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Life Insurance. By: Tyler, Maisie , Kenny, & Nikolai. What is Life insurance?. What is Life Insurance? Sum of money received by a beneficiary Based on monthly payments How Life Insurance Works The Insurance Company Give the beneficiary money when holder passes away Policy Holder

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life insurance

Life Insurance

By: Tyler, Maisie, Kenny, & Nikolai

what is life insurance
What is Life insurance?
  • What is Life Insurance?
    • Sum of money received by a beneficiary
    • Based on monthly payments
  • How Life Insurance Works
    • The Insurance Company
      • Give the beneficiary money when holder passes away
    • Policy Holder
      • Makes monthly payments to insurance company
    • Beneficiary
      • Receive money after holder passes away
who needs life insurance
Who needs life insurance?
  • MAY NOT NEED:
    • no financial dependents and probably will not in the foreseeable future
    • retired and living off investments or other income sources
    • A young child, unless child is earning income
  • NEED:
    • have dependents (children, spouse, partner, parents living with you, etc.)
    • have a mortgage or other large debts
    • have a large or complex estate
    • own a business or have a partner in a business
why do we need life insurance
Why do we need life insurance?
  • Providing replacement income for your dependents
  • Create an inheritance for your heirs
  • Fund a retirement
  • As an employment benefit
    • To protect a business against the loss of a key employee
  • Create Savings for your Spouse or Family Members:
    • Some types of life insurance create a cash value (can be borrowed or withdrawn on the owner’s request)
  • To pay your final expenses:
    • funeral, estate costs, and medical costs not covered by health insurance
risk factors
Risk Factors
  • Age
  • Gender
  • Height & weight
  • Medical record
  • Personal habits (smoke, drink, drugs)
  • Occupation
  • Credit Rating
  • Amount of coverage wanted
term life insurance
Term Life Insurance
  • Less $ buys you a larger amount (affordable for young policyholders)
  • Set period of coverage called “term”
  • Policies can be cancelled or renewed at end of term
  • More expensive after each renewal
  • Does not earn cash value
  • Can be converted to permanent policy
term pros and cons
Term: PROS AND CONS

PROS

CONS

  • difficult or impossible to get if you are in poor health.
  • some policies guarantee renewability until specific age.  
  • high monthly payment if smokes, serious health problems, obese.
  • at a young age ensures long coverage
  • low monthly payment
whole life insurance
Whole Life Insurance
  • Whole Life Insurance=permanent life insurance protection
  • Less complicated options
  • Premiums do not change
  • Benefits do not change
  • Earns an accumulates cash value slowly
  • Offers lifetime coverage
  • Cannot be converted to a different policy
  • More costly
whole pros and cons
WhoLE: Pros and Cons

Pros

Cons

  • not allowed to choose separate investment accounts
  • Not good at adapting insurance/retirement plans that change
  • Savings element (cash value) which grows tax-deferred.
  • Premiums won’t increase during lifetime
variable life insurance
Variable Life insurance
  • Also called Variable Appreciable Life Insurance
  • Variable life polices build up cash reserve
  • invest in any choice by insurance company.
variable pros and cons
Variable: Pros and cons

PROS

CONS

  • You assume the investment risks.
  • Can’t withdraw from cash value during lifetime.
  • Can apply interest earned on investments toward premiums
  • Potentially lowering the amount you pay.
universal life insurance
Universal Life insurance
  • The most costly
  • Offers lifetime coverage
  • Cannot be converted to different policy
  • Flexible payments
  • Can make changes to benefits based on needs and lifestyle
  • Earns and accumulates cash value at guaranteed rate
  • The most options to tailor needs
universal pros and cons
Universal: PROS AND CONS

PROS

CONS

  • You assume the investment risks.
  • Can’t withdraw from cash value during lifetime.
  • You assume the investment risks.
  • Can’t withdraw from cash value during lifetime.
what does life insurance cover
What does life Insurance cover?
  • Beneficiary
    • The money that is paid out from the policy will go to the beneficiary: an estate, spouse, or children.
  • Charitable causes
    • Some build a lump sum of money up to donate to a charity.
  • Final expenses
    • Covers burial and funeral costs, as well as medical bills not covered under health insurance.
  • Death taxes
    • Some use to pay their estate taxes, so that their family doesn\'t have to liquidate any property to pay the tax bill.
  • Inheritance
    • An inheritance is started by naming your policy after the beneficiary. The money earned on this policy will go to the heir.
  • Dependents
    • Life insurance is important to your dependents, especially if they solely depend on you financially.
where do i purchase life insurance
Where do I purchase Life Insurance?
  • Life insurance may be purchased from an insurance company through…
    • Licensed insurance agent
    • Internet
    • Direct mail
    • Bank
choosing the right one
Choosing The right one
  • Three questions present difficulty for most life insurance buyers:
    • How big of a death benefit do I need?
    • How long do I need coverage?
    • Where should I buy life insurance?
term costs
Term COsts
  • 25 year old $500,000 coverage- Male: $20.00 Female: $18.00
  • 40 year old $500,000 coverage- Male: $40.00 Female: $32.00
  • 50 year old 500,000 coverage- Male: $98.00Female: 71.00
  • 60 year old $500,000 coverage- Male: $290.00 Female: $190.00
whole life cost
WHOLE LIFE COST
  • Male
    • Age 50
    • 1,390,000 coverage
    • Whole life
    • Gensworth Financial
    • $169 a month
  • Female
    • Age 50
    • 1,390,000 coverage
    • Whole life
    • Gensworth financial
    • $149 a month
  • Male
    • Age 40
    • 250000
    • Whole life
    • AIG direct
    • $15.23 a month
  • Female
    • Age 40
    • 250000
    • Whole life
    • AIG direct
    • $12.23 a month
real life stories
Real Life Stories

The John Darwin Story- The John Darwin disappearance case was an investigation into the faked death of a former teacher and prison officer John Darwin, who turned up alive in December 2007, five years after he was thought to have died in a canoeing accident.

sources
SOURCES
  • "Understanding and Choosing Life Insurance." Financial Planning: A Comprehensive Guide to Personal Finance. Web. 19 Dec. 2011. <http://financialplan.about.com/cs/insuranc1/a/LifeInsurance.htm>.
  • "Why Do We Need Insurance - Life, Auto, Disability | Cheap Auto Insurance." Cheap Insurance HQ - Your Cheap Insurance Headquarters | Auto Insurance | Home | Life | Health. Web. 19 Dec. 2011. <http://www.cheapinsurancehq.com/Why-Do-We-Need-Insurance.html>.
  • "What Is Life Insurance?" Life Insurance - Term Life Insurance - Whole Life Insurance - Life Insurance Quotes. Web. 19 Dec. 2011. <http://www.lifeinsurancewiz.com/LifeInsurance/what.htm>.
  • "HowStuffWorks "Who Needs Life Insurance?"" HowStuffWorks "Business & Money" Web. 19 Dec. 2011. <http://money.howstuffworks.com/personal-finance/financial-planning/life-insurance2.htm>.
  • "Life Insurance Calculator." GenworthFinacial. n.d. Web. 16 Dec. 2011. <http://www.genworth.com/content/products/lifeinsurance/how_much_life_insurance_do_i_need/life_insurance_calculator.html?action=calculateMonthly&age=50&gender=female&qualident=CenterContent.31026>.
  • "Life Insurance." Wikipedia. n.d. Web. 16 Dec. 2011. <http://en.wikipedia.org/wiki/Life_insurance>.
  • "Life Insurance ." statefarm. n.p., n.d. Web. 16 Dec. 2011. <http://www.statefarm.com/insurance/life_annuity/life/life.asp>.
  • "How Much Will Life Insurance Cost Me?" CNNMoney - Business, Financial and Personal Finance News. 04 Sept. 2008. Web. 19 Dec. 2011. <http://money.cnn.com/retirement/guide/insurance_life.moneymag/index9.htm>.
  • Term4Sale - Instant Term Life Insurance Comparisons. Web. 19 Dec. 2011. <http://www.term4sale.com/>.
  • "Still A Colliery And Not A Town." Three Score Years And Ten. Web. 19 Dec. 2011. <http://threescoreyearsandten.blogspot.com/2011/01/still-colliery-and-not-town.html>.
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