Purchasing Insurance Online

As described in a previous post, it is possible, and becoming more popular it seems, to purchase life insurance over the Internet. The Internet is a world of its own, a separate part of reality, so it’s important to know what information you’re giving out and who is receiving it. Tons of websites offer free instant quotes on rates based on your age and health status, but only the more trustworthy sites will refuse to let you purchase their policies online unless you speak with an agent who is qualified to deal with these policies.

Sites also exist that allow you to get multiple quotes at once from a number of different insurance companies. This allows you to instantly compare rates and the benefits and drawbacks of each company’s policies available. It makes searching for the right plan and company much quicker and less painful.

Insurance Offered by Your Employer

The company you work for may have one or more insurance policy that is available to you. You may or may not qualify for certain coverage offered by the company, so it is important to consider the options of each plan before you make a final decision. Your employer may offer you a specific amount of coverage for free but might also offer another policy you would pay for. For coverage in addition to what’s offered to you at no cost, you may need to go through a short process similar to that of a policy you’d purchase elsewhere–answering questions about your health status. Just remember, though, if you have additional coverage (i.e., group coverage) you may not be permitted to keep it once you leave your job.

Buying Insurance Through the Mail or Over the Phone

Another way to directly purchase a life insurance policy in addition to buying one online is purchasing one through the mail or by phone. Of course, purchasing a policy through the mail is going to take significantly longer to process than buying one over the Internet. Some companies only offer their services over the telephone or through the mail, so don’t automatically rule out these options. Just because they are behind in the latest technology doesn’t mean that their products are no good. Though it may take longer to research them, who knows? Maybe the policy you’re looking for will be cheaper from them than most that you find online. You’ll most likely be able to find a term life insurance policy through the mail or telephone offer than a whole life insurance policy; so if you’re searching for a term life policy, take these ads into consideration as well.

Purchasing a Policy From a Financial Adviser

Most people still continue to purchase life insurance policies through insurance agents or other financial advisers. It is important to have a qualified agent, because someone who is qualified is much more likely to provide you with necessary information and suggest important questions to ask companies you’re looking to purchase from. It’s also a good idea to be sure that your agent or financial advisor is someone who listens to you, as well. You don’t want someone who just throws information at you and doesn’t take the time to consider your personal needs, so check out the different agencies around you to determine who you are most compatible with.

Compatibility and comfort are two of the most important feelings you should experience when dealing with insurance companies, their websites, and agencies that help you choose a policy that’s right for you. Do not underestimate the power of assistance. You don’t have to do it alone.

Why Choose the Internet?

Rather than going to each company and speaking with a representative, researching life insurance policies online allows you to have access to more than one policy and company at once. This is handy because you can have all the information at your fingertips rather than relying on your memory when traveling from company to company.

Getting quotes is much quicker when done online rather than through the mail. In addition to speed, once you decide which policy fits you best, the Internet allows you to see quotes side-by-side from competing companies. This allows you to choose your company based on the rates displayed from all those you’ve researched.

How to Find a Reliable Life Insurance Company

It is natural to be hesitant about providing your personal information online. So when delving into the realm of life insurance on the Web, you should be sure of a few things before you go filling in the blanks. Before you research available rates, it is important to research the companies you plan to get the rate estimates from. Perhaps you have heard of them through television or newspaper ads. Rather than relying on these ads, you should take advantage of the Internet not only to see their websites, but also to consult other trustworthy websites for the history of these companies as well as customer feedback. To secure your conclusion that these companies are authentic, be sure to determine that the state and Better Business Bureau have deemed them as such.

What to Compare

After deciding on a life insurance policy that works for you, maybe a term life policy or whole policy, you’ll need to find the most suitable company for your needs. In order to do so, there are certain characteristics that you should compare among prospective companies.

Some characteristics are important to keep in mind when comparing any two or more companies. If you’ve decided to choose a term life policy, how many years are you looking for coverage? Your available coverage could last for one to 30 years, with the average purchased by customers today at 20 years. Once you determine your term and you’ve narrowed your search down to a few reliable insurance companies, it is then time to compare the rates each company will charge in order for you to save money while getting the best deal available.

If you’re leaning towards purchasing a whole life insurance plan, your options are quite similar. However, there is no set term and prices of rates and premiums are generally higher. Though the rates and premiums are higher, comparing prices between companies is still a must. If your health status falls, which company’s premium will be best for you financially?

Make sure you read the fine print. What’s the payout rate to your beneficiary? What are the costs of benefits versus restrictions of the insurance policy you feel is best for you? Take advantage of previous posts listed here to get a general idea of the type of policy that’s right for you.

Who Can Get It?

It is great for the elderly who may be denied other types of life insurance due to their age. People who take advantage of this sort of policy typically do so to support upcoming funeral expenses once they pass away.

It is also wise for people with medical issues who face the same issue as the elderly–lack of coverage by any other insurance policy. If you’ve had traumatizing experiences with doctors in the past, life insurance that requires no exam allows you to avoid experiencing that once again. It’s great if you’re terrified of needles, as well.

Face Value Payout

A term life insurance policy that requires no exam still requires the applicant to answer some medical questions. It should be used strictly for insurance purposes. It would not be a wise idea to use this sort of policy as a retirement plan or an investment. A positive aspect of this type of policy is that the term can last between one and 30 years–it’s your choice! If you, as the policyholder, pass away within your chosen time period of the policy, your beneficiary will receive the face value of your specified policy. The face value of a policy is approximately multiplied 20 times the average price the recipient typically needs. In other words, if your beneficiary makes around $32,000 annually, the policy suggested would be a payout of about $640,000.

The recipient of your policy’s payout will be able to invest the money left after funeral expenses and other bills in order to build interest and continue to live comfortably without having to remove anything from the principle amount. The term life insurance policy is most often inexpensive because the policyholder usually passes away within the chosen term length, which is why the policyholder chooses the term he or she selects.

As always, be sure to consult your financial adviser or at least do your homework by researching the different policies available that best suit your situation before purchasing the first insurance policy you come across.

Who Should Buy Joint Term Life Insurance?

A joint term life insurance policy is the best support option for a number of people. These days, it seems as though both parents are employed in more and more families just to insure that the everyday bills are paid. More specifically, parents with young children will find this sort of policy most convenient because if one of the two were to pass away, the other parent would not have to stress over the need for money in order to pay for things such as childcare and tuition. It is very hard for a single parent to make it on his or her own in today’s society, so taking advantage of the joint term life insurance policy would be a very financially savvy move.

Couples would be wise to scoop up this type of policy when purchasing new homes, as well. In the event of a death, the other person would be able to contribute more money towards the mortgage. This may prevent the chance of the widow or widower facing foreclosure. It is a safety blanket for your house, in a way.

Those retired or approaching retirement should consider this type of policy, also. People who are retiring or have retired have the option of choosing a single-life plan or a last-to-die annuity for their significant others.

Making the Decision

The most common lengths for the joint term life insurance policy are 10 and 20 years. If you have younger children, it may be a wise decision to choose the 10-year policy. On the other hand, if you have older children, have been paying on your mortgage without this policy for some time, or have retired or will retire soon, a term of 20 years is usually recommended.

It is important to pick the term that works best for you and your significant other, so be sure to do your research and discuss your options with a few companies.

Why Should You Purchase a Life Insurance Policy?

Are you struggling to provide for your boisterous little babies? You’re managing two, maybe even three hectic jobs just to pay the bills. What do you do on your day off, if you’re lucky enough to get one? Maybe you take time to wash the laundry that has piled up over the past week and a half. With teens who change their outfits twice or possibly three times a day, the amount of dirty laundry seems never-ending. Then there’s the groceries. When do you have time to actually take time stop at the store in order to pick up dinner for the family for the rest of the week?

You would do anything for your children. One of the best things you can do for them is to purchase a life insurance policy that assures a supportive cushion will be there to care for your children if you pass away unexpectedly or suffer a terminal illness.

What Type of Policy Should You Invest In?

It’s been recommended by Gayle Buff, president of Buff Capital Management, that single parents should invest in a term life insurance policy. Why? Term life insurance policies have much lower premium rates than cash value policies, which of course makes them more affordable for people in tight spots. The coverage you as a single parent would receive is more reasonable than that of a cash value policy, because you most likely would not need as much coverage as is offered by cash value life insurance policies.

Being a single parent, the lone supporter of your family, you should calculate how much coverage would be necessary for your loved ones if you were to pass away. For this reason, it is very important that you know your family’s health history. If you should suffer from a terminal illness, you would want your loved ones who depend on you to be secured, right? Also, take into consideration your financial situation. How much are you bringing in each month, each year? Choosing a term life policy that is affordable based on your income is the best move you can make in order to protect those you love.

Cash Value Policies

These policies consist of at least three different subtypes: universal life, variable life, and whole life. They are described further in the previous post. Cash policies are term life policies that also include savings plans. These policies are put together in such a way that they last the entirety of the customer’s life. Part of the premium that you pay is put toward the payments for the life insurance portion of the specific policy. Once you retire, then, the savings portion of the policy is used to continue payments on your life insurance.

You’ve then got money saved up in your plan. Now that you know you’ve got the money for it, you suddenly feel the drive to purchase a new car. Taking money from your plan for this purchase could end very badly. The money in this plan is specifically for your life insurance policy, so if you choose to take the money for your new car from your policy, it may end with the tax-shelter feature of your policy being taken away. If you have a car that still gets you from point A to point B with few to no problems, it would not be wise to risk damaging the status of your insurance policy just to have the hottest new trend idling in your driveway.

However, some of the cash value policies provide the customer with the opportunity to pay low interest rates if borrowing money is absolutely necessary. The downfall to this is that you as the customer are then paying the company to use money that was yours in the first place.

Term Life Policies

You as the customer have the right to determine just how permanent you want your particular term life policy to be. It may last a number of years; and if you are satisfied with the service, you may renew the policy when its term comes to a close. If you are unsatisfied, you have no need to be concerned with it any longer because its renewal is not mandatory.

This policy does not include a savings plan, though. In a way, that is a good thing because then you are not tempted to touch the money put aside that was originally intended for the payment of your insurance policy upon retirement.

Term life policies, unless otherwise noted, are not forced to release payment to those you have chosen to receive it if your death is questionable within the policy’s specified time frame. This time frame is usually the first two years of the term life insurance policy. Be sure to thoroughly take note of all the details listed in your policy’s contract so you are well aware of the terms and conditions of that policy.

Once you pass away, the loved ones whom you designated able to take advantage of your policy may do so if you have not violated any terms or conditions. They can receive this payout one of two ways: (1) they could receive payments at an income-like rate or (2) these people may receive a “lump sum,” once-and-done sort of payment.

Be sure to always do your homework before purchasing a life insurance policy, researching different companies and the premium rates they charge.

Fixed and Variable Annuities

Fixed annuities provide minimum guaranteed interest rates throughout their terms. These types of investments are usually in things like securities and bonds. They’re based on a declared interest rate, but these rates are not always the same. Variable annuities don’t always guarantee minimum rates. They can also be invested mostly in common stock, which also provides the investor with the opportunity to vote on corporate matters for that stock. Sometimes, you’ll be asked to pay a specific fee for this service, but it certainly won’t be a wasteful way to spend.

Immediate and Deferred Annuities

Immediate Annuities bypass the typical accumulation phase and convert the process into a lump sum of guaranteed payments. The best part? Definitely the fact that the tax exemption period is during payout of the immediate annuity. On the other hand, deferred annuity plans aren’t taxed until after the accumulation period. During the accumulation period, you’ll be investing your money to secure yourself financially post-workforce.

Unregistered and Registered Annuities

Unfortunately, unregistered annuities don’t cut tax-payers utilizing this type of annuity any breaks. BUT they are similar to savings plans and have no serious charges when surrendered. Registered annuities are specifically registered with tax authorities and are the most recognized type of annuity available.

Some Pros and Cons of Annuities

The Pros

The great thing about many annuity plans is that they are tax-free for a certain amount of time. You don’t have to pay taxes on them right away, which allows you to invest more money when you can.
Once your annuity reaches a certain point in its development, often when you might retire, you have a guaranteed lifetime income. This is a major help to keep you living comfortably once you’ve reached the point in your life during which you no longer have to go to that pesky job each day.

The Cons

It is possible that you may, for one reason or another, struggle financially at some point before retirement. Unfortunately, the majority of annuity plans do not allow you to remove any portion of the money you’ve invested over time.
Another negative concept is that once you retire, there’s a possibility that you might have to pay taxes on the annuities you’ve invested in. Though you’re getting your invested money back over time, you’re also paying to use that money.

An Interesting Note

Men’s annuity rates tend to be higher than women’s generally. Why? Women are typically expected to live a few years longer than men.

In utilizing annuities, you can be assured that you will have money available in addition to whatever retirement plan your company may offer you.

When a loved one dies - there’s not a standard process for submitting life insurance claims to the insurance company and then receiving the death benefit. In fact, no two life insurance claims are ever the same. It’s an unfortunate reality that the majority of life insurance companies are looking for reasons to deny death benefit claims.  Yes, there are times when certain claims should be denied due to fraud, but more often than not, death benefit claims are denied for the wrong reasons.

Examples of initial death claim that were denied:

• A woman was denied because the she paid her premiums from her life savings. The insurance company claimed that she didn’t have enough earned income for them to issue a policy and therefore were not liable to pay the benefit.
• A man was initially denied because there was no named beneficiary… despite the fact that he lived with his disabled mother and had no wife or children and the intent was obvious.
• And another one where the autopsy report was misread by the claim underwriter who accused the insured of being a drug abuser.  Later, statements from the man’s doctor disputed this accusation and the claim was paid.

These are just some examples of why you need to prepare your life insurance death benefit claim before you submit. It’s important that you know what you need and what to expect from the insurance company.

Make sure you:

1. Read through the policy to determine and restrictions or stipulations for receiving the death benefit.
2. Check the date of the application. Is it the same as the policy issue date? Benefits don’t actually start until the date the policy was issued.
3. Know that if the insured person dies within two years of the policy date - the insurance company will almost certainly challenge the claim.
4. Review the death certificate for the cause of death. If you’re submitting a claim under an accidental death policy, the cause of death will be extremely important in collecting your claim.

Know that the insurance company will do several things when they receive a life insurance claim. First, they’ll ask the beneficiary to meet with a claims underwriter for an interview.  You’ll be asked about the insured’s personal life, their medical history, work history, and the cause of death… They’re looking to uncover anything that might have been hidden from the insurance company. In this case - it’s important that you bring someone along to support you, but also as a witness to the questions and answers. Then they’ll perform an investigation. They’ll look at autopsy reports, toxicology reports, old doctor visits, tax returns, social security records, and financial aide applications. It can be a lengthy process so stay in tune and record any conversations and meetings that take place.

If your claim is denied you must be notified - in writing - as to the reason why. From this information, and from the information you’ve collected  throughout the process, you can make an appeal. It’s best to have good representation if this happens… someone who knows the laws pertaining to insurance benefits so that you can complete the process quickly and correctly and collect the death benefit that your loved one intended you to have.

Credit Line Insurance - This type of life insurance will help pay credit card bills if something were to happen to you. However, keep in mind that the benefits from a term life insurance policy can also be used to make sure those creditors are paid as well as other bills.

Mortgage Life Insurance - With many people buzzing about mortgages, whether they’ve paid too much, or it’s the perfect time to buy with low rates, it’s not no wonder this type of insurance seems appealing. But don’t forget that a term life insurance plan can often do the same thing and usually with lower rates then what mortgage companies are offering.

Air Travel Life Insurance -  Aviatophobia: the fear of flying. What about the fear of overpaying? Even if you fly quite frequently, you still have a greater chance of dying in a Walmart parking lot than in an airplane. A term life policy will cover you whether you die in a plane or a parking lot.

The key lesson here is to do yourself a favor and avoid specialty policies. Often times, coverage is limited and rates are expensive. Term life insurance rates are inexpensive and your loved ones won’t be restricted on how to use the benefit. Making your life insurance policy as simple as possible will bring you peace of mind that your final wishes will be carried out the way you’ve planned.

Whole Life Insurance

Whole life, also referred to as “straight life insurance,” provides a set dollar amount of coverage, and a fixed premium that can never be canceled or exchanged for other premiums. Because these payments stay the same throughout your life, the premiums are higher compared to your ’statistical risk of death’ in the early years of the policy. This is why the reserves are built up. Assuming you live a long time after the policy was issued, your payments become lower based on your risk of death. Simply Put: During the first few years of a whole life policy, insurance companies take in substantially more money than they pay out!

Some of this surplus goes to the agent’s commission and some of it becomes your cash reserve, which the company puts in fixed-income investments. Then after several years, you’ll be able to borrow against the reserve, or cancel the policy and receive it’s cash surrender value.

Hint: This option is generally undesirable for younger people with small children who can’t afford the high premiums during the early years of the policy.

Universal Life Insurance

Universal Life combines some of the desirable features of both term and whole life insurance and offers some additional perks. For example, over time, the net cost of a Universal policy is lower than whole life insurance. You can also build up a cash reserve, as with whole life, and vary the premiums payments, coverage amount or both, from year to year. In contrast, whole life requires one set payment amount, which cannot be varied.

Another advantage to a Universal policy is that it normally provides you with more consumer information. Get details such as the amount of premiums going toward company overhead expenses, reserves and policy proceed payments. You can also find out how much is retained for your savings.

Variable Life Insurance

A Variable policy is where the cash reserves are invested in securities, stocks and bonds. In this case, policies combine insurance features with mutual funds. Therefore, your investment return is tied to the financial markets’ performance. In today’s economic times, this may seem like an absurd option, but talk to a qualified agent to learn more. You may be surprised at what this option can do for you!

Variable Universal Life

In this option, your policy is similar to that of a Whole Life policy, but combines the premium payment and coverage flexibility of Universal coverage with the investment opportunity (and risk) of Variable life insurance.

Single-Premium Life Insurance

A Single-Premium policy is just like it sounds. You pay, up-front, all the premiums due for the full duration of the policy. Typically, any policy with a savings feature can be purchased with a single premium. As you can imagine, this obviously requires a huge lump sum of cash — usually $5,000, $10,000 or much more depending on your age and the dollar amount of the policy.

You’re probably wondering: Who does something like this? Well, one reason to commit to such a policy is that it enables you to give the fully-paid-for policy to new owners, which can result in major estate tax savings.

Survivorship Life Insurance

This is also called “second to die,” or “joint” insurance, the latter sounding a little nicer… don’t ya think? It’s relatively new in to the insurance word. It provides a single policy that insures two lives, usually spouses. When the first spouse dies, no proceeds are paid. Instead the policy pays off only upon the death of the second spouse. Why does this work?
Estate Planning: Those wealthier couples who expect substantial estate taxes will be assessed on the death of the second spouse may use this policy as part of estate planning. It’s usually not needed for small to moderate sized estates.
Family Business or Real Estate Interests: A Survivorship policy may be desirable when a major family asset, or family business is on the line. These are assets that aren’t liquid and that the survivors may not want to sell.
Health Issues: Having poor health often times makes alternative insurance options nearly impossible to get or come with a much higher cost. Here, because two lives are insured, premiums for Survivorship policies are relatively low compared to policies on just one person’s life. Therefore, if the other spouse is in reasonably good health, the couple can usually obtain Survivorship Life insurance.

Keep in mind that this is just a broad overview of some different policies available. As always, you should consult with a licensed insurance agent to discuss the best options for your individual situation.