Term Life Insurance Lowdown

New Term Life Insurance products from The Principal Financial Group

With the view to offer affordable products with competitive underwriting, The Principal Financial Group has recently announced some critical changes in their Term Life Insurance Products. The Term Life Insurance products now include 15 and 30 year term products as well. There is also an enhanced conversion provision to age 70 along with a new super standard risk class. The low cost flexible options now made available will help life insurance marketers and financial professionals to help protect the assets of their clients and keep them prepared for the unexpected as well.

With the introduction of two new term products, the total number of options available to people opting for term life insurance goes up to five. The different products now available are – 10 Year, 15 Year, 20 Year and 30 Year Term products as well as Annually Renewable Term (ART). The company also has a package that can help people to identify their needs and take informed decisions. The program is called ‘From here to Security’ and includes step-by-step guides and interactive calculators to enable people to understand and assess individual financial protection needs while evaluating their coverage options. Business Wire reports:

"The new Principal Term line of life insurance products offers lower cost and more flexible options for life insurance marketers and financial professionals to help their clients protect their assets for the unexpected," said Deanna Strable, senior vice president of Individual Life and Specialty Benefits, Principal Financial Group.

Term Life Insurance or Whole Life insurance: What do I buy?

Life insurance is something every wise man or woman goes in for. It protects the interests of the individual and his or her family in more ways than one. However it is important to adequately but not over insure oneself. A lot of thought has to be put in before the decision of which life insurance should be taken. Different objectives can be met with different types of life insurances. More often than not, people are confused between term life insurance and whole life insurance and hence are not able to decide between the two. Remember, that term life insurance is temporary and hence provides coverage for a specific time period like 10, 20 or even 30 years. The policy pays off only if you die with in the policy period.

Whole life insurance on the other hand is designed to stay in effect till death occurs. It has to pay off one day. Premium for both stays the same through out the years for which the policy would be in effect. There is however a savings component built in to whole life insurance. Therefore the value of whole life insurance actually increases in value the longer you own them and hence are sometimes referred to as cash-value policies. You may actually be allowed to borrow from your policy if the policy terms state so. Read more on this on The Charlotte Observer.

Is buying a Term Life Insurance a cheaper option?

Perhaps yes! This is what the figures indicate. Term Life Insurance seems to the least expensive life insurance after all. And there is a valid reason for this difference in pricing. When you opt for a term life insurance you are buying coverage for your life and nothing else. This implies that you are not looking at it as an investment option and a way to build up your cash reserves. This is in sharp contrast to life insurances like whole life insurance that have a built in investment component. This investment component is what makes the policy more expensive.

Though this sounds exciting, remember that if you are above 50, you will be charged a hefty premium for a term life insurance. In such a scenario it would be wise to probably go for a whole life insurance. Therefore before you decide to buy a life insurance policy, do your homework and figure out what your requirements are. You also need to assess the kind of coverage that you need and also the amount you are willing to pay for the policy. Best syndication reports:

Many whole life insurance policies call these investments "retirement savings," but there are many other ways to save for retirement without having to choose a life insurance policy that may not be the best for you

Critical Illness Living Benefit

Term life insurance is an investment that does not generate monetary returns as long as the policy holder is alive. But there is one benefit that generates interest-free cash even if the applicant has not died.

The critical illness living benefit allows holders to avail a sum of money if they suffer from a cardiac arrest, stroke, malignant cancer, deafness, blindness, multiple sclerosis, kidney failure, paralysis, coronary artery surgery or any life-threatening illness during the term of the policy.

There are various conditions that have to be satisfied before obtaining this coverage. Not only must the applicant and his immediate family be healthy at the time of application, they should also have a history of good health.

Insurer Asked to Pay Up

An investigation into the activities of the American-Amicable Life Insurance Co. has concluded with the insurer being asked to settle $70 million in cash refunds and policy benefits to around 92,000 consumers in the U.S. military. The company has been found guilty of improper sales of insurance and investment products, according to the 20-month probe conducted jointly by insurance regulators in Texas and Georgia and the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

American-Amiable and its sister concerns were accused of breaching insurance and consumer protection statutes when they sold term life policies termed “Wealth Builder” or “Horizon Life” as investment products to military personnel. Almost all the soldiers who bought insurance from the insurer already had an adequate low-cost life insurance policy for $250,000, a sum that was partially subsidized by the federal government.

As a result of this violation and the subsequent ruling, American-Amicable has been banned from U.S. military bases for a period of five years. It is also barred from contacting military personnel for solicitation or sales purposes.

The companies deny violating any state insurance or consumer protection laws.