Our training in Life Insurance 101 and Investment 101 had just made me more confident about what benefit life insurance can make for my family and what is really the purpose of having a life insurance. To choose a life insurance we must know and understand what it its all about...But I want to add more to my ideas and here is what I found out... WHAT IS A PAID UP LIFE INSURANCE=====If you take it literally, it means the life insurance is paid up and you dont have to pay any more premiums. But the insurance industry tend to twist the definitions. For example, a dividend is suppose to mean a company has made profits and share those profits to its shareholders as a dividend. But in life insurance, a dividend really means that you have overpaid your premiums and the insurance company refund the excess amount to you. So, the term paid up in life insurance really mean that you have built enough cash value where you dont have to pay your premiums for awhile. The catch is, your life insurance is still enforced and someone has to pay the annual premiums. So the insurance company takes money from your cash value to pay for it. If you die someday, your family will get the death benefit MINUS whatever cash value was taken (including the interest charged on the cash value). When your cash value is near depletion, you will get a letter that your life insurance policy is in endangered of being lapse. If you do not pay the premiums, you will lose coverage.
Posted on: Sun, 02 Feb 2014 18:14:30 +0000
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