your estate having to pay Inheritance Tax on the proceeds of your policy and that could represent a 40% tax saving !

All you have to do is tell the online brokerage organising your policy that you want your policy “Written in Trust” and the names of the people who the life insurance company pay in the event of a claim. They will then sort it all out for you. The extra good news is that this service is invariably free of charge. So it’s a win win situation and there aren’t many of those around these days !

2. In the early years a Reviewable Life Insurance Policy will be cheaper but a Guaranteed Policy will work out a better buy in the longer term.

With a “Guaranteed Policy” the insurance company guarantees never to increase your policy’s premium.

With a “Reviewable Policy” you agree that your insurance company can review the cost of your policy at regular intervals. But don’t be kidded – in our experience a “review” is just another word for a price increase. After all, who’s ever heard of an insurance company passing up a chance to charge you more! The review intervals are usually between 2 to 5 years but this does vary between insurance companies. You will find the details of the review intervals on the documents sent to you before you accept the insurance – these are called The Key Features Documents.

So, comparing otherwise like for like policies, in the early years the premiums for a “Reviewable Policy” will undoubtedly be lower than the premiums for a “Guaranteed Policy”. Thereafter, the premiums for a Reviewable Policy increase eventually catching up with and overtaking, the premium for a “Guaranteed Policy”.

In our experience, you can expect the monthly premiums for a Reviewable Policy to exceed those of a Guaranteed policy in about 7 to 10 years and then within the following 10 years, more than double again. If your budget is currently tight then by all means choose a Reviewable Policy - after all your salary may increase in coming years and ease the strain. On the other hand, if the premiums for a Guaranteed Policy are affordable, we think they represent your best buy.

A footnote. Many insurance companies have stopped offering “Guaranteed” rates for standalone critical illness insurance policies. This because they have experienced much higher claim rates than they initially expected. However, you may still find a Guaranteed life insurance policy that also provides critical illness cover. As we have explained, “Guaranteed” rates are especially good value and if you can get a quote for a Guaranteed life policy that includes critical illness cover, you may have a real bargain.

3. Thinking about a Joint Life Insurance Policy?

A Joint Life Insurance policy is usually written on a first death basis. This means that the policy will pay out on the death of the first policyholder, subject to the policy being in force at the time. This leaves the second person uninsured and older. Older people can struggle to get life insurance at an affordable premium, so rather than a Joint Policy consider taking out separate policies now. Overall it will work out a little dearer - but you get twice the cover and double the peace of mind.

4. Taking out a Life Insurance Policy? Now would be an ideal time to include Critical Illness cover.

Are you likely to need Critical Illness Insurance in the future? Yes? Then consider adding it now to the life insurance policy you’re arranging. Why? There are three reasons.

Firstly, a Life Insurance policy combined with Critical Illness cover will work out significantly cheaper than buying two separate policies. Secondly, as we have already explained in the footnote to Tip 2, you may be able to buy a combined Life and Critical Illness policy with a guaranteed premium. That could be a real bargain. Finally, premiums for critical illness cover increase rapidly as you get older – so the sooner you take it out, the cheaper it will be.

5. Don’t confuse Terminal Illness cover with Critical Illness cover.

There’s world of difference between Terminal Illness and Critical Illness cover so it’s important to understand the difference.

Terminal Illness cover pays out the insured lump sum if a Medical Doctor diagnoses you with an illness from which the Doctor expects you to die within 12 months. Most good life policies automatically include Terminal Illness cover at no extra cost. It’s basically an early, and welcome policy payout.

A Critical Illness policy pays out the insured lump sum if you are diagnosed with one of a wide range chronic illness and there is no life expectancy criteria. Indeed, with many of the insured illnesses you could expect to survive for many years. For example: certain cancers, heart disease, stroke, multiple sclerosis, loss of speech, sight or hearing, onset of Parkinsons or Alzheimers disease, third degree burns etc. Say you were an engineer aged 40 and you lost your sight. A Critical Illness policy would pay out immediately and that money could well be vital in helping you and your family through many difficult financial years ahead. If you just had Terminal Illness cover there’d be no chance of a payout.

So as you can see, Critical Illness cover is far more comprehensive than simple Terminal Illness cover and for that reason critical illness cover always costs you extra.