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Life Insurance-Why you Shouldn’t Wait

Why You Shouldn’t Wait To Get Life Insurance

You may not think you need life insurance now, but if you wait too long to take out a policy, it could hurt you in the long run. Waiting until you feel you really need a policy means you will be older and the odds of having health problems increases. This can mean higher life insurance premiums or worse, being completely denied for a policy. Starting a life insurance policy earlier in life is a smart decision all around.

Age And Health Issues

It’s a simple equation: as we age our odds of having health problems increase. You will also be paying the premium on the policy for a shorter time period while being more likely to pass away. Life Insurance companies take all of these factors into consideration when they determine your premiums. Every year that you wait to take out a life insurance policy assures your premiums will be higher. It also increases the risk that some health issue will develop that will cause the insurance company to see you as a higher risk. The higher the risk they see of having to pay out on the policy before they have received sufficient premium payments from you, the more they are going to charge you to protect their interests. So, the longer you wait to get a life insurance policy, the more you are going to pay for it.

You Could Be Denied

If you are young and healthy you will be approved for a policy relatively quickly. But as you age, health problems can crop up that might disqualify you for a life insurance policy altogether. Heart issues, high cholesterol, diabetes and more are all problems more likely to appear with age—and this could mean you won’t be able to obtain a policy. If you take out a life insurance policy before issues like this occur, the insurance company can’t take it away due to changes in your health status.

Taking out a life insurance policy before you really need to have one is a smart choice and an investment in your future. Once you have a policy in force your premiums won’t increase, and as long as you continue to pay them you will be covered for the duration of the policy—for your entire life if you have chosen a Universal or Whole life policy. Even if you don’t have a family to protect now, you will already be prepared for that eventuality and have an affordable policy to cover them thoroughly.

Protect Yourself With Disability Insurance

Protect Yourself With Disability Insurance

When it comes to selecting the insurance policies you need to protect yourself and your family from unforeseen events, you have probably covered all of the basics. Auto insurance, homeowner’s insurance, life insurance. Many people never look beyond these main three. There is one particular policy, however, that is often overlooked and that could prevent you from losing everything in the event that you are unable to work. Disability insurance is one of the policies that everyone should carry, but in many cases it is overlooked.

You Really Do Need It

Many people balk at the cost of paying for disability insurance, especially when they are already paying premiums on so many other policies, most of which are not optional. It is easy to let something like disability go. However, becoming disabled is a very real risk that each of us faces every day. Accidents, injuries, illness—there are many things that could leave you unable to work and thus without an income.

Disability insurance is designed to protect you in the event of any sort of disabling event that puts you in the position of being unable to bring in your regular salary. You may have some coverage with your employee benefits, but in most cases it isn’t really enough to pay your living expenses and take care of yourself and your family. A disability insurance policy will make certain you have the money to continue paying the bills and living your chosen life in spite of a disability.

More Than A Good Idea

Most people will acknowledge that having disability insurance is a good idea, and yet many of them still won’t take out a policy. Much like health insurance, disability insurance is one of those policies everyone wishes they had when it is too late. You can’t get coverage once you are already disabled. Sadly, this is the time when many people realize just how important it really is.

Disability insurance should be considered just as important as those top three: auto, home, and life. It truly is a must-have insurance policy that will make an incredible difference should the day come when you need to use it

Talk to your insurance agent about disability insurance. He will help you determine how much you need and what type of policy is right for you; it is well worth it for your peace of mind.

 

Universal Life Insurance And Cash Accumulation

Universal Life Insurance And Cash Accumulation

You have probably heard about people taking out a loan on their life insurance policy, but don’t really understand what that means. How can you take out a loan on insurance? The answer is simple: you can access a cash accumulation account that grows over time when you are paying the premiums on a Universal (whole or permanent) life insurance policy. How does it work? Let’s take a look at the basics.

Cash Accumulation Accounts

When you pay the premium on a Universal life insurance policy, part of what you are paying is the actual premium, or what is also called the cost of insurance. This is the minimum amount that is required to keep the policy in force. The remainder of the premium, usually a pre-determined amount, goes into a savings account where it earns interest and accumulates over time. The longer you pay the premiums on the policy, the more money will add up in the account. You can even choose to pay a higher monthly premium so that more money goes into the savings account.

Loans And Surrenders

There are two ways to access the money in your life insurance account. One is a loan, and the other is a surrender or a withdrawal. The main difference is whether or not you pay tax on the amount. Because the money placed in a life insurance cash accumulation account is tax-deferred, you won’t pay any tax on it as income unless you take it out as a surrender. When you take it as a loan, however, you don’t have to pay tax on it. You do, however, have to pay it back to the cash accumulation account with interest. If you withdraw money from the account as a surrender instead of a loan, there may be a surrender charge that you will have to pay to get the money out. Bear in mind that if you should pass away without paying back the loan, the amount will be deducted from what is paid out to your beneficiaries.

How Do I Access The Money?

If you want to access the cash value of your policy, contact your insurance agent. It’s a good idea to discuss the pros and cons of a surrender versus a loan before you make a decision. Your agent can give you all the necessary details such as surrender charges and interest rates on the loan to help you choose the right option.

Life Insurance And Retirement – Re-evaluating Your Policy

If you are one of the many who will be retiring in the next few years, or if you have recently retired, you likely are thinking about changes to your finances. While retirement planning usually involves 401Ks and a reduction of your monthly expenses, changes to items such as life insurance may not be the first thing that come to mind. Retirement, however, may be the best time to re-evaluate your life insurance policy. Here are some things to consider in selecting life insurance that is retirement ready.

Final Expenses

While paying for expenses such as your children’s tuition fees or your mortgage may no longer be a concern, making sure your loved ones are not left with expenses such as covering your personal debts or funeral costs can really ease the burden after you are gone. There are a number of insurance policies specifically designed to cover these types of expenses, and in most cases the cost is very reasonable even after you have reached retirement age.

Permanent Life Insurance

Whether or not retirement is in your near future, considering the benefits of a permanent versus a term life insurance policy is important. Permanent life insurance policies give you the ability to retain some value in the principal that you can cash out later, thereby acting more as an investment than a term life insurance policy would. If you have already have a permanent life insurance policy, retirement may be the time to consider the benefits of cashing out some of its value.

Annuities

Annuities are another type of investment option that is offered by insurance companies. They act as a type of retirement protection that can give you the security of knowing you will have a guaranteed income should you live longer than expected, or should your retirement savings not be enough. There are a number of options to choose from in the annuities market, ranging from safer investments to riskier, potentially with higher yield return options.
Retirement is a major life change, and taking another look at your life insurance protection and options is an important part of preparing your finances. An insurance agent can help you find the options that are right for you.

What Term Life Insurance Policy Length Is Right For Me

If you have decided on term life insurance, you will next have to choose a term length. What you choose depends on several factors ranging from your budget to your life insurance needs.

What Does Term Length Mean?

Term length describes the period of time for which the life insurance policy will be in force. A term life insurance policy is an affordable choice for life insurance because there is an end date to the policy, reducing the life insurance company’s risk of having to pay out on the policy. The shorter the term, the lower the risk taken on by the insurer, so the premium is lower. Term life policies start with lengths as short as five years and usually go up to thirty years, depending on the company.

How To Choose a Term

The biggest deciding factor in how long your term life policy should be is the length of time you will require the policy coverage. Why are you taking out the policy? Do you want coverage to be in force until your children are adults? Are you looking for coverage for the length of your mortgage? These are two of the most common factors in term life. If your children are very young and you want to ensure there is a policy in force at least until they are old enough to care for themselves, then a 20 year term is probably the minimum you want to consider. If you just bought your house and want to cover the mortgage, consider a 30 year term—but remember that the amount owed on the mortgage will decrease as you pay it off. This means you might be able to choose a shorter term.

What About Short Terms?

The shortest of policy terms, five and ten year for example, are generally selected when the premium amount is too high due to age or health concerns for the insured to afford a longer term. In some cases a short term may be taken out because a previous term policy has expired and a few more years of coverage are needed. For the majority of people, spending a little more money every month on a longer term policy in the first place would be a wise choice to avoid overpaying on a short term policy later on. When choosing a term length, it is always a good idea to take out the longest term at the highest coverage amount that you can afford. Sometimes a shorter term with higher coverage is desirable; find the right balance between the coverage amount, the length of the term, and the premium by discussing it with your insurance agent.

Life Insurance And Major Life Changes

While life insurance can seem like a once-in-a -lifetime decision, there are a number of life events that should cause you to take another look at your life insurance policy to see if it is still right for you and your family. So what should your life insurance policy do for you and your loved ones, and what life events should make you re-evaluate whether your life insurance policy is still right for you?

Do You Need Life Insurance Now?

Deciding whether or not you need life insurance depends largely on your age and your personal situation. If you have children or a spouse, having life insurance, no matter what your age, is important to ensure that they are cared for should anything happen to you. If, however, you are not married or do not have children, do you still need life insurance? One thing to consider is whether or not you have any family or other people who rely on you financially, such as your parents. Another consideration is your age. It is considerably cheaper to purchase life insurance at a younger age, so if you plan on having a family in the future it may be wise to give yourself the best protection at the lowest rate.

Balancing Protection And Investments

Life insurance can certainly be more than just a financial security blanket for your family; it can also be a wise investment opportunity. In selecting life insurance there are, in general, two different types to consider—term and permanent. Term life insurance is a good choice if you are young and have a family. It can offer you the maximum protection for the lowest premium but, as the name suggests, the insurance is only valid for the term of the policy, at which point it expires. Permanent life insurance, on the other hand, offers you protection for life and usually gives you a return on your investment in the form of a cash value on the policy. While the premiums on a permanent life insurance policy will be higher than a term policy, it may be a better choice for long-term protection.

Retirement and Life Insurance

Retirement is a time when we experience a number of changes in both our day-to-day lives and our financial and family lives. This is also an important time to re-evaluate your life insurance policy, and in most cases make some changes in the type of coverage you have. At retirement you and your spouse’s financial situation is likely very different than when you first got married. Your family has also changed, and your children are likely not in need of the same financial security through you that they once did. This is a time when choosing a more affordable life insurance that can offer you a cash value may in your best interest.

An insurance agent can help you find the policy that works best for you at any point in your life.

Should You Buy Life Insurance For Your Child

Life insurance for a child may sound like a strange concept, and one that is even disturbing to many people. But the purpose of taking out a life insurance policy on a child is not a morbid expectation of an early passing. There are some very good reasons why taking out a life insurance policy for your child early in life is a good idea.

The Premiums Stay Low

When your child is young and healthy they will qualify for the best possible life insurance rates, and if you take out a Universal life policy those premiums won’t change as the child ages. Once the child reaches the age of majority, they can take over paying the premiums and continue to have the policy available as they grow older, with no increase in premiums. Even if they develop health problems later in life that might prevent them from qualifying for a life insurance policy, the existing one can’t be taken away. Your child will have a life insurance policy that is good for a lifetime no matter what happens.

Cash Starts Accumulating

The sooner you start the policy, the sooner cash will start accumulate in the account. This can serve as a savings account that your child can contribute to as they grow older, or that they can draw on whenever it might be needed. By the time your child reaches the age of 18, a cash accumulation account started at birth can contain a sizeable amount of money.

If The Worst Should Happen

No parent wants to think about it, but if a tragedy should occur, a life insurance policy can offer you the time that you need away from work to deal with the emotional and mental wellbeing of yourself and your family. While this isn’t the main reason to take out a life insurance policy for your child, in the event of the worst case scenario, you will be grateful for the extra help.

If you are considering a life insurance policy for your child, don’t be dissuaded by the feeling that it is morbid or frightening to think about. The main reasons for taking out the policy are not morbid, they are simply smart planning and thinking ahead for your child’s future.

Life Insurance And Retirement – Re-evaluating Your Policy

If you are one of the many who will be retiring in the next few years, or if you have recently retired, you likely are thinking about changes to your finances. While retirement planning usually involves 401Ks and a reduction of your monthly expenses, changes to items such as life insurance may not be the first thing that come to mind. Retirement, however, may be the best time to re-evaluate your life insurance policy. Here are some things to consider in selecting life insurance that is retirement ready.

Final Expenses

While paying for expenses such as your children’s tuition fees or your mortgage may no longer be a concern, making sure your loved ones are not left with expenses such as covering your personal debts or funeral costs can really ease the burden after you are gone. There are a number of insurance policies specifically designed to cover these types of expenses, and in most cases the cost is very reasonable even after you have reached retirement age.

Permanent Life Insurance

Whether or not retirement is in your near future, considering the benefits of a permanent versus a term life insurance policy is important. Permanent life insurance policies give you the ability to retain some value in the principal that you can cash out later, thereby acting more as an investment than a term life insurance policy would. If you have already have a permanent life insurance policy, retirement may be the time to consider the benefits of cashing out some of its value.

Annuities

Annuities are another type of investment option that is offered by insurance companies. They act as a type of retirement protection that can give you the security of knowing you will have a guaranteed income should you live longer than expected, or should your retirement savings not be enough. There are a number of options to choose from in the annuities market, ranging from safer investments to riskier, potentially with higher yield return options.

Retirement is a major life change, and taking another look at your life insurance protection and options is an important part of preparing your finances. An insurance agent can help you find the options that are right for you.

Why You Can’t Afford Not To Have Life Insurance

Insurance agents hear the same story over and over again: I know I need life insurance; I just can’t afford the premiums. The trouble is that those who feel they can’t afford to have life insurance are likely the people who need it the most. Here are a few of the reasons why the argument that you can’t afford life insurance coverage likely means you really need it.

You Have No Savings

If you live paycheck to paycheck and have no savings or other backup to cover yourself in case something goes wrong, then you also have no way to provide your family with what they need should you pass away. The less you have in the way of assets and savings, the more a life insurance policy will be needed by your loved ones in the event of a tragedy. How will they pay the mortgage and utilities, buy food, or handle all the other costs of everyday life? Without a life insurance policy, you will be leaving your family in a seriously difficult situation, dependent on charity or family members for help.

There’s No Extra Room In The Budget

When your budget is tight, which it is for many people today, you probably need every dollar that is coming in right now to cover the bills and make ends meet. What happens if some or all of that income is taken away? The family members left behind certainly won’t have a chance of finding income to replace what is gone quickly enough to avoid losing their home and more. While it can be difficult to fit the premium for a life insurance policy into a tight monthly budget, the cost of not fitting that policy in can be a lot higher if something unexpected happens.

If you really think you can’t afford to have life insurance, then the truth is you need to find a way. Talk to your insurance agent about ways to take out a policy affordably, and look at your budget to see if there is a way you can make room. The more you think you can’t pay for life insurance, the more you need that coverage to protect your family from losing everything if something happens to you. Knowing your loved ones will be okay if you are gone is well worth stretching the budget just a little more.

Tips For Choosing A Life Insurance Policy

If you don’t know where to start when it comes to shopping for a life

insurance policy, you are not alone. Life insurance can seem like a daunting

task because it has such serious consequences. You want to be sure you get

the right policy and pay the right premiums, so get some help and consult an

expert before you make a decision.

 

An Agent Can Help

Before you call an 800 number to get your life insurance policy through a

television commercial, consider talking to an insurance agent. Even if you do

decide in the end to go with a policy somewhere else, you can get valuable

information through the expertise offered by an agent. They will help you to

decide how much coverage you need and what type of policy is best. They

can explain to you all the rules and procedures involved in obtaining your

policy. If you don’t already have an agent, ask friends and family for a

referral to someone they trust.

 

Possible Discounts

If you look for a life insurance policy with the same company that insures

your home and car you may qualify for an additional discount on those

policies. Many large insurance companies offer multi-policy discounts for

customers who take out more than one type of insurance policy with them.

Ask what you could potentially save on your auto and home—it might make it

worth a slightly higher life insurance premium.

 

Getting Quotes

It’s always worthwhile to get numerous quotes on any major purchase you

make. Call around and get quotes from at least three different companies for

comparison. Be sure they are quoting the same policy limits as well as the

same type of policy and term length if applicable. Remember that quotes

may not be entirely accurate—what may be discovered on your health

screening could affect the true premium when the policy is issued. If the

premium amount is different from the quote, you will have an opportunity to

change your mind and decline the policy. Be sure to ask for detailed

information on the reasons why the premium is different.

 

Especially if you are choosing a long term or Universal life insurance policy,

you will want to be sure you have made the right decision. You will be

paying that premium for a long time, and changing to a new policy later

could cost you a lot of money. So be sure you are happy with the policy and

the premium, because once you choose a policy it is best to stay with it for

the long haul.

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