Live Your Life Insurance – Book Index

/Live Your Life Insurance - Book Index

Waiver of Premium – WP

The waiver of Premium (WP) is a special feature that can be added to your insurance contract for an additional fee.  It ensures that the life insurance policy continues to grow if the payor (usually the owner of the policy) becomes disabled and unable to continue the payments.  It comes into effect if the payor [...]

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Reduced Paid-Up Insurance – RPU

Reduced Paid-Up Insurance is a “Non-Forfeiture Clause” built into most all Whole Life insurance policies.  This is the “end of the rope” savior, in the event that cash flow simply dies and you don’t see a light at the end of the tunnel for many years.   The insurance company reduces your Death Benefit and [...]

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Premium Offset

  After out-of-pocket premiums have been paid for a number of years, premiums may be able to be paid by the current values of your policy.  This process is known as “Premium Offset”.  Premiums may be able to be paid either by current dividends, and/or existing values within your policy through the surrender of a [...]

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Premium

  Premium Whenever you purchase any life insurance policy, the payment that you make to the insurance company is called a premium. You can set it up to be monthly or annually (you can always change that option down the road, too). With Whole Life insurance, your premiums to the insurance company eventually end up [...]

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Policy Owner

There are four main parties to every life insurance contract: the life insured, the policy owner, the beneficiary and the insurance company.  The policy owner is usually the person who pays the premium, and often the same person as the life insured.  When the coverage is for business purposes (key man insurance, business partner), or [...]

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Policy Loan

Policy Loans are the preferred way to access money from your Whole Life insurance policy.  By accessing your money through policy loans (as opposed to cash withdrawals), you allow the policy to continue to grow at its full potential, as if you never took your money out of it in the first place.  For example, [...]

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Participating (PAR) Whole Life Insurance

There are different forms of Whole Life insurance serving different purposes.  Participating (PAR) Whole Life insurance is a type of insurance that shares in the profits of the policyholders, through a policy dividend.  In the United States, the mutual company is favored for this type of insurance for the fact that the participating policyholders share [...]

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Partial Surrender/Disposition

A partial surrender is the term used to describe withdrawing cash out of the policy as a direct “cash withdrawal” (see ”Cash Withdrawal”).  Its name comes from the fact that you are surrendering a little (or maybe larger) piece of your policy when you withdraw money out of it.   When properly set up, a [...]

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Paid-Up Additions – PUA

    This is the policy dividend option that we recommend to enable all of the options and concepts in this book.  You could choose a different policy dividend option, but in doing so, you would change how your policy operates and grows over time.  The Paid-Up Additions are what the dividends buy, and they [...]

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Opportunity cost

  Opportunity cost is what you lose when you let dollars go unnecessarily to a financial institution (possibly in the form of fees), the government (possibly in the form of income taxes), or any third party (possibly in the form of having money locked-in or simply being spent), and are missing a better investment opportunity. [...]

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