This a big buzzword for many insurance companies out there. But basically all in all it is life insurance. Plain and simple. The only difference is, if you have had a major life event in the last 13 - 18 months, with some carriers, you qualify for what is called simplified issue. That means that normally no medical exam is required to get insured.
What is a life event? Well, that's where the "mortgage part" comes in. A life event is a birth, marriage, divorce, mortgage purchase, or mortgage refinance. Therefore the name Mortgage Protection Insurance. It could just as well be called Birth Protection Insurance, Marriage Protection Insurance, or Divorce Protection Insurance. But as you can see those titles lend themselves to some...well...questionable market positioning.
It is just a fancy name for a term life policy with a death benefit in the amount of your mortgage. That way if you die, the house gets paid and the wife and kids get to stay there now that they have lost your income. I know that sounds a bit morbid, but hey, that's life insurance. And even if it is a divorce, it still fits. After all, if you are the one leaving the home, those are still your kids. Touchy subjects, death and divorce. But then again, so is homelessness.
Now, you might say "but I already have a life insurance policy." Great! That's a good thing, but let us say you have a $1,000,000 whole life policy. And let's say your mortgage is $250,000. And lets say that your income is $120,000 a year. That million is going to last a little of 8 years by simple math. Well, if your wife or husband or kids use the policy to pay off the house so that they can stay there after your death, the time just got cut to 6 years.
Bottom line, because of the fact that you just bought a house, had a baby, got married, divorced or refinanced, you get to apply for that extra security of leaving your family with a roof over their heads and no reason to dip into what you planned to leave them for replaced income. And you get to have it simplified issue.
As an added bonus, you can set it up with what is called a Return Of Premium rider. Basically at the end of the term, if you are still alive and kicking, you can get your money back. Think of it as a savings account with death benefits.
Listen, the last thing I like to talk about is my own mortality as well. But the fact remains. It truly is the debt that all men pay. So, if you are interested in protecting your family against an untimely repayment of that debt and the loss of your income, you'd better do it while you have the chance to do it easy. After a while, you don't get a choice. Later on due to age, illness, or injury, you may not even qualify to receive life insurance at all. Simplified or Non-Simplified.
I'll give it to you straight. There are other ways to insure your family's financial future. Investments, 401Ks, CD's, and even annuities. All of which are geared towards the hopeful eventuality that you live. Life insurance is there in case you die. Both sides of that fence are recommended. Unfortunately most people don't look at the dark side. If you are one of those, don't keep pretending it is not there. Do something about it.
Michael Lynn Graves
Article Source: http://EzineArticles.com/?expert=Michael_Lynn_Graves
2008/09/20
What is Mortgage Protection Insurance Anyway
2007/10/06
Whole Life Insurance Explained - The Pros & Cons Of Whole Life Insurance
By: Guitarjoe
Whole life insurance is a type of policy that provides you with insurance protection for the rest of your life, from the time you actually purchase the policy, until the day you either pass away, you stop making the premium payments or you reach the age of one hundred years. At that point, the insurance company will pay the owner of the policy 100% of the face value, which will also be the cash value. Therefore this type of policy insures you for your "whole life".
One of the interesting things about Whole life insurance is that it also builds what is called "cash value" over time. This cash value should not be confused with the "face value" of the policy. Let me explain the difference between the two.
Face Value = the amount of money that the insurance policy is supposed to provide in the event of the insured person. In other words, if the policy is for $50,000, then the face value is $50,000. If the person was insured for $100,000, then the face value of the policy would be $100,000. Whatever the amount is that the policy is supposed to pay is the face value.
Cash Value = the actual amount that the policy is worth. Cash value will grow over time within a Whole Life policy, however, it will never reach the Face Value amount of the policy unless the insured individual reaches 100 years of age. At this point the policy has fully "matured".
The way that this works is that a portion of the money paid into a Whole life policy goes toward buying insurance, while the remainder goes into an interest bearing account. This money can be borrowed against later in life, if you choose to do so and can be used for practically any purpose, however, just like any other loan it must be repaid.
Whole life insurance isn't as popular as it once was. These days many people are buying Term life instead because it's less expensive and also because that way they're buying only "pure" insurance and can make the decision to invest their money elsewhere. You can always start out buying Term and upgrade to a whole life insurance policy later in life, if you choose to. The decision is yours.
If you are need of an affordable Whole life insurance quote then you must do this before...
Stop! Learn More About Cheap Life Insurance Options And Even Get Free Term Life Insurance Quotes Right Now At TheLifeInsuranceGuys.com or by clicking on Whole Life Insurance Joe Stewart Is A Former Life & Health Agent That Now Works Independently.
Article Source: http://www.eArticlesOnline.com
2007/08/05
Term Life Insurance Understood
By: Roger Kelley
An important part of a sound financial plan, life insurance provides a death benefit to your beneficiaries and can replace some of the income you were earning. This can help preserve any investments, savings, or other assets you intended on paying off.
Term Life Insurance Can Be An Asset:
Term life insurance is a policy that provides coverage to the insured over a certain length of time. This makes this policy an asset to your overall financial portfolio. One key advantage of level term life insurance is that the monthly premiums remain level for the life of the policy (whether it be 5, 10, 15, 20, 25, or 30 years).
However, you may opt for "yearly" renewable term life insurance which has a lower initial premium. With this option the premium rises each year. Be advised that yearly renewable term life insurance is only cost effective for a few years because of the increasing premiums. Before you invest in term life insurance you need to decide if you are looking for a solution that runs more than a few years. A level term life insurance policy can cost less depending upon the number of years you'll require coverage.
Several Good Reasons For Investing In Term Life Insurance:
For starters, term life insurance will cost less than permanent insurance. A potential buyer may have several dependents at home and he/she has to protect his/her income. They may have bought a house and now have a 30 year mortgage for $300,000. In this scenario you can plainly see a good reason to purchase a level term life insurance policy for $300,000 30 year term to cover their mortgage. If something were to happen to the proposed insured between now or anytime over the next 30 years the insurance company would write a check for the full face amount of the term life insurance policy for the survivor. This would allow the survivor to pay off the mortgage and the balance would be paid to the designated beneficiary.
Term Life Insurance Conversion Option:
One nice thing about term life insurance is you can consider conversion options, such as a convertible option. A convertible term life insurance policy means that during a specified time you can convert all or part of the term insurance to a permanent life insurance product. If you chose3 this option you wouldn't have to prove evidence of insurability since you were already insured. For instance, if you take out a term life insurance policy your need for the amount of coverage may change down the road. You may still need some life insurance but can afford to lower the face amount of the policy, thereby lowering your premiums when you exercise a conversion option. The conversion option on a term life insurance policy simply gives you the option to convert over a certain amount to cover final expenses.
The attraction to term life insurance is that it can be bought at an extremely low price and can be very beneficial to young families. If you lock in a term rate at an early age while you are young and healthy the rate is guaranteed for the full length of time on a guaranteed level term.
It is also possible to combine term life insurance with a permanent life insurance policy. During the earlier years of the policy you'll have more coverage. As you get older there's a good chance you may not need as much insurance as you originally applied for. For example, the children may have grown up and the house is paid off. So the need for so much coverage is not there and the term insurance will expire. The client will still have the permanent insurance policy that was put in force at the same time the term insurance was issued. Now the client can use the permanent life insurance to pay off final expenses down the road.
Reasons Why You Might Need Life Insurance:
1. You can protect your family’s home and eliminate your mortgage.
2. Standard of living can be maintained.
3. Give you spouse a retirement income.
4. Provide income to pay off any outstanding debt you may have incurred.
5. Save the family business.
Term Life Insurance Policies:
1. Term policies can meet a wide variety of personal and business needs and are a practical way to receive the most coverage for your dollar amount.
2. You can purchase for a certain period of time (10,15,20,25,30 years) and during this time-frame your term insurance policy will provide protection and pay a death benefit to your beneficiary if anything happens to you.
3. Many term life insurance policies allow you to convert your policy to a permanent policy within a specific time period.
Article Source: http://www.uberarticles.com/articles
Term Life Insurance article submitted by Roger Kelley. Reliable coverage. Receive a FREE no-obligation quote at at Term Life Insurance Click here for other unique term life insurance articles.
Read More......Understanding Life Insurance
By: Barry Waxller
Life insurance is one of those things you need, but probably not something you look forward to buying. Make half an effort and you can save money by getting the best product for your situation.
A classic sketch of a conversation with a life insurance agent would show the person trying to buy a policy with their eyes glazed over. Why? The terminology being used is confusing. Well, let’s change that by discussing some or the common terms used.
An Adjustable Life Insurance Policy is a popular product. As the name suggests, one can adjust the premiums, term, death benefit and time when premiums are paid. Such flexibility lets you coordinate the policy to your current needs as they change.
An Assignment refers to the transfer of the ownership of an insurance policy from one person to another person. The actual document required to do this is also called the same thing.
When you buy an insurance policy, you will be asked to designate a Beneficiary. This is the person that you want to receive the funds that will be paid out from the policy on the death of the life insured.
What happens if the beneficiary listed in an insurance policy pre-deceases the owner of the policy? It can be a nightmare, so insurance companies require you to designate a Secondary Beneficiary. If the primary beneficiary is deceased, this person receives the funds.
An Adult Provision, often referred to as a Control Provision, appears in life insurance policies for a minor. The clause designates an adult to handle all elements of the policy until the minor reaches a specified age.
The Right of Conversion refers to an individual’s right to convert a policy held as part of a group into an individual policy if the person ceases to be part of the group.
There are life insurance polices designed for business obligations. A Credit Life Insurance is taken out on a business owner and used as collateral for some debt. The beneficiary is the creditor providing the loan to the business owner. If the owner dies, the benefits are used to pay off the debt.
A Waiver of Premium clause is something you should try to include in your policy. The waiver essentially says that if you become disabled, no further premium payments must be made. Coverage, however, continues.
A Universal Life Insurance Policy is another pillar of the insurance industry. It is an adjustable policy with a flexible premium. You can choose what you can afford to pay at a given time and a corresponding death benefit is generated. This can be adjusted from time to time.
The Variable Universal Life Insurance Policy is a more recent and popular product. Premiums and benefits are adjustable. Money is accumulated in the policy and can be invested. The flexibility makes the policy attractive.
The important thing to understand about life insurance is that polices differ greatly. This means you must understand exactly how a policy being pitched to you works. If terms are used that you don’t understand, ask for clarification!
Article Source: http://www.uberarticles.com/articles
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