Life Insurance Policies: Term vs Permanent

When it comes to purchasing life insurance, deciding which kind of policy to buy can be a challenge. But by learning about the characteristics of available life insurance policies and working together with an experienced life insurance agent, you’ll be able to choose the right policy to protect your loved ones.

Term Life Insurance

As the name suggests, term life insurance provides coverage for a certain period of time, as specified in your policy. This means that a death benefit will only be paid out if you die within your policy’s term. Because of this central characteristic, term life insurance policies tend to be much cheaper than permanent life insurance policies–making it a very appealing option to young adults or families who can’t spend a lot on life insurance.

Though term life insurance comes in two forms–level term (pays the same death benefit no matter when you die during the term) and decreasing term (the death benefit decreases throughout the duration of the policy)–level term policies are by far the most popular.

According to the Insurance Information Institute (I.I.I.) common types of level term policies are:

  • Annual (least popular)
  • 5 year
  • 10 year
  • 15 year
  • 20 year (most popular)
  • 25 year
  • 30 year

Many term life insurance policies are renewable, which means that you may be able to reinstate your policy after the term ends, although reinstatement may be contingent on passing a medical exam and will likely involve an increased premium. Additionally, the I.I.I. reports that most insurers will not renew a policy ending after 80 years of age.

Premiums for term life insurance are typically based on your age and health status at the time the policy is written. Some insurers guarantee your premiums to stay the same throughout the length of the term, but others may not make that guarantee (and increase your premiums throughout the term)–so be sure you’re aware of premium provisions before signing a policy.

Life insurance tip: Buying life insurance when you’re young and healthy will help you secure low premiums. Not a spring chicken? Take care of your health–stop smoking and exercise regularly to get the lowest insurance premium.

Permanent Life Insurance

Unlike term life insurance, permanent life insurance pays a death benefit whether you die they day after you sign the policy or 50 years later. Permanent life insurance policies are also appealing because of their ability to grow tax-deferred over a certain length of time–which can result in a large chunk of change. This cash value can be used in a variety of ways, providing additional benefits to policyholders and their families.

Because of these characteristics, permanent life insurance policies tend to be more expensive than term policies, which may not be conducive for young adults or families with income limitations.

Life insurance tip: Some term life policies can be converted to permanent life insurance policies, so if you’re interested in a permanent policy but can’t afford the premiums, ask your agent about term policies with this feature.

Permanent life insurance policyholders also have a wide array of policy options to choose from. The four common types of permanent life insurance are whole, universal, variable and variable-universal.

Whole life policies are the most common form of permanent life insurance and offer both a death benefit and the additional benefit of a savings account. If you buy a whole life policy, you agree to pay a certain amount for a predetermined death benefit. And, unlike a term life policy, whole life policies have the potential to earn annual dividends–which will earn interest if you let them accrue.

Universal life policies offer more flexibility, allowing you to vary how much you pay and when you make premium payments (with some limitations, of course). You may also be able to obtain a larger death benefit, provided you pass a medical exam, and like whole life policies, your universal policy may earn cash value over time.

Variable life policies incorporate a death benefit with a savings account that you can invest in stocks, bonds or mutual funds. While this may increase the value of your policy, it’s important to remember that if your investments don’t perform well, your death benefit will decrease. To avoid this, the I.I.I. says you can ask about variable policies that guarantee that the death benefit will not fall below a certain amount.

Variable-universal policies combine the features of variable and universal life policies, meaning that you have the investment options of a variable policy and the flexibility of premium payments of a universal policy.

Which Policy is Right for You?

Now that you have some idea of what policy options appeal to you, take the time to speak with a licensed life insurance professional that can answer questions and help you come closer to your life insurance decision. Because when you have all the facts, it makes finding affordable life insurance that much easier!

Efficiency at Work – How Leaders Should Manage Teams

Working as a team leader can be challenging. There are so many pieces that need to come together in order to create an efficient work environment. Leaders are specially prepared for certain issues in executive leadership training, but there are still many unexpected issues that arise in the workplace. For example, social loafing and group norms are challenges that need to be handled carefully. In order to learn how to effectively deal with these problems, it’s important to first understand what they are.

Group norms are guidelines or operating principles that everyone understands and agrees upon. Groups benefit from having strong norms. However, norms don’t just evolve. Especially when groups are made up of diverse individuals, it’s important that they don’t take norms for granted. Executive leadership training explains that the difference between satisfied and productive group members and group members who are frustrated is often the difference between groups that have well-established norms and those that are floundering.

The next issue that can arise involves something called social loafers. Social loafing is when group members get away with not doing their share of work and when other group members let them get away with it. Sometimes this occurs if a worker is likeable, other times it occurs because the other group members just don’t want to speak up about the other’s performance. It’s important to speak up and to be proactive. Right from the beginning, group members need to know what will happen to social loafers. If the group has specific operating principles in place, and everyone understands the consequences, social loafing is much less likely to occur.

Similarly to executive leadership training, in financial management courses future managers are taught the importance of honestly addressing social loafers because they can affect productivity negatively. Financial managers learn how to communicate with different levels of executives as well as communicate strategies, which is important in motivating people to meet goals. It is the financial manager’s job to deliver results, which directly depends on the success and organization of their team.

It’s necessary to have an organized and cohesive team in order to thrive. There are ways to see if you have a cohesive team on your hands. For example, you should first think back about all of the teams that you have belonged to whether it is in the organization you are in now or in previous positions that you may have held. If you think about the best group experience you have ever had, chances are that you are thinking of a highly cohesive team. A cohesive team works together, and you feel valued. You feel your contributions are valued and that people listen but may not necessarily agree. In fact, one of the hallmarks of a cohesive team is that members feel comfortable disagreeing with one another but do so respectfully. Financial management courses discuss how managers should deal with disagreement respectfully in order to be successful.

Overall, leaders can successfully manage their teams by recognizing social loafing before it negatively affects the rest of the group members, harming morale and the team’s performance. Also, managers can be effective by communicating honestly with all team members. Organization, strategy, honesty, and speaking up are keys to establishing strong group norms and ensuring that diversity is a positive influence on the group.

Auto Insurance Company FAQs

What is auto insurance? Most states require the owner of a vehicle to have a certain minimum coverage. But to protect oneself from law suits and expensive repair bills, it makes sense for the customer to go for more than the minimum coverage.

What is liability insurance?

Liability insurance is the coverage that the insurance policy gives the consumer, if he/she has caused an accident that has resulted in bodily injury to another party and/or damage to the property of another person. Bodily injury coverage pays for the medical expenses and the likely loss of wages, whilst property coverage pays for the cost of repair or even replacement for the vehicle of the victim.

What is a 20/40/10?

These are the liability coverage limits. Instead of presenting in terms of thousands of dollars, limits are presented in a series of numbers. 20/40/10 stands for $ 20,000/40,000/10,000, where $20,000 is the coverage for the bodily injury per person, $40,000 is the coverage for the bodily injury per vehicle. $10,000 is the property damage coverage per accident.

Is the minimum liability coverage limit the same, wherever one lives in the US?

It is different in all the fifty states. In Texas, for example one has to purchase at least 20/40/15 liability coverage limits. In California, it is 15/30/5. In New York it is 25/50/15.

It makes sense for the owner to know the local coverage limit and have a coverage which is more than the limit.

How important is the driver?s history in getting a good offer from an insurance company?

Owners with good driving habits are generally rewarded with discounts by the auto insurance companies. These may include people with airbags and centralized locks in their vehicles, people with no tickets history or driving offences etc.

What is an SR-22?

SR-22 is a form that proves that one carries auto insurance. SR-22 status is given for people falling in category of high risk. All the states require SR-22 for people who have had a past history of serious driving violations like drunken driving and reckless driving.

What is no fault insurance?

Several legislations in the US provide coverage like the ?no fault insurance,? where the victim should only prove his/her injury to claim damages from the insurers.

How does one know which auto insurance to choose?

Owners of the vehicles would be advised to choose companies with good credit worthiness. These companies are rated as A, AA, and beyond. The above points can be the best guidelines for any auto owner in choosing the right auto insurance company.

Missing or Lost Life Insurance Policies

Unfortunately it’s not an uncommon story; someone pays the required premiums on a life insurance policy for years and neglects, or forgets, to give the policy, or any information about the policy, to the intended beneficiary. The insured person passes, the policy documents can’t be found, if the beneficiary even knows about it, and the insurance money is never paid out. And those unpaid life insurance dollars run into the billions!

If you think that this is not happening, and you are the beneficiary on a loved one’s life insurance policy, just ask yourself these few simple questions:

1. Do you know the details of the policy?

2. Do you know the whereabouts of the policy?

3. If something happened today, would you know where to find the details?

If you answered, “no,” to any of these questions you’ve got big gaps in your knowledge which could lead to a real financial tragedy.

Further, if you even suspect that you may be a beneficiary, get the details now. Waiting until it’s too late to talk about it can, in addition to the grief caused by the passing of a loved one, cause severe financial hardship. These subjects, we know, are difficult ones to talk about. But to avoid the difficulties of not knowing, THEY MUSTBE TALKED ABOUT.

If, however, you have lost a loved one and are experiencing the difficulty of not knowing, there are some things that you can do. A few of them follow:

1. Go through your loved one’s financial documents for insurance company dividends or premium notices. Many people keep all their important documents in one place; often in a home office, a bedroom closet, or a safe deposit box at their bank.

2. Scan through their current and past checkbooks. It may be that the last premium is paid is recorded there.

3. Check your loved one’s cell phone contact lists and computer email addresses for the name of an insurance agent.

4. Get in touch with the current and/or previous employer who may have a record of a group policy. If your loved one was retired, group coverage may have been converted to individual coverage.

5. Monitor your loved one’s snail mail for a year. Watch for any correspondence from an insurance company.

6. If your loved one’s passing occurred some years ago, you can also check with unclaimed property office of any state where he/she may have lived. If an insurance company is aware of the passing of a policy holder but is unable to locate the beneficiary, after a period of time it has to turn the proceeds over to the state where policy was issued.

Finding a lost or misplaced life insurance policy can be a daunting task but there are ways… and your patience in searching could prove very rewarding. Also, there are services that will, for a fee, assist you in your search. http://www.LostPolicy.com is one such service. Insurance companies are not only willing to give the beneficiary their rightful due, they are obligated to. But it is the responsibility of survivors to make the required notifications and claim any proceeds.