Category Archives: Life Insurance

Types Of Life Insurance Available

July 23, 2022   Life Insurance

Types Of Life Insurance Available

Life insurance is considered an important cornerstone in any personal or family’s financial planning. For most families and individuals, life insurance is an extremely important way to safeguard their family in case of an accidental death. Individuals that take out life insurance policies have added peace of mine that if death occurs – their family will be financially secure. There are a few different types of life insurance products on the market; the most popular are Term Life, Whole Life (sometimes called Permanent) and variations of the two.

Term Life

Term life insurance is an insurance product that covers you for a specific term (time period). You usually pay the same rate over the life of the term and you are guaranteed a benefit of a specific amount in the case of death. Most term life insurance policies are from one year to thirty years. There are two types of term life; level term and decreasing term. The vast majority of consumers choose level term. Level term has the same cost from year to year, decreasing term means that the death benefit decreases from year to year or other schedule. There is also renewable term life insurance. With renewable term life, you can renew your life insurance once the term is up, even if you would normally not be able to qualify for term life due to health problems.

Whole Life/ Permanent

Whole life insurance pays a death benefit, whether you die in one year or at the age of 90. The benefit always stays the same and with most policies the payments also always stay the same. Some whole life insurance policies have an added feature that you can withdraw a cash value of the policy after a specific amount of time. For instance, a person that no longer needs to care for a family with a whole life policy can withdraw a cash value of the policy in order to live more comfortably.

Universal Life Insurance

This type of life insurance gives you more options than whole life. For instance, you can increase the benefit and you can withdraw money from the policy if it has a cash value.

Variable Life

Similar to Universal Life Insurance, however you usually get a savings account that earns interest. You can also invest money that is in your savings account via stocks, bonds and other monetary instruments..

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Find The Life Insurance That You Really Need

July 17, 2022   Life Insurance

Find The Life Insurance That You Really Need

In the world of life insurance, it is important to make sure that you have the best coverage for you and your family. That is where smart life insurance research comes in handy. Follow these tips to find the perfect policy for you without sacrificing coverage or losing money on a bad policy.

When buying your life insurance policy, use a financial adviser rather than a broker. You will only pay one fee for the services of an adviser, but a broker will charge you a commission, which usually adds up to be more money. Brokers may also be motivated to try and get you to choose an expensive plan so that they will get more commission.

Consider your family’s long term needs when choosing life insurance policies. You will probably want to provide for your estate for at least a couple of years. Buy a life insurance policy based on a two year average of expenses. Take into account the health of your family members as well.

When purchasing life insurance be sure you trust the people you are buying from. Selling insurance is very lucrative and regulation is relatively slim. Be sure that you have done your research about a company and the individual before you purchase a life insurance policy from them. Do not become a victim.

Find the lowest rates on life insurance. The easiest way to get the best life insurance rates is to research the companies available to you and then compare prices. Know what policies you need quoted, as well as your current rates before you call. You may also be able to check their websites.

As your life progresses, continue to make needed changes to your life insurance policy. Family and individual needs change and this can affect the coverage you will need on your life insurance policy. You may want to look at switching up coverage levels or even the type of life insurance policy itself.

Find the right type of life insurance policy for your needs. The three basic types are, whole life, term life and variable life. Whole life policies will be the most expensive, but they operate much like a savings account, meaning that you can use it as an asset in the future, if it hasn’t been used.

Purchase whole life insurance to build cash value. Whole life insurance not only protects you through your lifetime. It also builds cash value. Using policy loans, you are able to access the cash value for a number of things, including education costs and retirement income. Remember that whatever you borrow from the insurance policy will reduce the final death benefit, and you will be charged interest. This type of policy is renewed every year regardless of health.

As you can see from the previous list of tips, purchasing life insurance can really make a difference in, well, your life. It takes a lot of research, a lot of budgeting, and a lot of asking questions, but it is all worth it in the end to have a life insurance policy that works for you.

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Life Insurance Is More Affordable Than You Think (2)

July 11, 2022   Life Insurance

Life Insurance Is More Affordable Than You Think

If you have children or others who depend on your income for their survival, you should seriously consider a life insurance policy. This allows those close to you to have additional income in the case of your early death. The advice in this article will help you with choosing the right policy for you.

It is good practice to review and adjust your life insurance policy annually. Any major life event, such as the birth of a child, the purchase of a house or a child attending an expensive college, requires you to update your life insurance policy, otherwise, you could find yourself under-insured.

You should definitely customize your life insurance policy. Meet with your insurance agent and talk about the best plan possible. Even with a good plan, all your needs might be met. You can easily add riders to a policy to create new conditions under which your insurance will or will not pay out.

To obtain your life insurance policy in the quickest and easiest manner, first decide the way in which you are going to purchase your policy. There are several different options, such as purchasing directly from the insurance company, or going through a financial planner or insurance agent. Deciding beforehand will save you time.

When you enter into a life insurance policy, it is important for you to know that you have anywhere from 10 to 30 days as a “cooling off” period after the sale. This period exists to give you a chance to re-assess whether the policy is the right fit for you. If you find you need to cancel the policy within this period then you will be able to get your premiums fully refunded.

What company do you buy your insurance policy from? Remember the saying “you get what you pay for.” It is important that you realize that you need to purchase your life insurance from a reputable company that you can trust. Take time to do your research on a life insurance company by asking friends and family members about the companies they use. A life insurance policy is backed by the company that provides it, so you want to be able to trust the company to follow through with what they offer.

It’s important that you understand that term life insurance is only for protection and not for investing. There is no savings component in term life insurance, so your best bet here is to simply pay for this type of insurance and invest elsewhere. Your policy payments aren’t collecting interest or anything.

Be aware that you will need to make adjustments to your life insurance as your life changes. If you get married or divorced, you will need to readjust what you are currently putting aside. If you had children when you bought your life insurance, and they are now grown, you could save some money by adjusting your current life insurance policy.

Choosing a life insurance policy can be extremely confusing, but it is a necessary part of being a household provider. Those who depend on your income will not be left out in the cold if you die if you have a life insurance policy. The advice you have read in this article should help you in the process of selecting a good life insurance policy.

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Buying life insurance: A Shopping Checklist

July 5, 2022   Life Insurance

Buying life insurance: A Shopping Checklist

When shopping for term life insurance, you want to find the right amount of insurance coverage at a reasonable price with a company you can trust. But for many people, getting started is the hardest part. That’s where the following Life Insurance Checklist can help.

1. What you would like your policy to achieve?
Ask yourself what it is you want your life insurance to do. For example, do you want to have insurance coverage that will:

• Pay funeral arrangements?
• Pay the outstanding balance owing on a mortgage and other debts?
• Offset the loss of your income? And if so, for how long?
• Contribute to the future education of your children?
• A combination of all or part of the above?

Knowing what you would like to accomplish with your life insurance policy and approximately how much you need to achieve these goals will help you determine how much life insurance you should consider purchasing. Online life insurance calculators are available to help you put a dollar value on the amount of coverage you need.

2. Who would you like to insure under the life insurance policy?
Most insurance companies offer a variety of life insurance products to suit your lifestyle and family needs. You can get an insurance policy on your own life, or you can get one policy for both you and your spouse (called a joint life insurance policy). The most common joint life policy provides coverage when the first partner dies, leaving the life insurance benefit to the surviving spouse.

3. How long will you need life insurance?
Consulting a psychic isn’t necessary, although it does require that you estimate the timing of your life insurance needs. For example:

• When will your mortgage be paid off? The amortization period of your mortgage will often determine how long your term life insurance policy should be.
• When will your children be finished school? One day they’ll finish their education and having enough life insurance coverage to pay their educational expenses won’t be necessary.
• When are you planning to retire? You will have less income to replace at that time.

Knowing how long you’ll need life insurance coverage before you begin shopping will ensure you’re comfortable with the life insurance product you end up purchasing. Online tools are available to help you figure out which term for your life insurance policy is most recommended for people with similar lifestyles.

So now that you’ve got the how much, who and how long questions answered, you’re ready to shop.

1. Compare life insurance quotes from multiple companies:
It pays to shop around because life insurance rates can vary considerably depending on the product you choose, your age, and the amount of coverage you request. This is the easy part, because with the Internet you can compare life insurance quotes easily, online, anytime.

2. Which life insurance rate has been quoted – standard or preferred?
There are two basic life insurance rate groups you should know about when shopping for life insurance coverage: standard rates and preferred. Standard life insurance rates are the rates the majority of Canadians qualify for, while about one third of the population is eligible for preferred rates.

Preferred life insurance rates are typically offered to very healthy people and means you may pay a smaller premium than most. Usually preferred rates are offered only once the results of the medical information and tests are known. It will depend on your blood pressure, cholesterol levels, height, weight, and family health history. But preferred rates are worth it. They could save you up to 30-35% off your quoted premium.

When comparing prices, make sure you’re comparing ‘standard to standard’ or ‘preferred to preferred’ life insurance rates. If you’re not sure, ask the broker. It would be disappointing to find out you were quoted preferred rates at the beginning, only to find out you don’t qualify for them later.

3. Review the life insurance broker’s availability:
How easily can you get a hold of the broker? What are their hours of operation? Whether it is through their website or telephone, the life insurance broker should be easily accessible to you should you ever have questions or need to speak to them about a change in your life insurance needs. Look for toll-free numbers and extended hours of service as guides.

4. Review the medical information required to obtain the policy:
Typically the more medical information you provide, the better the price. For a policy that asks few or no medical questions, you can bet the premium is higher for the same coverage then a plan asking for more information. Depending on the company, your age, and the amount of coverage you want, you could be asked to provide blood and urine samples. To obtain the samples, a nurse will visit at not cost to you.

5. Consider a life insurer’s financial stability and strength:
A company’s financial stability is something to consider if you are planning on making a long-term purchase like life insurance. There are organizations out there, like A.M. Best, that evaluate insurers and provide a rating on their stability and strength.

6. Ask about renewal options and requirements:
Once the initial premium is set, it is usually guaranteed for the length of the policy (often 10 or 20 years). But what happens when the policy expires? Most policies are renewable until you are 70 or 75 so don’t forget to ask your broker if you will have to take a medical to renew your policy. While your premiums will be higher on renewal, find out if they will also be guaranteed to remain level for the second term of the policy.

7. Confirm the policy can be cancelled without penalty:
Most term life insurance policies can be cancelled at any time without penalty. Make sure to check with your broker to see if the life insurance company has any unusual cancellation policies.

8. Consider the conversion options and restrictions for the policy:
As your life changes so do your life insurance needs and you may want the option to convert your coverage some day.

To convert a term life insurance policy means to transfer all, or part of, the death benefit of the policy into a permanent life policy without a medical. For example, say you originally bought a term policy to protect a mortgage and child. Once the mortgage is paid and the child grown, you might find it desirable to convert the policy into one that will give you a new level premium for the rest of your life, and a death benefit that is guaranteed not to expire as you age.

When you purchase your life insurance policy, find out if there are any limitations on your age at the time of conversion. In most cases, you have the option of converting up until you are 60 or 65. As well, ensure you are given several options of the type of policies you can move into, the more the better.

Final tip – choose a life insurance broker you trust:
While it doesn’t necessarily impact the type of policy you choose to purchase, a rapport with your broker is critical in feeling comfortable with the life insurance policy you buy and the information you’ve received.

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A CPA Talks About Buying Life Insurance

June 29, 2022   Life Insurance

A CPA Talks About Buying Life Insurance

Not everyone needs life insurance. The first thing to do is make sure you need it. Life insurance is really meant for your family members or other dependents who rely on your earnings.

Why You Buy Life Insurance

You buy life insurance so that, if you die, your dependents can live the same kind of life they live now. Strictly speaking, then, life insurance is only a means of replacing your earnings in your absence. If you don’t have dependents (say, because you’re single) or you don’t have earnings (say, because you’re retired), you don’t need life insurance. Note that children rarely need life insurance because they almost never have dependents and other people don’t rely on their earnings.

Life Insurance Comes in Two Flavors

If you do need life insurance, you should know that it comes in two basic flavors: term insurance and cash-value insurance (also called “whole life” insurance). Ninety-nine times out of 100, what you want is term insurance.

Term Life is Simple to Buy and Understand

Term life insurance is simple, straightforward life insurance. You pay an annual premium, and if you die, a lump sum is paid to your beneficiaries. Term life insurance gets its name because you buy the insurance for a specific term, such as 5, 10, or 15 years (and sometimes longer). At the end of the term, you can renew your policy or get a different one. The big benefits of term insurance are that it’s cheap and it’s simple.

Cash Value is Trickier

The other flavor of life insurance is cash-value insurance. Many people are attracted to cash-value insurance because it supposedly lets them keep some of the premiums they pay over the years. After all, the reasoning goes, you pay for life insurance for 20, 30, or 40 years, so you might as well get some of the money back. With cash-value insurance, some of the premium money is kept in an account that is yours to keep or borrow against.

This sounds great. The only problem is that cash-value insurance usually isn’t a very good investment, even if you hold the policy for years and years. And it’s a terrible investment if you keep the policy for only a year or two. What’s more, to really analyze a cash-value insurance policy, you need to perform a very sophisticated financial analysis. And this is, in fact, the major problem with cash-value life insurance.

While perhaps a handful of good cash-value insurance policies are available, many— perhaps most—are terrible investments. And to tell the good from the bad, you need a computer and the financial skills to perform something called discounted cash-flow analysis. If you do think you need cash-value insurance, it probably makes sense to have a financial planner perform this analysis for you. Obviously, this financial planner should be a different person from the insurance agent selling you the policy.

What’s the bottom line? Cash-value insurance is much too complex a financial product for most people to deal with. Note, too, that any investment option that’s tax-deductible—such as a 401(k), a 401(b), a deductible IRA, a SEP/IRA, or a Keogh plan—is always a better investment than the investment portion of a cash-value policy. For these two reasons, I strongly encourage you to simplify your financial affairs and increase your net worth by sticking with tax-deductible investments.

If you do decide to follow my advice and choose a term life insurance policy, be sure that your policy is non-cancelable and renewable. You want a policy that cannot be canceled under any circumstances, including poor health. (You have no way of knowing what your health will be like ten years from now.) And you want to be able to renew the policy even if your health deteriorates. (You don’t want to go through a medical review each time a term is up and you need to renew.)

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Long Term Life Insurance – Why Get It?

June 23, 2022   Life Insurance

Long Term Life Insurance – Why Get It?

Long Term Life Insurance is term life insurance that is taken out for an extended period of time. Most term life insurance tends to be for a period of between one and seven years, but some people prefer a longer term cover. Insurance companies have responded to this demand by offering a new range of products that fall somewhere between whole life insurance and traditional term insurance.

Normally when people want long term cover, they purchase whole life insurance, which covers them for the duration of their life, and also builds a cash value. However, if you do not wish to pay the extra premiums that are associated with the investment, then perhaps long term insurance rather than whole insurance may be the way for you to go.

These policies may be referred to as “Permanent Life” policies, and can be set up so that they are payable on demise, or at a certain age. Long term life insurance really blurs the line between whole life and term life insurance, with policies often borrowing from both structures to offer the customer even more flexibility. If you do not wish to have an accruing cash value, then you don’t have to. You can also stipulate whether you want the beneficiary to receive a lump sum payment, or monthly payments to boost income.

Unlike shorter term policies, long term life insurance does tend to be initially more expensive, though over the length of the term it may prove more cost effective than short term life insurance policies. Talking to your preferred insurance provider will give you a good idea of the options that are available out there. Then you can shop around and compare policies online, which will give you an even better idea of your options. The market is booming, so if you are looking for more flexibility in your life insurance, now is the time to look.

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