Before buying term life insurance or any other type of insurance policy, it’s important to be aware of the company’s financial strength. By understanding your insurance carrier’s financial state, you can determine if the company will have the financial ability to pay-out when you or a beneficiary files a claim.
For a free term life insurance quote from a top-rated life insurance company, call a licensed life insurance agent at a multi-carrier brokerage firm who can compare rates with the best life insurance companies. In a matter of minutes you can get quotes from dozens of companies you know and trust.
Comparing all kinds of insurance, including term life insurance, can now be done quickly and efficiently with the help of the internet. Websites such as AccuQuote, ComparisonMarket, and eHeathinsurance can assist you in every aspect of your insurance needs. Simply log on and receive multiple quotes from various reputable insurers. Most rate comparison services are free and require some basic information in order to obtain these rate comparisons. And, most importantly, there is no obligation to buy.
Remember, price is important, but it’s also important to consider other factors, such as the financial stability of a carrier. If saving time and money is important, you should definitely take advantage of the convenience of comparing policies online.
Wills and trusts help us to protect ourselves. These documents indicate who will make important decisions for us in the future. For this reason, understanding how wills and trusts work is extremely important. When do you need a will? When do you need a trust? What is the difference between the two? Suze Orman explains the ins and outs of this very important topic on her website and how a life insurance policy fits within these documents.
A lot of people often ask the question, “what is insurable interest and why it’s a must have when buying a life insurance policy?”
For purposes of life insurance policies, everyone is considered to have an insurable interest in their own lives as well as the lives of their spouses and dependents. For life insurance, the insurable interest only needs to exist at the time the policy is purchased.
Business partners may have an insurable interest in each other, and a corporation may have an insurable interest in its employees’ lives, particularly key employees.
However, the insurable interest only needs to exist at the time the policy is purchased. This means that people can sell their life insurance policy to anyone they wish in a “life settlement” transaction.
A life settlement is the sale, assignment, transfer, or bequest of the death benefit or ownership of a life insurance policy by the owner of the policy. Typically, the owner of the policy receives cash (generally an amount greater than the cash surrender value in the policy, but less than the full amount of the death benefit); and the life settlement company becomes the new owner and beneficiary of the policy and is responsible for the payment of all future premiums. Upon the death of the insured, the death benefit is paid to the life settlement company.
While term life insurance is an appropriate type of insurance for most people, other types of life insurance policies, including permanent policies may be a better choice in certain situations.
There are three types of permanent life insurance: whole life insurance, universal life insurance and variable universal life insurance. Each of these provides protection for your entire lifetime, or in certain instances up to a specific age.
Unlike term life insurance, permanent life insurance policies can build cash values-money that you can borrow against and in some instances, withdraw to help meet future goals. In general, you pay no taxes on any earnings in the policy so long as the policy remains in force. Withdrawals or loans against the cash value are, in many cases, tax-free.
So, when is buying permanent life insurance appropriate?
If you have a long-term need for life insurance.
If you are interested in accumulating policy cash value to provide funds for education, retirement or other future goals.
If you want to take advantage of the tax-favored treatment of cash value life insurance policies.
However, before you make your decision, you should consider the following:
Permanent life insurance is about 3 times more expensive than term life insurance.
Loans, including any unpaid loan interest, and cash-value withdrawals generally reduce the death benefit, which could leave beneficiaries inadequately protected.
If you cancel or surrender the policy, or it lapses, you may have taxable income to the extent that the total of cash value and/or distributions or withdrawals exceed your basis in the policy.
Finally, keep in mind that the best policy to purchase is one that will be in force when you die. If you cannot or do not think you can afford the premiums for a permanent life insurance policy then DO NOT buy it. You’ll lapse the policy and lose money and more importantly you’ll lose the life insurance coverage for your family.
It’s that time again. In fact, I sent my son off to college just last week. It’s an emotional and hectic time. Not only should you remember to pack just about everything, you should also consider your changing insurance needs. The National Association of Insurance Commissioners (NAIC) offers these tips to help you review and update your insurance policies to cover your college student.
Health Insurance – Most health insurance policies cover dependents who are full-time students until the age of 23. Generally, a student must be enrolled in at least 12 credit hours per semester (six or nine credit hours in the summer) to be considered a full-time student. Individual policies differ, so check with your health insurer or benefits administrator about how the policy defines a full-time student and the maximum age of coverage.
Know Your Policy – Before leaving home, make sure your student has a copy of the relevant insurance cards and knows about obtaining referrals and approvals (if necessary) before seeking treatment. If you are insured by a health maintenance organization (HMO), check to see if your student will be outside the HMO service area while away at school. If this occurs, the student likely will have coverage for emergency care, but might have to travel to a physician or hospital within the HMO service area for routine care. If your insurer is part of a preferred provider organization (PPO), your insurer may pay benefits at out-of-network levels if you are outside your network. Check your plan provisions or speak with your insurer to find out what level of benefits are provided by your policy.
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