- What is Life Insurance?
- What are the types of life insurance?
- How to save money on life insurance policy?
- How to decide on the type of life insurance to choose from?
- Can you pay your mortgage with life insurance?
- How should you choose a life insurance company?
- How does a life insurance company choose you?
What is life insurance?
What are the types of life insurance?
- Term Life Insurance:
For those who are running on a budget, you can opt for a simple life insurance. Term life insurance allows the beneficiary death benefits for a specific period or 'term'. This term may be 1 or more years and the benefits are paid only in the event of death of the policy holder within the term of the policy.
There are certain term life insurance that can be renewed for more than one additional term. However, if you do so, your premiums may go higher. You may even sometimes be allowed to trade your term life insurance for a whole life insurance policy.Term Insurances are of 5 types:
- Annual renewal term insurance: Allows you to renew your term insurance every year till you reach a specific age which often freezes at 65.
- Renewable term insurance: With expiry of the term of the policy (generally 5-20 years), you can automatically renew the policy even if your health condition has worsened. It is similar to the annual renewable policy but this one is for a longer period of time.
- Level premium term insurance: Ensures that your premiums will not go higher for the term (between 5 and 20 years) of your policy.
- Decreasing term insurance: Allows your premiums to stay level throughout while decreasing your cash benefits each year. Such policies are usually used to cover items whose costs decrease with time.
- Convertible term insurance: With this policy you may convert your term insurance into any other type of life insurance policy that the company offers.
- Whole Life Insurance:
A whole life insurance covers a policy holder for his entire life. There is no date of expiry like in a term life insurance and the death benefits will be received by the beneficiary mentioned in the policy only in the event of the death of the policy holder. If you buy a whole life insurance you will have to pay a higher premium as compared to a term life insurance. The reason for this is that a certain portion of the premium paid for whole life insurance is put away into a savings program.When you compare the total premiums paid for whole life insurance and the total premiums paid for term life insurance it is seen that whole life insurance is less expensive. Even if you pay higher premiums for whole life insurance, the fact is that the premiums remain the same throughout the tenure of the insurance. But in the case of term life insurance, you may be paying lesser premiums in the beginning, but as you renew your term policy, premiums will increase. Hence, the total value accrued in term policy is bigger than a whole life insurance.
Certain clauses in a whole life insurance allow you to pay premiums for a lesser period of time. The greatest advantage in this policy is that the premiums develop cash values that may be claimed or used for purchasing rider policies for more protection. Few of the whole life insurance benefits are:
- Guaranteed death benefits
- Guaranteed cash values
- Fixed annual premiums
A whole life insurance also known as "straight life" or "ordinary life" insurance, is not just an investment for your future alone, but also for the future of your family.
To understand the basic difference between term life insurance and whole life insurance click here.
- Universal Life Insurance:
Universal life insurance is a flexible policy that provides security for you and your family. To know more please click here.
How to save money on life insurance policy?
- Seek financially sound companies: Look for companies that are financially strong so that when your beneficiary(s) make a claim, he may receive the benefits of life insurance without hassle.
- Shop around: Get life insurance quotes from more than one insurance provider. You may even ask an insurance agent or an insurance broker to get you few insurance quotes from different carriers. You may then compare the quotations and find a policy that suits your needs as well as pocket.
- Seek group insurance: Employer provided group life insurance is often given at subsidized rates so you may find a less expensive policy here. Even if you have to pay premiums out of your own pocket this might be a good idea for the subsidized rate they provide. However, premiums paid by you will probably be through payroll deduction which is convenient. But a comparison of group and individual rates depending on your age, health must be done to assess which is the best policy for you.
- Change in lifestyle: Maintain a healthy lifestyle. Smoking may rate you as a risk option and you may have to pay higher premiums. Exercise regularly and consider making more lifestyle changes if necessary.
How to decide on the type of life insurance to choose from?
- You need to make a short term investment and not a permanent one. With term life insurance benefits you can ensure the education of your children if you can invest in time. If there is a debt that you have to pay off, you may invest in term life insurance. Term life insurance covers you for a term of 5 to 20 years.
- You need a big amount of life insurance with a premium that suits your pocket. A term insurance usually pays only in the event of death of the policyholder. However, if you are alive at the time the policy ends, term life insurance coverage will stop until you renew it. But here, you will not build a savings like in a whole life insurance.
- You need life insurance stretching for the tenure of your life. A whole life insurance would pay the beneficiary the death benefit no matter when the policyholder dies.
- You feel the need to accumulate a savings on a tax-deferred basis. A whole life insurance has its own savings program that puts aside a certain portion of the amount you pay as premiums into the savings program.
Can you pay your mortgage with life insurance?
How should you choose a life insurance company?
- Identity of companies - Make sure to know the full name, office location and affiliation of the insurance company that you plan to buy from.
- Product sold - Check out what products the company is selling. Most often the companies provide a wide range of policies. Check for what you need and if they have it you may consider buying from them.
- Financial Security - Select a company that is strong financially and has been in business for long. Your life insurance is an investment to secure your lifetime. Be sure that your insurance company will make life easy for you and not otherwise.
- Ethics - Check if your company abides by the codes of conducts and principles of the Insurance Marketplace Standards Association. This non-profit organization promotes ethical conduct in life insurance marketing.
- Agent - An agent is supposed to help you out with your insurance needs on behalf of the company. You must consider taking help from a reliable person only. If there is any discomfort in dealing with the agent, move to another one.
- Cost of insurance - Based on your age, type of policy and features, and the amount of insurance to be purchased, compare one insurance company with the others. Find out one which offers a better coverage.
- Claims - A national claims database will give you the complaints (if any) against an insurance company. You may want to check to find if the company you are considering buying from is listed for consumer complaint.
How does a life insurance company choose you?
Your application for a life insurance policy has to go through the insurance underwriting process before it's approved. The underwriters evaluate the risks associated with your application and forward it to the insurance processing department of the company.Factors that influence underwriting procedure for Life Insurance
- Age of the individual to be insured.
- Gender of the person
- Pre-existing medical conditions
- Medical records of the family
- Smoker or non-smoker
- Mental health of the person
- Hobbies or lifestyle habits (activities like race car driving, mountain climbing or bungee jumping might be marked as risky)
- Driving records
- Credit history
- Selection of coverage limits, benefits etc.
- Medical reports after thorough health check-up including tests like :
> Blood pressure level
> Blood sugar level
> Cholesterol level
> Weight of the individual
> Urine tests
> Blood tests
> Stress tests etc.
Click here to know how the above mentioned factors affect the rates of a life insurance policy.Your life insurance policy might not come to your assistance in your lifetime. However it'll help securing the future of your loved ones when you won't be there to take care of them. A small amount spent at regular intervals will thus be able to give you the sense of security, as you hand over the risks to your insurer. Top
- Term life insurance benefits do not build any cash value
- What if you want to surrender your life insurance policy?
- The Tax Implications on Life Insurance Death Benefits
- Term life Vs Whole life insurance?
The reason why I'm asking is because they're into the 13th year now and they are still paying the expensive premium. When I called the representative, they told me that the account has accumulated certain cash value and dividend, but the accumulated dividend can only cover approximately 3 years of premium.
I did some research, I understand that the cash value is like equity, but is it truly equity like we really own the money? if yes, when can we cash out the equity? if we cash out, the policy terminates? I understand that when the insured dies, the beneficiary would get paid the face amount, but what happen to the cash value? who gets it? Also, what happen if the insured dies of old age (not due to accident), is it still covered by the policy? what happen to the cash value?
Thanks in advance for your help.
Total Comments: 282
Posted: Mon Apr 10, 2017 04:13 pm Post Subject: Need insurance
My mom is 86. Need it asap
Posted: Mon Apr 10, 2017 04:17 pm Post Subject: Need insurance
My mother needs insurance asap!
Please call me. 7869072918.
Posted: Sat Apr 15, 2017 04:23 am Post Subject: insurance agent requirements
if I have been convicted of violation of Arkansas hot check law and delivery of a controlled substance with intent to deliver can I become a licensed insurance agent
Posted: Sun Apr 30, 2017 06:53 am Post Subject:
Posted: Thu Aug 03, 2017 06:16 pm Post Subject: Meed life insurance for 87 year old male
Need life insurance for 86 yr old male
Posted: Fri Aug 25, 2017 09:20 pm Post Subject: Mortgage life insurance
How much does it cost in attached premium per 100,000 of mortgage for an 84 yr. old female in good health?
Posted: Wed Aug 30, 2017 04:39 pm Post Subject: policy
Re; certificate # 010FA64016 Is it still active?
Posted: Tue Oct 10, 2017 05:35 am Post Subject: jackson life ins co
I don't have insurance with them and I received a usps pink card letting me know that I have a large envelope at the post office that needs to be signed for, I am a widow and have been for 5 years, I don't know why I would be getting this letter
Posted: Thu Jan 11, 2018 12:29 am Post Subject: Questions about simplified issue policies
Hey everyone, I was approached a few months ago about becoming a life insurance agent. The money sounded good so I've been looking into it, got my license, and have been contracted to sell through several carriers.
Since I jumped in quickly, I wasn't fully aware of what I was doing, but now that I have a decent grasp of what's going on, I'd like to address some concerns. Firstly, the company I work for is focusing on selling simplified issue whole life insurance policies. The original strategy I was told was to focus on seniors with health problems who think that they either don't qualify for fully underwritten policies or think they have limited options. I'm coming to realize that this may not always be the case and to not be aware of the general purchasing strategies of other types of customers could be doing people a huge disservice.
Question 1: I'm getting conflicting messages about the underwriting standards for simplified issue term life and simplified issue whole life. The claim from my manager is that simplified issue term life has stricter underwriting so it is easier to place someone in simplified issue whole life. I've heard from other sources that the underwriting for term and whole is generally the same. Does anyone on here actually have the qualifications to clearly claim if underwriting for simplified term versus simplified whole is a real concern(not guaranteed issue, I understand what is happening with guaranteed issue)? It seems as though when I ask this question I generally get biased answers (term agents have their pitches, whole agents have their pitches).
Question 2: As a general rule of thumb, wouldn't it be better service to approach each new client with the mindset that they might qualify for fully underwritten insurance and to make them fully aware that even though they may have some health problems, certain carriers could qualify them with a fully underwritten policy, leading to a better price and coverage? It seems as though to me that if you only focus on simplified coverage you would be tempted to not mention that other fully underwritten policies are available. Not only that, but I just read that sometimes people who are disqualified for simplified policies are then sometimes placed into fully underwritten policies (I assume because then they can get more accurate information about what is going on with the individual's health). So again, why not just start with the fully underwritten possibility in mind?
Question 3: For the average customer, I could see them wanting the price of term insurance but the peace of mind that permanent policies provide. In my research I came across guaranteed universal policies. They are products that can be set to certain ages (85, 90, 95, 100, 121), which could essentially function like a permanent policy, but without the cash value (I believe the cash value is available but you just don't fund it, keeping it at zero, so all your premium can go towards coverage). Is there any difference in the underwriting for these policies and would it be possible to get a simplified issue guaranteed universal policy?
Question 4: If there are any significant differences among underwritings of simplified issue term life, simplified issue whole life, and guaranteed universal (simplified or not), how would I know as an agent where to make the cutoff decisions for putting them in one or the other?
Posted: Wed May 09, 2018 10:52 pm Post Subject: