Archive for the ‘Life Insurance’ Category

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Shopping for a Life Insurance Agent: what you need to Know

Tuesday, January 19th, 2010

Shopping for a life insurance agent may not be an easy task. After all, you are looking for a trusted individual who has plenty of experience and a proven track record of client satisfaction. It is because of these factors that you should take the time to make sure you choose the right agent through which to purchase life insurance.

Your life insurance agent should have your best interest at heart, and should understand both your needs and your desires so that the life insurance products you choose are best suited for you, your personal situation, your goals and your budget.

Your Shopping Checklist:

  • Rapport - Regardless of how much experience an insurance has in a particular area, your life insurance agent must be able to communicate well with you and be able to develop a good rapport with you. In other words, a professional relationship with a life insurance agent will simply not work if you don’t feel comfortable with him or her. Your life insurance needs are not “one size fits all,” so your agent must be able to understand your specific needs and customize life insurance policies to suit you.

  • Properly Licensed - Always check with your life insurance agent to make sure he or she has the proper license to sell insurance in your state. You may also check with your state insurance department regarding your agent’s ability to sell insurance in your state.

  • Industry Experience - The bottom line is that your life insurance agent is only as good as his or her experience in the industry.  Experience in the industry does more than show your agent’s knowledge; it clearly shows his or her commitment to the industry and his or her position. In other words, your agent’s industry experience usually means that he or she will be there for you, now and in the future.

  • Sensitivity - Your agent must be sensitive to your needs and your wishes, and must be able to help your loved ones navigate the process of claiming your life insurance policies once you pass. You owe it to your family to find a life insurance agent who will be there for them during this difficult time.

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Your Common Life Insurance Questions Answered

Monday, January 11th, 2010

Life insurance is a frequently misunderstood type of insurance. Although most of us realize that we need life insurance, many of us don’t know where to turn to get the best coverage at the best price.

Don’t let the unknown scare you; protecting your loved ones with comprehensive life insurance is one of the single best things you can do for them.

The following are some of the most commonly asked questions about life insurance:

Q:  Can someone else take a life insurance policy on me?

A:  Only those individuals with an “insurable interest” in you can take out a policy on your life. For example, a parent or spouse may take out a life insurance policy on you. There are also cases in which an employer or a business partner may also take out a life insurance policy on you.

Q: What does a standard life insurance application entail?

A: To apply for a life insurance product you will likely be asked to fill out an application, which often includes your age, your health history and other personal information. Based upon this information, the insurance company may or may not take insure you. Many insurance companies also require that applicants undergo complete health examinations before being eligible to receive life insurance benefits.

Q: What type of life insurance product is best for me?

A: There are many types of life insurance products available, including term and whole life insurance, as well as hybrid policies. The type of life insurance product you choose will largely depend on the following factors: your age; your health; your family situation; and your financial situation. Term policies, for example, are often more affordable than whole life policies, while whole life policies are intact for your lifetime, not just a certain length of time.

Q: Where can I shop for life insurance?

A: Shopping for life insurance has never been easier, thanks to a myriad of life insurance companies that offer online life insurance quotes and life insurance information. Shopping online for life insurance also allows you to compare policies between companies and even between the same insurer.

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Understanding your Life Insurance Policy’s Terms and Exclusions

Tuesday, January 5th, 2010

A comprehensive life insurance policy is crucial for the protection of your family in the event of your death. However, not all insurance policies are created equal, so it is up to you to understand the terms, conditions and exclusions of your life insurance policy so that you can be assured you have secured a premium life insurance product.

The provisions and exclusions of any life insurance policy, in short, detail how the policy will pay out in the event of your death. There are a set of common provisions in any life insurance product, which include:

  • Ownership clause - The ownership clause of your life insurance policy states that you own the life insurance product as long as you are alive. The ownership clause allows you, as the owner of the policy, to designate beneficiaries, make all decisions regarding the policy and make all decisions regarding the cash value of the policy.

  • Grace period provision - The grace period section of the insurance policy details the time frame during which you can make your premium during the policy’s grace period (the grace period for a monthly premium is typically 30 days). If you are unable to make a timely payment, your policy may be cancelled by the insurance company, which is where the policy’s reinstatement clause comes in.

  • Reinstatement clause - The reinstatement clause in your life insurance product allows you to reinstate the policy and continue receiving benefits. There are certain conditions, however, that you may have to meet before reinstating your policy.

  • Incontestability clause - The incontestability clause protect you, the policyholder, from a denial of benefits due to misrepresentation or false information. Most insurance companies are very particular about health exams because of this type of clause.

  • Suicide clause - Most policies have a suicide clause that prohibits your family members from drawing on the policy if you commit suicide within two years of taking out the policy.

  • Dangerous activity clause - Most policies prohibit your family members from drawing on your policy if you die during participation in a dangerous activity, such as sky diving or auto racing. It is because of this clause that it is important to point out your participation in any type of dangerous activity to your insurance agent upon applying for a life insurance product.

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How to Distinguish Between Life Insurance Policies

Friday, December 18th, 2009

We all know the importance of life insurance, but after that it often gets a bit muddled. The first step in taking out a comprehensive life insurance policy involves educating yourself on the different types of life insurance that is available so that you know you are making the best decision possible.

When searching for quality life insurance, you will likely encounter the following types of insurance:

Term Insurance

Term life insurance is life insurance that is available for a certain period of time. The time period for term insurance can range anywhere from 5 years to 30 years, depending on the length of time you desire. However, one the term period has expired, you are left without insurance. Often times, term insurance is ideal for individuals that need life insurance for a certain time frame in their lives. For example, you may choose to take out a term life insurance policy that will last until your children are adults. Term life insurance is often chosen by individuals because it is much less expensive than whole life insurance policies.

Permanent Life Insurance

Permanent life insurance is the most frequently purchased life insurance policy, as the policy lasts until the individual dies, provided he or she continues to pay on the policy. Permanent life insurance policies also have a cash surrender value, which thereby allows the individual to build up cash value as they pay on the policy; the cash value in the permanent life insurance policy grows tax-deferred. In addition, permanent life insurance provides a fixed premium and a fixed death benefit.

The cash value of a permanent life insurance policy may allow you to borrow from the insurance company and use the policy’s cash value as collateral. You may use the cash value to pay premiums, buy more coverage and even exchange the policy into an annuity product. You may also cancel the policy and receive a lump sum of money.

There are two, different types of permanent life insurance:

  • Whole Life Insurance - Whole life insurance allows an individual to pay a fixed premium for a fixed death benefit over the life of the policy.
  • Variable Life Insurance - Variable life insurance involves allowing the insurance company to invest your premiums; your cash value and death benefit depend on the performance of these investments.

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How to Choose the Best Term Life Insurance

Tuesday, December 15th, 2009

Term life insurance is often the popular choice for individuals who are looking for quality life insurance with low premiums. Most term life insurance policies are relatively straightforward, as you choose the term (i.e. length of time) you want to carry the policy and the amount of your term life insurance policy.

Term life insurance is ideal for individuals who want to be covered for a specific amount of time. For example, a young parent may choose to take out a term life insurance policy that will protect his/her family until the children are of legal age. Another individual may choose to take out a term policy until his/her home is paid off.

Although term life insurance is pretty straightforward and easy to understand, there are a few things you should keep in mind when shopping for a term life insurance policy:

  1. Guaranteed renewal term life insurance policy - Look for a term life insurance policy that gives you the option of renewing it once the original term has ended. In particular, make sure you can renew the policy regardless of your health; after all, we don’t know what the future holds, so it is best to keep your options open regarding your term life insurance. Also, make it a point to think through your decision regarding your loan’s term. In other words, don’t get caught with a term policy that simply won’t protect you for a long enough length of time.

  2. Fixed premium term life insurance policy - It is generally best to only take out a term life insurance policy that offers a fixed premium for the life of the policy. Many term life insurance policies will offer super-low premiums for the first, few months and then raise them afterwards. However, it is probably best to choose a policy that offers the same premium for the life of the policy so that you can better plan your finances.

  3. Shop around and save - Not all term life insurance policies are created equal; and that goes for price, too. Make it a point to shop around when searching for a term life insurance policy. In addition to comparing prices, compare companies, as well. In other words, choose a company with a strong financial history so that you can be sure your term life insurance policy will be valid during the duration of the policy.

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Why your High Cholesterol Levels Affect your Life Insurance Rates

Thursday, December 3rd, 2009

Your ability to obtain a great life insurance policy, at a competitive rate, is dependent upon many things, including your cholesterol levels! Besides your age, your weight and your overall level of health, there are many things that can’t be seen that impact your ability to obtain life insurance as much as the obvious.

Because high cholesterol levels are linked to coronary heart disease, and coronary heart disease is the number-one killer of both men and women in the United States, it only makes senses that life insurance companies are more than interested in the health of their applicants; in particular, their cholesterol levels.

High Cholesterol Equals Deadly Consequences

The Centers for Disease Control estimates that one in five Americans has high cholesterol. It is because of this fact, and the fact that many people with high cholesterol suffer a stroke or heart attack, that life insurance companies have given this health topic great attention. In fact, if you have high cholesterol, you can be sure that you will end up paying higher premiums than those individuals with low blood cholesterol levels.

Testing for High Cholesterol Levels

During the physical exam for life insurance, you will likely be given a physical, which includes blood work. Among other things, your blood will be tested for cholesterol levels. It is important to realize, however, that individuals who previously had high blood cholesterol levels, but are now successfully controlling them, will likely not be penalized.

Although each insurer’s definition of high cholesterol is different, you can generally expect to be penalized for your cholesterol if your bad cholesterol, or your LDL cholesterol, is above 100, or if your overall cholesterol levels are above 200. You can check with your insurer regarding their requirements for blood cholesterol levels.

What to do Before Applying for Life Insurance

The best thing you can do before applying for a life insurance policy is to get a full physical exam from your doctor, including blood work. If your doctor finds that you have high blood cholesterol levels then you can start being treated, therefore remedying the situation before you apply for life insurance.

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How to Choose the Best Life Insurance Policy

Monday, November 30th, 2009

Choosing life insurance should be a multi-step process. Your ability to obtain the best insurance, at the most competitive rates, involves hard work on your part.

Although most people don’t give life insurance too much of their time - after all, it is often an unpleasant topic to think about - it is important to research your options and consider both your and your family’s needs when choosing a life insurance product.

To do this, there are a few steps you should take:

  • Consider your options regarding insurance providers. Do your homework and research a variety of insurers. Check out whether the company is fee-based or commission-based, and don’t forget to research the company’s history, performance ratings and customer-service reputation.

  • Consider your coverage needs. In order to determine the value of your life insurance policy you should consider your needs, for both yourself and your family. Many insurers, for example, recommend that your life insurance policy value equal at least two to three years of your annual income. You may choose your life insurance amount based on your children, your spouse or the amount of money it would take to pay off your mortgage, for example. Many life insurance companies offer easy, convenient online calculators that help you decide how much life insurance you may need to protect your family and care for them in the event of your death.

  • Decide which policy is right for you and your budget. There are many different life insurance products, including term life insurance and permanent life insurance. What works for one individual may not work for another; in other words, your decision will be a personal one, based largely in part on your budget. Your decision to purchase a particular life insurance product may be based on your ability to cover short-term expenses, or it may be based on your age.

  • Re-evaluate your circumstances and your needs on an annual basis, and make changes to your policies, if necessary. Your circumstances can change at any given time, so it is important to make sure your life insurance policies reflect both your and your family’s needs.

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Evaluate the Pros and Cons of Life Insurance Settlements

Tuesday, November 10th, 2009

If you’re thinking of purchasing a new home, or suddenly in the need of liquid cash, experts generally agree that opting to settle your life insurance policy may be a realistic option; however, experts also commonly reinforce the issue that settling one’s life insurance can result in potentially large losses on the policy’s value.  A life insurance settlement essentially involves a broker offering to purchase the value of your life insurance policy in exchange for liquid cash.  Oftentimes, this exchange allows the broker and / or 3rd party investors to pay for your policy in order to reap financial benefits in the future.  In fact, retirees are often targeted by companies with offers to exchange their life insurance policies for an immediate sum of money, as settlements can lead to incredibly lucrative payouts for investors.

Life Insurance Settlements

If a broker ever offers a sum of money or a payment in exchange for your policy, keep in mind that the broker will only be offering to pay for a mere fraction of the policy’s actual value.  If you choose to take the broker’s offer, then the broker generally will sell your policy to an interested buyer.  The buyer will then make the payments for the premiums of your policy.  While this sounds like a fairly innocent business exchange, the reality of the financial implications can be quite devastating.

For example, if a 70 to 80 year old woman has a life insurance policy that has a total worth of $1 million, then a life insurance settlement broker may be interested in offering the woman an immediate payment of potentially $250,000-and possibly more!  While the instant cash may undoubtedly have its perks, the broker most likely sold off the plan to an investor; therefore, once the initial policy holder passes away, the investors are able to receive the $1 million life insurance value.

While the concept of profiting off others’ demise often strikes many individuals as offensive, this process of exchange between policy holders and brokers has become a fairly common and lucrative investment for some individuals.  Ultimately, before making the serious decision to settle your policy, meet with your financial advisor and / or insurance agent to evaluate the pros and cons for your unique financial circumstance and needs.

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Can Your Life Insurance Policy Protect Your Pets?

Monday, November 2nd, 2009

While life insurance policies are certainly ideal for individuals seeking to protect their loved ones from financial distress in the aftermath of one’s death, some policy holders have expressed interest in extending coverage to include their beloved pets as well.  While each life insurance policy will vary, some life insurance providers have created new forms of pet life insurance to help offer protection against the financial burdens associated with a pet’s demise.

Life Insurance for Pets

If you are interested in pursuing life insurance protection for your pet, then an array of major companies may be able to offer you unique policies with personalized features.  Often known as pet replacement insurance, pet life insurance can offer compensatory amounts of varying values, with some plans even providing benefits up to the amount of $10,000 or more.  With this coverage feature, a policy holder is compensated for the loss of their pet in order to regain financial standing for their “investment.”

Ideal Candidates for Pet Life Insurance

As each pet owner invests unique costs and efforts into the training and maintenance of their animal, not all pet owners may benefit from animal life insurance protection.  Generally, ideal candidates for pet life insurance are individuals with large vet bills, training costs, grooming costs, and other major expenses invested in their animal’s upbringing.  For example, individuals with pure-bred dogs opting to have their dog compete in competitions often carry large financial burdens and expenses for this pursuit.  As a result, the loss of one’s animal can force a pet owner to be subjected to potential financial losses from various competition rewards and prizes.  In such case, compensation for the loss of one’s pet can help trainers and owners regain their footing in order to potentially re-invest in a “show dog” for future competitions.

To find out if you may benefit from pet life insurance policies, ask your current provider about any available programs or contracts.  Since pet life insurance is a relatively new and unique insurance option, some pet owners may need to research new companies to find the most optimal coverage for their personal pet-based needs.

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Retired With Life Insurance? Avoid Getting Ripped Off With Insurance Provider Schemes

Thursday, October 15th, 2009

If you’re flipping through channels on any given afternoon, you may undoubtedly come across various advertisements geared towards older retirees promoting life insurance policies.  Oftentimes, these ads may include celebrity spokespeople and appealing incentives; however, many experts warn consumers about the potential of getting ripped off when opting for unreliable life insurance packages for older citizens.

Life Insurance Schemes: Looking for the Warning Signs

Accepts Anyone-With No Medical Questions or Exceptions

A life insurance plan that promises to provide coverage without asking any medical questions should usually stand out as a company that needs to be questioned.  Often known as “guaranteed issue policies,” these life insurance packages are advertised to be sent directly to your home once you send in your payment.  While these policies may certainly provide benefits for many individuals, some policy holders commonly confuse these “guaranteed issue” with “quick issue” and / or “simplified issue” policies.  If you find yourself opting for a “guaranteed issue” life insurance plan, then you should be aware that this form of coverage should only be reserved as a last resort.  “Guaranteed Issue” policies offer fewer benefits and come at a much higher price than companies that require a physical exam and / or a brief report of your medical history.

Don’t Get Caught by a “Catch”

To gain greater profit without loss, many life insurance companies may include various “catches” in their coverage agreements.  For example, while the life insurance policy may agree to cover all funeral costs, the policy may include the “catch” that costs will only be covered if a funeral occurs prior to the age of, for example, 75.  In this case, if you live beyond 75 years, then you’re insurance investment for your funeral may be a complete loss.

Consider the Long Term Benefits

Some life insurance plans provide policy holders with “graded benefits,” which essentially gives the insurance provider greater power over adjusting the terms and costs of coverage.  With “graded benefits,” insurers are permitted to simply pay refunded premiums for up to 3 years after the purchase date of the policy.  With this power, an insurer can simply offer a 3 year refund instead of the full policy benefits / payments upon the death of the policy holder.

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