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Friday, 28 March 2008

Sowtoday, The Comparison between Universal Life and Term Life Insurances
Sowtoday, The Comparison between Universal Life and Term Life Insurances

Universal life and term life insurances are the two most commonly used health insurance plans available in the US today. Both plans provide the necessary benefits to the surviving members in the case of an unfortunate death to meet the funeral expenses, medical bills, pending credit card bills, tax debts and residual mortgages. Every person is strongly advised to take at least one of these plans in their lifetimes so as not to be a burden on the remaining family members after death. This becomes much more important in case the dead person was the sole earning member of the family. Having coverage will ensure some relief on the financial burden to the family, though the personal loss will be irreparable.

However, making the choice between universal life and term life insurance is the most difficult part. Since both these policies have their relative merits and demerits, the confusion becomes all the more rampant. Only proper information on the two kinds of policies would help the person to make a better decision.

This article has been written to reduce the confusion in the minds of potential policyholders as regards universal life and term life policies. By knowing what these policies are about, you would be able to make your decision.

(1) Universal Life Insurance

Universal life insurance is a policy that covers for the necessary death expenses, but in addition it also provides a tax-deferred savings account. Hence this policy is called as a cash value policy. The policy would not begin paying back until at least fifteen years of its initiation; but after that there will be a steady increase in the savings account. When the policy matures, the policyholder is entitled to all those accrued bonuses. People who think of life insurance as a kind of investment are the likely buyers of this kind of policy. Though there are cynical investors who do not take the investment part of the policy in high regard; as they are of the opinion that better investment options are available in other places.

The disadvantage with the policy is that the premiums tend to be higher. But that can be considered as the money being invested. Though the premium rates are higher, they diminish with every payment made; and after a stipulated number of years, there could be no payments to make at all. Once the payments are done with, the policy remains for the entire life of the person. It does not need to be renewed; unless there is a lapse.

(2) Term Life Insurance

Term life insurance does not carry the benefits of a savings account at the end. This is a basic coverage policy which is valid for a predetermined period of time. There are no bonuses from a savings account, but the upside is that the premiums are low. This policy is good for people who have invested their money elsewhere or for those who are looking for a cheap policy.

Term life policies do not carry on till the entire life of the person. They are valid for specified periods of time, such as ten, fifteen, twenty, twenty five or thirty years. After that period, the policy provider may renew the policy. People like these policies for the flexibility they provide as regards periods of maturity. A particular period could be covered with these policies. If a couple needs a policy covering only their child?s college years, then term life insurance is the best option. Thus term life insurances could be looked upon as short term policies to cater to specific needs only.

But the rates of a term life policy tend to fluctuate. The rates begin at low levels, but they would increase as the policyholder advances in years. These policies also need to be renewed and hence there are additional fees that it attracts during renewal. Sometimes the fees are so high that people do not go ahead with the renewal.

Adam Heist is the owner of the Loans website. At their website, you can learn more about Secured Finance as well as many other things relating to the industry. We encourage you to visit our site today and see what we have. Also check Personal Finance for additional informaiton.

Posted by sowtoday at 4:19 AM EDT

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Friday, 8 February 2008

Sowtoday, Medical History Aspects that Health and Life Insurance Companies are Most Concerned about

If you think that illnesses like diabetes and cancer in your medical history are the only things that health and life insurance companies care about, think again. Those are not the only possible causes of death. There are also other data that your medical history could reveal and which a health and life insurance company would consider alarming.

Medical History Aspects that Health and Life Insurance Companies are Most Concerned about If you wish to know how your medical history makes you look in the eyes of a health and insurance company, the following questions will allow you to determine the answer for yourself.

Vices. Obviously, if you are guilty of consuming too much alcohol, nicotine, and drugs even once in your life, this will be reflected on your medical history and your health and life insurance company would naturally learn about it. It's possible that they won't require you to pay exorbitant rates for insurance, but rest assured that you'll still be charged a slightly higher rate than they would charge other people who are free of any vices.

Top 10 Most Common Causes of Death in the United States. If your medical history reveals you to be in danger of having any of the top 10 most common causes of death in the United States, you will be definitely charged higher health and life insurance rates.

As of 2000, the Centers for Disease Control and Prevention cited the following as the most common causes of death: heart diseases, cancer (of all kinds), cerebrovascular diseases, chronic lower respiratory diseases, accidental or unintentional injuries, diabetes, influenza and pneumonia, Alzheimer's, nephritis or other similar disorders, and lastly, septicemia or having bacteria in the blood and which originates from an infection from any part of the body. Septicemia is also considered a common disease resulting and associated with other more serious diseases like SARS or severely acute respiratory syndrome.

Accidents and Job-Related Injuries. Your medical history contains information about every visit you pay to your doctor. Your health and life insurance company will not, however, stop from merely reading what your injuries consisted of. They will also determine the causes behind the injuries. If they learn that you had an accident due to your job or a particularly nasty hobby, those will definitely initiate a new round of questions for you to answer.

According to the National Safety Council, being a pedestrian, pedalcyclist, and motorcyclist are the top three most common reasons for a person to get into an accident. Obviously, being a pedestrian is something that none of us can help. But using a bicycle or motorcycle are obviously two things that cannot happen without your consent - regardless of whether or not it's required by your occupation - and these may also make an insurance company charge you a higher premium.

As mentioned earlier on, being involved in an accident will be included in your medical history and allow a health and life insurance company to research about your past. Consequently, they'll find out whether or not you're telling the truth about your occupation. The National Crime Victimization Survey reported police officers, private security guards, taxi drivers, prison guards, and bartenders as the top five riskiest jobs as of 2000. If your work by any chance falls under any of these categories then prepare yourself for another negotiation because it will take a lot of convincing for an insurance company to still give you low rates.

Emotional, Mental and Psychological Disorders. Physiological risks are not the only things that an insurance company would be concerned about. If your medical history reveals that you previously suffered from any emotional, mental or psychological disorder, the health and life insurance company will then take the necessary actions to determine if you are still suffering from the disorder today, and if you are taking appropriate medication and treatment for it, and also if there are any chances for you to become suicidal or have violent tendencies in the future. Obviously, a 'yes' to either question would not reduce your insurance rate.

The worst thing about any person's medical history is how it often portrays past and present events entirely in black and white, making it harder for you to convince the health and life insurance company to give you a more affordable option. But rest assured that it is possible - and you don't have to lie about it!

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