Posted on Fri, Sep 28, 2012
Buying life insurance is important. It is a valuable financial tool to help provide for those closest to you and to ensure that your financial obligations will be completed no matter what. However, even we can admit that it can be overwhelming. Life insurance is not a product that you buy every day. On top of this, there are a huge number of policies available. How do you know which life insurance is right for you?
Finding the right life insurance for you is often a matter of knowing what questions to ask. Below you will find some of the basic questions you should be asking yourself and your life insurance salesperson throughout the buying process.
Do I Need Life Insurance?
This is the most basic question to ask. There are many situations where you should purchase life insurance. You should purchase life insurance if there are people that rely on you financially, such as children, a spouse, or elderly parents. Life insurance is also important if you have made major financial commitments that will need to be fulfilled after your death. These include buying a home or starting a business.
What Kind of Policies are out There?
While there are numerous permutations of life insurance, there are two major divisions. These are term life insurance and permanent life insurance.
Term life insurance will cover you for a specified time known as the term. The terms usually last between 20 and 30 years. If you die during this term, your beneficiaries will receive the agreed upon death benefit. At the end of the term you will either have to renew, convert to a permanent plan, or decide to forgo insurance. Term life insurance is the most affordable type of life insurance. It has lower premium payments than permanent life insurance.
Permanent life insurance will last throughout your life. It does not expire. Permanent life insurance also usually features a cash value that accumulates over the life of the policy. Permanent life insurance is the more expensive life insurance option.
Which Type of Life Insurance Should I Purchase?
There is no easy answer to this question. Many people prefer the security of permanent insurance and also like the investment aspect of these plans.
On the other hand, term life insurance is much more affordable. Many experts recommend term because it only covers your time of greatest financial need. If you invest the savings from a term policy, you will often have a greater return than on a permanent policy and will be better prepared for when the policy ends.
Contact a trusted life insurance agent to discover your options.
How Much Insurance Do I Need?
This is not always easy. You must consider all of the financial obligations you will leave to your loved ones. Also, remember the burden the loss of your own income will create. You want to make sure that your death benefit will be sufficient to pay off debts and keep your family on firm financial ground until they can be comfortable without your income. Make sure you talk to your agent to help you figure out how much life insurance you need.
These are just starting questions to consider. As you move closer to purchasing life insurance, there will be questions particular to your situation. Make sure you have an agent you can trust to help guide you through this process.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Wed, Sep 26, 2012
You did it. You worked hard and saved throughout your life. Now, you’ve arrived at retirement. Maybe you have even saved wisely enough to retire early. Good for you. Enjoy your retirement years. Take the time to reconnect with old friends, travel, and enjoy the company of those closest to you.
Even though you may think your financial planning is over, there are several things you can do to help keep your golden years golden.
Put Idle Assets to Work for You
Look at your assets to see if there are any that you are not putting to use. For instance, do you own property that is not being used? Maybe you have a beach house that you don’t visit anymore or an apartment above your garage. Renting these properties will provide a steady stream of income. You can also sell assets such as cars, boats, or property that you are no longer using. These assets aren’t doing you any good just sitting there unused.
Create a Retirement Budget
You are finally free from work. You probably want to do all of the things you have put off all at once. Be careful. You’ll have plenty of time to travel, eat at nice restaurants, take in sporting events, and fulfill all your other wishes. Just be careful that you don’t burn through your retirement savings too quickly. Create an annual budget and try to stick to it. This will help relieve stress down the line.
Evaluate your Life Insurance Needs
Take a good look at your life insurance. Some people will decide they no longer need coverage. Other people use the cash value from a permanent policy to help pay for retirement. Life insurance can also be a key component of estate planning. If you have any questions, you should contact a life insurance expert to help make your decisions easier.
Get a Part-Time Job
This is only partially a piece of financial advice. Sure, a little extra income from working 15 hours a week may come in handy, but this is more about remaining active and social. A part-time job is a great excuse to get out of the house. Look for opportunities at your favorite places to hang out. For instance, maybe your local golf pro shop could use a helping hand. If you’re going to be there anyway, you might as well make a little money.
The most important piece of advice is to just enjoy your retirement. You’ve worked hard your entire life and now you have the opportunity reap the benefits.
How do you handle your financial planning as you near retirement? Share your 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 Mon, Sep 24, 2012
Turning 50 can be daunting. As they approach half of a century on this planet, many people begin to feel that the best parts of their lives are behind them. This does not have to be the case. Many people enjoy entering their fifties. With children growing into adulthood and moving out, couples often enjoy more freedom than they have had in years. It is a great time to experience the world with the added wisdom and maturity your years afford.
You can enter your second half-century confident in your finances by following these tips.
Assess your Savings and Goals
It is always important to understand your goals and if you are on track to achieve them. For instance, if you want to retire early, you must be certain you have been saving enough money. If you have fallen behind in achieving your goals, devise a plan that will help bring you back up to speed. Consult with a financial planner to help you understand where you are and what you need to do to meet your goals.
Make a Will
If you have not already prepared a will, this is the ideal time to do so. At this age you have an understanding of your assets and the people you would like to name as beneficiaries. If you created a will when you were younger, this is a good time to reevaluate and update the document. Your circumstances may have changed drastically from your thirties and forties. There may be new children and even new spouses in the picture. Make sure your will reflects your desires for your estate.
Rebalance your Portfolio
When younger, most investors focus on building wealth. As you approach retirement, it is wise to shift the focus to protecting your wealth. You can’t afford to be too risky in your investments. If you lose money, you do not have as much time to recover as you did in your thirties. Focus on low risk investments that will provide a more steady return.
Reassess your Life Insurance
If you purchased term life insurance when you were younger, there is a good chance you are nearing the end of your coverage. This is a good time to assess your current life insurance needs. If you are still in good health and feel you are insurable, you may want to renew your life insurance coverage or convert to a permanent policy. Many people make life insurance a key part of their estate planning.
By following these tips and focusing your financial plans around retirement, you will be able to turn 50 with the confidence that your finances are in order.
If you have any tips for financial planning for your fifties, please share them 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, Sep 18, 2012
Your forties may end up being the most fulfilling time of your life. You have gained enough experience to be confident in the workplace and at home. You should take pride in your relationships and watching your family and children grow. Although, there is also the added stress that comes along with these responsibilities.
Relieve any financial stress of turning 45 by following these tips.
Focus on Retirement
Your most important savings goal should be retirement. Make sure you know what your goals are and if you are on track to reach them. Many experts even suggest that retirement savings should take precedence over children’s college savings. Teenagers entering college have the advantage of applying for loans and scholarships. These options are not available for retirement.
Evaluate All of Your Assets
It is crucial that you understand your net worth. This will give you the strongest sense of where you are on your path and where you need to be. When evaluating your assets, make sure that nothing falls through the cracks. Remember all of your investments, stocks, bonds, 401(k)s, and savings accounts.
Evaluate Your Life Insurance Needs
If you bought life insurance when you were younger, that policy may not fit your current needs. For instance, a spouse and children may not have entered the picture. Make sure your death benefit will cover your current obligations. If you are not as close to reaching your goals as you would like, it might be time to convert term life insurance to a permanent policy. Talk to a life insurance expert to learn about your options.
Work toward Paying Off Your Mortgage
For many people, a mortgage is the last major debt they have. Make sure you are up to date on your payments. If you have extra funds, you might want to consider funneling more toward this loan. Once you pay off your mortgage you will be debt free, and will own your home outright.
Don’t Take on any Debt
This is the time of your life when you should be shedding debt, not taking on more. Don’t fall into the trap of purchasing products beyond your means with credit. Make a budget and stick with it. Try to avoid any unnecessary purchases. Paying for everything with cash will help keep you honest.
If you are approaching 45, we’d love to hear how you’re preparing. Please share the steps you are taking in the comments below.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Mon, Sep 17, 2012
It has been said that life truly begins at 40. This may be true. As you enter into middle age, many people find themselves on solid financial footing. Most people are in committed long term relationships and have started families. You may not have the carefree spirit of your younger years, but as people reach 40 many enter what is often a rich, fulfilling time in their lives.
Make the most of this time. There are a few steps you should take to prepare.
Evaluate your Net Worth
Make a report of all of your assets and liabilities. This will help you understand where you are financially and where you need to go to reach your goals. Many people will create this report annually to help track the fluctuations in their net worth. Creating this report will keep you liable for your wealth building efforts.
Increase Your Savings and Investments
As you move up the ladder at your career you may find your income increasing as well. Make an effort to save as much as possible for the future. In your late thirties and early forties there is still enough time to create the savings you need to retire before it’s too late. Talk to a financial planner to help create and refine the investment and savings strategy that will help you reach your goals.
Reevaluate Your Current Life Insurance
Maybe you purchased life insurance when you got married or when you first bought a home. This policy has remained unchanged, while your financial and personal circumstances may have evolved. For instance, you may now have children or a business to tend to. Talk to a life insurance expert to help you evaluate your needs and find out if your current policy is still sufficient.
Move toward Being Debt Free
People often accumulate debt through their twenties and thirties. As you enter middle age, you should make a concerted effort to get out of debt for good. Divert extra funds to pay off your credit cards. Begin to pay for everything with cash to avoid falling back into the debt trap. Only take out loans for important purchases such as for a new home.
Take Your Health Seriously
You are saving for retirement and to send your children to college. Make sure you live to see these events. Visit your doctor to ensure you are not at risk for any major medical issues. Make important lifestyle choices about eating healthy and exercising. Keep yourself in shape so that you are ready to reap the rewards of your life.
Following this advice will help you enter your fourth decade with confidence.
Are you nearing 40? What are you doing to prepare? Feel free to share with us in the comments below.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Sun, Sep 16, 2012
Your early thirties are a time of transition. With your twenties firmly in the past, you are clearly in the adult world. Still, with many people putting off starting a family into their thirties, you may still enjoy many of the freedoms of youth. You are free to travel and open yourself to new experiences, but you must also prepare yourself for future responsibilities.
Complete Grad School or Decide if it is Right for You
Your undergrad years are most likely a thing of the past at this point, but those seeking graduate degrees may still find themselves in school into their thirties. Many people spend several years in the “real world” before deciding to go back to school to redirect their lives or give themselves better footing to advance in their chosen professions. By the time you are 35 you should be out of school and focused on your career.
Diversify Your Savings
Hopefully you already have some savings. If not, it is never too late to start. If you have started savings, this is an excellent time to diversify your investments for a greater return. Consider investing in a mixture of mutual funds and bonds that provide a balance of safety and return you are comfortable with. Talk to a financial planner to help you understand your options.
Decide If You Want a Family
You may already be married or have started a family. If so, hopefully you have taken steps to put your family on firm financial ground. For the growing number of individuals who have put off starting a family, you should decide if this is something you want. Even if you think a family is still far in the future, you can still prepare your finances for that possibility.
Purchase Life Insurance
If you have not already purchased life insurance, this is an excellent time to do it. While still relatively young and healthy, many people find life insurance rates more reasonable. You are also taking on more responsibility at this age. This includes marrying, starting a family, starting a business, and buying a home. Buying life insurance will help ensure that these obligations will be fulfilled even if you die.
Start Savings Accounts for Your Children
If you have children, you should start saving for them. Even if you do not have children but plan on starting a family, this is a great time to save. Start college savings accounts as early as possible. The longer savings accounts are in effect, the more they will grow. You can also start flexible savings accounts to help your children in other ways as they age.
If you’re in your early thirties, we’d love to hear how you’re preparing for your future. Share your tips in the comments below.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Sat, Sep 15, 2012
When is the right time to purchase life insurance?
It’s a hard question without any clear right or wrong answer. There are many reasons to purchase life insurance. Most people purchase life insurance when they take on financial responsibilities that could affect their loved ones if they die.
As you go through life, there are several events that should trigger you to consider purchasing life insurance.
1. Marriage
Marriage is the joining together of two lives. You and your spouse will be bonded together for the rest of your lives. This includes sharing financial obligations and responsibilities. When you combine incomes, you will often begin a lifestyle that is different from your single life. This could include purchasing a house, renting a larger apartment, or buying new vehicles. Purchasing life insurance will help your spouse continue in this lifestyle after you are gone.
2. Having Children
Your children will rely on you completely from the time they are born until they strike out on their own as adults. You are responsible for providing shelter, food, clothing, education, and so much more for your children. Purchasing life insurance will help guarantee the financial well-being of your children in the event that you are no longer available to help them.
3. Starting a Business
This is one that many people do not consider. Starting a business could be the culmination of a life of dreaming and planning. You want to make sure that your business will continue to thrive after you are gone. Purchasing life insurance will help ensure your business will stay open even if you are not there to run it. Your business partners will be able to keep up with expenses and your employees will keep their jobs thanks to your life insurance.
4. Elderly Relatives Become Dependent on You
Your spouse and children are not the only family members that may depend on you. Sometimes as family members enter old age, they become dependent on you to provide for them. This could include keeping a roof over their heads or providing necessary medical care. A life insurance policy will make sure they are taken care of if you are no longer there to help.
Guarantee that the people who rely on you will be financially secure no matter what. If you are approaching any of these life events, the time is right for you to buy life insurance.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Fri, Sep 14, 2012
As couples begin to have children and start families many mothers – as well as some fathers – may decide to stay in the home to focus on raising the children. While one parent provides for the family financially, the other does the hard work of looking after children and the home.
When a family in this situation shops for life insurance, they often only purchase insurance for the breadwinner of the family. Since stay-at-home parents earn no tangible income, they are often overlooked. This can be a mistake.
The Value of Stay-At-Home Parents
They may not have a paying job, but stay-at-home parents play numerous roles within the family. These range from the obvious such as child care provider and cook to the easily overlooked such as financial planner and accountant. According to salary.com, the average stay-at-home mom works 94.7 hours a week at jobs that in the workforce would earn a salary of $112,962.
Imagine replacing an annual income of $112,962. It wouldn’t be easy. The remaining parent would be forced to pay for many of the services that the stay-at-home spouse completed, or would have to complete these tasks alone. The surviving parent may have to cut back on work, which could cause a decrease in income. This is just one reason why many stay-at-home parents should consider life insurance coverage.
Reasons Stay-At-Home Parents Need Life Insurance
Pay for a Funeral
The average funeral costs more than $7,000. This cost might be too much for a newly single parent to absorb. If a family will have a hard time paying for a funeral for a parent, than that parent should at least have enough life insurance to cover this cost.
Pay for Child Care
As stated above, stay-at-home parents provide a valuable service in raising children. Most families will be forced to pay for child care in the event of one parent’s death. This can be a sizable investment. Life insurance can help ease this burden.
Provide Children with an Inheritance
All parents want to provide for their children for as long as possible. Life insurance will help ensure that your children will be taken care of,
even if you pass away early. This money can be used by your children to pay for higher education, purchase a home, or even to start a family of their own. Life insurance can be part of the legacy you leave for future generations.
When you compare life insurance quotes for your family, it is important to consider everyone, including stay-at-home mothers and fathers.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Thu, Sep 13, 2012
Everyone, please be seated. You can continue your conversations with your friends after class is over.
In our last class we discussed the different types of term life insurance policies. I know many of you had questions about other options available for term life insurance. Today we will take a closer look at this.
No two term life insurance policies are exactly the same. This is because there are many provisions known as riders that can be added to provide different options to the consumer. In practice, there are an almost infinite number of term life insurance policies. This is important to consider when you compare term life insurance.
Common Term Life Insurance Riders
Accidental Death Benefits: With this rider, the death benefit greatly increases in cases of accidental death. This increase can be two or three times more than the amount if you die of natural causes.
Reinstatement Clause: With this clause, you can reinstate a lapsed policy within a specified period of time as long as you remain insurable. This is designed to help protect you in cases where you cannot keep up with payments.
Accelerated Death Benefits: This rider allows you to collect a portion of your death benefit early if you become terminally ill. This is often used to help alleviate medical bills, the loss of income, and other financial burdens.
Family Income Benefit: The family income benefit rider splits the death benefit into monthly payments instead of a single, lump sum payment. You can choose the term you would like the payments made over when you opt for this rider.
Waiver of Premium: This rider waives your premium payments when you suffer a major injury, sickness, or other long-term disability. The period of waived payments usually lasts between one and six months, but can extend even longer.
Incontestable Provision: With this rider, an insurance company cannot contest any claims made after an agreed upon period from the start of the policy.
Spouse Insurance: This rider offers life insurance coverage for your husband or wife for additional premium payments.
Child Term: A child term rider provides life insurance coverage for a child or children up to a certain age. When children reach adulthood or the agreed upon age, you may have the option to convert them to an individual policy.
Long-Term Care: This rider acts as long-term care insurance that provides monthly payments if you require long-term home care or a stay in a nursing home.
Thank you for your attention class. Of course, there are many other riders available when you shop for life insurance. It is important to work closely with an expert to help guide you through the process.
Are there any questions?
That is an excellent question, Mr. Jenkins. Yes, many riders can affect the cost of term life insurance or the value of a payout. It is important to understand the riders on a life insurance policy when you shop and compare insurance.
That’s the bell class. Be sure to review for the exam. Hopefully, you paid attention in our previous classes:
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Wed, Sep 12, 2012
Good morning class. I hope everyone enjoyed their weekend, but now it’s time to get back to work.
Today, we will be discussing the different types of term life insurance. I hope everyone has completed the reading before class. I expect everyone to participate in the discussion after the lesson.
What Is Term Life Insurance
To review, term life insurance protects the policy holder for a set time period. This time period is referred to as the term. Your beneficiaries will only receive a death benefit if you pass during the term.
Term life insurance has many benefits over permanent life insurance. It has lower premiums, which usually remain level throughout the term. It is popular with young adults who are starting families or entering into major financial obligations. Term life insurance covers the period of greatest financial necessity. Many people find themselves no longer in need of life insurance after their term is complete.
Are there any questions? I don’t see any hands. So, I’ll move along.
Types of Term Life Insurance
Level Term Life Insurance
Level term life insurance is term life without any bells and whistles. It is the most basic form of term life, and adheres to the description above. You make level payments throughout a term that usually lasts between 10 and 20 years. If you die within the term, your beneficiaries receive the agreed upon death benefit.
Convertible Term Life Insurance
With a convertible term life insurance policy you have the option to convert to a permanent policy within an agreed upon number of years. This is a good option to have in case circumstances in your life change and you feel that you need permanent coverage.
Renewable Term Life Insurance
As the name suggests, renewable term life insurance policies have the ability to be renewed at the end of a term. Usually, you can renew regardless of your health at the time. However, premiums may increase.
Decreasing Term Life Insurance
In this type of term insurance the premiums remain constant, but the value of the death benefit decreases throughout the term. This type of insurance usually features low premiums. These policies are often used to help cover debts such as a mortgage that also diminish over time.
Thank you for your attention class. These are only some of the more common types of term insurance. There are many other options available. If you want to learn more, you can always talk to a term life insurance expert.
Now I would like everyone to put their desks in a circle so that we can have a discussion. If you would like to participate, please feel free to comment below.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Tue, Sep 11, 2012
If you’ve been asking questions about how you can increase your coverage or discussing additional options with an insurance professional, you might have noticed this word “rider” keeps coming up. Well, what exactly is a rider? Ride what?
How does it affect your coverage, and what types of options are available?
Well, let’s keep it simple. A rider is nothing more than a fancy-schmancy term for options that can be added to your policy if you agree to pay a higher premium. In other words, it “rides” along with your policy and offers a little something more at a higher price (though it can also take away to decrease your premiums).
The rider may come with the policy presented to you, and you may be able to ask for it removed. In other cases, you may have the option to add them later on. Pay more money; get more benefits. It’s that simple.
Great, so what kinds of life insurance policy riders can you access? Here are some of the most common.
1. Spousal Rider
This one’s a pretty common rider. The first thing on a lot of people’s minds when they run out and get hitched is, “What’s the cheapest way I can get my wife or husband covered?”
Sometimes you can just add a spousal rider to your policy by paying a somewhat higher premium.
2. Other Insured Rider
Much like the spousal rider, this rider includes coverage for other family members. It can also sometimes be used for someone involved with your business.
3. Child Rider
Same as above but specifically for providing insurance coverage to your children.
4. Living Benefits or Terminal Illness Rider
Sometimes you need your benefits before you pass away. Sometimes you get really, really sick. Sometimes you get in a bad car accident and can’t take care of yourself.
The living benefits rider or the terminal illness rider can help you pay for your care, and that can be a godsend when it’s needed.
4. Accelerated Death Benefit Rider
Here’s an important one.
You can sometimes access part of the face amount of your policy before you die if you’re injured or become really sick and are given a short time to live. This helps you get your affairs in order beforehand rather than leaving everything to be taken care of by your family after you’re gone.
5. Annual Renewable Term Rider
Sometimes, neither term life insurance nor permanent life insurance makes sense for your personal needs. In cases like this, a renewal term rider might be what you’re looking for. It can give you the best of both worlds and bring your premiums down a little bit.
The cash value won’t be quite as substantial as it would be with a permanent policy, but for some people it’s the perfect solution.
6. Cost of Living Rider
This life insurance policy rider allows you to buy annual term insurance that is directly tied to the consumer price index and changes along with it. You usually won’t have to prove yourself healthy or fit for this one, which is always nice.
7. Disability Income Rider
Another rider designated for those with the misfortune to end up completely disabled, this one awards a monthly payout from your death benefit – typically about 1%. Again, this usually only applies in the case of being completely disabled; partial disabilities don’t count.
8. Waiver of Premium Rider
With the right policy, purchasing this rider allows for the total waiver of your premiums in the case of disability, and there won’t be any change in your coverage.
9. Waiver of Cost of Insurance Rider
Usually meant for universal policies, the waiver of cost of insurance rider annuls the cost of your insurance in the case of permanent and complete disability.
As you can see, there are plenty of different riders for different circumstances and situations – just another way to provide the perfect policy for each individual. What’s your personal situation? Ask your insurance provider what types of riders they have that can create solutions that serve you.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Mon, Sep 10, 2012
Knowing about the basic types of insurance out there is a great start towards finding the perfect solution. Usually, an insurance agent will talk at length with any new customer to discover their particular needs so they can suggest a policy that makes the best fit.
There are a few other types of life insurance out there that provide specific solutions. In certain cases, it just makes sense to go with these prepackaged plans.
Here are 6 special-need types of life insurance everyone should know about before making an insurance decision.
1. Mortgage Life Insurance
One of the main concerns of insured people is what the loss of an income stream can mean for their family in the event of their passing. This is particularly true if they have costly bills to worry about, and for most that means the mortgage.
One unique form of insurance offered by life insurance companies, mortgage life insurance, can provide enough to pay off an entire mortgage in the case of the policyholder’s death.
The death benefit is paid directly to the beneficiaries and does not have to be used to pay off the mortgage.
Keep in mind that these policies are form of term insurance. It is not a permanent benefit.
2. Senior Life Insurance
If the policyholder is concerned about a beneficiary’s ability to handle a large cash payout directly after the occurrence of death, senior life insurance might be the answer. Instead of paying the entire death benefit at once, small amounts are released in the early years preceding the policyholder’s death. After a set period has passed, the entire amount is released.
3. Juvenile Life Insurance
For those who want to get their child off on the right foot with their insurance, juvenile life insurance policies are available. This is a way to build up cash value early in a child’s life while leveraging their low risk of death to access a low premium.
This provides a head start for the insured, building up a good deal of interest over those additional years.
4. Family Life Insurance
Losing anyone in the family can be financially devastating – not just the breadwinner. If the insured wants to cover the entire family, including the children, family insurance may be the answer.
This type of insurance is sold in units per person and allows for those who bring in the highest income stream to be insured for the most, reflecting the realities faced by the modern-day family.
5. Family Income Life Insurance
With family income life insurance policies, an income amount is agreed to be paid out for a certain number of years after the insured (usually the breadwinner) passes away, allowing the family time to prepare for a new standard of living.
6. Credit Life Insurance
Most people take on debt for a reason and accept the risks associated with that debt. But there’s one risk no one likes to create – the risk of leaving all debts behind for a grieving family.
Credit life insurance provides an answer. Like mortgage insurance, it pays off the balance of loans, whether they are car loans, education loans, or even credit cards.
Unlike mortgage insurance, however, credit life insurance is purchased through the financial institution orchestrating the loan in the first place. Payouts are made directly to the lender rather than the family of the deceased.
Do any of these life insurance types seem to be the perfect match for what you’re looking for in a policy? Get in touch with a seasoned professional today to discuss more or find out if there is something else you don’t know about.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Sun, Sep 09, 2012
If a term life insurance illustration comes across as a daunting read, consider the complexity and depth of a permanent life insurance illustration.
As most people know already, a term insurance policy only covers a set number of years. This might mean one single year or a few decades.
A permanent life insurance policy, on the other hand, can cover up to 100 years, as it is meant to insure the policyholder for their entire life. Herein lies a very specific distinction.
Term illustrations can be complex. Any insurance proposal is bound to be due to the complex nature of the industry. It may take a few pages to outline and go over 100 different types of data that are all integral to the functioning of the plan. A permanent life insurance illustration, meanwhile, will be about 10 pages long. Inside the reader will find 1,000 or more data figures that pertain to the plan.
Of course, the policyholder needn’t soak up, memorize, or even fully understand each and every one of these figures, but it gives one an inkling of the complexity of these illustrations.
How Permanent Life Insurance Illustrations Are Created
In most cases, a permanent policy will need to be broken down by computerized software. All projections are changing, some drawn from the past and others drawn from the future. It would be extremely difficult for a broker or agent to sit down and figure it all out without the software.
Indeed, even term policies are often handled by computers these days.
So how do these programs come up with these educated “guesses” about what to charge and how the different variables of a plan come together?
Well, typically, an approximation of price and performance draws from investment earnings (interest rates and dividends), mortality experience (the risk a company can bear to insure), persistency (policy lapse rates, or how many policies actually stay in-force), and company expenses (administrative and operative).
These are projections though; the actual event of each of these factors unfolding will directly affect the actual cost and performance of a permanent life insurance policy.
The greatest fluctuation in these numbers can be expected in the performance category – specifically, interest rates. That said, even a minute change in mortality can result in a drastic impact on how the policies perform. These death benefits can constitute a lot of money, and when the company has to pay out more than reasonably expected, well… Fortunately, these companies have their calculations down well, and these inconsistencies are a seldom occurrence.
Illustrations and the Investment Nature of Permanent Life Insurance
One thing to keep in mind over all others is that an illustration is nothing more than a document highlighting projections of the future. A lot of things can happen. A lot of things can go wrong.
This is the investment nature of a permanent policy and something a buyer should understand before going in. None of the factors used to calculate these are controlled by the company orchestrating the illustration.
It’s also important to understand that the company takes on a lot of risk as well. As soon as the policy is taken out, the company takes on the entire risk of having to come up with the death benefit if something should happen. The investment has not had time to perform yet; therefore, no value has had time to build.
The premiums in these early days cover expenses – that’s it.
As the cash value of the policy builds up interest and has time to grow, it in essence begins to pull the risk out of the company’s hands. Eventually, the policy pays for itself and their risk is nonexistent.
In the end, if the policy does not increase in time with the mortality charges and other expenses, the policy can fail or lapse.
Protecting Yourself Against Risk
How can an individual be protected from this? These occurrences are pretty rare. If they weren’t, insurance companies would not be in business.
Another way to find protection is to realize the investment nature (read “the volatile nature”) of permanent policies. This is what term policies are for – a little more stability at a lower cost. This is why so many experts advise leaving life insurance to life insurance companies and investments for investment accounts.
Then again, not everyone is the same, and not everyone has the same life insurance needs.
What’s the perfect policy for you? The only way to really find out is to sit down with a licensed expert and pick through the details. Above all, don’t forget that they are in business to find solutions – they aren’t there to swindle you.
Talk to them. Ask questions. Let them know that, unlike the average consumer, you do really care about your life insurance and its performance.
Connect with someone today.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Sat, Sep 08, 2012
Do you understand how your permanent life insurance policy works? A lot of insurance companies simply slap down that premium and expect everything to go exactly as laid out in the policy illustration, but any permanent policy that relies on a cash value is highly dependent on performance.
Illustrations are projections – nothing more. That means that things don’t always go as planned. If things don’t go as “projected,” your premium payments may actually go up or even down.
Fair enough – that’s part of taking a risk, right? When you tie your life insurance to an investment, risk is naturally involved.
That may be fine with you, but let’s take a second at just what exactly you’re getting into. What are these variables that affect your permanent life insurance policy’s performance?
1. Mortality Experience
If the company you bought your policy with experiences more mortalities than expected, guess what? Death benefits have to be paid out. Since premium projections are calculated based on a statistical idea of mortality rates, this will affect your premiums.
2. Increased Expenditure
If the expense of maintaining policies, or even overhead expenses like the rent and the lighting, goes up, so may premiums. In contrast, decreased expenses might mean savings for you.
3. Persistency Fluctuations
Have you heard about “persistency” yet? The term refers to how many people hold onto their policy for its entire life and actually end up reaping the benefits. If too many policies lapse, the insurance company takes a hit – because when the investment side of a policy isn’t given to grow, the company never gets beyond the stage of owning all the risk.
They have to offset this somehow – it might mean higher payments from current policyholders. Of course, the opposite is also true; if the persistency is more favorable than projected or remains stable, you very well might see savings.
4. Interest Rates
Doesn’t it always feel like we’re at the beck and call of interest rates? Well, the same is true for a permanent policy, as the investment side of the policy relies on favorable interest rates to enjoy favorable growth. It all affects your policy.
If interest rates rise, on the other hand, you’re sitting pretty.
It’s extremely important for all of us to grasp this one fact about permanent insurance policies – the level nature of the premiums is not 100% guaranteed. It’s a risk we take, and for some it’s worth it, but it’s worth being clear on this fact as well.
By understanding these factors, we know what to look out for. We also know what to consider when analyzing an insurance company or specific policy. How correct have their projections been in the past? How often do their policies lapse? How do their investments perform?
Never be afraid to ask the hard questions when taking a serious look at insurance. It’s all a part of the buying process.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Fri, Sep 07, 2012
One of the most important concepts to grasp when seeking an understanding of how life insurance policies work is the role of mortality charges. What is a mortality charge? Essentially, it’s the cost of insuring people.
Insurance companies come up with calculations based on past population experience – to be specific, how many people within a given population survive and what constitutes high-risk behavior. Mortality charge reflects just how many individuals in the given population can be expected to pass away and within what time frame.
These calculations allow life insurance companies to arrive at dependable conclusions about how much insurance they can afford to provide an individual. In order to streamline the insurance process, these calculations and assumptions have been organized into tables that can be used as a reference point or entered into software to create instantaneous projections.
On top of mortality charges, other expenses include administrative overhead, the run-of-the-mill bills paid by any standing business, and (as always) taxes.
It’s also important to realize that there is not necessarily an industry-wide standard when it comes to figuring mortality charge. It is easy to assume every company would arrive at the same figures, but variation is common.
Why Mortality Charge Varies between Life Insurance Companies
Most companies base their figures on the same tables, but other data comes into play as well. A large company with considerable time in the industry might use their own experiences as a way to hedge their “bets.”
Also, different insurance companies serve different purposes. Some companies serve the purpose of insuring people who are considered high-risk, like smokers or professionals in hazardous industries. Others might serve people who are considered unhealthy by most insurance companies – people who might be otherwise uninsurable.
So if these companies are serving different markets with different mortality experiences, obviously the mortality experience of each company will be different.
Find out how mortality rates differ depending on what product is being reviewed. If they are not the same for all products, find out why.
Also, inquire whether some type of guarantee comes with projected mortality expenses, especially if they vary greatly from historical norms. If the future mortality expenses are predicted to go up, you should find out whether or not the mortality expenses will be lower if that high mortality experience fails to be realized.
Mortality Charge and You
Mortality is the key to life insurance – it is the reason it exists in the first place. But it really isn’t all that complicated. Think of it this way. Insurance companies predict how many people will pass away in a statistical group. Sometimes they expect more to pass away, in which case they must charge higher mortality expenses to cover the cost of paying out death benefits. Sometimes they expect less, in which case their payout for death benefits is lower.
Just make it a point to determine how mortality charge is arrived at in any illustration analyzed, and if possible, get written documentation about what to expect.
Want to find out more about how mortality charges affect your insurance? Just want to find a plan that works in your favor? Speak with a licensed professional today and start preparing for the future.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Thu, Sep 06, 2012
Universal life insurance represents frightening prospects for some people. When considering insurance meant to protect and serve an individual’s family after they have left this Earth, the idea that a death benefit may not be guaranteed to be there when needed can be quite startling.
In typical cases, here is what happens to a lot of policyholders who live to see a ripe old age. After they pass the age of 95 or perhaps 100 years old and their policy ends, they are cashed out. They will have enough money and low enough responsibility by this time to “insure” themselves. The person is then given the cash value that has built up over the life of their policy.
While substantial, this cash value is usually lower than the death benefit. Not to mention they often see negative tax consequences for the payout.
Extend The Death Benefit on your Cash Value Life Insurance Policy
Fortunately, some insurance companies are trying to solve this problem. Many now offer cash value life insurance policies that extend all the way up to 120 years old. Why shouldn’t a customer have access to benefits they have patiently paid for their entire life?
There are a couple different ways insurance companies solve this problem. In some cases, they may not even charge anything above expense charges for policies carried beyond 100 years old. In other cases, they might charge the expenses plus cost of insurance, but this can be tricky, as there are no significant mortality experience calculations based on these years.
By providing a death-benefit extension, the company can ensure the carrier gives the full benefit when it’s actually needed by their family or estate.
Options for Extending the Death Benefit
One clause to look for with these universal policies is called the No-Lapse Guarantee Clause. This clause promises to keep the policy in-force for a set length of time, with a guarantee that it will not lapse no matter what the market conditions.
Another choice is the Death Benefit Guarantee, which promises to keep the policy in-force as long as premium payments are current and no loans are taken out. So the policyholder can rest assured that their beneficiary will be awarded the death benefit even if the market goes down and their account takes a hard hit. There may be demands tied to the regularity and amount of payments, withdrawals, or changes.
Of course, these policy additions mean higher premiums. Premium amounts are dependent on the value of a policy; therefore, any benefits, assurances, or guarantees added to a policy will almost always mean a premium increase.
Nobody wants to be punished by their life insurance simply for outliving the majority of the human population. Consumers purchase life insurance to protect their families when they go. If they reach 95 or older, they have paid into that policy their entire life and have earned every penny of that death benefit by living a long, full life.
Naturally, they deserve to see the funds go to our family as intended.
To learn more about how to get a guarantee of a death benefit on a universal policy or to find out if there is another type of policy or special clause that better serves your needs, speak with a professional today.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Wed, Sep 05, 2012
Let’s be honest - many people don’t fully understand life insurance.
We want to grasp how it all works. We know it’s a move that protects and serves our families, but sometimes it’s hard to wrap our minds around every single detail when we’re not immersed in the industry. We want a simple solution that tackles this “challenge” for us so we can focus on other pressing matters.
Term life insurance is often a good place to turn. It’s simple. It’s direct. And for most people, it really is the answer to what they’re looking for.
But there are still options with term life insurance coverage. So how do you cut through the clutter and compare two policies that both look great? Or, if you already have a policy, how do you decipher it – what’s really going on?
Here are some questions you might want to consider when doing an analysis:
Are the Term Life Insurance Policies Actually Similar?
First off, make sure you’re not comparing apples to oranges. When you’re sorting through costs, make sure you’re not looking at two policies with a decade’s difference in their prospective terms, for example. Always compare apples to apples to see a true cost comparison.
Can You Convert to a Permanent Policy? Without Proving Insurability?
We all know term life insurance is temporary. This is what keeps it low-cost.
But if your health changes or you’re diagnosed with a serious illness during the term and then it expires, will you be able to convert your policy into something permanent without having to prove you’re healthy? Or will you be stuck uninsurable once your term ends?
A lot of policies include a provision for this scenario, and it can be a lifesaver if something does go wrong. But make sure you know how long this convertibility option lasts, as it sometimes expires before the term is over.
What about a conversion credit? Are there any incentives given for converting to a permanent policy somewhere along the way? Isn’t there value in that?
One last thing to keep in mind about conversion is what types of options you’ll have when you convert. You don’t want to be limited to just insurance packages that are low-value or high-cost if you can help it.
What is the Insurance Company’s Reputation?
You can always look into third-party reviews about the different insurance companies out there. What’s their history in how they deal with their customers?
Disability Benefits?
Sometimes you might end up in a major accident or come down with a hard core illness that disables you. Your life might not be over, but you can end up feeling pretty defenseless if you can’t pay the bills without your income coming in.
With some coverage options, you can get disability benefits paid out of your policy by subtracting from your future death benefit. There’s certainly some value to be found in that.
Does the Term Life Insurance Policy Come With Riders?
One policy might seem to be quite a bit more expensive, but if you look closely, there’s probably a reason. In a lot of cases, this reason is the riders you select with it– from an accidental death benefit rider to the family rider to the terminal illness rider.
Each has its own unique value depending on your circumstances.
So, while making the decision to go for a term policy means you’ve whittled down your decision-making process quite a bit, it’s not over yet. You can’t just look at two different policies and assume the lower-cost one must be a better deal.
Have a closer look. Ask questions. Find out what you’re really getting and why the prices differ. Once you’ve made your decision, you can hand off your insurance needs to the experts. Until then, make sure you know what you’re looking at.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Tue, Sep 04, 2012
Finding the right life insurance company may seem like a challenge, but it does not necessarily have to be one. Some folks are extremely intimidated by the mere thought of obtaining life insurance. With all the different options out there, it can seem overwhelming at first. However, there are a lot of checks and balances in place to make sure consumers end up on top.
Life insurance companies have put a lot of effort into creating systems that walk you through step by step so it becomes a hassle-free process.
For some people, life insurance is something they only foresee needing for ten or twenty years. When looking ahead, they should also dig into the company’s future.
Research a Life Insurance Company’s Reputation
If you want to research a specific insurance provider, here are some questions to ask… How long has the company been around? What is their reputation in the industry?
Insurance companies operate from a lot of the same principles and expectations. In order to look out for the best interest of consumers, the government keeps the industry very competitive. This is a good thing for the customer. It means terms are often similar and premiums are very often competitive even among top companies.
A lot of credible information can be obtained about individual companies through the many third-party rating companies, many of whom now make all their information available to the public online. These helpful rating services break down each company’s financial outlook and creditworthiness in a way even the layman can understand.
While life insurance companies do pay to be rated, the rating companies are extremely stringent about credibility and reputation. If they allowed their opinions to be swayed for monetary gain, the public trust in these companies would fall and their role would quickly become obsolete.
Next Steps: Compare Policy Options
Finding the right company is not all it takes to find the right insurance coverage. It all comes down to the individual policy and how it pertains to the individual being insured. Conversations with agents about the different options available should be taken just as seriously as choosing which life insurance company is the right one.
Also, use online brokerages to your favor. They’re there for a reason.
They allow you to shop around through offers from various insurance companies all in one convenient place. You can compare quotes and get details in real time – and find the best solution that works for you.
Check out your choices now.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com