Archive for the ‘Life Insurance’ Category

« Older Entries
Newer Entries »

Whole Life Insurance: What to do About a Lapsed Policy

Tuesday, May 18th, 2010

At some point in your life, things were going great, financially, so you got yourself in on a life insurance policy. You paid the premiums for a long time, then, life, as it tends to do, happened. You found yourself unable to pay the premiums, and after a while, your policy lapsed. Maybe you simply stopped paying because you no longer need the insurance. Either way, your policy is no longer in effect. What should you do?

Late Payment

If you still want the policy, and can find the extra money to pay, there is often a grace period of about one month to catchup on payments and keep your policy working for you. Most insurance companies will still pay benefits to your beneficiaries, even if you are late on the payment, should you leave this earth during the grace period. The insurance company will simply deduct that which is owed from the benefit amount being paid.

Reinstating Your Policy

If your whole life insurance policy lapses, you might be able to reinstate it. This can be much cheaper than trying to get a new policy. You might still have to go through the company’s requirements to prove insurability again, such as credit checks and medical exams, etc. You will have to do this within five years of lapsing and make sure you have satisfied all debts on the policy to be reinstated. Do not make it a habit though. The chances that any life insurance company will allow you to lapse and reinstate over and over again is pretty slim.

Surrender Value

Instead of allowing your whole life insurance policy to lapse, you can ask the company about the surrender value of the policy. The company might be willing to use the cash value to consider the policy paid up. You can no longer borrow against it at this point, however, the policy remains in place and there is still a death benefit, should the need arise.

Life Settlement

Another alternative to allowing a policy to lapse is to sell it. This is known as a life settlement. You sell your policy to an investor. You collect the cash and they become the beneficiary of your policy, collecting benefits at the time of your death. It’s a win-win situation. You get cash now and stop paying premiums. The investor takes over your payments, collecting the benefits in the end. This is done by investors who are looking for a higher yield than that within the general market. There are some conditions for doing this, so be sure to talk it over with a professional first.

Before you allow any policy to lapse or take an alternative route, consider why you bought the insurance in the first place and how your choice will affect your dependents.

Tags: , , , , , , ,
Posted in Life Insurance | No Comments »

Car Insurance for Newly Licensed Teen Drivers

Wednesday, May 12th, 2010

It is a proud day in the life of a teenager, having learned to drive a car and successfully passed the licensing examination. Now, they will have more freedom. It is a step to becoming an adult. Most parents feel proud, yet apprehensive. There are a lot of dangers out there on the road. Inexperienced teen drivers are often a cause as well as a victim of that scenario. There is enough worry for parents of young drivers. Compounding it with sky high insurance rates does not help the matter. Often, teen car insurance rates are much higher simply because of age and inexperience. However, there are a few things you can do to help cut those rates down to a more affordable price.

Obtaining Quotes

Get a quote from all the local auto insurance companies as well as big names and online sources. This will help you to initially narrow down those insurance companies who offer the best coverage at the best rates.

High-Risk Insurers

There are companies out there who specialize in insuring the high risk motorist. While the ‘high-risk” tag is nothing personal against your particular teen driver, their age alone is enough to garner high rates from other companies. If you want a better rate for the high-risk group, find a company who specializes in such insurance.

Parent Policies

Another good way to save money on teen auto insurance might be to add your teen driver to your existing policy. Often, companies offer cheaper rates with the parents on the policy, since they are taking the bulk of the responsibility. Also, many companies provide discounts for multi-drivers and multiple vehicles, so it could be a great money-saving choice to go this route.

Education

If you want a great rate on teen auto insurance, their education could be the key. Encourage your teen to successfully complete a driver education course that is either sponsored by their school or by the DMV. This could gain you and your teen a discount right from the start.

Another important factor for discounts on teen driver insurance is their grades. If a teenager can strive to maintain good grades in school, this can add up to great discounts on their auto insurance for simply being a good student.

Teen driving is a proud milestone as well as a bit of a worry. You can take the worry out of the insurance costs by shopping around and doing your best to find great rates and discounts to ease the financial burden.

Tags: , , , , , , , , ,
Posted in Life Insurance | No Comments »

Life Insurance and Being Overweight

Thursday, May 6th, 2010

There is no doubt that a number of health conditions can make it difficult to obtain life insurance. Sometimes the consumer winds up paying more just to secure the same coverage as a healthy person or they find themselves getting turned down flat because they are just too high risk.

Weight is a sensitive issue for many people. Whether it is due to some other health factor, genetics or lifestyle choices, being overweight is a serious issue for many Americans. Because weight problems can and do often lead to other serious issues such as diabetes, hypertension, heart disease, heart attacks and strokes, it can be downright next to impossible for an overweight person to obtain an inexpensive life insurance policy, at least in the mainstream.

What They Look For

When you apply for life insurance, the insurance company will take into account your age, medical history, and other lifestyle factors that make you a low or high risk customer. When it comes to your weight, the number on the scale will make a difference, but they will take this is account compared to your body size and build. They will consider your weight in proportion to your height and bone structure in order to determine what kinds of risk factor your weight poses to your future health. The more you weigh in relation to the size of your body, the more health risks you are likely to face. This could wind up costing you a lot in insurance premiums.

Your Options

To the insurance company, the “ideal customer” is one who lives a healthy lifestyle, poses little to no risk factors and expects to live a long and healthy life. In a perfect world, this would make sense. However, accidents happen, none of us are promised tomorrow, and more and more Americans are facing weight challenges each and every day. Now, if you absolutely feel that you need to have insurance from some well-known, mainstream life insurance company, odds are, you will have to obtain what discounts you can (if there are any) and just bite the bullet, paying whatever you have to in order to keep the coverage. If at any time in the future, you do lose weight, your rate could come down.

If you find it unfair that you have to pay more for life insurance because of your overweight status or see those rates as much too high, you might be able to find lower-priced coverage by going with an insurance company that does not ask a lot about your medical history and requires no medical exam or a company that specializes in insuring the higher risk groups. While you won’t get an exceptionally favorable rate, you’ll still save some money over going with the other guys.

Your other option is weight loss. Do this only under the supervision of a medical doctor. Weight loss is often easier said than done, but set realistic goals and do not get discouraged. You can do this by keeping the right motivation in mind. Don’t do it for the insurance alone and do not lose weight because you’re aiming to look like some model you saw on TV or in a magazine. Do it for you and your health alone. In the end, you will feel better, have more self-esteem, be healthier and might just find a better insurance rate after all.

Tags: , , , , , , , ,
Posted in Life Insurance | No Comments »

Types of Permanent Life Insurance Explained

Monday, May 3rd, 2010

For some people, especially those with no dependents and few late-in-life worries or debts, term life insurance is a good choice. It expires after a set period of time. Their out the money spent, but hey, it was there, just in case. For those with dependents, debt, etc., permanent  life insurance might be the better choice. After all, it never expires, is there whenever you need it and some also build a cash value that you can borrow against, with the option to pay it back or not. However, permanent life insurance is not that cut and dry. There are different types of permanent life insurance policies. You’ll want to know your options before making your final decision.

Whole Life

Whole life is probably the most common and most popular type of permanent life insurance. It is considered a great retirement investment. While the premiums are somewhat higher than that of term life insurance, whole life does not expire, often gives greater benefits, such as a dividend option which returns any over-payments to you, as well as building a cash value.

Universal Life

Universal life is comparable to whole life, but comes with its own set of benefits and advantages. Universal policies are also often called adjustable life insurance. They build the same kind of cash value as whole life insurance, however, universal gives you the option to borrow against that cash value. It is flexible and you might even be able to pay smaller premium, should your cash value cover the difference in costs. These loans do not come without their terms and conditions, so be sure to read the details. However, one loophole is that you might not have to pay it back. The only downfall is you loose the amount of cash taken out in overall benefits. So be careful. You could lose your entire policy altogether if you withdraw too much money without returning at least some of it.

Variable Life

Variable life insurance is like the stock market of the life insurance game. Not only does it offer death benefits to your loved ones when you are gone, it has a bevy of investment options for you to choose from, which will be managed just like regular stock would. You can use your cash value to invest for greater returns. Is it risky? Perhaps. You will certainly want to invest in stable options, though nothing is predictable, and have a professional guide you through the process so you don’t lose much and hopefully gain a lot more. Of course, variable policies also allow you to borrow against the cash value under the same terms as universal policies; another excellent benefit, should you need it.

Variable Universal

This option is pretty much a compilation of all the other options. It gives you the same kind of investment options, builds cash value and also will allow you to pay lower premiums once you have enough cash value built up to help cover the difference.

There is not a great deal of difference in these policies, however, there is enough difference to encourage you to look closely and choose the option that best suits you, your family and your lifestyle.

Tags: , , , , , ,
Posted in Life Insurance | No Comments »

Life Insurance and Tobacco Use

Tuesday, April 20th, 2010

If you use tobacco products of any kind, you can expect to pay a higher life insurance rate than non-users. Life insurance companies understand the difficulties that tobacco users face with their addiction. It’s not a habit you can break as easily as 1, 2, 3. Still, they view tobacco use negatively, considering users a high risk. Cigarette smokers are viewed even less favorably than those who smoke cigars, a pipe or even use chewing tobacco. You’re high risk lifestyle could result in cancer, cardiovascular disease and other health problems, including an early death, which causes your life insurance rates to soar.

Policies

You can pay a higher rate and get reasonable life insurance coverage from companies with strict rules for tobacco users. There are also a few companies out there who specialize in policies for tobacco users. If you choose to go with this option, you might be able to save some money on your policy, though you will still pay more than a non-tobacco user.

Be honest about your tobacco use when applying for life insurance. Any medical exam required can easily determine if you fibbed or not. This could result in no coverage at all. if you are an occasional smoker, you could get a lower or non-smoker rate, whereas those who smoke moderately to heavily will not. The same goes for people who use tobacco products other than cigarettes; their rates will probably be better than that of the cigarette smoker.

What Can You Do?

Life insurance is obviously a concern for you. Otherwise, you would not be looking into your options. Even if you have quit smoking and using tobacco products, you might still pay a higher rate the first few years, depending on how long it has been since you quit. After all, the health risks are still there; the damage has been done. It takes a while for your body to restore to the health of a non-smoker.

If you have not quit smoking or using tobacco products, you could always either quit or try to quit. It is easier said than done, though. Some people can lay the tobacco and cigarettes aside and never look back. Other struggle to quit, often turning to a variety of methods to help them; some successful, others not so much. Then, there are those people who actually enjoy their tobacco use. Sure, it is an addiction, but also something they like to do. Who has the right to judge what makes another happy?

If quitting is not in the cards for you, look into life insurance policies that ask little to no nosy personal or health questions and do not require a health exam. You might pay a little more than a standard policy, but you will still save money over those policies that have strict tobacco use rules and penalize you for that personal choice.

Tags: , , , , , ,
Posted in Life Insurance | No Comments »

Insuring Your Child’s Life: Right or Wrong?

Tuesday, April 13th, 2010

It’s been a conversation of controversy for many years. Should you or should you not insure the life of your child? Some people see it as morally reprehensible; like you have bad motives and it makes you a horrible parent. Admittedly, there have been instances where that was the case, but for most people, it’s not about ulterior motives. It’s about protection and being prepared, come what may.

Insuring you child’s  life is not wrong. It does not make you a bad parent. If anything, in most cases, it probably makes you a very good and conscientious parent. While some may disagree, it is a matter of personal opinion. A parent should do what they feel is best, by weighing the pros and cons and not letting others influence their choice. It’s your child and your lives that you need to be concerned with. No one else has the right to make that decision for you.

Why Consider Life Insurance for a Child

Children are no less vulnerable to illness, accidents and death than adults. In fact, they are probably far more vulnerable, even under the best of circumstances. Trying to insure a child after illnesses are discovered is often difficult, if not impossible. Getting that insurance in advance will help you to avoid this issue should their health become a problem later on.

For all those naysayers out there, the truth is, few parents are thinking about profiting from the death of their child. Many would gladly give that money up in a heartbeat if they meant they could have their child back, living and breathing and happy. Still, the money is a good thing. It does not cost any less to handle the final expenses of the tragic loss of a child, and often, there are medical bills and other expenses to worry about. Grief is not alleviated when compounded by the stress and worry of paying extra bills.

Added Benefits

Another good thing to know is that when you insure your child through a reputable company you don’t have to pay a lot to keep the policy going. When paying the premiums and keeping the life insurance policy up to date, if benefits are never needed during childhood, the policy will double in coverage at age 21. These policies also build cash value, so you could borrow on it if you had too, and your child also has the cash option when they are older. It’s a nice investment for the child’s future, at the very least.

In the end, it is completely up to the parent to decide if children’s life insurance is needed or is right for them. It does not matter whether someone else thinks it is wrong or if the media makes it sound that way. This kind of insurance exists for a reason and is good to have when most needed.

Tags: , , , ,
Posted in Life Insurance | No Comments »

No Medical Exam Life Insurance: Is This the Right Choice for You?

Thursday, April 8th, 2010

For the longest time, those who wanted a life insurance policy had to endure medical exams that could easily result in higher rates or even flat-out denial because of existing health conditions that could easily impact their lifespan. For many people, the fear of dealing with the exams and the insurance company decisions caused them to simply forgo any life insurance at all, leaving their families without those much needed benefits in the end. Then, along came no-exam life insurance policies. These would appear to be the ultimate answer to the problem. However, no-exam policies are not for everyone. There are several things to consider before you simply jump aboard the no-exam bandwagon.

The Advantages

Life insurance policies not requiring a physical exam do have their advantages. Instead of filling in some lengthy booklet that details your entire medical history, you simply answer a few health questions or sometime, none at all. This makes the life insurance application process much shorter. These kinds of policies also often allow for you to fax, e-mail, or mail in your application, as opposed to meeting with an agent. The whole idea protects your privacy regarding anything beyond the basics.

In addition, you do not have to worry about taking the time out to go see a doctor or possibly even spending money out of your own pocket for an exam. Even if you only had to pay a co-pay or just spend the money for the gas to get there, money is money and every little bit saved makes a big difference.

Because it takes far less time to process no-exam applications, the cost is lower for the insurers. That, in addition to the overall lower rates that have appeared in the last decade could be a good thing.

What to Consider

If you are young or in reasonably good health, it might be worth it to go ahead and go through a standard application process and medical exam. Your good health and age could qualify you for an even cheaper rate. For older folks, those with preexisting health problems, a history of smoking, and other major lifestyle considerations, it might be best to go with the no-exam option. Few questions are asked, so no one is going to raise an eyebrow over health-related concerns, and in the event of the inevitable, the benefits will still be there to help your loved ones in their time of need.

The best way to go about it is to get quotes from several companies based on both options. See what the rates will be and if you feel you can qualify for the cheaper rates with a physical, the whole effort might pay off. However, if you don’t see yourself qualifying or you don’t feel there is much difference in the rates being offered to you, skip the hassle and go for the no-exam plan.

Tags: , , , ,
Posted in Life Insurance | No Comments »

Borrowing From Your Life Insurance Policy

Tuesday, April 6th, 2010

When you’re facing a terrible financial crisis or some kind of emergency, often the cash you need to handle the situation just isn’t readily available to you. However, if you happen to be the owner of whole life or permanent life insurance policy, you may be able to borrow against that policy and get the cash you need. Of course, you really should only do this if it is really a very serious need, and it will also depend on how long the policy has been in effect.

Can I Borrow From My Life Insurance?

You sure can, as long as your policy is not term life. It works differently, so you can not borrow against it. A whole life policy builds up a cash value. Technically, it is a type of investment. You would borrow against the benefit amount of the entire policy, as opposed to only the amount you have paid in premiums. The sum you borrow, for whatever reason, will simply reduce the amount of benefits payable in the event of your death.

Now That I Have Borrowed All of This Money, What’s it Going to Cost Me?

Well, as the policy owner, it’s your money. It is not like a bank loan. You can choose to pay the money back if you want to ensure that the original benefit sum is available later on, however, if you can live with a little less being paid to your family in the end, then you don’t have to pay it back. It won’t affect your credit score and no one will come around, trying to collect a debt.

Are There Any Limitations?

Not really. However, there are a few things to be aware of. You can borrow up to the full cash value of your policy. It simply reduces what will later be paid out. If you want that policy to be there in the end, you will want to repay it. Some policies might be better for borrowing than others are, so check with your insurance company. This is due to interest rates ion investments made by the insurance company and fees and such. Get the terms and conditions up front. Still, you won’t have to repay if you choose not to. There are not ground rules for what the money has to be used for either. That is completely up to you, and no one can say an differently.

A life insurance policy that allows you to borrow on the cash value is a great asset to have. However, if you want to protect the interest of those you will leave behind someday, be cautious and don’t borrow too much or at least return some of the funds so the policy will be there to fulfill its ultimate purpose one day.

Tags: , , , ,
Posted in Life Insurance | No Comments »

Attention Alcohol Consumers: Imbibing Could Have an Impact on Life Insurance Rates

Friday, April 2nd, 2010

It’s pretty much a given that if you’re more than a social drinker, someone who maybe likes to party and drink a little more than you should, that it could have an impact on your health and your health insurance. Did you know that excessive drinking could also impact your life insurances rates?

To life insurance companies, and in all reality, there is a huge difference between those who occasionally enjoy a glass of wine or beer and those who tip the bottle back until the last drop and go back for more. No offense is meant by this statement. Excessive drinking is a serious problem that is admittedly difficult to overcome. It’s simply important that you know if you have this problem, your life insurance company will want to know, will find out and it could adversely impact the premiums you pay every month.

Why Drinking Impacts the Price

Heavy drinking impacts your life expectancy. In 2008, the CDC announced that a lifestyle of heavy drinking is now considered the third leading cause of death in the U.S. chronic alcohol abuse can lead to serious medical conditions including physical conditions such as cardiovascular disease, cirrhosis of the liver, stroke, gastrointestinal problems and many other physical ailments. it could also negatively impact you mental and emotional health as well.

When you apply for a life insurance policy, they will want to know your drinking habits. Frankly, you might as well be honest. It can’t be hidden. Should they not find out about it beforehand, if you death is found to be due to anything related to alcohol consumption, the insurance claim could be disputed or altogether denied.

On the life insurance application, admitting to more than 2 drinks per day will not get you a preferred rate. 3 or 4 will even bar you from a standard rate, therefore you will wind up paying much more than you probably want to.

Don’t Try to Hide It.

Excessive alcohol use is likely to be noted in your medical records, even if only suspected. Most doctors do not simply suspect this without good reason. Your insurance company will look at this, your application and will also consider other factors. If you have an alcohol related condition at the time of application, if you have been in treatment or are currently in treatment and if you have any DUIs or other alcohol related violations and how long it has been since you last had one. All of these factors could impact your rates.

If you tried to hide your alcohol use, tough luck. Even if you were not honest on your application, the insurance company can still find out from your medical records and background check. Either way, you will wind up with a higher rate, a “rated” policy (which carries an additional premium) or an outright denial.

Insuring Your Life in Spite of Alcohol Problems

The truth is, it can be very difficult to obtain life insurance if you are a heavy drinker. You are very high risk. The insurance company knows you are a liability and statistically, your death is likely to be sooner rather than later. Therefore, you are looking at paying a higher price or being completely denied. If the company finds out you lied about your alcohol consumption after the policy is in effect, they could cancel it. If you can get yourself into a program and sober up  you have a better chance of obtaining life insurance. It still won’t be easy. Some life insurance companies might postpone a decision to insure you for up to 2 years after treatment to ensure sobriety and possibly improved health.

It really boils down to this fact; if life insurance is a concern for you, and you want to prepare yourself and your family for the inevitable, excessive drinking could get in the way. You might not have the option for life insurance and if you do, you’re going to pay more. Your best bet is to put the glass or bottle down and walk away, even if it means rehab and regular support, regaining your health and the option to protect the future of your family.

Tags: , , , , ,
Posted in Life Insurance | No Comments »

Term or Whole Life: Which Life Insurance Policy is Best for You?

Tuesday, March 23rd, 2010

We’re all going to die someday. It’s a fact of life. Maybe not one we all care to spend our days thinking about, but still, it’s a good idea to give it some thought and be prepared. Life Insurance is a big part of that preparation. Truth be told, it’s a very selfless act to purchase a life insurance policy. You’re not thinking of yourself when you do this; you’re thinking of the loved ones who will be left behind with both memories of you and final expenses to pay.

You will probably leave some bills and debts unpaid. Most of us will. Relentless creditors won’t care that your gone. They still want what’s owed to them and will harass your loved ones to get it. Life insurance can help take care of that. Then, there are the expenses of the funeral and burial or cremation. Funeral cost thousands of dollars these days, and even if you choose to forgo a memorial service for yourself (put it in writing; your loved ones might not know or agree if you don’t have it stated in black and white), something still has to be done with the remains of your physical existence. Burial or cremation are both still expensive, so life insurance is a sure bet that your loved ones will be able to carry out your final wishes.

Before you purchase a policy, you need to decide which type of life insurance is right for you.

Term Life Insurance

Term life policies offer death benefits for a certain number of years. You choose the amount and the length of the policy. Should death occur within the term of the policy, benefits will be paid. Should you outlive the policy, well, no money will be seen. Still, term life is a fairly affordable option, though the premiums can fluctuate, especially for those with few or no dependents. Even without children or a spouse who depends on you, you will still probably have family or friends who will want to see to your final wishes and expenses. A term life policy can do this.

Whole Life Insurance

Whole life policies, while a bit more expensive than term policies (the premiums do remain the same though), are excellent for those with dependents or those who truly want to be prepared for death, no matter when it comes. Unlike term policies, whole life does not have an expiration date, therefore, as long as the premiums remain paid, the policy is always in effect no matter what age your death may occur. Whole life policies really give you and your loved ones that extra peace of mind. These policies also gain cash value, so should there ever be a need, you could borrow against it, though it is not advised to do this frivolously. Only borrow on your life insurance if it is an important reason and there is no other option.

There are other types of life insurance as well. Your best bet is to look at your needs, compare the options and choose the policy that best suits you and those you will leave behind.

Tags: , , , ,
Posted in Life Insurance | No Comments »

« Older Entries
Newer Entries »