Life insurance
Life insurance is a type of insurance that provides payment to the family members or the related beneficiaries after the person who has taken the insurance dies. You have to pay the monthly premium. Life insurance is of three different types.
It has a specific term. These policies are the most common types of term life insurance, but there are some policies that have a longer term. The monthly payment that you make is called the premium.
This life insurance is the cheapest among all types of life insurance.
You can decide the monthly instalments that you have to pay as well as the coverage period.
The drawback of this type of policy is that if the policyholder doesn’t die within the term of the policy, the policy expires, and the beneficiaries do not get any money.
The whole life insurance is also called permanent life insurance. In this, the family of the policyholder gets money even after he dies.
If the policyholder dies after several years, then also the family of the policyholder gets the money.
The premium amount is fixed for the whole term period of the insurance.
The premium amount in the case of whole life insurance is fixed and is expensive.
This is a type of life insurance which is very flexible. For example, if the policyholder gets fired from his job due to any reason, then he can reduce his premium amount.
Pros of universal life insurance?
As discussed earlier, the premium amount is flexible and can be adjusted according to one’s needs and requirements.
The coverage is for the whole life.
Cons of universal life insurance?
Universal life insurance is the most expensive.
Determining the cost of insurance?
Now, let us look at how to determine the cost of life insurance. The cost of life insurance depends on various factors that determine the amount that the policyholder has to pay as the premium, such as the health, age and the type of coverage chosen by the policyholder.
Discuss factors in detail
The whole life insurance costs more than the term.
The premium varies directly with the payout amount. If the payout amount of the policy is high, then the premium amount is also high.
If the age of the policyholder is more when he buys the policy, then the cost of the policy is also higher.
Another factor that determines the cost of the policy is gender. Females live longer than men. So, the females have to pay lower premiums than men.
Cash flow banking
Cash flow banking is a strategy in which the clients do not rely upon loans taken from traditional loans instead prefer to buy insurance policy. This concept is very easy to understand. Also, you have to pay lower interest.
How does cash flow banking work?
Firstly, you have to buy a whole life insurance policy and wait for some time until the value of your policy increases. Later, when you are in need of money, you can get a loan against your policy instead of taking a loan from traditional lenders who charge high interest rates. In this case, the policy acts as collateral for getting the loan.
How do you choose whole life insurance?
A whole life insurance policy is the basis of cash flow banking, and it is very important to set up the policy correctly. The first step is buying a policy with dividends. Dividends are the amount of money given to policyholder by the insurance organisation.
Another important factor is paid-up additional insurance. They increase the policy value of the insurance. Generally, the paid-up additional insurance is combined with the dividends.
Benefits of cash flow banking
The interest rates charged by life insurance and other insurance companies are generally lower than those charged by traditional loan providers and credit card providers.
Most of the banks and other financial institutions pay you interest only on the amount that is present in your account. For example, if you withdraw some amount from your bank account, then you will get interest only on the remaining amount in your bank.
Whereas in the case of insurance companies, you get the same dividend even if you have borrowed against your policy. Thus, you would be earning the dividend on the whole amount that was initially present.
As in the case of cash flow banking, you borrow funds against your insurance policy; you will get access to the cash quickly whenever you need it. You don’t have to get any application approved and processed.
You do not have to pay taxes on the funds that you get. Thus, this helps save your money, which otherwise would have been used in paying taxes.
The loan terms are flexible, and if the client is unable to pay the loan, the principal amount, along with the interest rate, is deducted from the policy. This is a better way as compared to that of traditional loans.
Downsides of cash flow banking
Cash flow banking has many advantages, as discussed above, and also is a very effective strategy, but it is not a practical way to manage our money and funds. There are certain limitations of cash flow banking, which are discussed below.
The mutual funds company provides dividends, which are quite reliable, but they are not guaranteed, and it is quite risky.
The whole life insurance policy premiums are expensive. These are risky if you are not sure that you can pay the high amounts of premiums for a longer duration of time.
These funds take time to build
Before borrowing against your policy, you have to grow your policy. This process may take many years, and if you decide to get a loan before completing the required conditions, it may become difficult for you.
Cash flow interest is not a practical option for all. If the person can’t afford the whole life insurance policy, then the term life insurance policy is worth considering.
What is Allstate car insurance?
Allstate is an auto insurance company. Along with providing car insurance, it also provides motorcycle, boat and pet insurance as well. It also provides certain discounts, but the premium rates of Allstate insurance are higher than other types of insurance.
Allstate coverage options
Bodily injury liability protection
This coverage is required in most of the states. It covers the physical injuries that are given by the policyholder to the other people.
Property damage liability protection
This coverage is also required in all the states in the US. In this type of protection, the damage which is caused to another person’s or
The organisation’s property by the policyholder is covered. It is primarily used in case of damage to other’s cars, but it can also be used in case of damage to buildings, trees, fences, mailboxes, etc.
This coverage includes paying for the damage incurred to the policyholder and the passengers of the policyholder’s car. It also includes the expenses required for the funeral in case the person dies. The cost of other essential services, such as child care or dog care, which the person is unable to do because of injury, is also provided.
This coverage is commonly known as med pay. It covers all the medical costs of the policyholder and the other passengers in his car, no matter whose fault the accident occurred. It is an optional coverage, indicating that it is not required in all the states of the US.
In this type of coverage, the damage that is caused to the policyholder’s vehicle due to a collision with another vehicle or other object is covered.
This provides coverage to the car that is damaged due to events other than collisions, such as thefts, vandalism, fires, natural disasters, etc.
This coverage provides basic assistance such as tow, tyre changes, unlocking, etc.
If your vehicle is damaged due to some cause, then the cost of repair is provided to you.
This includes the insurance policies for companies such as Uber, but they only provide coverage if the passengers are in the car.
Allstate also provides various kinds of discounts. These discounts help to reduce the costs of the auto insurance bill of the policyholder. The various discounts offered by the company are
Automatic payment plan discounts, etc.
How to lower car insurance costs?
Many insurers provide car insurance, and all provide different discounts. So you must compare various insurers and find the one that best suits your needs and requirements, such as lower interest rates, etc.
You can ask the various insurance companies about their policies by contacting them through the number provided by them.
Update your driving information
Many factors affect auto insurance, such as your driving record, the place where you live, credit score, etc.
Most of the insurers provide more than one type of coverage and give discounts to people who buy multiple policies. Bundling policies such as a home and a boat policy will help to decrease the rate.
Conclusion
In this article, we discussed life insurance and its types that are term life, whole life and universal life insurance. The pros and cons of all types of life insurance are also mentioned. The factors determining the cost of life insurance are also discussed in detail.
After this, we studied cash flow banking and understood its workings. The factors of choosing whole life insurance are discussed along with other advantages and disadvantages of cash flow banking.
At last, we looked at the insurance review of Allstate’s insurance company. We came across the coverage options of Allstate and also discussed the discounts offered by them. The methods to lower car insurance costs are also discussed.
