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The Main Types of Life Insurance: A Detailed Guide

The Main Types of Life Insurance: A Detailed Guide

Life insurance is a staple for American households, with approximately 54% of adults in the US holding life insurance policies. Life insurance is a contract between you and the contractor that guarantees your family’s financial security should you die unexpectedly.

It’s important to put a lot of thought into the life insurance policy you choose. That’s because this insurance policy is what will determine your loved ones’ future after you pass on. The first step in choosing the right life insurance policy is knowing the different types of life insurance available.

Today’s post is a comprehensive guide on what types of life insurance policies exist for your consideration. This should help you make a more informed decision the next time you’re looking for life insurance. Let’s jump straight into it.

What Are the Different Categories of Life Insurance?

Before delving into the types of life insurance policies, let’s first look at the categories of this insurance policy. All types of life insurance break down into four major categories, and they are:

Term Life Insurance

This is the most common and popular kind of life insurance. It also has the simplest terms compared to other policies. A term life insurance policy pays your beneficiaries a fixed amount of money should you die.

However, a term life insurance policy only covers you for a specific period. If you die after this period, your beneficiaries don’t get a cent. That’s right; no death equals no compensation even if you paid a bundle in premium costs.

With term life insurance, you’re essentially paying the insurance company to protect your beneficiaries in case of your untimely death. Life insurance terms can be 10, 15, 20, 30 years, or sometimes more. You’ll pay the insurance company a premium for the specific term, and your family receives a death benefit should you die within that period.

Permanent Life Insurance

Permanent life insurance is the other category of life insurance policies. Unlike term life insurance, you’ll have to pay premiums for the rest of your life. The insurer will enforce the policy until your death or until you stop paying your premiums.

Permanent life insurance is more expensive than term life insurance. Your premium amount doesn’t change for the entire policy’s term. Your beneficiaries also get a fixed death benefit should you pass on.

Also, permanent life insurance policies have a cash value. This means that part of your premium acts as a tax-deferred investment and accrues with interest into a bulk payment that your beneficiaries receive when people die.

Level Term Insurance Policies

Like term life insurance policies, a level term policy covers your beneficiaries for a specific time. However, the premiums and benefit amount are the same with level term insurance policies even if you pass away. This is ideal for long-term agreements because while the premium remains the same, the coverage increases.

It’s worth noting that premium rates with term life insurance policies increase as they age. However, level term insurance policies have higher premiums than term insurance policies. Do the math and find out which one works for you.

Yearly Renewable Term Policies

These life insurance policies don’t have specific term limits. However, you have to renew the policy every year. This makes it an affordable option, but things might get more expensive further along the line.

What Are the Types of Life Insurance?

With that out of the way, let’s now look at the types of life insurance available for your consideration. The different types of lie insurance include:

Universal Life Insurance

Just like a permanent life insurance policy, universal life insurance policies have a cash value. However, universal life insurance policies are a tad more flexible than permanent policies with their flexible premium payments. It means you can use part of the cash value you’ve accrued to lower your premium amount.

In fact, if you’ve accumulated a substantial cash value, you might be able to do away with the premium payments entirely. However, there’s a trade-off for paying a lower or no premium at all. It means you have to sacrifice your cash value, which means your beneficiaries don’t get as much in benefits as they should.

Your universal life insurance may act as a long-term investment strategy, depending on how you look at it. Part of your premium covers your policy, while the other acts like your savings. This makes total sense, but this may not be the most feasible long-term investment option.

That’s because your insurer might hit you with hefty management charges that reduce your cash value. Plus, with the annual renewal term, most of your premium charges will go towards paying for the policy and not your “savings.”

With that in mind, it’s worth noting that universal life policies break down into three types:

  1. Guaranteed Universal Life Insurance: This type of life insurance has fixed premium payments. There’s also no cash value with this type of policy. You have to choose a specific age which you want the insurer to guarantee the death benefit.
  2. Indexed Universal Life Insurance: This policy has a cash value, but the insurer attaches it to an index on the stock market. The cash value can make gains, depending on the index’s performance. The policy will outline how much your cash value can increase using a particular formula.
  3. Variable Universal Life Insurance: With variable universal life insurance, the cash value is linked with particular investment accounts. They can be stocks, bonds, or mutual funds. You can adjust the premiums, but there’s no guarantee of a death benefit.

Variable Life Insurance

Variable life insurance is different from variable universal life insurance. Unlike the latter, variable life insurance has fixed premiums but is still tied to investment, typically a mutual fund. Depending on market conditions, you can make some significant cash, but you can also lose a lot of money.

This type of life insurance seems like a good investment option, but it has its downsides. For instance, you can only invest your cash value in the investment option the insurer offers. This limits you from exploring other more promising options.

This policy is also a tad riskier than the other alternatives. That’s because they’re too many variables in your cash value “investment” that may go either way. You could make a killing or lose it all.

Types of Underwritten Life Insurance Policies

Underwriting in insurance describes the process an insurer uses to determine how much risk they’re willing to accept and how much they’ll charge. With underwritten insurance policies, the insurers will underwrite the amount you’ll pay for the policy. Here are the common types of underwritten life insurance policies.

Fully Underwritten Life Insurance

This is among the most affordable life insurance options for healthy individuals. Part of applying for this policy requires a comprehensive medical exam. It also entails a deep look at your family’s health history, hobbies, and travel activities.

The state of your health and your family’s health history will determine how much the insurer will charge you for the policy. The greater your risk of passing on, the more you’ll pay the insurance company.

Simplified Issue Life Insurance

This type of life insurance doesn’t require a medical exam during the application process. However, your insurer might ask you a couple of questions regarding your health. How you answer these questions determines whether the insurer will approve you for the coverage.

The application process is much simpler than a fully underwritten life insurance policy. For instance, instant-approval life insurance utilizes big data, algorithms, and artificial intelligence to approve and decline applications. It also lets you how much your insurance policy costs in a snap.

Simplified issue life insurance is a popular choice for most individuals. However, it’s worth noting that the policy attracts a higher premium than other policies. Plus, its coverage is a tad limited compared to other types of life insurance.

Guaranteed Issue Life Insurance

As the name connotes, this life insurance is guaranteed by insurers. This means that you don’t have to worry about any medical examinations, health questions, and the like. As long as you’re within the age range, you qualify for coverage.

This is an excellent option for most because there’s almost zero chance of rejection. However, there are a few downsides to the policy. One of them is that the policy is slightly more expensive than other policies.

Also, the coverage is a bit low compared to the premium amount you pay. Lastly, your beneficiaries will only get partial death benefits if you die within the first few years of coverage.

Other Types of Life Insurance

Apart from the above, there are other types of life insurance policies you can choose from. These policies include:

Final Expense Insurance

Final expense or burial expense insurance is one of the most affordable life insurance options. It’s a type of mini life insurance policy that’s super easy to qualify for. The term final expense insurance may be a marketing gimmick, considering it’s the same as any other whole life insurance policy.

The only difference between this policy and other life insurance policies is the premium and benefit amounts. The death benefits should ideally cover funeral expenses, but the beneficiaries can use the money for anything. The policy is great for covering minor expenses but not long-term financial security for your beneficiaries.

Joint Life Insurance

Joint life or first-to-die insurance is a type of life insurance for couples. The policy covers both you and your spouse for the price of a single policy. The insurer pays the surviving couple a death benefit if the other couple dies, hence the “first-to-die” tag.

Joint life insurance makes a lot of sense for most couples because it gives the surviving couple much-needed security. However, there’s a tiny problem with this life insurance policy. It doesn’t take into account the income disparity in a couple.

That’s right; joint life insurance adopts a one-size-fits-all approach for couples’ salaries. That means you’ll have to pay a bundle in premium costs even if one of you earns a minimum wage. Remember, the purpose of life insurance is to replace the salary of one spouse should they die.

When you do the math, you may find that taking separate life policies makes a lot more financial sense. However, this depends on your unique situation.

Survivorship Life Insurance

Just like joint life insurance, survivorship or second-to-die life insurance is a policy that covers couples. However, unlike joint life insurance, the insurance company only pays out death benefits after both spouses pass away. It’s much more convenient and affordable than having separate insurance policies for each spouse.

Survivorship has a cash value that you can use as a form of investment. It’s also customizable with riders to fit your situation.

Is Life Insurance Worth It?

There’s always the question of whether getting life insurance is a good idea. The answer is a resounding yes. Life insurance is a great way to ensure the financial security of your loved ones if you die unexpectedly.

However, whether life insurance is worth it depends on your particular situation. If you don’t have anybody under your wing, there’s no need for life insurance. The same also goes for individuals with children who are fully grown and can take care of themselves.

That said, your life insurance policy is only worth it if you pick the right policy. Getting the right insurance will determine whether your death benefits will secure your beneficiaries’ future.

Pick the Right Policy for Your Loved Ones

Now that you know all the different types of insurance policies, it’s up to you to pick the right one for your needs. Weigh all the pros and cons of each policy and pick one that works for you. Your loved ones’ future depends on your choice.

Be sure to check out the other posts on the site for more informative reads.

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Trudeau’s Gun Grab Could Cost Taxpayers a Whopping $7 Billion

Trudeau's Gun Grab
Trudeau plans to purchase 2,063 firearm from legal gun owners in Canada - Rebel News Image

A recent report indicates that since Trudeau’s announcement of his gun buyback program four years ago, almost none of the banned firearms have been surrendered.

The federal government plans to purchase 2,063 firearm models from retailers following the enactment of Bill C-21, which amends various Acts and introduces certain consequential changes related to firearms. It was granted royal assent on December 15 of last year.

This ban immediately criminalized the actions of federally-licensed firearms owners regarding the purchase, sale, transportation, importation, exportation, or use of hundreds of thousands of rifles and shotguns that were previously legal.

The gun ban focused on what it termed ‘assault-style weapons,’ which are, in reality, traditional semi-automatic rifles and shotguns that have enjoyed popularity among hunters and sport shooters for over a century.

In May 2020, the federal government enacted an Order-in-Council that prohibited 1,500 types of “assault-style” firearms and outlined specific components of the newly banned firearms. Property owners must adhere to the law by October 2023.

Trudeau’s Buyback Hasn’t Happened

“In the announcement regarding the ban, the prime minister stated that the government would seize the prohibited firearms, assuring that their lawful owners would be ‘grandfathered’ or compensated fairly.” “That hasn’t happened,” criminologist Gary Mauser told Rebel News.

Mauser projected expenses ranging from $2.6 billion to $6.7 billion. The figure reflects the compensation costs amounting to $756 million, as outlined by the Parliamentary Budget Office (PBO).

“The projected expenses for gathering the illegal firearms are estimated to range from $1.6 billion to $7 billion.” “This range estimate increases to between $2.647 billion and $7 billion when compensation costs to owners are factored in,” Mauser stated.

Figures requested by Conservative MP Shannon Stubbs concerning firearms prohibited due to the May 1, 2020 Order In Council reveal that $72 million has been allocated to the firearm “buyback” program, yet not a single firearm has been confiscated to date.

In a recent revelation, Public Safety Canada disclosed that the federal government allocated a staggering $41,094,556, as prompted by an order paper question from Conservative Senator Don Plett last September, yet yielded no tangible outcomes.

An internal memo from late 2019 revealed that the Liberals projected their politically motivated harassment would incur a cost of $1.8 billion.

Enforcement efforts Questioned

By December 2023, estimates from TheGunBlog.ca indicate that the Liberals and RCMP had incurred or were responsible for approximately $30 million in personnel expenses related to the enforcement efforts. The union representing the police service previously stated that the effort to confiscate firearms is a “misdirected effort” aimed at ensuring public safety.

“This action diverts crucial personnel, resources, and funding from tackling the more pressing and escalating issue of criminal use of illegal firearms,” stated the National Police Federation (NPF).

The Canadian Sporting Arms & Ammunition Association (CSAAA), representing firearms retailers, has stated it will have “zero involvement” in the confiscation of these firearms. Even Canada Post held back from providing assistance due to safety concerns.

The consultant previously assessed that retailers are sitting on almost $1 billion worth of inventory that cannot be sold or returned to suppliers because of the Order-In-Council.

“Despite the ongoing confusion surrounding the ban, after four years, we ought to be able to address one crucial question.” Has the prohibition enhanced safety for Canadians? Mauser asks.

Illegally Obtained Firearms are the Problem

Statistics Canada reports a 10% increase in firearm-related violent crime between 2020 and 2022, rising from 12,614 incidents to 13,937 incidents. In that timeframe, the incidence of firearm-related violent crime increased from 33.7 incidents per 100,000 population in 2021 to 36.7 incidents the subsequent year.

“This marks the highest rate documented since the collection of comparable data began in 2009,” the criminologist explains.

Supplementary DataData indicates that firearm homicides have risen since 2020. “The issue lies not with lawfully-held firearms,” Mauser stated.

Firearms that have been banned under the Order-in-Council continue to be securely stored in the safes of their lawful owners. The individuals underwent a thorough vetting process by the RCMP and are subject to nightly monitoring to ensure there are no infractions that could pose a risk to public safety.

“The firearms involved in homicides were seldom legally owned weapons wielded by their rightful owners,” Mauser continues. The number of offenses linked to organized crime has surged from 4,810 in 2016 to a staggering 13,056 in 2020.

“If those in power … aim to diminish crime and enhance public safety, they ought to implement strategies that effectively focus on offenders and utilize our limited tax resources judiciously to reach these objectives,” he stated.

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Google’s Search Dominance Is Unwinding, But Still Accounting 48% Search Revenue

Google

Google is so closely associated with its key product that its name is a verb that signifies “search.” However, Google’s dominance in that sector is dwindling.

According to eMarketer, Google will lose control of the US search industry for the first time in decades next year.

Google will remain the dominant search player, accounting for 48% of American search advertising revenue. And, remarkably, Google is still increasing its sales in the field, despite being the dominating player in search since the early days of the George W. Bush administration. However, Amazon is growing at a quicker rate.

google

Google’s Search Dominance Is Unwinding

Amazon will hold over a quarter of US search ad dollars next year, rising to 27% by 2026, while Google will fall even more, according to eMarketer.

The Wall Street Journal was first to report on the forecast.

Lest you think you’ll have to switch to Bing or Yahoo, this isn’t the end of Google or anything really near.

Google is the fourth-most valued public firm in the world. Its market worth is $2.1 trillion, trailing just Apple, Microsoft, and the AI chip darling Nvidia. It also maintains its dominance in other industries, such as display advertisements, where it dominates alongside Facebook’s parent firm Meta, and video ads on YouTube.

To put those “other” firms in context, each is worth more than Delta Air Lines’ total market value. So, yeah, Google is not going anywhere.

Nonetheless, Google faces numerous dangers to its operations, particularly from antitrust regulators.

On Monday, a federal judge in San Francisco ruled that Google must open up its Google Play Store to competitors, dealing a significant blow to the firm in its long-running battle with Fortnite creator Epic Games. Google announced that it would appeal the verdict.

In August, a federal judge ruled that Google has an illegal monopoly on search. That verdict could lead to the dissolution of the company’s search operation. Another antitrust lawsuit filed last month accuses Google of abusing its dominance in the online advertising business.

Meanwhile, European regulators have compelled Google to follow tough new standards, which have resulted in multiple $1 billion-plus fines.

google

Pixa Bay

Google’s Search Dominance Is Unwinding

On top of that, the marketplace is becoming more difficult on its own.

TikTok, the fastest-growing social network, is expanding into the search market. And Amazon has accomplished something few other digital titans have done to date: it has established a habit.

When you want to buy anything, you usually go to Amazon, not Google. Amazon then buys adverts to push companies’ products to the top of your search results, increasing sales and earning Amazon a greater portion of the revenue. According to eMarketer, it is expected to generate $27.8 billion in search revenue in the United States next year, trailing only Google’s $62.9 billion total.

And then there’s AI, the technology that (supposedly) will change everything.

Why search in stilted language for “kendall jenner why bad bunny breakup” or “police moving violation driver rights no stop sign” when you can just ask OpenAI’s ChatGPT, “What’s going on with Kendall Jenner and Bad Bunny?” in “I need help fighting a moving violation involving a stop sign that wasn’t visible.” Google is working on exactly this technology with its Gemini product, but its success is far from guaranteed, especially with Apple collaborating with OpenAI and other businesses rapidly joining the market.

A Google spokeswoman referred to a blog post from last week in which the company unveiled ads in its AI overviews (the AI-generated text that appears at the top of search results). It’s Google’s way of expressing its ability to profit on a changing marketplace while retaining its business, even as its consumers steadily transition to ask-and-answer AI and away from search.

google

Google has long used a single catchphrase to defend itself against opponents who claim it is a monopoly abusing its power: competition is only a click away. Until recently, that seemed comically obtuse. Really? We are going to switch to Bing? Or Duck Duck Go? Give me a break.

But today, it feels more like reality.

Google is in no danger of disappearing. However, every highly dominating company faces some type of reckoning over time. GE, a Dow mainstay for more than a century, was broken up last year and is now a shell of its previous dominance. Sears declared bankruptcy in 2022 and is virtually out of business. US Steel, long the foundation of American manufacturing, is attempting to sell itself to a Japanese corporation.

Could we remember Google in the same way that we remember Yahoo or Ask Jeeves in decades? These next few years could be significant.

SOURCE | CNN

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The Supreme Court Turns Down Biden’s Government Appeal in a Texas Emergency Abortion Matter.

Supreme Court

(VOR News) – A ruling that prohibits emergency abortions that contravene the Supreme Court law in the state of Texas, which has one of the most stringent abortion restrictions in the country, has been upheld by the Supreme Court of the United States. The United States Supreme Court upheld this decision.

The justices did not provide any specifics regarding the underlying reasons for their decision to uphold an order from a lower court that declared hospitals cannot be legally obligated to administer abortions if doing so would violate the law in the state of Texas.

Institutions are not required to perform abortions, as stipulated in the decree. The common populace did not investigate any opposing viewpoints. The decision was made just weeks before a presidential election that brought abortion to the forefront of the political agenda.

This decision follows the 2022 Supreme Court ruling that ended abortion nationwide.

In response to a request from the administration of Vice President Joe Biden to overturn the lower court’s decision, the justices expressed their disapproval.

The government contends that hospitals are obligated to perform abortions in compliance with federal legislation when the health or life of an expectant patient is in an exceedingly precarious condition.

This is the case in regions where the procedure is prohibited. The difficulty hospitals in Texas and other states are experiencing in determining whether or not routine care could be in violation of stringent state laws that prohibit abortion has resulted in an increase in the number of complaints concerning pregnant women who are experiencing medical distress being turned away from emergency rooms.

The administration cited the Supreme Court’s ruling in a case that bore a striking resemblance to the one that was presented to it in Idaho at the beginning of the year. The justices took a limited decision in that case to allow the continuation of emergency abortions without interruption while a lawsuit was still being heard.

In contrast, Texas has been a vocal proponent of the injunction’s continued enforcement. Texas has argued that its circumstances are distinct from those of Idaho, as the state does have an exemption for situations that pose a significant hazard to the health of an expectant patient.

According to the state, the discrepancy is the result of this exemption. The state of Idaho had a provision that safeguarded a woman’s life when the issue was first broached; however, it did not include protection for her health.

Certified medical practitioners are not obligated to wait until a woman’s life is in imminent peril before they are legally permitted to perform an abortion, as determined by the state supreme court.

The state of Texas highlighted this to the Supreme Court.

Nevertheless, medical professionals have criticized the Texas statute as being perilously ambiguous, and a medical board has declined to provide a list of all the disorders that are eligible for an exception. Furthermore, the statute has been criticized for its hazardous ambiguity.

For an extended period, termination of pregnancies has been a standard procedure in medical treatment for individuals who have been experiencing significant issues. It is implemented in this manner to prevent catastrophic outcomes, such as sepsis, organ failure, and other severe scenarios.

Nevertheless, medical professionals and hospitals in Texas and other states with strict abortion laws have noted that it is uncertain whether or not these terminations could be in violation of abortion prohibitions that include the possibility of a prison sentence. This is the case in regions where abortion prohibitions are exceedingly restrictive.

Following the Supreme Court’s decision to overturn Roe v. Wade, which resulted in restrictions on the rights of women to have abortions in several Republican-ruled states, the Texas case was revisited in 2022.

As per the orders that were disclosed by the administration of Vice President Joe Biden, hospitals are still required to provide abortions in cases that are classified as dire emergency.

As stipulated in a piece of health care legislation, the majority of hospitals are obligated to provide medical assistance to patients who are experiencing medical distress. This is in accordance with the law.

The state of Texas maintained that hospitals should not be obligated to provide abortions throughout the litigation, as doing so would violate the state’s constitutional prohibition on abortions. In its January judgment, the 5th United States Circuit Court of Appeals concurred with the state and acknowledged that the administration had exceeded its authority.

SOURCE: AP

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