Life Insurance Lawyers

Types of Life Insurance Policies

There are several different types of life insurance policies to chose from. People typically want life insurance so their loved ones will receive money if they die an untimely death. But life insurance can do more for you than that; it can also be an effective financial tool.

There are two primary types of life insurance policies, term life insurance and cash value life insurance:

• Term Life Insurance - If you have term life insurance you make payments ("premiums") to the life insurance company at regular intervals, such as monthly or yearly. You make these payments for a specified period of time, such as 5, 10, or 20 years. If you die during that term then the life insurance company pays a specified amount of money to whomever you designated as your beneficiary (the person who receives the life insurance money).
• If you do not die during that term then your life insurance pays nothing. Most insurance companies will allow you to renew your policy for another term, but at higher premiums.
• Cash Value Life Insurance - Cash Value Life Insurance is also known as ordinary, whole, and universal life insurance. Cash value life insurance is similar to term life insurance in that you make regular payments called premiums. They're different, however, in that cash value life insurance spans your whole life, whereas term life insurance only covers you for a specified period of time. So no matter when you die, the life insurance company will pay out as long as you have been paying your premiums.
• Another benefit to cash value life insurance is that you will build up "cash value." This means that a portion of your premiums will be kept in an interest earning account. There are several ways you can use the "cash value" of your life insurance:
• Get a loan - You can borrow money against your cash value. This option is better than a conventional loan because the insurance company will not check your credit and there is no repayment schedule. But you cannot borrow more than your total cash value.
• Surrender the cash value - You can cancel your policy and get your cash value in a lump sum. This is often referred to as "cashing out."
• Skip a premium payment - If you need to miss a premium payment you can use your cash value to pay it and continue your life insurance coverage. You can only do this until your cash value reaches zero, at which point your life insurance will be cancelled if you do not pay your premiums.
• There are also some disadvantages. Cash life insurance usually has higher premiums than term life insurance. Additionally, term life insurance tends to be better for older people since there would be less time for cash values to accumulate.

Do I Need an Attorney to Help Me with My Life Insurance Problem?

Life insurance policies are full of technicalities and rigid requirements. Additionally, life insurance is regulated by state law, so you have to know the laws in your locality. An attorney can help you fully understand your life insurance policy and explain how your state's laws affect it. If you ever have to sue your life insurance provider, an attorney will know exactly how to do it.

Vea esta página en español: Seguro de Vida o visita Abogados-Leyes.com para más información legal.