Posted on Tue, Oct 30, 2012
Life insurance is something everyone should have, but not everyone does. One reason for this is because finding a reputable life insurance company can be difficult. There are a lot of factors to consider that reach far beyond just the life insurance rates offered. When it comes to finding the right life insurance provider for you, make sure you vet your candidates against these factors.
History
Life insurance is an important financial tool, so you want to take your time finding a company that has been around for many years. A company that has been around for a while has already worked out the kinks in their business and they’re likely to have a number of happy customers. In addition, they’ve probably mastered turnaround time and underwriting guidelines.
Customer Satisfaction
All businesses need to focus on customer satisfaction, and life insurance is no exception. Customers choose to companies that they feel treat them with respect and in the life insurance industry, that means quick claim times, responsiveness to questions and a willingness to discuss policy changes and more. Before you settle on a life insurance company, be sure to talk to your friends and family to get their recommendations. They’ll be able to tell you how they feel about their life insurance provider and which companies they might have looked at when they were researching life insurance.
Financial Strength
The most important thing to consider in a life insurance company is its financial strength. When it comes time to pay out a benefit, customers want to know that their provider has the funds available to do so. You can research the financial strength of companies to see how they rate against their competitors. When you choose a life insurance company, you’ll feel confident in your decision knowing the company is financially stable.
When it comes to buying a life insurance policy, you want to feel confident in a life insurance company you trust. Follow these tips to find the right life insurance company for your needs.
Have you bought life insurance? How did you compare life insurance companies? Please share with us in the comments.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Fri, Oct 26, 2012
If you’re nearing the end of your term on your term life insurance policy, you have some important decisions to think about. Does your policy offer the option to renew or convert to another type of life insurance policy? Here are some things you’ll want to think about if your term life insurance policy is up for renewal.
Premium Considerations
The premiums for term life insurance are scheduled at a set rate until your policy term ends. When that time comes, you’ll want to consider all of your options. Your age, financial stability and physical health all play a role in whether or not your policy can renew automatically.
In addition, premiums for renewable term life insurance tend to get more expensive the older you get. In that case, sometimes it makes sense to switch from term life to permanent life insurance when your policy is up for renewal. When you initially buy a life insurance policy, you might want to consider whether the life insurance company requires “insurability” evidence.
Renewal Provisions
Adding a Renewal Provision or Guaranteed Insurability Rider to your term life insurance policy can usually help guarantee yourself a renewal period at the end of your policy. However, these riders and provisions aren’t given to everyone. Oftentimes, they have age requirements or might even require a proof of insurability in the future. Before you go down this road, you should ask your life insurance company for specifics about Renewal Provision options.
Age Considerations
In general, you should be mindful of your age throughout the process of renewing a life insurance policy. It’s not uncommon to find that renewing a life insurance policy gets more expensive as you get older. Prior to your policy reaching the renewal time period, start researching your options for renewal or switching to another type of life insurance policy.
Whether you choose to renew your term life insurance policy or not, make sure you have made some sort of plan for the security of your loved ones. Don’t leave your beneficiaries in a lurch, instead, plan ahead and purchase a life insurance policy that is the best fit for you and your loved ones.
Have you renewed your term life insurance? How did you make this decision? Please share with us in the comments.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Tue, Oct 23, 2012
Becoming a new parent is one of the most exciting events in your life, but it comes with many major responsibilities. There are plenty of things you need to consider when you introduce a new child into your family and here are some financial considerations to be mindful of.
1. Quote Life Insurance
Although it’s unpleasant to think you might not be around to take care of your child one day, it’s important to plan for everything. Most new parents will purchase term life insurance because it’s usually the least expensive option and you often have more flexibility to update your coverage as your family’s needs change.
2. Adjust Your W-4
Whenever you have a major personal life change, you should update your W-4. Of course, this includes having a child. A new baby can be a major tax event for you. You can claim an additional allowance for a dependent and might even qualify for the Child Tax Credit, Child Care Tax Credit or other tax credits. These credits can allow you to reduce your withholding to account for the added tax benefits.
3. Open a College Savings Account
Start planning for your child’s future immediately and open a college savings account. It’s never too early to start setting aside funds for your son or daughter’s college education. Plus, the earlier you start saving, the easier things will be when it comes for your child to apply to and attend college.
4. Add Your Baby to Health Insurance
Most health insurance companies will cover costs associated with your baby as long as you add the baby to your existing policy within 30 days of giving birth. Check with your provider to find out what is required to add the child to your plan. Once you add your baby to your health insurance plan, be prepared to see an increase in premiums.
5. Estate Planning
If something were to ever happen to you, you need to know that your child will be raised and provided for. One way to ensure this is to make a will that includes who should take care of your child and their finances. In addition, check your retirement accounts. For retirement accounts, you can usually name beneficiaries when you open them. Update them after giving birth in order to reflect that your child is a beneficiary.
To learn more about buying life insurance in preparation for your new addition’s arrival, visit Efinancial’s E-Learning center.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Sat, Oct 20, 2012
After carefully comparing quotes and products, you have decided to purchase a life insurance policy. Congratulations. You are making an important decision to help secure the future for those closest to you. Now, there are still a few steps to complete the process. The most important is the medical interview and exam.
If you are applying for traditional underwritten life insurance you will undergo a medical exam to assess your risk. There are several things you can do to prepare for the medical exam and interview.
Before the Life Insurance Exam
Your life insurance application will include a number of questions that must be answered with complete honesty. You will provide your age, height, and weight as well as answer questions about your smoking, drinking, and exercise habits. You will also have to reveal any existing medical conditions along with your family medical history and any high-risk activities you participate in.
The Life Insurance Medical Exam
This medical exam is usually done in your home or office by a paramedical professional. Leading up to the exam you will receive further instruction on what to expect. You usually will be asked to fast for certain amount of time before the exam.
The life insurance medical exam itself includes a basic physical that will cover checking your height, weight, blood pressure, and heartbeat. You may also be required to provide blood and urine samples. Depending on your medical history and the type of insurance you are applying for, you may be asked to undergo more testing. These could include stress tests, EKGs, and chest X-rays.
Avoiding the Life Insurance Medical Exam
If you don’t want to undergo a medical exam, there are options for you. You can seek a no medical exam life insurance policy. This type of life insurance only requires the completion of a questionnaire. It allows for a shortened application process. However, if you are healthy, undergoing the life insurance medical exam often results in lower premiums.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Thu, Oct 18, 2012
It is important to comparison shop when making any major purchase. When buying a home, you will look at many houses. You’re going to test drive a number of vehicles before selecting the car that is right for you.
Shopping for life insurance is no different. There are a huge number of products available to you. You will only pick the best one for you by carefully comparing policies. Comparing life insurance quotes will help ensure that you get a fair price along with all of the riders and coverage you need for your particular circumstances.
There is no single answer to the question of how many companies to compare. The best advice is to compare as many as possible. With the vast number of products out there, this can seem like a tall order. There are few steps that can help.
Before You Compare Life Insurance Quotes
Narrow your options through research. There are many online resources to help you understand life insurance. Learn about the different types of life insurance available to you and the advantages to each.
Then, consider your own needs and the needs of your family and loved ones. This will help you decide what type or types of insurance will work best for you. For instance, if you know you are looking for a term life policy, it will help narrow your search before you begin to compare life insurance quotes. You will only compare products that are of the most interest to you.
Comparing Life Insurance Quotes Online
Once you have an understanding of what type of life insurance you need, you are ready to compare quotes. Remember to consider more than just the price. The cheapest policy may not include a high enough benefit amount or all of the riders you need. Compare quotes until you find one that works for you. Then, compare some more until you are sure you have found the best option.
There are several ways to compare life insurance quotes online.
You can go to multiple company websites to compare quotes for similar products. This is effective, but often proves time consuming and confusing.
Another option is to compare life insurance online with a broker. Brokers carry products from many top life insurance companies. They are able to compare quotes from across these companies to provide the ones that best meet your needs. For instance, Efinancial provides a comparison of competitive quotes from the today’s most trusted life insurance companies that meet your criteria. Using a broker provides consumers with a one-stop shopping experience to find the coverage that is right for you.
Have you bought life insurance? How did you compare life insurance quotes? Please share with us in the comments.To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Tue, Oct 16, 2012
Is buying life insurance online safe? The answer is yes as long as you take the time to understand what you are buying and where you are buying it. By taking the proper steps you can feel confident that you will receive the right policy from a reliable company.
What to Look for when Buying Life Insurance Online
The most important step to buying life insurance online is making sure you are shopping with a reliable organization. Before working with a company, make sure that they are properly licensed. The company should hold a license to sell life insurance in your state.. If you can’t find this information on the company’s website, contact them directly. Look for a company with the credentials you expect.
You can verify a company’s license with your state’s Insurance Commissioner’s Office. The Better Business Bureau (BBB) can also be a valuable resource. Checking with the BBB will help confirm that the company you are providing information to is reliable.
The Types of Life Insurance Sites
When buying life insurance online you will likely encounter two types of sites.
Corporate life insurance sites are owned and operated by a single life insurance company. They will only sell products from this company and will not provide comparison quotes from other companies.
Life insurance broker sites offer products and quotes from a variety of companies. This gives you the option to compare prices and features in a single location. Using an online broker helps save you time and find the best policy at the most reasonable price.
Don’t Be Afraid to Buy Life Insurance Online
Once you are armed with the correct knowledge, you will be able to shop for life insurance online with confidence. The Internet provides an excellent opportunity to shop and compare policies from the comfort of your own home and on your own schedule.
To learn more about buying life insurance online, visit Efinancial’s E-Learning center.
If you have bought life insurance online, share your tips and experiences in the comments below.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Tue, Oct 16, 2012
Rather, insurance companies must finely balance the protection they offer with a risk and cost analysis, a complex task that requires closely analyzing every new customer they take on.
Enter the underwriting process.
The main objective of this process is to ascertain how much of a risk it is to cover your life. Essentially, the insurer must dig down deep to develop an understanding of how likely it is that your life will actually end while covered by their policy and then balance that risk with appropriate charges.
It is no exact science but by following the same finely-tuned principles to provide coverage for hundreds of thousands of individuals, they create a system that can support itself and protect you and me.
So, what does this underwriting analysis really look at?
1. Life Choices/ Habits
Certain lifestyle choices bring on a greater chance of an early death – no news here either. Smokers can expect to pay a higher premium. Frequency of alcohol abuse is telling. Build plays a role as well (your height to weight ratio).
2. Extreme and Dangerous Avocations
It makes perfect sense that risky activities present a higher risk of death. Avocations considered dangerous may include but are not limited to skydiving, hang-gliding, scuba diving, motorcycle racing, and rock climbing.
The effect of avocation on life insurance varies depending on the activities, the individual’s skill level, and frequency of participation.
3. Driving History
For most people, it’s no big surprise that car accidents are a leading cause of death in this country, and life insurance companies see a lot of claims stemming from victims of the road. For this reason, your driving records will be scrutinized as well. A recent history of aggressive or sloppy driving is indicative of higher risk and will certainly affect your rating.
4. Current Health Status
By far, the most crucial component of underwriting your policy is getting a firm grasp of your present physical health, which is determined through a series of questions and a medical examination.
During the medical exam a nurse will take all your basic measurements, blood work, and a urine sample. In some cases, an EKG might be required, and you might even be asked to climb up on a treadmill.
5. Documented Medical History
The underwriting process also includes looking into your medical history; health issues in the past are great predictors of the future. They will ask for info about previous doctors, hospital visits, medical conditions, and emergencies.
Chances are the underwriter will want to order your medical records to see the history for themselves, and they very well may consult Medical Information Bureau records for confirmation.
6. Family History
Did one of your parents pass away at a young age from either a heart condition or cancer? Do your siblings suffer from medical conditions of this nature? Are your parents experiencing a particularly long, healthy life?
Genetics and family history play a large role in accurately predicting life expectancy, and the underwriter will no doubt be interested in all of this information.
These are just some of the variables an underwriter will look into while evaluating your application for life insurance.
Keep in mind that certain companies do specialize in particular types of cases. For instance, some specialize in insurance for people with specific health conditions. Typically, there is a solution for everyone.
Also, don’t forget that you have substantial amount of control over your own personal health, the most significant aspect of underwriting your policy. Even after your policy is in-force, you may have an opportunity to get a lower premium by changing your habits and getting healthier.
Take advantage of it and you can not only save money but live a longer, happier life.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Mon, Oct 15, 2012
If there are issues or red flags with your application, the underwriting will be advised by a medical director working for the company as to how they should deal with the case. Cases of a life insurance application being completely denied are pretty rare. The odds are much more likely to be that an insurance provider will offer you a policy with a higher premium, decreased benefits, or both.
Do not be too alarmed about getting a poor risk assessment; there are often some things you can do to improve your health as well as get lower premiums in the future.
Meanwhile, here are a few tips for dealing with a borderline case in underwriting:
Find Out if You Can Present More Information
If the underwriter is concerned about your case, you will typically be given the opportunity to provide new or additional information to address the issue. Get as much information about the problem as possible and then take that back to your doctor.
If you’re considered too risky to insure (or even just want clarification on your rating), write a letter to the insurance firm requesting an explanation. The Fair Credit Reporting Act requires their response, and they will send the information to your doctor for closer scrutiny.
They are not obligated to get into the small details with you, as they are not your doctor, but you should be able to get a general reason and the specific results of all medical examinations undertaken.
Open Up the Lines of Communication
Your own perception of any medical conditions you have will naturally be more optimistic than that of the insurer’s.
Remember that everyone involved comes at a medical condition from a different angle. As an insurance firm, their business is run on tight margins of risk, and they are paid to be cautious about these things. With this in mind, it’s important to realize that they might not clearly understand what is going on and simply need some clarification.
Communication can go a long way in a case like this. Just speak to the insurance provider. Find out if there is anything you can do to have them look on your case more favorably or whether there is more information that would help. Open up the lines of communication.
Do Your Homework Ahead of Time
Sometimes you have merely picked the wrong insurance company.
Different companies often specialize in providing insurance to people with a particular condition because they understand the risk involved and how to deal with it.
With this in mind, if you are well aware that you have a tricky medical condition, do the homework ahead of time and apply with a company more likely to feel comfortable with your case.
On Tobacco Usage and Insurability
Insurance firms almost always charge higher premiums to those who use tobacco but are also well known to vary greatly in the way they deal with tobacco usage. Varying criteria may apply to the different types of tobacco – cigarettes, chewing tobacco, cigars, etc – frequency of use, and length of time passed since last usage.
Of course, in order to qualify as a non-smoker, you must test negative for nicotine in your medical exam.
Watch Your Weight
Weight deserves special mention because in all but the most extreme cases it is well within your control.
Your build has a significant effect on your life insurance rating, and for good reason. It comes to no surprise for most that obesity leads to chronic diseases later in life. The good news – even small decreases in weight can lead to lower premiums.
Try your best to get it within control. Even after your policy goes into effect, it may be possible get your premium lowered based on this information down the road.
Life insurance is extremely important, and you don’t want to keep putting it off, so make sure to take appropriate measures in order to get the coverage that’s right for you and your budget.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Sun, Oct 14, 2012
Established in the early 1900s, the Medical Information Bureau, MIB, goes largely unnoticed by most insurance holders, but it plays a very crucial role in the life insurance industry. A consumer reporting agency owned by member companies, the organization manages a gigantic database that underwriters in the various health-related insurance fields use to verify data about new applicants and minimize fraud.
Due diligence during the underwriting process is the key to fraud prevention – carefully scrutinizing each new case, verifying data as often as possible, and arriving at accurate conclusions of risk. This is where we get around to MIB.
If an MIB member insurance company wants to dig a little deeper into the medical/health background of a new applicant, they can request a report from MIB. This report lists brief, coded information about the applicant’s medical background and other relevant information regarding health and longevity collected by MIB member companies during the course of their underwriting investigations as authorized by the applicant. In addition to medical information, MIB may also have information about hazardous avocations or hobbies such as skydiving.
Getting your information into the MIB database takes applying for some sort of health-related insurance like life, health, disability income, critical illness, or long-term care. Membership is widespread with MIB member companies supporting 80% of health and disability insurance policies and 99% of life insurance policies.
While considered a business entity, MIB can also be viewed as an industry association owned by nearly five hundred collaborating insurance companies. The main goal of this association is to prevent, stop, and catch fraud in health-related insurance claims, thereby keeping insuance premiums affordable for those seeking protection.
It’s important to realize that since the sole purpose of MIB is collecting information about consumers for these reports, the government also considers it a specialty consumer reporting company; thus, they are held to the federal Fair Credit Reporting Act as is any other reporting agency. This means that you as a consumer have access to a free report once a year if you want to see what’s in your files.
At the end of the day, MIB is here to protect the integrity of the insurance industry, ensure that insurance systems continue running smoothly, and serve you as a consumer.
It's an asset to insurers; it’s an asset to you.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Fri, Oct 12, 2012
Facing the reality of life insurance shakes a lot of people up. It’s a necessary component in any modern financial plan, and it’s the right thing to do when people you love depend on you, but sitting down for a moment and facing your own mortality is a humbling experience. Once you gather your courage and take that leap, you fully realize how a lack of coverage puts your family at risk.
From that moment on, you feel as if you can’t rest until they are officially protected.
But a life insurance application for a traditionally medically underwritten life insurance is not instantaneous. Before the application decision is made you first go through underwriting, an analysis used to determine eligibility before you receive a decision.
It takes time – sometimes a month or two. It may require looking into your background to verify details. It will certainly include a medical exam. If you have a medical condition or if the underwriting department comes up with something that needs to be cleared up, it can take considerably longer.
This can really overwhelm some people and leave them feeling vulnerable. What if the unthinkable occurs and you pass away before your life insurance application is complete?
This is where the concept of the conditional receipt, or binding receipt, comes in handy. Usually, as soon as you submit your application, you have the option to put down your first premium payment, equal to the amount you stand to pay if your application is accepted. This is no meaningless act; it actually “binds” your coverage to the date of submission (assuming the underwriter does find you eligible).
So, if you are in pristine physical condition when you apply for your policy and then lose your life in an accident while waiting to hear back from the insurance provider, the underwriter continues with your case. If it turns out you would have been accepted, the company then awards the death benefit to your beneficiary, even though you only made one premium payment.
If it turns out you were ineligible for the policy, however, the beneficiary will simply get your premium payment back.
This mechanism ensures your family will get paid out and that you have some type of coverage while waiting for your application to clear. Of course, there’s always the risk of your application being refused; this is why it’s important to know your health status and be completely upfront and honest about everything during the application. Remember that it is pretty unlikely to be completely denied if you don’t have a terminal, incurable illness.
Keep in mind that there are sometimes other mandatory conditions involved. For example, your insurer may declare the conditional receipt invalid until after your medical exam – they will let you know ahead of time, so no surprises here. Also, in most cases, conditional receipts are only allowed on policies for $250,000 or less.
Some experts point out that holes exist in the protection offered by conditional receipts. For instance, if your application would have been accepted but not at the rating you applied for, the conditional receipt is then considered invalid and the death benefits go unrewarded.
For a more stable solution, some companies offer the option of buying “temporary life insurance” which also goes into effect while waiting for application approval. The considerable advantage is that if you are taken by an accident during this time, the death benefit is given to your beneficiary even if it turns out your application would have been denied.
While more expensive, it obviously offers far more peace of mind than a conditional receipt.
Have you taken the time to protect your family from the potential financial loss and suffering associated with untimely death? It isn’t always easy to think of these things, but it’s a responsibility too large to ignore. Find out how you can protect them by speaking with an insurance expert today.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Thu, Oct 11, 2012
At the end of the day, life insurance isn’t really about you, is it? If there are people in the world who depend on you, it is a crucial component of any financial plan, but you’re not going to be around to collect when it’s time for a claim to be filed. So, the most important thing to determine when making your purchase is who the beneficiary will be, the person or entity who is awarded the death benefit in the event you pass away.
Consider Your Beneficiary Options
You actually get a great deal of control over how your death benefit is paid out – and that’s the way it should be because you’re the one footing the bill.
You can appoint one person to receive the money if you choose, or you can appoint multiple people. You can have the money donated to charity. You can have it paid into a trust or your estate.
Then, there are all types of insurance plans that also allow you to delegate the funds in other ways. For instance, you might use it to pay off credit cards or settle a mortgage.
How Many Beneficiaries Do You Want?
You can have just one primary beneficiary if that’s all you need, but most people like to cover all bases. Appointing a secondary beneficiary allows the death benefit to be passed down the line to the next person should the primary beneficiary pass away before you do.
Your primary beneficiary is first in line to receive your death benefit. If the primary beneficiary dies before you, a secondary or contingent beneficiary is the next in line. To go even further, a final beneficiary can be appointed in case the unthinkable happens and both the primary and secondary are deceased before you.
You can appoint multiple beneficiaries at any “level” as well. This would come in handy, for example, if you want your wife to be the primary and sole beneficiary but to have the death benefit split between your two children if she passes away first.
What Happens if Your Beneficiary Dies at the Same Exact Time as You?
In some states, the Uniform Simultaneous Death Act states that if you and your beneficiary die together in an accident and it cannot be determined who died first, the benefits will go to the next in line. If there is no secondary beneficiary, however, the funds will go to your estate (assuming you have one).
Find out how your state deals with such a scenario, especially if you spend a lot of time with your beneficiary – many of us do since they are typically the most important people in our lives. At the very least, make sure to appoint secondary beneficiaries so you’re covered on all angles.
How Will Your Death Benefit Be Used?
This should be covered extensively by your insurance provider, but in most cases, your appointed beneficiary gets the entire sum, and they typically won’t owe income tax on this money.
If you owe estate tax, funds may be taken out to cover this, but most people with a considerable estate talk with their estate planner and their insurer about the best way to deal with this ahead of time. If you haven’t already, my best advice is to do so as soon as possible.
If you already have a trust or a will set up to deal with this, it’s imperative you consult with your attorney before making your final decision about what type of life insurance to purchase.
Changing Your Beneficiary
Sometimes we make the wrong decision and later change our minds. Or, sometimes life just brings major changes. Either way, sometimes we have to reconsider our beneficiary. Fortunately, the vast majority of life insurance carriers provide the freedom to come in and make changes here as needed.
All that said, it is easy to let time get away from you. If a change is necessary, do not neglect notifying your insurance company. Anytime something big happens – like a death, a marriage, a divorce, or the birth of a child – sit down and reconsider if it is time to make a beneficiary change, and then make it a high priority to get it done right away.
The Choice is Always Yours
Only you know what, and who, is most important in your life. Only you know who will need the money most. It goes without saying that only you know who should be your beneficiary.
It may be your children, especially if you pass away while they’re still growing up – they will need to be fed and clothed. They will need enough money to live comfortably until they are old enough to fend for themselves. If you want them to have a future, that means money for college or vocational training.
If you have a special needs child, their demand for financial care may even extend into adulthood.
What about your spouse? He or she may be forced to suddenly care for the entire family on their own, with an entire income stream suddenly wiped out. Imagine them facing the pain, suffering, and obligation of losing you and having to go it alone…
Are your parents aging and dependent on you for financial support? Other family members?
Do you have debts? A mortgage? Charities you want to support – a legacy you want to leave behind?
At Least Do Something
This is one of the most personal decisions you’ll make in your lifetime, and it’s arguably the most important as well. So, I urge you not to let it overwhelm you so much that you procrastinate – remember that you can always change your beneficiary later, anytime you need to.
Click here to speak with an expert today and find out how to best protect your loved ones when you go. You’re unique. So are your loved ones. That means you need a solution that fits your unique circumstances.
Get in touch today.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Wed, Oct 10, 2012
When analyzing a specific life insurance option, the reputation of the insurer is often a great way to figure out what you can really expect. For your security and peace of mind, third-party companies exist to rate insurers based on predetermined standards of creditworthiness and financial stability.
The good news – it doesn’t cost you anything. Life insurance companies themselves cover the costs of being rated. They do pay a hefty fee for this, but the rating companies also live and die on reputation, so favoritism is virtually unheard of in the industry.
There are four major rating organizations for you to choose from, and each utilizes their own unique system based on their own idea of what variables paint the picture of a healthy insurance organization. While exact criteria differ from rating system to rating system, the overall aim is essentially the same – to determine the financial strength of an insurance company and its financial instruments.
Specific variables used to draw conclusions about financial strength may include diversification, performance, competition, management, and financial soundness – of course, it differs depending on the system being used.
At the end of the day, ratings communicate how likely the company will be able to pay claims on the policies they issue. Getting paid is obviously crucial if you want your policy to fulfill its role in the event of your early demise, so ratings are a great start for doing your own research.
Where to Start Searching for Third-Party Insurance Company Rating Services
A good place to start is A.M. Best Company. Founded in 1899, they are the oldest insurance rating company in the business. Not only have they been around for awhile but they have a strong reputation for getting it right as well and have a stellar record when it comes to forecasting financial problems in a specific company’s future.
In fact, Best’s Financial Strength Rating is considered by experts from all around the planet to be the “benchmark” rating system.
How Do Third-Party Insurance Company Rating Services Work?
To give you an idea of how rating systems work, Best’s Financial Strength Rating, like all others, relies on a sequence of letter grades. In this particular system, a company in liquidation is notated by an “F” and a “Superior” Company is notated with an A++. The grades of financial stability closely correlate with what you remember from your report card days, making if fairly intuitive, and the use of -, +, and ++ are implemented to communicate variances among the different grades.
The other major ratings companies are The Fitch Group, Moody’s Investors Services, and Standard & Poor’s (S&P) – otherwise known as the “”Big Three,” or the Nationally Recognized Statistical Rating Organizations observed by the SEC (A.M. Best is not one of the Big Three because they are primarily focused on the insurance industry).
Note again that ranking systems differ between the different companies – all communicate their appraisal of a company’s stability through letter grades, and the levels are somewhat transferable from system to system, but the specifics pertaining to how they use these annotations and the relative worth of each letter varies according to the particular grading system.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Tue, Oct 09, 2012
When applying for medically underwritten life insurance, and after you’ve completed your life insurance application, you will undergo a physical examination to get a sense of your health for the underwriting process. Remember that this is not like a physical checkup from a regular medical doctor looking for ways to make you better if you happen to be sick.
That isn’t the goal of a medical professional hired by the insurance companies. Rather, your examiner is trying to get a snapshot of your health so they can accurately weigh the risk of insuring you and make a recommendation based on that risk.
The level of risk ascertained by the examination will have a direct impact on your life insurance policy and the cost of your premiums.
Here are some tips for being fully prepared for your examination.
1. Schedule a Morning Exam and Get a Good Night Sleep
Try to schedule your appointment for morning time so that you are nice and relaxed, but make sure you get a good night’s rest as well. And skip the coffee – it makes you anxious and elevates blood pressure.
2. Skip Alcohol for 24 Hours (and Cigarettes)
Be careful not to sabotage your results by drinking beforehand; even a little bit of alcohol can cause an increase in blood pressure for up to twenty-four hours.
If you smoke, stop about thirty minutes before your appointment as it also raises your blood pressure. In fact, if you really want some real control over your risk level, stop smoking altogether.
3. Avoid Salt for 3 to 4 days
Yet another way to artificially raise your blood pressure is salt intake, as salt retains fluids. Ease off the stuff before your appointment.
4. Drink Plenty of Water
Drinking plenty of water should help flush out your system and help provide the most accurate results.
5. If you take an EKG test
The electrocardiogram test takes your heart’s electrical activity and turns it into a graph of line tracings. It is meant to search for issues with your heart’s electrical activity.
First off, you want to be nice and mellow when you go in for this test; an anxious state can really throw off results. Avoid coffee like the plague.
Slow down.
Take a breath.
This is going to be easy.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Mon, Oct 08, 2012
You are ready to purchase life insurance. Fantastic. Isn’t it reassuring to know that your affairs will be in order and no loose ends will be left behind? Death is uncomfortable to think about, but we can find solace in knowing our families, our businesses, and our estates are protected.
What about the incontestability clause?
Misconceptions about the contestable period often cause skepticism even after new policyholders secure a strong policy. Let us clear away some of the hearsay.
Here is how the clause applies. It basically gives insurance companies two years to contest the validity of a policy even after it has gone in-force. So within those two years, they can go back and contest your application if they find you were accepted under false pretenses (if you lied to get approved). If so, the policy may be voided.
In addition, insurers may deny life insurance claims resulting from a death occurrence within those two years if the applicant lied to get approved, especially in a case where the facts omitted pertain to a condition that ended in death.
Indeed this is no small matter. In recent times, insurers have often been allowed to deny claims even after the contestable period was up if new information revealed an omitted condition that led to death.
What about suicide?
Suicide clauses apply here as well. Usually, if a policyholder commits suicide within the first two years of a policy, the death benefits go unpaid; instead, the premiums are refunded to the beneficiary.
After the two years are up, however, death benefits are paid even if the policyholder dies at their own hand. All facts considered, this is a pretty fair gesture on the part of insurance companies.
A lot of people are pretty weary about the contestable period especially. Skeptics worry that companies look for holes in life insurance applications every time a policyholder passes away within those two years so they can deny the claim and save money.
After all, who remembers every single detail about their medical history when applying for life insurance, right? Surely there must be holes in every application...
This couldn’t be farther from the truth. Contestable periods exist for one reason and one reason only – to prevent and cut back on instances of fraud. Misleading information in an insurance application leads to the company charging as if a condition didn’t exist. On an industry scale, when these higher risks go uncovered, there’s no money to cover deaths caused by them.
So the cost of fraud becomes the responsibility of the insurance agency and is often passed on to other policyholders. Dishonesty not only gets the individual a lower rate but compromises the entire system.
Insurers simply must be diligent about rooting out these challenges to the system and doing everything in their power to eradicate them.
Also, it’s important to realize that not all scenarios end in the insurance company refusing benefits. In cases where the insurance application would have been accepted for a lesser amount, they usually pay out the face amount of the lesser policy minus the extra premium amounts they would have received had the applicant been honest.
How to “protect” yourself against your policy being declared invalid?
Once again, these companies are not out to wrong you by any means. So, number one, just be honest about everything in your application process. Divulge all medical problems and risks. Resist the urge to cut your cigarette intake in half, or worse, to take a break from cigarettes long enough for the nicotine test and claim you’re a non-smoker. Tell the company the truth about your more dangerous activities as well.
If unsure about the exact details of your medical history, it is all there in your files. Find out. Then you can sleep well knowing not only that you told the truth but that your beneficiaries will be promptly paid if you die in an accident.
Rather than think of the incontestability clause as something worthy of suspicion; think of it as a mechanism that helps make insurance possible by protecting the system from fraud. Without it, you might not have access to these means of financial security for your family or your estate in the event of your absence.
It’s worth appreciating.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Sat, Oct 06, 2012
Have you considered how your life insurance benefits will be dealt with in the event of your
death? Have you devised a plan for your beneficiary so there is no confusion and you can rest assured the claim will be filed and the benefits paid out? How will you ensure the policy is not forgotten by your loved ones? Most policyholders at least want to know what the process of filing a life insurance claim is like so they can tell their beneficiaries what to expect.
It’s Up to You to Get the Process Started
This is crucial. Make sure your beneficiary knows about the life insurance policy so it does not go unclaimed; devise a foolproof plan for getting the paperwork to them. If you’d rather not divulge anything about the policy now, leave instructions with your attorney to notify proper parties when the time comes.
Also, keep the policy in a safe place where they can easily get to it, being careful not to store it somewhere that would be off-limits in the event of your death. If you have additional forms of life insurance – travel life insurance, credit life insurance, mortgage life insurance, etc – additional preparation is needed to ensure these matters are dealt with as well.
It is the beneficiary’s responsibility to take action and file the claim, which involves contacting the insurer to request the proper paperwork and producing a death certificate, as required by law. Once the paperwork is reviewed and as long as there are no hold-ups, payment is swift and straightforward. In most cases, the entire process takes a week or two.
However, if the insurer decides to investigate the claim, it can take months. This is rare.
Why Would a Provider Need to Investigate?
Most investigations concern the contestable period or the suicide clause. Simply put, these mechanism are in place to protect the insurance company, so they will use them when needed.
The Suicide Clause
This clause states that if the policyholder commits suicide within the first two years of the policy, the death benefits will not be paid out. Suicides after the two-year period are covered.
The Incontestability Clause
The Incontestability Clause allows your insurer a contestable period of two years from the start of the policy to look for material misrepresentation. If you hide something from them that would have influenced the decision to approve the policy or resulted in a higher premium, they have grounds to contest claims.
This is especially true if the circumstances hidden contribute to the policyholder’s death.
Material Misrepresentation Has Two Possible Outcomes
If the company merely would have charged a higher premium had they known about the risk factor, they may simply calculate the amount of insurance the paid premiums would have bought and pay out that amount instead.
In a worst case scenario, however, the policy can be deemed invalid and the claim completely denied. For obvious reasons, this is a devastating decision when your beneficiary is counting on those funds, which is why it is essential to never jeopardize your policy by hiding details relevant to your case.
How Will Your Death Benefits be awarded?
Many policyholders opt for the lump sum settlement option. In this scenario, the entire death benefit is paid out to the beneficiary at once, and they retain full control over how to use that money.
You also can specify a life income option, which is paid out over the beneficiary’s life. This ensures a lifelong income stream for the ultimate peace of mind. Yet another option is the specific income provision, which releases the money under a specific, predetermined payment plan.
Or perhaps you would prefer the interest income option. In this case, the insurer only pays out interest on the death benefit, which remains in their possession. When the beneficiary passes away, the death benefit is then paid out to a secondary beneficiary.
If no settlement option is specified when taking out your policy, the beneficiary gets the choice when they make the claim. No matter the choice, death benefits are tax exempt, so the money is tax-free for your beneficiary.
For more information on your life insurance policy, make sure you contact Efinancial with your questions today.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Fri, Oct 05, 2012
Sometimes policyholders notice a new option in the insurance marketplace and decide it makes more sense than their current plan given their present circumstances. One available option is to strike an agreement with the new insurance carrier and exchange the existing policy for the new. This process can be a headache, so it’s important that the decision isn’t rash.
Underinsured
Usually, your needs simplify as you age because less people depend on you, or your greater financial plan matures enough to handle all your needs. Sometimes, however, life gets more complex as it unfolds, and you need more coverage to cover an increased asset portfolio or replace a higher income.
Additional coverage may seem, at face value, a reason to replace your existing policy, but it may be unnecessary as well. Buying a term insurance policy fills the holes in your policy without complicating things.
Change in Needs
Life insurance policies are often customized using different features to uniquely suit the policyholder’s specific needs. This is the way it should be because everyone is different.
But things change. Your kids grow up and move away. A divorce. An increase or decrease in income. Losing or gaining assets. Career change.
If it is impossible to accommodate changing needs under the existing policy, a new policy might be the right answer.
Get a Cheaper Rate
One of the most common reasons for policy replacement is to access lower premiums. A change in smoking status, getting out of a unismoker policy, overcoming a serious medical condition, an improvement in physical health and vitality, or leaving a dangerous occupation are all legitimate means of accessing lower costs – assuming your present insurer will accommodate changes.
Or, sometimes, the new policy just offers the same coverage or more coverage at a better price.
Who wouldn’t replace their policy in a case like this?
Switching to a New Type of Life Insurance
Many people jump over to a new insurer to ditch their term insurance and access the benefits of a cash-value policy that builds up over time. While these permanent policies do have their upsides, the downsides often cancel out the benefits.
Remember, permanent insurance is generally more expensive, especially if you want a solid death benefit in the end. For a lot of young people, it’s not really realistic.
Rather, you might consider sticking with a term insurance policy and investing the difference on your own.
Switch From Permanent Insurance to Term
A more sensible move might be to replace a permanent policy with the cheaper alternative of term life. This can make sense if you want to save money, take advantage of other investment vehicles, remove the risk from life insurance, or just simplify your plan.
Whatever your reason for wanting to replace your insurance policy, you can find out more about the additional options on the market by doing a quick search online. Click here to compare prices and packages from some of the most dependable insurance carriers on the market.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Wed, Oct 03, 2012
Money is tight these days. Many seem to struggle to keep all their financial priorities
straight. Life insurance is not one of those things you can always reserve for the back burner though; it’s arguably one of the most important purchases you’ll make in your entire lifetime.
Fortunately, life insurance premiums are extremely variable from person to person. This can seem like bad news if you are a particularly high-risk individual and expect to be rated very poorly in comparison to peers in your age group, but when you step back for a second and realize what it really means, that much of the cost is well within your control, it can represent very good news.
There are plenty of ways to cut back on life insurance costs. Let’s look at a few to get an idea of just how simple it can be.
1. Get Proactive About Health
While it isn’t always possible to take full control of your health, especially if you’re dealing with a serious medical condition, most people do have control over some important health variables that also play a large role in ratings and premiums. Getting serious about diet and exercise, for instance, can have a drastic effect on weight and blood pressure, often considerably faster than most people realize.
Many people will see a change in their health within months of starting a proactive health plan.
Consider this well in advance and get a head-start before you even go in and start the medical underwriting process. If you’re not exactly the picture of health at the moment, this will have a huge impact on how you’re rated – not to mention the change it will bring to your life and well-being.
2. Open Up the Lines of Communication
Don’t assume that every decision an insurer makes is set in stone. If you don’t like the rating or the premium they offer, talk with them. Find out what’s hurting you most and ask if there is anything you can do to change it. Ask if more information from your doctor would help, for instance.
Also, realize that communication starts long before the insurer has made a decision. When you submit your application, try to include all the details and documentation possible, especially if you’re weary of a condition being misunderstood.
3. Stay in Touch
Even after you secure a policy, you can sometimes go back and get your premium lowered in the future if a medical condition shows improvement or goes away. Make sure to notify your insurer of anything that seems significant.
5. Prepare for the Medical Exam
Don’t underestimate how much of a difference properly preparing for your medical exam makes. Do not drink alcohol for a full 24 hours and avoid coffee, other stimulants, and excessive salt. Drink plenty of water leading up to the exam and get a good night’s rest.
6. Compare Life Insurance Policies
The market is full of choices. Shop around. Compare prices. This is where a brokerage comes in handy. They can do the insurance shopping for you and help you find a company and the coverage that best meets your needs and your budget.
If you have a particular medical ailment they can help you find a company that may specialize in your condition and may be able to help you find a better rate.
7. Get a Handle on Your Vices
Are you a smoker? It goes without saying that it will generally increase your premiums, but you do have a choice here.
Quitting smoking will not only give you the opportunity to have your status changed to non-smoker (usually after one year) but will likely help alleviate other issues you might be having with blood pressure that could lead to more positive medical exam results.
The same goes with drinking – if you’re an excessive drinker, this is no doubt having an impact on your premiums. To go further, heavy drinkers often don’t realize how severely their alcohol abuse affects their overall health.
Cutting back does amazing things for weight, blood pressure, and disease risk.
8. Apply for Term Insurance
Term insurance is another fantastic way to save money, and the corresponding death benefits are quite substantial for the price. Most people do not need some complicated financial instrument with an investment portfolio; they just need the security of knowing their loved ones will have some reasonable financial support while suffering a loss.
To find out more about your options for term insurance and other life insurance products, contact Efinancial and talk with a professional today.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Mon, Oct 01, 2012
For some people, life insurance is not just about looking after others when they are gone or
even just protecting their own estates. They may already have policies in place for those things but have yet one more crucial priority to cover while on this Earth – giving back and leaving a legacy behind in the form of donations to charity.
It has become increasingly common these days for policyholders to gift their life insurance benefits to nonprofits and charities supporting causes they believe in.
As a donation vehicle, life insurance makes perfect sense simply because of the sheer leverage involved with this unique financial instrument. A life insurance policy represents a far more substantial donation than would be possible if the policyholder had kept their premiums and instead donated payments each month.
You have several different options when using a life insurance policy for donation purposes.
In one scenario, you simply gift the policy to the charity, and you receive an income tax deduction for the gift, which is another great incentive for some people. The amount of the deduction depends on the value of the policy, which may need to be ascertained by a professional life insurance appraiser.
In another scenario, you name the charity as your beneficiary. In this case, the death benefit is paid out to the organization when you die just as if they were any other beneficiary. However, when a donation is handled in that manner, the previously-mentioned tax deduction does not apply.
Here is why.
In most cases, it’s illegal for a party to have a life insurance policy out on someone else if they have no “insurable interest” in that person, which is a fancy way of saying they must have more to gain by them being alive than dead. Insurable interest is meant to offset the financial interest in a policy being paid out.
Examples of people who have insurable interest in you would be your family members, due to your relationship and economic ties. Of course, you also have unlimited insurable interest in yourself, and so you can purchase as much life insurance on your own life as you want (within reason).
A charity, meanwhile, has no “insurable interest” in you, which has the potential to be frowned upon by regulators. While most states have enacted laws to allow an exception for donations like this, deductions do not apply since any challenge to the policy would likely result in it being voided on the basis of the insurable interest concept.
Other alternatives to consider when using life insurance for charitable purposes are the inclusion of charitable giving riders, usually only used on large policies, or the gifting of policy dividends, if the policy has an investment component.
Since gifting life insurance benefits is so common these days, most nonprofits understand how it all works, but always make sure the organization is willing to accept your gift before making any commitments.
For more information on your life insurance policy, visit our E-Learning Center or request a quote today.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com