Part of your premium pays for insurance coverage and administrative fees, and part goes into a cash value account, which grows tax deferred. The longer you pay your premiums, the larger it has the potential to grow. If you die when the policy is in force, your beneficiary receives the death benefit, or face value of the policy, which includes the balance in your cash value account.
USING YOUR CASH VALUE – There may be times when you can borrow against the cash value, some- thing you can’t do with a traditional term policy. Interest rates on cash value loans are generally lower than the rates available on other loans.
However, the loan you can take is limited to a percentage of the account value. Even more important, any amount you’ve borrowed and haven’t repaid at the time of your death, plus the interest due, is subtracted from the face value and reduces the amount your beneficiaries will receive. Since your primary goal in buying the insurance to begin with is protecting your loved ones, you may want to borrow against that protection only as a last resort.
Whole life insurance is the oldest and most straightforward type of permanent life insurance. You select the face value, which remains fixed for your life. If you want additional coverage, you can add a term rider or buy another policy. The premium is guaranteed not to increase while the policy is in force. You may also be able to choose among payment schedules, so you can select one that best suits your budget. For example, you might pay a premium each year, either in a single payment or installments. You might buy a policy that lets you pay for a lifetime’s worth of coverage within a fixed period, such as 15 years. Or you might choose a policy that will be entirely paid up when you reach a certain age. The company invests your cash value on your behalf, generally in conservative, slow-growth, but low- risk, investments.
Universal life insurance is permanent insurance that’s a little more complicated than whole life coverage—but much easier to adjust as the circumstances of your life change. While the details of a whole life policy, such as the death benefit and the premium, are generally fixed when you buy, both the death benefit and the premiums you pay may be adjusted with a universal life policy.
FLEXING YOUR POLICY
Like a whole life policy, a universal life policy provides a death benefit and an account value. When you make a premium payment, the insurance company deducts an administrative cost, figured as a percentage of the premium, and deposits the rest to your account value. Then each month, the company deducts enough from the account value to cover the costs of insuring you, including administrative fees. The remaining balance earns interest at a rate that reflects what the company is earning on the investments it makes. If the issuing company earns more than it anticipated, it credits more to your account value. But you never accumulate earnings at less than the guaranteed rate.
Contributions from the book Guide to Understanding Life Insurance in this press release are used with permission from Light Bulb Press.
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Norwalk Insurance Agency Educates On The Cost of Contractors Insurance
Norwalk, Connecticut (findit ) January 20, 2021 – JMG Insurance, a Norwalk specialty insurance agency, offers readers some valuable information regarding how much contractors insurance costs. The new article is guided by the insurance experts at JMG who have extensive experience helping clients find the perfectly priced plan for their needs. They have designed this new article to help readers get a better idea of what factors will affect the cost of contractor’s insurance the most.
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While this new article focuses on explaining how to calculate the cost of contractor’s insurance, JMG’s website offers visitors more information regarding their team, experience, as well as a full list of service offerings. JMG offers personal, business, and specialty insurance that helps clients get the protection they need at the best possible rate. They offer thorough insurance plans for business owners, contractors, errors and omissions, general liability, group benefits, construction companies, and more. Their agency was built on the principles of providing superior customer service and quality insurance solutions for their clients, and they work hard to uphold these values. Their team strives to make the insurance process as simple as possible for every client.
With the addition of this new article, the team at JMG hopes that contractors will have a better understanding of what factors will affect how much a comprehensive insurance plan will cost. For more information, reach out to the qualified contractor insurance experts at JMG today at 1-844-304-7332 or visit their website at https://jmg.com/. Their offices are located at 29 Haviland Street in Norwalk, Connecticut 06854.
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