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Other types of life insurance

The following types of life insurance provide only certain types of coverage or are sold in special circumstances:

Credit life insurance is a type of policy that lenders buy to cover the balance of a loan when the borrower dies before the loan. Banks or lenders may require you to purchase a policy of life insurance of credit as a condition for a loan.

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If you already have a life insurance policy, you may not need credit life insurance. Perhaps you remember rather assign part of the benefits for death to the lender to pay the balance of the loan.
Credit accident and health coverage pays the balance of your loan if you become ill or are injured and unable to pay the loan. A lender that requires this type of coverage usually adds the cost of premium to the loan.

You may have to undergo some level of assurance for credit life insurance. Texas law prohibits lenders require you to buy credit life insurance or credit insurance for accident and health for some types of loans. The following are some restrictions:

A lender should not require credit life insurance or credit insurance for accident and health as a condition for any mortgage loan. Instead, you can request to purchase an insurance policy guarantee for the mortgage (mortgage guaranty policy, by its English name), which is a type of coverage that protects a lender in case of default under more general circumstances.
A lender should not require you to buy credit and credit life insurance coverage for accident and health for any loan with one term greater than 10 years.

A lender may not charge you a borrower more than the amount of the premium of the company by the coverage, can neither profit by requiring coverage.

The lender may not require you to buy the coverage of a specific company.
Funeral expenses insurance paid pre is a type of special policy to pay in advance for funeral services. An advantage of this insurance is that it fixed the funeral costs at current prices.
Funeral expenses insurance can be expensive in comparison to other types of life insurance. The amount of the insurance premiums often exceeds the amount of the benefit for death. In addition, many policies will not pay the full amount of the funeral expenses if you die before you pay a required amount.

A standard life insurance policy or a well planned savings program can be a better way to pay for the funeral costs. You should look carefully before purchasing funeral insurance and be sure that you understand the details of the policy.

Service at home or in the industry life insurance is a type of insurance that is sold door-to-door. Some policies of the home life insurance service can be a good deal, but many offer reduced death benefits, accumulate cash value slowly or have high insurance premiums.

Policy individual vs. Policy group

Individual life insurance is bought by people and ensures the life of one or more persons in one policy. This type of coverage gives you the most choice, since you have the freedom to buy between multiple companies to find the policy that best meets your needs. Many companies sell individual policies that include only the features that you need.

Individual policies generally have strict assurance guides because the risk of the company focuses on one person. Healthy younger people often pay less for coverage than those older people or who have high risk factors. A company may refuse to sell a policy to someone who is considered high-risk.

Group life insurance is purchased by employers, unions, or Government entities and ensures to a group of people under a single contract. State and federal laws restrict the criteria for insurance companies for policies in group. If you do not qualify for an individual policy due to their age or health reasons, group life insurance coverage may be a good option.

Group policies often offered through employers or other organizations, such as professional organizations, churches or fraternities. Any organization sponsoring a group life policy must offer it to all members of the group regardless of their age or health condition. It is illegal to ask members of the group to purchase a policy as a condition for membership. In group life insurance can be sold as term life insurance, ordinary insurance of life or universal life coverage.

Modification of your coverage

Additional clauses and endorsements are additional benefits of the policy that you can add a policy to expand coverage, usually for an additional premium. Some of the most common endorsements are:

The additional term life insurance adds coverage of life term to a regular or universal life policy. For example, if you need $500,000 of total coverage, it could buy a policy of permanent life of $100,000 with a $400,000 additional term insurance rider. As you have more income, you can convert part or all of the clause to the universal life policy.

Guaranteed insurance ensures that you can buy additional coverage to the company in the future, regardless of their age or health status. These factors could be used anyway to determine the amount of your insurance premium. Generally you should purchase additional coverage before certain date or established the life event, such as retirement or 65 years of age.

The accidental death provides death benefit if you die as a result of an accident. In some cases, a provision for accidental death in your policy can pay double if you die due to an accident. Certain restrictions may apply.

Exemption from payment of premiums for disability insurance covers your insurance premium if you qualify as disabled as defined in the policy. This benefit continues the inability for the duration. This additional clause is usually available only for persons under 60 years of age.

Accelerated by cause of death benefit is an option for full or partial prepayment of the death benefits while you yet live, if it is diagnosed with a terminal illness, specific disease or illness of long term care. Often people buy this clause to help pay for the care you need at the end of his life. The rider usually requires a doctor to confirm that you can not carry out certain activities of daily living.

Conjugal amendment clause provides an additional term coverage for your spouse. Essentially, this additional clause combines two policies into one.

The clause of amendment for children provides term coverage for their children. Most companies require that the son has at least 14 days old, and usually hard coverage until the child is 21 or 25 years of age.

Payment options

Companies typically pay the benefit at death in a single total amount; However, there are other payment options. You or the recipient can choose how the benefit will be paid for death. Common payment options include:

Interest option. The amount of the death benefit stays with the insurance company, and the company regularly pays interest to the beneficiary.

Fixed period. The company pays the benefit for death at regular intervals, with interest, for a selected period.
Refund of life. The insurance company pays the beneficiary a monthly amount established for the rest of his life. With this option, it is possible that the beneficiary receives more than the stated death benefit if he or she lives longer than expected.

Know your rights

Death benefits of timely payment

Insurance companies must pay to the recipient the corresponding to the insurance of life within a period of two months from the date it receives proof of death and have verified that the beneficiary. For an individual life policy, the company must also pay interest on the benefit for death from the moment in which the company receives the proof of loss statement until the moment in which the company pays the benefit for death.

If missing a payment from your insurance premium

Most policies have a grace period of 31 days after the date of payment of the premium at which you can pay for it without that charge you interest and will still have coverage. If you die during this period, your beneficiary receives the benefit by death less the premium that is.

If your policy is has expired

To restore a policy that has expired, the company may require that you pay for part or all the overdue insurance premium, with interest. If upon expiration of your policy, you have a loan for its value in cash, the company can also require you to pay the unpaid interest and restore the loan. Most of the companies will reset a policy within a period of five years, but it may be required to answer some additional questions of health or make another medical examination.

The purchase of life insurance

When you request to purchase a life insurance policy, the company will evaluate your risk factors. According to the information you provide, the company will decide if it sells a policy and how much charged. Call this evaluation assurance. You can expect to fill out a health questionnaire. It is possible that you also have to provide medical records, submit to a medical examination or complete financial questionnaires.

Probationary period

It is important that you fill out the application completely and so accurate. Life insurance policies have a two-year trial period. If you die during this period, the company can investigate the cause of death and verify the information you provided in the application. If the company discovers that you provided incorrect information, or that it withheld information, it cannot be denied payment of the benefit for death. This may be the case, even if the information is not related to the actual cause of death. If the company refuses payment, you must repay the premiums you paid into the policy.

Once your policy has been in force for more than two years, it is undisputed, except if you do not pay their premiums. If you die for any reason after this period, the company must pay the benefit for death. The information you disclosed in a sincere manner never can be used as basis to deny the payment. Never allow another person, including an agent, to sign your application on your behalf.

Most of the companies will not pay benefit for death during the first two years of the policy if the cause of death is suicide. If the company does not pay benefit for death in the event of suicide, it will return the amount of the paid insurance premiums.

How choosing the correct amount

There is a formula to determine the amount of life insurance you need. Some consumer groups recommend to purchase an amount of coverage that is five times greater than their annual household income, while others recommend 10 times your income.

To decide the amount that is right for you, consider the amount of debt you have, the amount of income you will need to replace your family, and if your survivors will have other costs to pay, such as funeral expenses or costs of University. Also, consider if you want to leave a legacy or gift to their beneficiaries.

It is also important to consider the value of the services provided by persons who do not generate income. For example, the care and administration of the home of a father or mother who stays at home with the children should be included.

The intelligent purchase of life insurance

Get quotes from several companies. Each insurance company uses their own assurance guides. A company can sell you a policy with a premium of insurance substantially lower than another company. There are two types of life insurance agents, who have income from wages, commissions, bonuses, or a combination of the three.
or captive agents only sell policies from the insurance company for which they work.

or independent, or brokers, agents sell policies from several companies. A broker can provide you with several budgets of different companies during a single visit or phone call.

Make your own comparisons. Make sure that policies that provide similar levels of coverage. While more features, options, and benefits include a policy, it will cost more. A more economic policy may have less features, or provide a benefit for death substantially less. A more expensive policy could have a better value when you take into account the amount of the benefit for death for every dollar charged. Do not choose a policy based only on price.

Make sure that the agent and company are licensed. An agent or company to sell insurance in Texas without a license is illegal. The surety Association of Texas for the life and health insurance The Texas Life and Health Insurance Guaranty Association, pays part or nearly all claims from companies that have a license in Texas who are going bankrupt or become insolvent. If your company is not licensed and is going bankrupt, its beneficiary may not obtains the benefit for death. You can tell if a company is licensed.

Investigate the company. The financial strength of an insurance company, and the history of complaints tell him much about the quality of service that it provides. You can inquire about the solvency of a company and the number of complaints of customers if you call the consumer help line, or if you use our Web site. Buy a policy of low administrative burden (Commission) or without Commission. You can save money, particularly in a permanent life insurance policy, if you buy a policy with fees and low administrative charges, which altogether is called the load. Financial planners are directors of insurance that have a license and often sold these policies. Generally, financial planners charge customers a set fee. Since low-load policies have less initial fees, you will lose less if you took out money early.

Use your free trial period. Policies in Texas provide a period of free trial of at least 10 to 20 days. During this time, you can cancel the policy for any reason and receive a full refund. Use this time to read your policy carefully to make sure that coverage is ideal for you.

Below we offer some additional tips to help you buy a life insurance policy:
Agents often used tables to show you how to grow the cash value of a policy. Confirm that the table shows a cash value that is guaranteed by the insurance company and not a financial projection of what the company currently pays. The projections are based on assumptions and you should never trust them as a pledge of the policy performance. It is possible to win much less than the projection. Ask your agent a history of projections of the company versus the current growth of cash values. The agent must not oppose to this.

Be careful if an agent tells you that the interest or dividends earned on your policy will make your insurance premiums will disappear during the life of the policy. If interest rates or dividends decrease, it is possible that you have to pay higher insurance premiums or paying for one period longer that expected.

Some agents also sell retirement investments and loans. The law prohibits agents to offer discounts in an investment or loan or offer any kind of gift to induce you to buy life insurance. If you think that an agent has made him an inappropriate offer, call the consumer help line.

Insurance companies sometimes marketed life insurance policies as retirement savings tools, succession, elective funds or mortgage protection plans. The not clearly identify a policy as life insurance is a statement false and violated the law. If you think that an agent or company has made a false statement in a policy, call the consumer help line.

Several simple guidelines can help prevent you from becoming a victim of insurance fraud:
or never pay a policy with cash.
or never sign a blank application form.
or consider the company before buying insurance over the phone or on your first visit.
or if you need help to choose a policy, ask a friend or relative to visit the agent with you. The agent must not oppose to this.
Implications financial have life insurance

Medicaid

The cash value of a life insurance policy is considered as an asset when determining if you qualify for Medicaid. Part or all proceeds from a loan that is retrieved using the policy as collateral could not be considered as property under certain circumstances. If you have Medicaid, you should speak with an attorney or financial advisor to understand any consequence of having a life insurance policy.

Taxes

The cash value of a life insurance policy usually accumulates tax-deferred. This means that you don’t pay taxes until after. The cash value withdrawals are usually not subject to taxes until the amount of removal exceeds the total of premiums paid on the policy.

The law generally considered the benefit as refundable death by loss of the beneficiary, and not income. Therefore, the beneficiaries do not have to pay federal taxes on the income or taxes on inheritances for the payment of life insurance.

If a policy does not have a named beneficiary, or the beneficiary is deceased, the death benefit is paid to the succession of the insured. The heirs will have that pay all taxes on the money received. If you are considering purchasing life insurance, talk to an attorney or financial advisor to fully understand the tax consequences.

Bankruptcy

Unless there is an exemption established by law that is applicable, such as fraud, the life insurance death benefit and cash value are completely exempt from

creditors

all demands in any bankruptcy procedure
execution, confiscation, embargo or other legal process.
How replace your policy with a new
You must check the price and coverage of your policy every few years to make sure that you are still getting a good value and the coverage you need. However, not always replace an old life with a new insurance policy is a good idea. Consider the following:

The new policies usually take longer time to accumulate cash values and pay dividends.
The two-year trial period begins again with the new policy. During this period, if you die and the company discovers that you gave a false statement in the application of its policy, not pay benefit for death.
If the change to a new policy means to remove the value of a permanent life policy early, their cash value could be reduced by rescue fees.

You may have less secure that it needs, if the new policy does not provide the same benefits and coverage than the old policy.

You will probably have to answer some additional questions about your health or have another medical exam.
State law requires officials to give you a warning with tips so consider carefully if a replacement is more convenient.

If you change a policy, your agent can earn a Commission on the sale. An agent that convinces someone to switch to a new policy with the purpose of gaining a Commission, regardless of the implications of coverage, acting illegally. This is called transaction to influence. If you think that an agent has unduly encouraged him to sell a policy to buy a new, you may file a complaint with TDI.

Travel expenses and life settlements

Sometimes you need to convert your life insurance policy into cash or use some of the money that would be paid with the benefit for death. People do that sometimes because they deplete their savings for retirement or become seriously ill and need expensive treatment or care.

A life insurance policy is a personal property. You can sell it as well as other property. However, there are special regulations. You can sell their life insurance policies to an authorized supplier of liquidation of life, in Exchange for a percentage of the policy death benefit.

If you have a terminal illness, you can sell your life insurance policy and receive a settlement of life, formerly known as an early settlement. To do this, your doctor must determine that two years or less of life are to you. Under federal law, all income of an early settlement are tax-free.

If you do not have a terminal illness, he could still sell their policy and get a life settlement; However, it may owe taxes on money earned by the liquidation of life.

Amount of sale

The settlement provider will only pay a percentage of the face value of the policy. For example, a life settlement provider could pay $75,000 for a policy of life insurance that will pay $150,000 when the insured dies. There are no laws requiring a minimum sale amount. Settlements typically range between 10 and 75 per cent of the face value of a policy.

It is a good idea to contact several suppliers of liquidations, as prices may vary. These settlements providers generally considered the following factors to determine how much you pay for a policy:

Their life expectancy. Settlement providers pay more for policies if you have a shorter life expectancy. Therefore, the selling price per payment for travel expenses, as it was known previously, is generally higher than the liquidation of life. Most payments providers won’t be buying a policy in a liquidation of life unless you are age 65 or older.

Insurance policy premiums. Since the supplier liquidations usually assumes all future payment obligations, a policy with lower insurance premiums is worth more.

Revenues can be obtained by a liquidation by travel or life can affect your eligibility for Medicaid benefits or other benefits from the Government. Income may not be exempt from creditors or bankruptcy procedures. Before entering into a life settlement, consult a lawyer or financial adviser.

Life settlements providers and brokers (agents representing policyholders to negotiate payment transactions) must be registered. For a list of providers of life settlements and registered brokers.

Alternatives to consider

There are other ways to convert policy into cash. The following are other options:
If your policy has cash value, you can get the cash.
Many lending institutions offer loans using your policy as collateral.
A policy with a provision or rider to accelerate the benefits will pay in advance all or part of the benefit for death until you die if they diagnosed a terminal illness, a specific disease or illness requiring care in the long run.

Annuities

Life insurance companies, agents and brokers can sell annuities as a kind of investment. Annuities can provide a way of generating savings or have an immediate income.

There are two main types of annuities: fixed annuities and variable annuities. Each type has certain characteristics.

Fixed annuities have a guaranteed minimum interest rate. Money Investing and their profits are guaranteed not to lose money.

Variable annuities allow you to select sub accounts that range from conservative to very aggressive. The potential gain is greater with a variable annuity, but also is the risk. Money put into a variable annuity is not guaranteed and may lose money.

In addition to the two main types of annuities, each annuity can be deferred or immediate.
An annuity deferred usually is used to generate savings. Money increases with tax-deferred and is removed in the future, typically during retirement or death. A deferred annuity has two phases; the phase of accumulation, in which the money is invested, and the phase of payment, when the money is withdrawn or paid to the owner of the annuity.

An immediate annuity immediately provides a source of income “type pension” of the money that you give to the insurance company. You can choose to receive payments during a certain period of time, for the rest of your life, or for the rest of his life and that of your spouse. It is important to read the contract and understand what happens with their money in an immediate annuity when you die.

Annuities may not be the best choice for everyone. It depends on your needs and objectives. Typically, they may apply charges of rescue during the first seven years. Therefore, annuities are not usually good short term investments.

When you purchase an annuity, you make a payment to the insurance company. Many investors buy versions of the same annuity. All premiums of insurance buyers combined into the Fund or account, which accumulated earnings. In Exchange for an administrative fee, a portion of the proceeds, or both, the company that manages the annuity agree to pay you a profit on their investment.

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