LIFE INSURANCE AND THOSE QUALIFIED FOR IT

Life estate deeds give an individual the right to enjoy all benefits of ownership of property while they are alive. As soon as the individual dies, the life estate ends, and ownership benefits seamlessly pass onto the remainder person on the estate. This tool is often used in estate planning to make sure a home is effectively transferred to a child. For example, John wants to pass his home onto John, Jr. He wants to avoid probate and lawsuits in doing this after his death. As such, he passes the home onto John, Jr., today. However, John needs to live in the home for the time being. He establishes a life estate deed. This allows him to live in the home and gain all the benefits, and costs, of home ownership until the day of his death. At that point, John's life estate expires. John, Jr., does not have to inherit the house through an estate. Instead, he is already the named owner of the home, and he can begin receiving ownership benefits immediately. Once a contract for a life estate deed has been signed, it is difficult to revoke it. The parties listed in the contract would have to initiate the revocation because they are the lawful owners of the property. Another withdrawal option is to determine the parties were not in a sound legal mind or committed fraud when the contract was signed. This is very difficult to prove. Most cases involve a lengthy lawsuit and very expensive legal costs because life estate deeds are carefully drawn and executed. There are many different types of life insurance policies on the market today. Not all of them are suitable for every type of person. This article considers a few of the different types of life insurance policies and who usually purchases them. Term Insurance One of the most common forms of life insurance is term insurance. This type of life insurance will guarantee a payment to your loved ones for a certain period if you die. For example, you might decide to purchase a 20-year term life insurance policy. This will ensure that if you die anytime within the next 20 years, your beneficiary will be paid a lump sum. This type of insurance is traditionally the least expensive option when it comes to life insurance. Therefore, this type of insurance is very popular with those who do not want to pay any more than they have to. Many individuals that are just starting out in their careers and are on tight budgets tend to go with this type of insurance. The early portion of your adult life is usually the time when you have the most at stake. You may have a new mortgage and car payments and be trying to support a young family. Therefore, you need to make sure that your life is insured in order to protect your family. Term insurance provides an easy way to do this. Whole Life Insurance Another very popular form of life insurance is whole life. Whole life insurance is a type of insurance that provides a death benefit for your entire life. Therefore, at some point, someone is going to get paid when you die. With this type of insurance, you are going to be paying a larger premium than you would with term insurance. The reason behind this is that this type of policy also carries with it an investment aspect. Part of your premium is going to go into an investment fund that is professionally managed. The managers will choose investments and bring in a return for the fund. This actually creates a cash value for your policy. Therefore, if you decide to cash in the policy, you will be able to get back some money. This type of life insurance also provides you with the ability to borrow against the cash value in most cases. Individuals that choose this type of insurance want to ensure that they have a death benefit regardless of how long they live. Many people also like the "hands-off" investment aspect of it. Universal Life Another type of life insurance is universal life. This also provides a permanent death benefit. However, with this type of insurance, you will have more control over your money. When you pay your premiums, part of the money will go towards a cash account, and part will go towards the death benefit. Depending on how the investments in the cash account are going, your premiums will fluctuate. Therefore, you can potentially pay less of a premium with this type of insurance.