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The entire death benefit of a whole life policy is free of income tax, except in unusual cases. [3] This includes any internal gains in cash values. The same is true of group life, term life, and accidental death policies. However, when a policy is cashed out before death, the treatment varies.
Supplemental life insurance is designed to boost the coverage your employer’s basic group life policy provides, allowing you to secure a higher death benefit than the base policy alone. Many ...
Universal life insurance addresses the perceived disadvantages of whole life—namely that premiums and death benefits are fixed. With universal life, both the premiums and death benefit are flexible. With the exception of guaranteed-death-benefit universal life policies, universal life policies trade their greater flexibility for fewer guarantees.
Variable life policies: These have a guaranteed death benefit and cash value—but you can invest the cash value to earn higher returns. The investments do come with risk—and may even lose value ...
A viable alternative to the life-with-period-certain annuity is to purchase a single-premium life policy that would cover the lost premium in the annuity. Impaired-life annuities for smokers or those with a particular illness are also available from some insurance companies. Since the life expectancy is reduced, the annual payment to the ...
This type of policy is particularly beneficial for older individuals or those with health conditions that might make it difficult to get other types of life insurance coverage. Death benefits for ...
The phases of an annuity can be combined in the fusion of a retirement savings and retirement payment plan: the annuitant makes regular contributions to the annuity until a certain date and then receives regular payments from it until death. Sometimes there is a life insurance component added so that if the annuitant dies before annuity ...
Graded death benefit policies: Policies like guaranteed issue life insurance often have a graded death benefit period, typically the first two years. During this period, if the insured dies from ...