Life insurance is purchased for a number of reasons. One of them is the cash value of the whole life policies.

As time goes by and people  forget how their policies work they could be missing out on some benefits that could be a help.

First is a policy loan. Once a policy builds up a cash value, if a client needs money, money can be borrowed from the policy instead of surrendering it for the cash.

Another option a client has is to have his or her policy converted to reduced-paid up life insurance. The cash value in a policy can be used to buy a smaller policy that would require no more premiums be paid.

Third, the money in a policy can be used to by what’s known as Extended Term Insurance. Extended Term Insurance is simply a matter of using the cash value as a one-time payment to buy a term policy with the same face amount as the original policy. The policy will last a certain  number of years and days based on your age and policy rating.

All these provide a way of keeping your policy if force if money gets tight.

These options are not available with term insurance. If term is all you have at the moment, let’s get together and let me show how you can take advantage of a policy with more possibilities for you and your family.

Call me at (231) 744-9099 or check out www.muskegonlifeinsurance.com

Life insurance helps protect your family’s financial security. Some people have life insurance through work, while others buy individual life policies.

Regardless of what type of life insurance you have, there’s one small detail that, if overlooked, can cause one big headache: naming a beneficiary of your policy.

A beneficiary is the person who receives the proceeds of a life insurance policy when the insured person dies. If you select your spouse as the policy beneficiary, he or she will be paid a benefit at your death. Besides individuals, beneficiaries can be a company, charitable organization or legal entity called a “trust”.

Selecting a beneficiary enables you to take advantage of the numerous benefits life insurance can provide your family. Unfortunately, many people decide hastily or even forget to select a beneficiary.

Avoid These Traps

Not naming a beneficiary – or doing so improperly – can rob loved ones of intended benefits, cause legal complications or create unexpected tax bills. For example, naming a spouse as beneficiary – a common practice – may be unwise if he or she is unprepared or unable due to illness to take over the family finances following your death.

What if your spouse is the beneficiary and then you divorce? If you forget to change the beneficiary to your new spouse, all the proceeds may go – against your wishes – to your former spouse.

Appointing young children as beneficiaries is also risky. A court-appointed legal guardian will hold and manage the life insurance proceeds until they reach 18 or 21 years old, depending on state law. This process generally involves legal formalities, delays and expenses. As a parent, you may be uncomfortable knowing that once your children reach the age of majority, they will be entitled to receive the full proceeds to spend as they wish.

If you forget to name a beneficiary, life insurance proceeds go into your estate and can be subject to estate taxes. One way to address potential problems is by designating a trust as beneficiary of your life insurance policy.

When filling out a beneficiary form, make sure you precisely indicate the beneficiary’s name, social security number, and relationship to you. If you name “my spouse” as the beneficiary and then divorce and remarry, a court may have to decide which spouse you meant.

Because naming a beneficiary is so important, it’s a good idea to ask a knowledgeable insurance or legal advisor for help with the decision. I’ve been helping people with life insurance decisions for almost 20 years. Feel free to contact me at (231) 744-9099 or start with my webesite at www.muskegonlifeinsurance.com

At the age of 50 or over, many people have grown children who have moved out of home and may have their homes paid for at this stage, so why would someone over 50 require life insurance?

Reasons to get Life Insurance Over 50:

• Mortgages or loans may still be outstanding and can be settled by an insurance payout in the event of one’s death.
• Funeral expenses can be covered with the money paid out by a life insurance policy.
• Sometimes other family members such as grown children will purchase a policy for their parents. They do this as a way to plan for the future when their parents are not around.
• Job losses or financial downturns may have caused savings to stop growing.
• With financial troubles in the world, many older kids are returning home or one may be supporting one’s own parents which can make life insurance necessary.
• Leaving cash to beneficiaries. Most of the time life insurance payments are not taxed, so this is a way to leave some cash to heirs which they can keep or use to settle debts.

What are the Limitations for Over 50 Life Insurance?

It is more expensive to take out life insurance over 50 but the expense may be worth it compared to the prospect of one’s partner being landed with debts in the event of one’s death. Health related questions will go back for perhaps 10 years or more and may include questions on immediate family heath issues. Smokers may pay more and one can be expected to submit to a blood and urine test for larger insurance amounts ($50 000 or more).

What Over 50 Life Insurance Policies are Available?

Term life insurance is lower cost insurance because it has a limit such as 10, 15 or 20 years. At the age of 50 or over, most companies will not insure one for longer than 20 years.

• Life insurance over 50 policies are sometimes referred to as senior policies or called final expense. These policies are smaller face value whole life policies designed to provide affordable cover for older people and which will not expire as long as the policy is kept in force.
• Simplified issue life insurance policies are policies where there are fewer health related questions asked by the insurer and older people can qualify a little easier. Also these policies usually provide an immediate death benefit at an affordable rate.
• Guaranteed issue life insurance means that the insurer will waive health questions. But be careful because instead of asking health questions, these policies use a waiting period of up to three years before the policy is in full force and in the meantime, should the insured pass away, the beneficiaries will only receive refunded premiums plus interest or a percentage of the whole face value. Also, the premiums will be higher than simplified policies.

If one has financial obligations such as a mortgage or dependents who are counting on one to pay for college, the best life insurance policy to buy is a standard term life or whole life policy in an amount that can cover a number of family needs, including final expenses.