The bottom line What is conditional life insurance coverage? It is a broad label for coverage that only pays out when specific conditions are met, most often the policyholder dying within a set term. Term life insurance provides death benefit protection for a specified period, and generally does not build cash value. What is conditional … Read more

The bottom line What is a life insurance surrender charge? It is a charge you may incur when you surrender a permanent life insurance policy during its surrender-charge period. The contract controls the period and amount. Before acting, ask the insurer for current policy values and review whether replacement would restart early policy costs. A … Read more

The bottom line What is a life insurance illustration? It is a presentation that shows how a policy may work over time, including benefits, premiums, expenses, and policy periods. The National Association of Insurance Commissioners says an illustration can include both guaranteed and non-guaranteed elements, so projected values are not promises. A life insurance illustration … Read more

The bottom line What is variable life insurance? It is permanent coverage with cash value whose performance can move up or down with selected investment options. Premiums, fees, and investment results affect the account value, while the policy’s death benefit depends on the contract’s terms. The trade-off is market exposure inside a life insurance policy. … Read more

The bottom line How does dependent life insurance work? It is coverage that pays a death benefit if a covered family member, usually a spouse or child, dies. Coverage is typically an add-on to your own life insurance, with a contract-defined benefit and coverage period. Key facts Dependent life insurance may cover a spouse or … Read more

The bottom line How does credit life insurance work? It connects a life-insurance benefit to a named debt, so the covered loan can be addressed if the borrower dies before repayment. The protection is narrow, so review the policy terms and compare it with coverage that gives a family broader control. Credit life insurance is … Read more

The bottom line How does second to die insurance work? It covers two people and pays the death benefit after the second insured dies, rather than after the first death. The structure is generally treated as permanent life insurance, so the contract’s product type and premium terms deserve close review. Second to die insurance covers … Read more

The bottom line What is the mec early withdrawal penalty? It is a 10% additional federal tax on the taxable part of a distribution from a modified endowment contract when no statutory exception applies. MEC distributions generally reach contract gain before basis, so ordinary income tax may apply before you recover what you paid. The … Read more

The bottom line What is life insurance face amount? It is the death-benefit amount written into a policy, paid to the beneficiary when the covered death occurs under the contract. Term and permanent policies use a face amount, but permanent policies can also build cash value. The number is coverage, not the premium you pay. … Read more

The bottom line How does the life insurance transfer for value rule work? It is a federal income-tax rule under section 101(a)(2) that limits the amount of a death benefit that can remain excluded from income after a life insurance contract is transferred for valuable consideration. The Internal Revenue Service explains the limit and its … Read more