By Mark Prip
When you are looking for cheap term life insurance, you have to shop around to find the best deals. Anytime that you are looking to save money, you will want to compare your options and shop around to see what is out there. Life insurance is no different. You should always get a few quotes from a few different companies in order to make sure that you are truly getting the best deals. This is often more complicated than other shopping because it involves answering a lot of questions, occasionally submitting to medical exams, and waiting for a response. However, it is something that you need to do to get the cheapest rates.
Cheap term insurance is available to just about anyone, as long as they are not terminally ill or facing serious diseases that put them at a higher risk of death. The insurance companies give out policies and rates based on their risk level, which includes how likely someone is to file a claim for life insurance benefits. Therefore, if you are healthy it is much more likely for you to get cheap insurance rates than if you were not as healthy. Age matters, as well. Younger customers will have lower rates than older customers because they are statistically less likely to file a claim.
Compare your risk level at different companies to see where you rank. Take the time to figure out exactly what you are getting quoted for and what coverage you are offered. By giving yourself the chance to see your options, it will be much easier for you to choose cheap term insurance rates that you can appreciate much more than you might realize. Rushing, on the other hand, will likely cause you to pay more than you should or to not get the best coverage available.
When you shop around for cheap term insurance, you will have a much better understanding of what life insurance is, how it works, and the options that you have for coverage. Being an informed consumer is a big part of making the best decision regarding your life insurance needs, no matter what those might be. It is easy to get cheaper rates on life insurance if you are able to know what you have to choose from and which companies offer what rates, so make sure that you comparison shop to save money on your insurance rates.
Mark Prip recommends checking out this unique site on [http://www.getlifequotes.com/]Cheap Term Insurance for more information.
Visit this informative Life Insurance site today at http://www.getlifequotes.com to run instant quotes and learn more about Life Insurance plans.
Article Source: [http://EzineArticles.com
Friday, July 16, 2010
Affordability Problem? No Worries, Here We Have the Solution - Cheap Life Insurance Options
By David Livingston
Not necessary that everyone shall be comfortable with the concept of life-insurance and for all those who are not too comfortable with this nothing can beat the cheap life insurance options. I am sure everybody must be worried about their loved ones, and the life insurance policy helps you to relax in this matter by providing a security to your loved ones. People who think on a long term basis never miss upon the opportunity of getting for themselves the best of the best life-insurance. But at times the high premiums of the best life-insurance policies doesn't even let their mid be in peace and this is the reason why the cheap life-insurance policies have been made.
All those who are aspiring to have a cheap life-insurance should have a look at the term life-insurance, which is insurance for a limited period because the other categories of insurance that is the permanent or whole life-insurances are slightly higher. But do not rush because not all cheap life insurance policies are good ones. It is not necessary that if they offer you some advantages with the price then they'll not have any other disadvantages. It is very important to know all the aspects of the cheap life-insurance policies before buying the policy.
For all those who have the intentions to buy the right kind of cheap life insurance should make a good strategy first because lack of this strategy can make things really difficult for you. Because of the expansion in the insurance market there are many insurance companies and at times because of this it has become really difficult to select the best life-insurance company. You have to get the information related to the credentials of the life-insurance company before you make a buying decision. Do not be in a rush to decide upon anything, be careful and be alert because you might be misguided by the advertisements.
The type of life-insurance you should buy depends upon your basic life-insurance requirements. For example, term life insurance policies are selected by the ones who have a temporary insurance needs or when the insurance needs are for a limited period. When the life-insurance needs are for a longer period, the permanent life insurance policies are selected. In the same if you are looking for some other benefit tagged along with the life-insurance like some investment happen along with the life-insurance benefits then you need to go for the whole life-insurance options. There is a myth that term life-insurance is the only cheapest form of life-insurance.
Well, term life-insurance may be cheap, but there are some options in the whole life-insurance also that are cheap and affordable. You will have to do lots of research to find out the best life insurance for you. If you want to know which one of the life-insurances is the purest form of life-insurance, then the answer is term life insurance. The major advantage with the whole life-insurance policies is that along with the life insurance benefit, you have accumulated cash. When you surrender the whole life-insurance policy, you usually get the accumulated cash.
The reason why most of the people opt for the term life insurance is because they provide you the coverage at the lowest rates as compared with the other types of life insurances. Taking a life-insurance policy relaxes you because you know the fact that you have secured the future of your loved ones even if you are not with them to take care. To get the cheap life-insurance, you need to be young and healthy. The life insurance companies will offer you some of the best deals at the lowest rates only if you are young and in good health.
If you are young and you are not in the best of the health, you may not get the best deals. So, before you decide for a particular rel=nofollow [http://www.equote.com]cheap life insurance, make sure that you get in good health. If you have to join the gym to do so, go ahead and join one. Assess your health after few months and then if you feel that you are good enough to go in for the life-insurance, give it a shot. Often these life-insurance companies conduct medical tests to assess the health conditions of the applicants.
If you do not want the medical examination to be done even then you will have some options because these days some of the life insurance companies are giving the policies without a medical examination. There are two very important things that should be know by all those who are planning to escape the medical examination, first is that these policies are a little more expensive from the regular ones and the second thing is that these policies have many loopholes. There are three steps to go for the online life-insurance policies:
- You complete a small online form
- You make the payment
- You print the life-insurance policy
David Livingston has been involved in the insurance industry for a long time and is considered to be one of the leading expert in this industry. For more information on how to get affordable life insurance or getting [http://www.equote.com/li/nomedicallifeinsurance.php]life insurance quotes, visit his site today.
Article Source: [http://EzineArticles.com/?Affordability-Problem?-No-Worries,-Here-We-Have-the-Solution---Cheap-Life-Insurance-Options&id=4238790] Affordability Problem? No Worries, Here We Have the Solution - Cheap Life Insurance Options
Permanent Life Insurance - Worth the Money?
By Denise M
Buying life insurance requires a lot of thought and planning. For most people, the choice is between a permanent insurance policy and a term life policy. Here's a bit of information on permanent life insurance to help you make a better-informed decision.
Permanent life explained
Permanent life insurance will remain in effect until the insured dies, after which the death benefits will be paid out to the beneficiaries. The premiums on permanent insurance are designed to remain equal throughout the life of the insured. Premiums are high because permanent life policies develop cash values that can be accessed by the insured through surrenders or through loans against the policy.
The cash values in permanent life insurance policies typically include two components:
A guaranteed cash value, already referred to above. The cash value grows based on a pre-set schedule, and grows to a sizeable amount upon maturity of the policy (typically at age 100).
Most permanent insurance policies additionally have a non-guaranteed cash value element, typically made up of dividends or earnings on the cash value, which can enhance the value of the insurance policy over time.
There are many permanent life policies in the market today with varying features and varying degrees of control over the cash value component of premiums.
Permanent vs term life
In sharp contrast to all the cash-value possibilities that permanent life can offer, term life insurance policies only offer you the death benefit, and only cover you for a particular number of years, called the 'term'. Because of the absence of cash values and the temporary nature of this policy, term life premiums are more affordable.
Permanent life insurance can be substantially more expensive than term life insurance, but the death benefit is guaranteed as long as premiums are paid. On the other hand term life policies can buy you the same amount of death benefit as a permanent insurance policy, at a fraction of the premium cost.
The pros and cons of permanent life insurance
The drawbacks of permanent insurance are:
With most permanent life insurance policies, you don't have a say in the investment portfolio to which your cash value component is linked.
Because of its investment component, the best benefits on a permanent life policy are gained in the long term. So this is not a great life insurance policy for someone who wants a stopgap life insurance policy.
If you fall short of funds the cash value portion of permanent policy can be borrowed against. This attracts interest, so it is advisable not to borrow against a permanent life policy unless it's a last-resort effort to access money during a tough financial situation.
The investments of most permanent insurance policies are by nature very conservative (variable permanent life policies are the exception) with a strong possibility that if you were to invest the same amount of money elsewhere, you would earn much more on your investments. In fact there is a school of thought that advocates that permanent insurance may not be worth the money at all when compared to the benefits of buying term and investing the difference in premiums (between term and permanent).
Let's move on to the advantages of permanent life.
If you have difficulty exercising discipline in money matters, permanent insurance is a great option because it offers you 'forced savings'. If not for the policy, you probably would have difficulty investing money so consistently into an investment avenue.
Permanent life is a life-long insurance policy and the premiums are consistently level. Though it can be quite a pinch in the first few decades of your policy, as the years pass, it can get more affordable.
When you outlive a term life policy, you will need to buy more insurance, predictably at higher premiums. This problem does not arise in permanent insurance because the policy is lifelong, and premiums are consistently equal.
Is permanent life insurance right for you?
It all boils down to the life insurance needs at your current stage in life. If you are very young and have several financial obligations such as small kids, their college education to think of, mortgages, loans, etc. then permanent policies may not be right for you just yet because of their high premium costs. Term life would be a lot better. On the other hand, if you are older, and are mostly done with your financial obligations you will need a life insurance policy to cover you for the rest of your life, and that's where permanent life seems the more feasible choice.
How long do you plan to keep your insurance policy? If you want to be insured for several decades, you have to think of permanent insurance and not term, because even though term premiums are low, they will increase each time your policy expires, and you take out a fresh policy.
However, one must also consider the fact that permanent insurance investments grow conservatively. Therefore, those who are looking at great returns on their investments are better off buying term and investing the difference (that they save on premiums) in tax-deferred investment vehicles like IRAs, Roth IRAs and even educational accounts like the 529s. The general opinion is that if one can make sound investments elsewhere with this savings in premiums, the returns would be much greater returns than a permanent life policy could provide. If you look at it from this angle, permanent insurance doesn't really seem worth the money. The choice however, should totally depend on individual considerations.
Finally...
You need to spend some thought on how much your coverage should be. With permanent life especially, you don't want to be over insured because defaulting on your premiums can cancel your policy. You don't want to be under insured either, and put your family through tough times. So use an online life insurance needs calculator for an accurate estimate of how much life insurance you will need.
Shop around before you buy your life insurance. You can do this online in a hassle-free manner by getting quotes from a reputed online insurance agency. Check if the website is BBB-accredited, and you can be assured of its authenticity.
About AccuQuote: AccuQuote is a leader in providing [http://www.accuquote.com]term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying [http://www.accuquote.com/types.cfm]term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.
Article Source: [http://EzineArticles.com
Everything About Life Insurance!
By Michael Aponte
I want to start off this 2010 with an article regarding Life Insurance. Many people find this topic morbid but believe me when I say this contract is as important as a Will and should be taken just as seriously as health insurance. Due to the length in details of this article I have provided chapters for easy reading. I hope this will educate you on Life Insurance and the importance of its necessity. (Note: For better understanding "You" is the policy owner and the insured)
Chapters:
1= Introduction
2=When/If you have Life Insurance already
3= Difference between a Insurance Agent and Broker
4= Types of Policies
5= What are Riders and popular types of Riders
6= The medical exam
1) About general Life Insurance:
This is a contract between you and an insurance company to pay a certain amount (the premium) to a company in exchange for a benefit (called the Death Benefit, face amount, or policy amount) to the beneficiary (the person you want to get paid in the time of your death). This can range based on the type of policy (which will be discussed momentarily), your health, your hobbies, the Insurance company, how much you can afford in premiums, AND the amount of the benefit. It sounds overwhelming but it is not if you have the right agent or broker.
Now many people can say that Life Insurance is like gambling. You are betting that you will die in a specific time and the insurance company bets you won't. If the insurer wins, they keep the premiums, if you win...well you die and the death benefit goes to the beneficiary. This is a very morbid way of looking at it and if that is the case you can say the same for health insurance, auto insurance, and rental insurance. The truth is, you need life insurance in order to ease the burden of your death. Example 1: A married couple, both professionals that earn very well for a living have a child and like any other family has monthly expenses and 1 of the couple has a death. The odds of the spouse going back to work the next day is very slim. Odds are in fact that your ability to function in your career will lower which RISK the cause of not being able to pay expenses or having to use one's savings or investments in order to pay for these expenses NOT INCLUDING the death tax and funeral expenses. This can be financially devastating. Example 2: lower middle income family, a death occurs to 1 of the income earners. How will the family be capable of maintaining their current financial lifestyle?
Life insurance is about the ability of lowering the risk of financial burden. This can be in the form of simple cash or taxes via estate planning.
KEY Definitions:
The Insured: The person that is covered by the insurance company (He/She does NOT have to the policy owner)
The (policy) Owner: The one that pays the premium, controls the beneficiary, and basically owns the contract (Does NOT have to the insured...hope you understand it can be either/or).
Face Amount: Also known as the death benefit. The amount to be paid to the beneficiary.
The Beneficiary: Is the person/persons/organization who will receive the face amount (death benefit)
2) When/If you have Life Insurance:
First, you should review your beneficiaries once a year and your policy approximately once every 2-3 years. This is free! You need to make sure the beneficiaries are the people/person you want to get paid! Divorce, death, a disagreement, or anything of the sort can make you change your mind about a particular person to receive the benefit so make sure you have the right people, estate/trust, AND/OR organization (non-profit preferably) to receive the benefit. Furthermore, you need to review every 2-3 years because many companies can offer a lower premium OR raise the benefit if you renew your policy or if you find a competitor that sees you have been paying the premiums may compete for your business. Either way, this is something you should consider to either save money or raise the policy amount! This is a win-win for you so there should be no reason not to do this.
3) Life Insurance Agent or Broker, what is the difference?:
The major difference is an Agent is usually an independent sales man that usually works with different insurance companies in order to give the client the best possible policy while the Broker works for a particular company. My personal advice: always choose an Agent. Not because I am one myself BUT because an agent can look out for your benefit by providing different quotes, types, riders that are available (explained later), AND pros/cons regarding each insurance company. If you don't like a particular insurance company, tell the agent and he should move on to the next carrier (if he persist for some odd reason, fire him). Buyers BEWARE: The Agent should get paid by the carrier that is chosen, not by you specifically. If an Agent asks for money upfront for anything, RUN! There are also Insurance consultants that you pay but to keep things simple, see an Agent. Consultants and Agents are also great in reviewing current policies in order to lower premiums or increase benefits.
4) Types of Policies:
There are 2 main categories: Term and Permanent Insurance. Within each of the 2 categories have sub-categories. I will explain them at a glance in order for you to make the best possible choice for you and your loved ones. Remember, you can have estate/trust or a organization as the beneficiary. (Note: There are even more sub-sub-categories within these sub-categories but the difference are so small and self explanatory that I have not included it in this article. Once you speak to an agent you will have enough knowledge by this article that you will know what questions to ask and know if you agent is right for you).
Term Insurance: A temporary policy in which the beneficiary is paid only upon death of the insured (you) within a specific time period (hence the word "Term"). Term Insurance is usually less expensive with a smaller death benefit. Some do not require medical exams BUT expect to pay a higher premium since the risk of the insurance company is unknown. Also, term insurance normally does not accumulate cash value (explained in permanent insurance) but can be purchased on top of your permanent policy (for those that may have coverage already):
Convertible Term: Ability to convert policy to permanent. There are some REALLY GOOD policies that require no medical exam, driver history, or hazardous avocations at a certain point in order to convert to permanent coverage guaranteed with all the benefits that permanent insurance policies has to offer.
Renewable Term: Able to renew a term policy without evidence of insurability.
Level Term: Fixed premiums over a certain time period than increases (great for those that are young adults and expect within 10 years to have a increase in pay).
Increasing/Decreasing Term: Coverage increases or decreases throughout the term while the premium remains the same.
Group Term: Usually used for employers or associations. This covers several people in order to reduce premiums. (Great for small business owners)
Permanent Insurance: Just as the name states, this provides coverage throughout the lifetime of the insured. This also builds cash value which is fantastic for tax purposes because if you loan out money to yourself using this cash value there are no tax implications. Few policies may have in general withdrawal tax-free. However in most cases, If you withdraw the cash value you pay the only the taxes on the premiums (the amount that grew) which is fantastic. Just make sure your agent knows not to have the cash value grow larger than the death benefit otherwise it is subject to 10% taxes! Surrender charges may also apply when you withdrawal so PLEASE consult with an agent who can assist you with these details. You should consider Permanent Insurance if you have a family and don't mind an increase in premiums (amount you pay) by a few dollars compared to term.
Traditional Whole Life: Pay a fixed amount of premium in order to be covered for the insured's entire life which includes accumulating cash value.
Single-Premium Whole Life Insurance: Whole life insurance for 1 lump sum premium (usually that 1 lump sum is very large in order to get a great death benefit).
Participating Whole Life Insurance: Just like Traditional Whole life except it pays you dividends which can be used as cash OR pay your dividends for you! There is no guarantee that you will be paid the dividends, this is based on performance within the insurance company.
Limited Payment Whole Life Insurance: Limited payments for whole life but requires a higher premium since you are in fact paying for a shorter amount of time. This can be based on payment amounts (10, 20, 30, etc payments) or a particular age (whole life is paid up at age 65, 75, 85, etc).
Universal Life Insurance: Flexible premiums with flexible face amounts (the death benefit) with a unbundled pricing factors. Ex: If you pay X amount, you are covered for X amount.
Indexed Universal Life: Flexible premium/benefit with the cash value is tied to the performance of a particular financial index. Most insurance companies crediting rate (% of growth) will not go below zero.
Variable Life Insurance: Death Benefit and cash value fluctuates according to the investment performance from a separate account of investment options. Usually insurance policies guarantee the benefit will not fall below a specified minimum.
Variable Universal Life Insurance (also called Flexible Premium Variable Life Insurance & Universal Life II/2): A combination of Variable and Universal which has premium/death benefit flexibility as well as investment flexibility.
Last Survivor Universal Life Insurance (also called Survivorship or "Second to die" Insurance): Covers 2 people and the death benefit is only paid when both insurers have died. This is FANTASTIC and somewhat a necessity for families that pay estate taxes (usually High-Net-worth individuals).
5) Life Insurance Riders, what is it and why is it very important:
Rider is the name of a benefit that is added to your policy. This provides special additions to the policy which can be blended and put together. There are SO MANY types of riders that I would have to write a different article regarding Riders (and insurance companies add new types of riders often) but I want to at least name the most popular (and in my opinion, the most important) that you should highly consider when choosing a policy. Riders add to the cost of the premium but don't take riders lightly; it can be a life saver!
Accidental Death Benefit Rider (AD&D): Additional death benefit will be paid to the beneficiary if you die from a result of an accident (ie: Car accidents, a fall down the stairs). This is especially important if the insurer travels often, relatively young, and has a family. Please note: You can buy AD&D Insurance separately.
Accidental Death & Dismemberment Rider: Same as above BUT if you lose 2 limbs or sight will pay the death benefit. Some policies may offer smaller amounts if losing 1 eye or 1 limb. This is great for those that work with their hands.
Disability Income Rider: You will receive a monthly income if you are totally and permanently disabled. You are guaranteed a specific level of income. Pay attention to this detail, depending on the policy it will either pay you depending on how long the disability lasts OR time frame of the rider.
Guaranteed Insurability Rider: Ability to purchase additional coverage in intervals based on age or policy years without having to check insurance eligibility.
Level Term Rider: Gives you a fixed amount of term insurance added to your permanent policy. This rider can add 3-5 times the death benefit or your policy. Not a bad deal!
Waiver of Premium Rider: If you become disabled which results to the inability to work/earn income, the waiver will exempt you from paying the premiums while your policy is still in force! There is a huge gap between policies and insurance companies so the devils in the details with this rider.
Family Income Benefit Rider: In case of death of the insurer, this rider will provide income for a specific time period for your family.
Accelerated Death Benefit Rider: An insurer that is diagnosed with a terminal illness will receive 25-40% of the death benefit of the base policy (The decision is made between the insurer and the insurance company). This will lower the death benefit however depending on your finances or living lifestyle, this rider should not be taken lightly and should seriously be considered.
Long-Term Care Rider: If the insurer's health compels to stay in a nursing home or receive care at home, this rider will provide monthly payments. Please Note: Long Term Care insurance can be bought separately for more benefit.
6) The Medical Exam:
This section is not to scary you away but to mentally (and possibly physically) prepare you for the medical exam so this way you know what to expect and can get the lowest possible premiums while receiving the highest possible death benefit. This really shouldn't be a concern if you work out regularly and maintain a healthy eating habit (notice I said habit and not diet. Diets don't work for long term).
The exam is mandatory for most insurance policies. Many term insurance do not require one but expect a low death benefit and/or higher premium. The idea of the exam is not just to see if you're insurable but to also see how much they will charge the insurer/policy owner. The exam is done by a "paramedical" professional that are independent contractors hired by the insurance company who either come to your home or has an office where you/the insurer visit. They are licensed health professionals so they know what to look for! In very few cases the insurance company may ask for an "Attending Physician Statement (APS)" from your doctor. This must be provided by your doctor and NOT copies by you. TIP: The "paramedical" job is to give the insurance company a reason to increase your premiums so don't give any details that are not asked.
First part (either called Part 1 or Part A) is complete by the Agent or by you. Part 2/B is the paramedical or physician portion. The best bet is to have your agent contact a paramedical that specializes in mobile exams for an easier exam for you. Paramedical will contact you to schedule an appointment. The exam is not optional so it's not a matter of yes or no but when and where. This entire exam will cost you nothing except time so make the time, life insurance is important!
The paramedical/physician will take your medical history (questions), physical measurements of height and weight, blood pressure, pulse, blood, and urine. Additional tests will vary based on age and policy amount (yes, the higher the death benefit = the more tests that must be provided). Now if the policy is substantial, the insurance company may not send a paramedical but require an actual Medical Doctor to exam you. Of course, this is chosen by the insurance company so remember my tip earlier! This exam may even include a treadmill test and additional crazy exams in order to see if you qualify for that substantial amount and low premium. On the flip side, if you choose a low insurance policy, you will just have a paramedical doing simple tests that mentioned earlier with no additional exams.
What they are looking for: Paramedical/Physicians are looking for health conditions that may shorten your life. Remember, insurance companies are here to make a business and if you're a liability then it might be a risk they do not want to take or raise the premium to make the risk tolerable. Blood and urine is taken to see the following:
- your antibodies or antigens to HIV
- Cholesterol and related lipids
- Antibodies to hepatitis
- Liver/kidney disorders
- Diabetes
- Immunity disorders
- Prostate specific antigen (PSA)
- Drug tests such as cocaine
The Results: They are sent directly to the insurance company's home office underwriters for review. Many times you can request (must be written request) to receive a copy of the results however many insurance companies will automatically do this. Many times they will find abnormalities but it's usually not a concern and just speak to your medical professional for a follow up (remember: the insurance company will look at these exams with a "fine tooth cone" in order to see what the risk are). The underwriters will look at the exam results and the application (remember part 1/a? well, now they want to see if your also lying) and determine the premium amount. Smokers pay more; any nicotine in your system will consider you a smoker, even if it is just socially.
The premium is determined by a category that you fit in. This really depends on the insurance company on how they factor but the general rule is if you are a higher risk, you pay higher premium. If you are standard risk, you will pay a standard premium, and if you are a preferred risk, you will pay a low premium.
You can decline the policy after you receive the final quote after the exam but do remember this: All results will become part of the MIB group's database (Medical information Bureau). This is a clearinghouse of medical information that insurance companies use to store information after you apply for Life/Health/Disability Income/Long Term care/Critical Illness insurance. So for seven years it will be on database. You can receive a free report annually (like a credit check) at their website which I included at the bottom of this article.
Now that you know practically everything there is to know about life insurance. I hope you realize how important it is. It may seem like a lot but the hardest part is simply choosing what type of policy is right for you. This can be done with the help of your Agent. In the end, everyone is different and everyone should analyze their own situation and need for the beneficiaries. If you have even the slightest concern for a loved one regarding what will happen if you was no longer with us then you should consider life insurance. There truly is a feeling a relief once you know you and your loved ones are covered regardless of how much you or that person makes. For many that feel that their loved ones don't need the death benefit due to whatever the case may be ("they earn enough money to survive" is the biggest reason I hear against life insurance), this can be a simple last gesture of "I love you" or appreciation for them being part of your life.
I hope I was able to educate you in Life Insurance and if you have any additional questions please feel free to email me.
MIB website: rel=nofollow http://www.mib.com/html/request_your_record.html
Financial Consultant, Risk Manager, Insurance Agent, and Retirement Planner here to give honest opinions on the current financial trends. (*Please note: This is not a solicitation and opinions on this blog are independent and not connected to blogger.com. Please consult with your financial representative prior to applying any recommendations on this blog or twitter. If you have ANY questions, please feel free to contact me. I will be more than happy to chat with you!). http://www.MichaelAponte.Biz
Article Source: [http://EzineArticles.com
I want to start off this 2010 with an article regarding Life Insurance. Many people find this topic morbid but believe me when I say this contract is as important as a Will and should be taken just as seriously as health insurance. Due to the length in details of this article I have provided chapters for easy reading. I hope this will educate you on Life Insurance and the importance of its necessity. (Note: For better understanding "You" is the policy owner and the insured)
Chapters:
1= Introduction
2=When/If you have Life Insurance already
3= Difference between a Insurance Agent and Broker
4= Types of Policies
5= What are Riders and popular types of Riders
6= The medical exam
1) About general Life Insurance:
This is a contract between you and an insurance company to pay a certain amount (the premium) to a company in exchange for a benefit (called the Death Benefit, face amount, or policy amount) to the beneficiary (the person you want to get paid in the time of your death). This can range based on the type of policy (which will be discussed momentarily), your health, your hobbies, the Insurance company, how much you can afford in premiums, AND the amount of the benefit. It sounds overwhelming but it is not if you have the right agent or broker.
Now many people can say that Life Insurance is like gambling. You are betting that you will die in a specific time and the insurance company bets you won't. If the insurer wins, they keep the premiums, if you win...well you die and the death benefit goes to the beneficiary. This is a very morbid way of looking at it and if that is the case you can say the same for health insurance, auto insurance, and rental insurance. The truth is, you need life insurance in order to ease the burden of your death. Example 1: A married couple, both professionals that earn very well for a living have a child and like any other family has monthly expenses and 1 of the couple has a death. The odds of the spouse going back to work the next day is very slim. Odds are in fact that your ability to function in your career will lower which RISK the cause of not being able to pay expenses or having to use one's savings or investments in order to pay for these expenses NOT INCLUDING the death tax and funeral expenses. This can be financially devastating. Example 2: lower middle income family, a death occurs to 1 of the income earners. How will the family be capable of maintaining their current financial lifestyle?
Life insurance is about the ability of lowering the risk of financial burden. This can be in the form of simple cash or taxes via estate planning.
KEY Definitions:
The Insured: The person that is covered by the insurance company (He/She does NOT have to the policy owner)
The (policy) Owner: The one that pays the premium, controls the beneficiary, and basically owns the contract (Does NOT have to the insured...hope you understand it can be either/or).
Face Amount: Also known as the death benefit. The amount to be paid to the beneficiary.
The Beneficiary: Is the person/persons/organization who will receive the face amount (death benefit)
2) When/If you have Life Insurance:
First, you should review your beneficiaries once a year and your policy approximately once every 2-3 years. This is free! You need to make sure the beneficiaries are the people/person you want to get paid! Divorce, death, a disagreement, or anything of the sort can make you change your mind about a particular person to receive the benefit so make sure you have the right people, estate/trust, AND/OR organization (non-profit preferably) to receive the benefit. Furthermore, you need to review every 2-3 years because many companies can offer a lower premium OR raise the benefit if you renew your policy or if you find a competitor that sees you have been paying the premiums may compete for your business. Either way, this is something you should consider to either save money or raise the policy amount! This is a win-win for you so there should be no reason not to do this.
3) Life Insurance Agent or Broker, what is the difference?:
The major difference is an Agent is usually an independent sales man that usually works with different insurance companies in order to give the client the best possible policy while the Broker works for a particular company. My personal advice: always choose an Agent. Not because I am one myself BUT because an agent can look out for your benefit by providing different quotes, types, riders that are available (explained later), AND pros/cons regarding each insurance company. If you don't like a particular insurance company, tell the agent and he should move on to the next carrier (if he persist for some odd reason, fire him). Buyers BEWARE: The Agent should get paid by the carrier that is chosen, not by you specifically. If an Agent asks for money upfront for anything, RUN! There are also Insurance consultants that you pay but to keep things simple, see an Agent. Consultants and Agents are also great in reviewing current policies in order to lower premiums or increase benefits.
4) Types of Policies:
There are 2 main categories: Term and Permanent Insurance. Within each of the 2 categories have sub-categories. I will explain them at a glance in order for you to make the best possible choice for you and your loved ones. Remember, you can have estate/trust or a organization as the beneficiary. (Note: There are even more sub-sub-categories within these sub-categories but the difference are so small and self explanatory that I have not included it in this article. Once you speak to an agent you will have enough knowledge by this article that you will know what questions to ask and know if you agent is right for you).
Term Insurance: A temporary policy in which the beneficiary is paid only upon death of the insured (you) within a specific time period (hence the word "Term"). Term Insurance is usually less expensive with a smaller death benefit. Some do not require medical exams BUT expect to pay a higher premium since the risk of the insurance company is unknown. Also, term insurance normally does not accumulate cash value (explained in permanent insurance) but can be purchased on top of your permanent policy (for those that may have coverage already):
Convertible Term: Ability to convert policy to permanent. There are some REALLY GOOD policies that require no medical exam, driver history, or hazardous avocations at a certain point in order to convert to permanent coverage guaranteed with all the benefits that permanent insurance policies has to offer.
Renewable Term: Able to renew a term policy without evidence of insurability.
Level Term: Fixed premiums over a certain time period than increases (great for those that are young adults and expect within 10 years to have a increase in pay).
Increasing/Decreasing Term: Coverage increases or decreases throughout the term while the premium remains the same.
Group Term: Usually used for employers or associations. This covers several people in order to reduce premiums. (Great for small business owners)
Permanent Insurance: Just as the name states, this provides coverage throughout the lifetime of the insured. This also builds cash value which is fantastic for tax purposes because if you loan out money to yourself using this cash value there are no tax implications. Few policies may have in general withdrawal tax-free. However in most cases, If you withdraw the cash value you pay the only the taxes on the premiums (the amount that grew) which is fantastic. Just make sure your agent knows not to have the cash value grow larger than the death benefit otherwise it is subject to 10% taxes! Surrender charges may also apply when you withdrawal so PLEASE consult with an agent who can assist you with these details. You should consider Permanent Insurance if you have a family and don't mind an increase in premiums (amount you pay) by a few dollars compared to term.
Traditional Whole Life: Pay a fixed amount of premium in order to be covered for the insured's entire life which includes accumulating cash value.
Single-Premium Whole Life Insurance: Whole life insurance for 1 lump sum premium (usually that 1 lump sum is very large in order to get a great death benefit).
Participating Whole Life Insurance: Just like Traditional Whole life except it pays you dividends which can be used as cash OR pay your dividends for you! There is no guarantee that you will be paid the dividends, this is based on performance within the insurance company.
Limited Payment Whole Life Insurance: Limited payments for whole life but requires a higher premium since you are in fact paying for a shorter amount of time. This can be based on payment amounts (10, 20, 30, etc payments) or a particular age (whole life is paid up at age 65, 75, 85, etc).
Universal Life Insurance: Flexible premiums with flexible face amounts (the death benefit) with a unbundled pricing factors. Ex: If you pay X amount, you are covered for X amount.
Indexed Universal Life: Flexible premium/benefit with the cash value is tied to the performance of a particular financial index. Most insurance companies crediting rate (% of growth) will not go below zero.
Variable Life Insurance: Death Benefit and cash value fluctuates according to the investment performance from a separate account of investment options. Usually insurance policies guarantee the benefit will not fall below a specified minimum.
Variable Universal Life Insurance (also called Flexible Premium Variable Life Insurance & Universal Life II/2): A combination of Variable and Universal which has premium/death benefit flexibility as well as investment flexibility.
Last Survivor Universal Life Insurance (also called Survivorship or "Second to die" Insurance): Covers 2 people and the death benefit is only paid when both insurers have died. This is FANTASTIC and somewhat a necessity for families that pay estate taxes (usually High-Net-worth individuals).
5) Life Insurance Riders, what is it and why is it very important:
Rider is the name of a benefit that is added to your policy. This provides special additions to the policy which can be blended and put together. There are SO MANY types of riders that I would have to write a different article regarding Riders (and insurance companies add new types of riders often) but I want to at least name the most popular (and in my opinion, the most important) that you should highly consider when choosing a policy. Riders add to the cost of the premium but don't take riders lightly; it can be a life saver!
Accidental Death Benefit Rider (AD&D): Additional death benefit will be paid to the beneficiary if you die from a result of an accident (ie: Car accidents, a fall down the stairs). This is especially important if the insurer travels often, relatively young, and has a family. Please note: You can buy AD&D Insurance separately.
Accidental Death & Dismemberment Rider: Same as above BUT if you lose 2 limbs or sight will pay the death benefit. Some policies may offer smaller amounts if losing 1 eye or 1 limb. This is great for those that work with their hands.
Disability Income Rider: You will receive a monthly income if you are totally and permanently disabled. You are guaranteed a specific level of income. Pay attention to this detail, depending on the policy it will either pay you depending on how long the disability lasts OR time frame of the rider.
Guaranteed Insurability Rider: Ability to purchase additional coverage in intervals based on age or policy years without having to check insurance eligibility.
Level Term Rider: Gives you a fixed amount of term insurance added to your permanent policy. This rider can add 3-5 times the death benefit or your policy. Not a bad deal!
Waiver of Premium Rider: If you become disabled which results to the inability to work/earn income, the waiver will exempt you from paying the premiums while your policy is still in force! There is a huge gap between policies and insurance companies so the devils in the details with this rider.
Family Income Benefit Rider: In case of death of the insurer, this rider will provide income for a specific time period for your family.
Accelerated Death Benefit Rider: An insurer that is diagnosed with a terminal illness will receive 25-40% of the death benefit of the base policy (The decision is made between the insurer and the insurance company). This will lower the death benefit however depending on your finances or living lifestyle, this rider should not be taken lightly and should seriously be considered.
Long-Term Care Rider: If the insurer's health compels to stay in a nursing home or receive care at home, this rider will provide monthly payments. Please Note: Long Term Care insurance can be bought separately for more benefit.
6) The Medical Exam:
This section is not to scary you away but to mentally (and possibly physically) prepare you for the medical exam so this way you know what to expect and can get the lowest possible premiums while receiving the highest possible death benefit. This really shouldn't be a concern if you work out regularly and maintain a healthy eating habit (notice I said habit and not diet. Diets don't work for long term).
The exam is mandatory for most insurance policies. Many term insurance do not require one but expect a low death benefit and/or higher premium. The idea of the exam is not just to see if you're insurable but to also see how much they will charge the insurer/policy owner. The exam is done by a "paramedical" professional that are independent contractors hired by the insurance company who either come to your home or has an office where you/the insurer visit. They are licensed health professionals so they know what to look for! In very few cases the insurance company may ask for an "Attending Physician Statement (APS)" from your doctor. This must be provided by your doctor and NOT copies by you. TIP: The "paramedical" job is to give the insurance company a reason to increase your premiums so don't give any details that are not asked.
First part (either called Part 1 or Part A) is complete by the Agent or by you. Part 2/B is the paramedical or physician portion. The best bet is to have your agent contact a paramedical that specializes in mobile exams for an easier exam for you. Paramedical will contact you to schedule an appointment. The exam is not optional so it's not a matter of yes or no but when and where. This entire exam will cost you nothing except time so make the time, life insurance is important!
The paramedical/physician will take your medical history (questions), physical measurements of height and weight, blood pressure, pulse, blood, and urine. Additional tests will vary based on age and policy amount (yes, the higher the death benefit = the more tests that must be provided). Now if the policy is substantial, the insurance company may not send a paramedical but require an actual Medical Doctor to exam you. Of course, this is chosen by the insurance company so remember my tip earlier! This exam may even include a treadmill test and additional crazy exams in order to see if you qualify for that substantial amount and low premium. On the flip side, if you choose a low insurance policy, you will just have a paramedical doing simple tests that mentioned earlier with no additional exams.
What they are looking for: Paramedical/Physicians are looking for health conditions that may shorten your life. Remember, insurance companies are here to make a business and if you're a liability then it might be a risk they do not want to take or raise the premium to make the risk tolerable. Blood and urine is taken to see the following:
- your antibodies or antigens to HIV
- Cholesterol and related lipids
- Antibodies to hepatitis
- Liver/kidney disorders
- Diabetes
- Immunity disorders
- Prostate specific antigen (PSA)
- Drug tests such as cocaine
The Results: They are sent directly to the insurance company's home office underwriters for review. Many times you can request (must be written request) to receive a copy of the results however many insurance companies will automatically do this. Many times they will find abnormalities but it's usually not a concern and just speak to your medical professional for a follow up (remember: the insurance company will look at these exams with a "fine tooth cone" in order to see what the risk are). The underwriters will look at the exam results and the application (remember part 1/a? well, now they want to see if your also lying) and determine the premium amount. Smokers pay more; any nicotine in your system will consider you a smoker, even if it is just socially.
The premium is determined by a category that you fit in. This really depends on the insurance company on how they factor but the general rule is if you are a higher risk, you pay higher premium. If you are standard risk, you will pay a standard premium, and if you are a preferred risk, you will pay a low premium.
You can decline the policy after you receive the final quote after the exam but do remember this: All results will become part of the MIB group's database (Medical information Bureau). This is a clearinghouse of medical information that insurance companies use to store information after you apply for Life/Health/Disability Income/Long Term care/Critical Illness insurance. So for seven years it will be on database. You can receive a free report annually (like a credit check) at their website which I included at the bottom of this article.
Now that you know practically everything there is to know about life insurance. I hope you realize how important it is. It may seem like a lot but the hardest part is simply choosing what type of policy is right for you. This can be done with the help of your Agent. In the end, everyone is different and everyone should analyze their own situation and need for the beneficiaries. If you have even the slightest concern for a loved one regarding what will happen if you was no longer with us then you should consider life insurance. There truly is a feeling a relief once you know you and your loved ones are covered regardless of how much you or that person makes. For many that feel that their loved ones don't need the death benefit due to whatever the case may be ("they earn enough money to survive" is the biggest reason I hear against life insurance), this can be a simple last gesture of "I love you" or appreciation for them being part of your life.
I hope I was able to educate you in Life Insurance and if you have any additional questions please feel free to email me.
MIB website: rel=nofollow http://www.mib.com/html/request_your_record.html
Financial Consultant, Risk Manager, Insurance Agent, and Retirement Planner here to give honest opinions on the current financial trends. (*Please note: This is not a solicitation and opinions on this blog are independent and not connected to blogger.com. Please consult with your financial representative prior to applying any recommendations on this blog or twitter. If you have ANY questions, please feel free to contact me. I will be more than happy to chat with you!). http://www.MichaelAponte.Biz
Article Source: [http://EzineArticles.com
Wednesday, July 14, 2010
Student Auto Insurance Can Be Lowered
By Eddie M. Abel
We all want to save money wherever possible. When you are a student it is even more necessary not to waste money. It would be great if students were given a reduced rate on their insurance. This would certainly help to cut back on monthly living expenses. Every bit helps if you are a student who also holds down a job. The sad reality is the insurance industry does not make allowances for students. In fact, student auto insurance is regarded as expensive when compared to other groups.
As a group, students are seen as high risk. The insurance industry regards students as drivers who are still inexperienced. However, there is another reason why insurers regard students as high risk. They have statistics gathered over the years that prove the majority of students are involved in more accidents and this means they claim more than other groups. The statistics show the main reason for the higher rate of accidents is due to speeding.
Even if you are a student who is careful and does not speed there is no way the insurer can know for certain you are not high risk due to you not having an established driving history. However, the industry will give you special treatment if you show you are a student who consistently gets good grades. They believe if you are a diligent worker it is a sign you will be a careful driver. If you can show this by your grades you will be offered cheaper student auto insurance.
The only other alternative to getting your student auto insurance at a better rate is to ask your parents to include it with their insurance. If they have their auto insurance and household insurance with one provider there is a very good chance the cost of student insurance can be lowered.
Eddie Abel is a researcher, blogger, and a [http://bestcheapautoinsurance.com/parents-insurance-can-help-your-student-auto-insurance/]student auto insurance specialist. Click this link to get your FREE quote or find more practical cost-cutting insurance tips and advice at his site: [http://bestcheapautoinsurance.com/]Cheap Car Insurance.
Article Source: [http://EzineArticles.com
Womens Car Insurance For the Group and Individual
By Eddie M. Abel
It cannot be disputed that women deserve better insurance rates. Most men see this as being inaccurate because they believe they are the best drivers. However, they don't realize it's not about the best driving skills. The reason women get better insurance deals is because they are careful drivers. Insurance companies are not impressed by what the majority of men regard as best i.e. handling a vehicle while speeding.
Insurance companies are impressed by women because we are so cautious we don't speed. Even if great numbers of men have the ability to handle a vehicle while speeding there are enough who can't and don't. This attitude is not dreamt up by the insurance industry. There are facts and figures to prove men speed. The speeding often results in accidents and other mishaps. Women drivers are less likely to speed and therefore they don't claim as often as men do. This is the reason why womens car insurance is more cost effective than men's.
It should be noted that not all women are let off the hook. As a group, women are favored by insurance companies that sell womens car insurance. However, individual female drivers who have a record that shows they have been involved in accidents due to speeding will be penalized. Even though the insurance companies want women drivers as their clients they do recognize there are exceptions to every rule and there are individual women drivers who are as risky as men.
If you want to be one of those women who benefit from cheaper womens car insurance premiums then make sure you maintain a good driving record. It is your consistently good history of driving, few claims and meeting your monthly premiums on time that will win you the best insurance for a woman driver.
Eddie Abel is a researcher, blogger, and a [http://bestcheapautoinsurance.com/womens-car-insurance-is-different/]women's car insurance specialist. Click this link to get your FREE quote or find more practical cost-cutting insurance tips and advice at his site: [http://bestcheapautoinsurance.com/]Cheap Car Insurance.
Article Source: [http://EzineArticles.com
Inexpensive Auto Insurance Must Come From Reputable Providers
By Eddie M. Abel
It could take a long time if you want to find inexpensive auto insurance. That is why many consumers simply don't even try. They take the first insurance premium that comes their way. This is because they don't realize how important it is to find the most cost effective auto insurance possible. The cost of insurance becomes very important when you add up every premium over the years and see it amounts to thousands and thousands of dollars over an entire driving career.
Don't be put off because you believe it will take up too much time. There is an easy way out and it's right online. Find a website that is dedicated to auto insurance providers. Reputable sites offer a free online quote service to consumers. All you have to do is provide your area / zip code. The site is set up to provide you with quotes from a variety of insurance providers located in your area.
Within minutes you are provided with a list of quotes. Take a look at the inexpensive auto insurance quotes. Your next step is to check the rating of each of those providers. A rating is what proves the stability of the company. For example, if you choose a provider that is above a C rating you will be dealing with an established company that is financially stable. Insurance companies are rated from A to DDD. It is companies rated D and lower that do not always honor their claims commitments.
If you want to find a policy that is suited to your needs for the least possible monthly premium it is necessary for you to do the mentioned checks. You want inexpensive auto insurance but you want it form a provider that has the finances to pay you out when required.
Eddie Abel is a researcher, blogger, and an [http://bestcheapautoinsurance.com/be-confident-and-get-inexpensive-auto-insurance/]inexpensive auto insurance specialist. Click this link to get your FREE quote or find more practical cost-cutting insurance tips and advice at his site: [http://bestcheapautoinsurance.com/]Cheap Car Insurance
Article Source: [http://EzineArticles.com
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