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Small Business Insurance - I Know I Need it, But Where Do I Start?
Small business insurance coverage is provided by a single policy. This is a business owners policy that will provide property and liability coverage for your business. A business property policy is similar but only covers a building and its contents. The type of policy you need will depend on the coverage that is ...
Should You Use Life Insurance as an Investment?
Investments come in many types including using an insurance policy. If you choose to use an insurance policy as an investment it needs to be a policy that accrues a cash value. This cash value component for insurance policies in found on permanent life insurance only. These are policies that are referred to as a whole life, universal life and variable universal life policy.
Permanent Life Insurance
Permanent life insurance allows you to borrow a from the policy if you need short term funds. Premium that you have paid on the policy will depend on the amount that you can borrow. However, any amount that you borrow needs to be paid back. If you do not pay back money that you borrow from a policy the death benefit will be reduced by the borrowed amount.
When insurance is necessary you should determine the specific type of policy that will offer you a good value based on the price. However, the cost of permanent insurance coverage is expensive which means that the amount to buy needs to be considered. When using life insurance as an investment you may not need to have a large amount of coverage.
Permanent insurance policies do not expire. This is what makes the cost more expensive than any other type of insurance policy. To use insurance as an investment it needs to be purchased when an individual is young. The older a person gets the more an insurance policy will cost. This means that the cash value amounts will have longer to accumulate.
Estate Taxes
Many reasons exist to obtain a life policy as an investment. One reason is to purchase a policy that can be used to pay to any estate taxes that are assessed to heirs when an individual dies. When planning for retirement and you have no dependents a permanent insurance policy for its cash value that will not be taxed.
Cash Value
The cash value for an insurance policy will depend on a variety of factors. These include the amount of time the policy is in force and the premium amount. You have many options that are available to make the premium payment. Premiums for an insurance policy can be paid monthly, semi-annually or with a full-amount payment each year. If you pay your premium monthly, any amount that is above the cost of the base payment will go towards the cash value.
Payments
Life insurance companies that offer permanent insurance policies will only collect a specific amount of premium each year. Payments that are above a set amount for the policy each year will force an issue of a refund. If you want to save additional funds for retirement or for a rainy day, you can make use of the cash value that has accrued by surrendering your insurance policy.
Earnings
Calculate the investment earnings for your policy by multiplying the percentage used for the cash value calculation by the number of years to keep the policy in force. This will give you the projected earnings of an insurance policy if it is used as an investment.
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