Multiple Protection Insurance

There are many types of multiple protection insurance policies that one can buy to ensure that their family is taken care of with death benefits. Learning the different types of these insurances can help one make an informed decision on the best one for their situation.


1. What Is Multiple Protection Insurance?

Life insurance is a contract written up between an individual and the insurer. The policy agrees to pay out a sum of money when the individual dies, or when the policy matures. The policy owner agrees to pay a premium at regular time periods, usually monthly, or in lump sums. With a life insurance policy, the policy will pay the benefits to the designated beneficiary of the policy, whomever the policy holder has previously decided on. Insured events may not only be death, but also a terminal sickness. A life insurance policy is a legal document, one that must be followed upon the holder's death. There are two types of common insurance policies, term life and whole life.

Multiple protection insurance is a combination of term and whole life insurance. This life insurance policy will pay some part of the face value during the period of the term policy. When the term period expires, it will become a whole life policy. The time that both the term and the whole life coverage are in effect is what is considered to be the multiple protection period of insurance.

2. Whole Life Insurance

There are many different features of whole life insurance. The first is that premiums are usually level and can be payable for the life term of the individual. Your annual premiums will be lower the younger you start the policy. Dividends can be earned when one purchases a whole life insurance policy. Dividends happen when life insurance costs end up being smaller than the buyer thought in the beginning of the premium. A portion of your life insurance policy may then be returned to you as a dividend, but it is not a guarantee.

Some of the money that one pays into a whole life insurance policy will grow into guaranteed cash value. A term life insurance policy will not do this. If you give up your policy, the cash value will then be made available to you. With a policy in force, the policy holder can borrow against it and pay the current policy loan interest rate, whatever it may be at the time. Different factors decide the amount of your guaranteed cash value, such as the kind of policy you have, how big it is, and how long you keep it for. The growth is also tax deferred. Any borrowed amounts will lessen the death benefits and value of the cash surrender.

3. Term Life Insurance

Holding a term life insurance policy will give death protection for a set period of time, commonly known as a term. This is the most common and easiest form of life insurance, developed so people on a smaller budget could afford life insurance. For a somewhat small premium to start, term insurance can be bought in large amounts. This works well for life insurance coverage to provide extra coverage in your children's youngest years. The features of receiving term life insurance are very beneficial. It is initially affordable. The premiums are adjustable, which means that a company can either lower or raise premiums if changes occur within the policy holder's life such as investment earnings, expenses, and more. This is not something to worry about, however, as a company is not permitted to raise their policy above whatever the maximum premium that is already stated in your policy.

A term life policy is usually renewable, which can let the policy holder continue with their coverage even after the original coverage period. When the policy is renewed, the premium will increase to whatever the amount is for the age of the insured. Most policies allow the holder to convert them to age 75, which can allow the policy holder to exchange their current policy for a permanent life insurance policy.

4. Why Buy Life Insurance?

It is important to purchase a life insurance policy, especially when you have a spouse and children. A multiple protection life insurance policy will pay your beneficiaries a specific amount of money when you die. This may be just the time they need it most.

There are many reasons your family will need money if you die, especially unexpectedly. They will be able to keep any houses or apartments that are owned by either paying off the mortgage or at least keeping up with the rent. A life insurance policy can help your spouse keep paying any car payments, keep up on credit card debt, pay any childcare expenses, and keep medical costs current. Life insurance can also pay regular household bills, such as phone, gas, and electric bills. It can also pay everyday bills such as food, clothes, fuel, and much more.

Another important reason to have life insurance is to help your children pay for their continuing education. The death benefits paid out can keep a younger student in private school, or help pay for college expenses such as room, board, books, and other expenses. Finally, a life insurance policy can help pay funeral expenses when you die, which can be quite substantial. Funeral and burial costs can be more than many families can handle unexpectedly. Having adequate insurance can make things much easier on a family in need.

5. How Much Life Insurance Is Enough?

Before applying for a life insurance policy, it is important to figure out just how much you think you will need. Figure out how much cash your spouse or dependants will need in the event of your death. Factor in the number of children you have, and what their needs may be. Will they be going to college, or are they in college? Is there a family business that needs to be run and maintained? Is your home paid off, and if it is not, how long is your mortgage? All these questions need to be examined before deciding how much life insurance needs to be purchased. Individuals vary, so individual insurance will vary, as well.

Most life insurance companies maintain that the amount of insurance needed should equal 5 to 7 times the policy holder's annual gross income. If you plan to make any charitable donations at the time of your death, make sure you purchase enough life insurance to achieve that goal. Make sure that there is enough money to be evenly distributed between your spouse and children, and that everything can be easily covered. Death is a difficult and devastating thing-struggling in debt is the last thing families then need to endure. Having enough life insurance can make at least one aspect of your family's lives easier.

6. Who Should Buy Life Insurance?

It is a common misconception about who should buy life insurance, especially a multiple protection life insurance policy. Many people think they are too young to buy life insurance. This is simply not true, especially if you are married and/or have children. Parents are one of the biggest groups who should purchase life insurance. Life insurance can provide for a spouse and children in the event of an untimely death. With bigger families come bigger houses, bigger cars, and bigger bills. Death benefits can help a grieving widow handle these, and take care of the children, as well.

Those who are a single parent are especially obligated to buy life insurance. As a single parent, one must ask themselves what would pay for the kids if they died. Who would take care of them? A life insurance policy can help handle this issue. People that run a small, family-owned business certainly need life insurance. If the main breadwinner dies, a life insurance policy can keep the business up and running, pay the bills, and keep the payroll current.

There are many reasons that one should purchase a life insurance policy. Simply knowing that your family and children are taken care of is enough reason to purchase a multiple protection life insurance policy.

7. Modified Premium Whole Life insurance

Another part of multiple protection life insurance policy is modified premium whole life insurance. This is permanent insurance that can protect the policy holder for the rest of their life, as soon as it is purchased. This permanent insurance can accumulate cash value and can receive dividends, as well. The premiums are typically lower than that of whole life insurance, and they remain the same for the first five years of the policy's life. In the sixth year, the premium increases, and will remain level as long as the policy is in effect.

Modified premium whole life insurance is an excellent part of having a multiple protection life insurance policy. It provides mortgage protection, which can help pay off mortgage debts if the policy holder dies. Cash value can be accumulated throughout the policy life and used to supplement a retirement fund. Remember, this will decrease the benefits that will be received at death. You can also give your benefits to a charity of your choice upon your demise. Modified premium whole life can help pay for any dependants' schooling after death, or help keep a family business up and running. There are many benefits to this type of insurance.

8. Benefits Of Modified Premium Whole Life insurance

There are other benefits to including this type of insurance in your multiple protection life insurance policy. This insurance is great for businesses, as there are executive bonuses, salary continuation, deferred compensation, and more involved with having it. Having this life insurance means that your permanent protection will never be cancelled, provided you are paying into your premiums. The first five years' premiums are lower, and the policy has a cash-deferred cash value accumulation. The dividends on this type of policy, if earned, are determined by the board of directors of the company. When it becomes payable, it may be used as cash or to buy more life insurance. It can also be used to reduce the premium you pay for the policy.

A qualified life insurance agent can help one pick the right type of multiple protection life insurance policy. There are many qualified companies that offer insurance, and the sooner you get started on a policy, the better.

9. Long Term Care

Long term care is a type of insurance that is used for nursing care. It is primarily for people with disabilities or chronic illnesses. Since these issues can be very expensive, long term care insurance can be a great solution. Long term care insurance picks up when other insurances won't. This type of insurance can cover things such as help for people living in their home, such as cooking, cleaning, bathing, and dressing. It can help those going to community programs. Long term insurance can help pay for the costs of visiting nurses, or for nursing home care. It can also help with assisted living services.

Middle age is probably the best time to think about long term care. This is the time that you will be most likely eligible to get a life insurance policy, and the premiums will probably be lower. There are different types of coverage you can get, such as a policy that only pays for nursing care or home care. There is also the ability to put together a package that can include nursing homes, assisted living, and more. You can also decide what your benefit period will be, such as whether you want benefits to last from three to six years, or even for the rest of your life. You can add inflation protection to make sure your premiums do not rise with the continuing rise of health care. Make sure to talk to a licensed professional to determine the needs of your policy. Long term care can be beneficial to many people, especially if it is included in a multiple protection life insurance policy.
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