Purchasing term life insurance online may seem risky when you know nothing about the company.

When shopping online for affordable term life insurance, don’t fall into the trap of a “come on” term life insurance rate. The Internet is a great way to get a free life insurance quotes, but sometimes only basic questions are asked: age, sex, height, weight, yes/no smoking. You may be initially quoted a cheap life insurance rate, but often times you may not be able to qualify for it.

Also, when shopping online, keep in mind that if you want the best rate, you need to take a medical exam.  There are policies that don’t require a medical exam, but the amount of term life insurance coverage is usually limited and is the cost is much higher.

Before beginning your search, determine how much life insurance you need by using a life insurance calculator. This will help you in getting an accurate life insurance quote based on your needs. Good luck!

January 29, 2009

Mortgage life insurance

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If you’ve recently bought a new home or refinanced your existing mortgage, brace yourself for the onslaught. Before you even finish unpacking, your mailbox will be filled with offers for mortgage life insurance.  Byron Udell, a life insurance and annuity industry expert, is here today to explain the difference between mortgage life insurance and a term life insurance policy.

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Length: 4:36

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There are several things to consider when you’re purchasing term life insurance. First, don’t wait till you need the coverage. Buy it when you are young and healthy.  As you get older, term life insurance rates increase.

When shopping for coverage, keep in mind that the highest financial rating doesn’t necessarily mean the best price. When shopping online, the important thing is to at least be looking at an “A” rated company.

If you are considering buying $450,000 of coverage, buy $500,000 instead. Life insurance companies often give breakpoints at $100,000, $250,000, $500,000, $750,000 and $1,000,000.

Once you’ve made your decision on which policy to buy, be sure to pay annually if you can afford it. Paying annually can save you up to 20% with some companies versus monthly, quarterly or semi-annually.

There are several types of term life insurance. The most common and the best type is a level term life policy. This type allows you to lock in cheap term life insurance for a number of years without a premium increase. That means for a specific time period your premium rate stays the same.

A less popular policy is “annual renewable term.” This gives you coverage for one year with the option of renewing it each year. The downfall to this policy is that your rates will go up every year you renew.

The final and most recent type of term life insurance to come to market is return of premium term life or ROP. Under this type of policy, if no death benefit has been paid by the end of your insurance term, you receive all your premiums back. This policy is a bit more expensive than regular term life insurance, but it gives you more than a swift kick if you don’t die.

If you have trouble finding life insurance because of illness or a troubled medical history, you can turn to guaranteed issue life insurance coverage, sometimes called “quick issue” or “simplified issue” insurance. Guaranteed issue policies require no medical exam, but you pay a higher premium in exchange for the guaranteed coverage. That’s because the insurance company takes on more risk in insuring people without knowing their medical condition. Guaranteed issue policies can require waiting periods before coverage kicks in. They might be the only option for some people. A life insurance broker can search the marketplace for a guaranteed issue policy that meets your needs.

Term life insurance is often pure insurance protection. This means that it does not have a cash value feature.  It covers you for a specific period of time – usually 10, 15, 20 or 30 years. If you don’t die within the term there is no pay-out of the policy.

Unlike credit card life insurance or mortgage life insurance, term life insurance covers all kinds of debts.  If you have children, term insurance can protect your family’s finances, providing money for college and living expenses if you die before your children are fully grown.

In most cases, an exam may be required. This exam will be paid for by the life insurance company and will be done at your home or office at a time that is convenient for you. The results of your exam, which typically includes a blood test, can greatly impact the price of your life insurance.

Here’s an article from the Detroit News Press from January 16, 2009. It really sickens me when I read these types of stories. It also reminds me to take a moment to remind people of the importance of insurable interest. Remember, only people who depend on you for financial reasons should be made beneficiaries. This decision is NOT to be taken lightly. This is why I’m so against life settlements. Anyway…here is the story:

A 26-year-old Detroit man living in New Orleans is accused of killing his friend after making himself the beneficiary of two $250,000 life insurance policies.

After a nearly two-year investigation, police arrested David Stann on Tuesday in New Orleans in the shooting death of 19-year-old Gary Jones of Detroit.

Stann is charged with first-degree murder and other felonies in connection with Jones” death on March 25, 2007. He is expected to be returned to Detroit and arraigned early next week.

Detroit Deputy Police Chief Marshall Lyons said Stann, who knew Jones for seven years, convinced him they could make money if he took out the life insurance policies and made Stann the beneficiary. About 14 months later, police said, Stann shot and killed Jones and collected on one of the policies.

Once you have purchased term life, don’t just file it away. It’s important to review your policy on a regular basis.  When life changes – such as a birth, divorce, remarriage or even a new mortgage or job – you should review your policy.

Make sure the death benefit covers your current needs. In the case of the birth of a child or a new marriage, you might want to increase it. On the other hand, if the mortgage is paid and your children have completed college, you may want to lower it. Or, if you health has changed you might want to exercise you conversion privileges.

Keep in mind that life insurance rates have come down dramatically.  It might make sense to replace your old policy and purchase a new one. For example, 10 years ago a healthy 30-year-old guy bought a 20-year level term policy with a $500,000 death benefit with an annual premium of $455 a year. Now, the same guy, age 40 is still in good health could take out a new 10-year, $500,000 level term policy and pay just $295 a year. That’s a 35 percent saving!

January 22, 2009

Types of Insurance to avoid

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Have you ever gotten a phone call from the credit card company offering inexpensive insurance that will pay off your balance in the event that you die? The sales person will try to make it sound like the deal of the century. Just 39 cents or less per $1000 you owe each month and you can wife the slate clean for your family. Byron Udell, founder and CEO of AccuQuote, is here to tell you why you shouldn’t fall for the bait and what you can do to protect your family in the event of an untimely death.

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Length: 3:53

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Finding a life insurance agent that you trust can be a daunting task. But, if you do your homework, you can find a reliable agent.

Start by asking friends and family members to make some recommendations. After getting some recommendations, contact the agents and ask about their certifications. Look for someone that has a Chartered Life Underwriter (CLU) or Chartered Financial Consultant (ChFC) designation.

Be sure the agent you choose can provide multiple life insurance quotes from multiple companies. Often times, agents only represent a few companies and these products are not the lowest priced.  Check with a multi-carrier brokerage, like AccuQuote, to compare thousands of life insurance rates in a matter of minutes.

Above all, you want to find an agent or advisor who listens well, understands your goals and makes meaningful recommendations. A good agent will take the time to understand your objectives and financial goals and then work with you to find the right life insurance policies available for your specific situation.

Finding affordable life insurance is easy you’re armed with the knowledge of ways you can save.

Keep the following in mind when you’re shopping for affordable life insurance:

• Life insurance rates are substantially cheaper when you are younger. Be sure to buy as much protection when you’re young and healthy. You’ll most likely qualify for the best available rate.
• Most companies increase the price of their policies six months before someone’s birthday. That’s a lot of money if you have a 20-year policy.
• Companies offer “price breaks”. Be sure to compare prices at certain face amounts. You may actually pay the same amount or sometimes less money for more coverage.
• Be sure to shop around if you participate in high-risk activities, such as hang-gliding, skydiving, mountain climbing, scuba diving, and racing. Every company looks at risk factors differently and some are more liberal in certain areas than others.

Purchasing a life insurance policy through your employer is convenient, but it may not be the best deal. Group rates are often based on a composite profile of all employees. Those that are less healthy than you and older than you drive up rates. Purchasing life insurance coverage through your employer usually doesn’t make sense unless you have certain medical conditions that make buying an individual term policy too expensive.