College Media Network

The Observer

The Student Newspaper of Case Western Reserve University
  • Home
  • News
    • USG Briefs
  • Sports
  • Fun Page
  • Opinion
  • Focus
    • The Buzz
    • Worst Case Scenario
  • About Us
  • Options
    • Login
    • Register
    • Letter to the Editor
    • Advertise
    • Syndication
    • Podcasts
    • Classifieds
    • Archives
    • Search
  • Blog

Planning ahead with life insurance

Valbona Bushi

Issue date: 4/24/09 Section: News
  • Print
  • Email
  • Page 1 of 2 next >

Life insurance is for anyone, not just the elderly. The main purpose is to make cash available to support those that are left behind, as well as pay any outstanding debts in your name (student loans, anyone?). In turn, if you have no debts to pay off, this can become your estate to leave behind. Applying when you are young makes you eligible for a better life insurance policy because, in theory, you are in better health than your parents- although doing a few extra sit-ups or quitting smoking might not hurt anyway.

When you are young, you are in the best position to apply, because your need for life insurance is low. This is a good way to be proactive. There are many factors to take into account of how much life insurance you will need. Explore your options when buying, either on your own or with a financial or insurance professional.

Let's go over all the different types to understand which type might best work for you:

There are two basic types:

Term life - These policies provide protection only for a specific period of time. They tend to be cheaper and the fee to you is based on this period of time and your other health factors. If the time passes, the policy just expires and neither you nor your beneficiaries will receive anything. These can be renewed once expired but because you have aged considerably since purchasing the original policy, the cost will increase. Term life is usually available in period of 1-30 years at a time.

Permanent (cash value) life - usually this will be the most expensive in the early years to build a reserve as you get older. If the policy is discontinued, the cash value will be returned to you. Under this, there are several more options:

Whole life - Equal premiums for your entire life with the death benefit and cash value predetermined and guaranteed as long as the premium is paid. Any payment in excess of current costs of insurance goes to a cash-value account. This is allowed to grow and is in fact guaranteed under this policy. It is allowed to grow more than it's guaranteed and it's all tax deferred.

Universal life - Premiums can be made in any amount, at any time, and you still get no choice on how the cash value of the policy is invested. While you may choose to pay the minimum premium, it will have an impact on your cash value component and ultimately your death benefit. Another benefit that other policies don't tend to offer is that universal life policies make public all aspects of how the policy is constructed, including the cost to the company.
Page 1 of 2 next >

Article Tools

Viewing Comments 1 - 1 of 1

    Life Insurer

    posted 5/04/09 @ 12:41 PM EST

    This is great unbiased information. Usually, the writer of an article on life insurance pushes their own agenda, be it term life or permanent. I believe there is a need for all types of life insurance and should never be approached on a "one-size-fits-all" basis. (Continued…)

    Details   Reply to this comment

    Post a Comment

    In This Issue


    • Alum shares experience as legal clerk for Supreme Court Justice
    • Forgotten legends: the blockade of Euclid Avenue
    • Hudson Relays
    • Planning ahead with life insurance
    • Second annual Relay For Life raises over $88,000
    • Showing off: Research ShowCASE provides opportunity to present latest research
    • Source of success: fifth annual SOURCE Symposium celebrates students' research

    The Buzz

    • The Buzz

    USG Briefs

    • USG Brief

    Worst Case Scenario

    • Worst Case Scenario: 2009-10 preview


    • Baseball: Spartans lose to Wooster at Progressive Field
    • Seven-to-five job
    • Softball: Spartan bats silent against Bluffton
    • Spartan Spotlight: Allen Ye
    • Top 10 Spartan sports stories of 2008 - 2009
    • What to watch for this summer

    Fun Page

    • Crossword Answers
    • Jumble Answers
    • Sudoku Solutions


    • Case Culture: Summer break shouldn't break your back
    • Editorial: Semester grades
    • Global Scorning: Earth Day: Don't assume it's only about "flower power"
    • Red, White, and Skewed: So many crises, so little time


    • Alternative Press editor offers disappointing analysis of scene culture
    • Case alumnus Girl Talk returns for end-of-year blowout
    • Cleveland Museum of Art hosts unique exhibition of powerful African artwork
    • Juggling Club's end of year spectacular wows audience with skill
    • Sex and Dating: Remembering those who matter
    • Spartans of Style: What not to wear
    • Stand-up comedy show tonight
    National College Advertising and Marketing | Privacy Policy (8/15/07) | Terms of Use (4/28/08)
    Content Submission Agreement (8/23/07) | Copyright Compliance Policy (4/27/09) | RSS Terms of Use