Monthly Archives: September 2018

Everything About 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.

How To Get Inexpensive Auto Insurance

Getting your first car is one of the things you never forget, and making sure you can afford to put it, and keep it on the road is something that you need to consider before taking ownership of that great vehicle. You’re going to love that car, so protect it too!

It is the wise car owner who takes some time to do some research and find the most inexpensive auto insurance quotes they can BEFORE they make that all important car purchase. Getting auto insurance quotes is easy, it takes only a short time and they are free. When choosing the car of your dreams, take your time whilst selecting the best insurance, make sure you get the right policy at the best price. So what is the best way to find discount auto insurance?

The internet is the preferred choice when searching for auto insurance discounters. A quick search for a phrase like inexpensive car insurance will get you to the best comparison sites quickly. There are many companies in the market, offering you the best quotes from the top auto insurance companies and providers. Take some notes as you get prices, then head to the next site and do some more comparisons. They will email you all the details and you can then compare policies and costs.

The next step is to do some comparisons between all the top companies and try to work out which ones suit your personal needs. Take a good hard look at the detail before you compare their rates. What do they really offer. Remember that some may be cheap for good reason, too many restrictions and rules that may make their policy unsuitable. Some companies offer some really good discounts and special promotions at various times.

Some overcharge routinely, others try to get your custom by keeping their rates low. Auto insurance is a peculiar beast, and keeping abreast of what the companies offer will make sure that you are wiser and more able to get a deal. You need to know whether your money is being put to good use and properly protecting your dream car, and you. Whatever vehicle you have, you will want the auto insurance to look after it, and leave you to do the polishing and customising.

Regarding making a cheap insurance short-list, here are a few good tips. Choose the top 3-4 companies and get all the quote details to hand. Give them a ring in turn and explain exactly what you need in terms of insurance coverage for you and your baby.

Tell them how much you are prepared to spend. Getting inexpensive auto insurance is the goal here so you need to be astute in your thinking.

Once all the offers are in, you need to choose the best one for your needs. Make sure that you ask all the questions you need to and then, once you are happy, finalise the offer. It is essential to make sure that you are totally happy with everything before you pay out or sign any agreements. Make sure there won’t be any shocks or surprises when you get your policy documentation.

Insurance is a good investment to protect your motor vehicle, so try not to choose solely based on cost. To get the best auto insurance for your car, you MUST ensure you don’t miss out important details when you get your quotes or sign up.

The steps to get a good car insurance quote are simple, just follow them and save money. IF you follow this basic advice, as you get wiser you will be able to narrow down your research and know what questions to ask. Some of you may think, that all sounds great, but how do we actually put this into practice?

Direct Car Insurance

Until recently, the method of purchasing auto insurance involved finding a reputable agent who offered the insurance a customer needed. The next step in the process was determining which level of car insurance a customer needs. This step, for most consumers, is a compromise between price and a level of coverage they can live with. After business is concluded the consumer usually won’t speak to the agent until their policy is up for renewal or a claim must be filed. There is generally a markup on the price of the insurance policy due to the compensation due the agent for providing the service.

There is a new trend which has emerged in the auto insurance world that is saving the consumer money. This trend is a product called direct car insurance. Simply explained, this means the agent variable in the auto insurance equation has been removed. Direct car insurance has the almost immediate impact of eliminating part of the cost of an auto insurance policy by removing the agent’s commission. The method of purchasing this insurance is mainly done online. The result is cheap auto insurance rates passed on to the consumer. With the agent removed from the equation direct auto insurance offerings allow you to quickly and easily modify levels of coverage on the fly to see how it impacts the insurance policy’s rate. The consumer does not have to deal with an agent trying to sell them on coverage in which the consumer may do without.

Purchasing direct car insurance online is certainly cheap but this does not refer to the quality of coverage. In order to offer car insurance to consumers, a company is required by law to pay for claims and offer the same coverage to all customers. What this ultimately means, is that by purchasing cheap (price) online direct car insurance you will have the same coverage as if you purchased a policy from an independent agent. The personal level of service a customer receives from an agent provided auto policy is the same as a policy offered from a company offering direct car insurance.

The worry many consumers may have about purchasing cheap online direct car insurance is related to what happens if the policyholder is involved in an accident and must file a claim. One thing to keep in mind is that when the consumer needs accident repair on the vehicle the agent was not doing the repairs personally. In fact, most of the time the agent was not involved in the claims process unless the policyholder specifically requested it. The claim was handled by a customer service center specializing in handling policyholder claims. This level of specialization has existed for quite a long time. This claims process is the same at companies offering online “cheap” direct car insurance.

In short, if you are looking to save some money and are used to dealing with an agent down the street, you should look in to many of the available cheap online direct car insurance companies. You will see the level of coverage and service you are used to from an agent is available at a much discounted rate. Visit Elephant Auto Insurance online to get a cheap quote on car insurance.

Three Ways to Reduce Your Auto Insurance

This script focuses on cheap car insurance and strategies to cut down these expenses. It examines the options of deleting old autos, raising the policy deductibles, and accessing insurance carrier discounts. Readers must be able to discover pragmatic techniques to shrink their auto insurance expenses.

Most people around the country are seeking for suitable methods to lower costs in a number of areas. With the recession in the current economy, it is critical for many consumers to reduce their spending. Certain expenses, like automobile insurance are important to daily life. Although they are essential to function in society as drivers, there are certain practical ways to lower these costs.

Choosing the right insurance carrier is one of the ways that you can easily reduce your car insurance expenditure. Various online sites may assist those looking for auto insurance. You will uncover a vast group of insurers to choose from. This is a great advantage as it relates to choice and saving money. Applying specific techniques can help you to save even more.

Low cost auto insurance doesn’t provide preferred coverage. What it does provide shoppers is insurance policy that is budget friendly. There are certain things that individual customers can do to make their insurance affordable on a monthly basis. Often these are straightforward and convenient methods to consider. Let’s take a look at ways to find more affordable auto insurance by cutting down expenses.

1 – Terminate old vehicles covered

Several people have older autos that are actually collectors’ items. These are cars that are not driven or are mechanically nonfunctional. Keeping regular auto insurance on these vehicles is not a budget conscious idea. Removing regular insurance on these autos can provide you with the lower cost vehicles insurance that you need. Do not forget that insurance is the law in almost all states, so you ought to always maintain liability insurance on any owned auto, even if inoperable. (collectibles and show autos have significantly lower liability premiums than regularly used cars.)

2 – Increase amounts of deductibles

Deductibles are always issues for customers to fight over. A lot of people think that low deductibles will pay off over time if an accident takes place. Most insurance carriers, however, say that this is a guaranteed way to decrease monthly costs. The policy monthly payments will decrease if deductible amounts are raised.

3 – Ask for carrier credits

Before settling on an insurance policy, it is important to check for the possibility of discounts with your insurance agent. In many cases, there are discounts and credits related to the details of your specific situation. Possible credits may include: Alarm systems, anti-lock brakes, good student discounts, prior insurance discounts, multi account discount when you have more than one account (ie life, home, condo) with same insurer, not necessarily the agent; home discount or a credit for just being an owner of a single family home or a condo; and other details may provide you with credits for cheap car insurance.

Living in a large metro area such as Los Angeles or Chicago can be used in your favor or against you. In Chicago, for instance, the premium of car insurance is much higher than the neighboring suburbs, perhaps 30% – 60% higher, on the average. However the awesome thing about Chicago is that there are many Chicago auto insurance companies that are competing to earn your insurance business. Intelligent buyers will always have a better bargain in Chicago.

How to Get Your Best Auto Insurance

You just have bought a car and you are wondering – what insurance premium can I expect for my vehicle? One fixed answer perfect for everyone doesn’t exist here. We are all different, so different will be our best individual auto insurance policies.

Getting your best auto insurance policy is a two-phase selection process:

  1. Deciding on what insurance provisions you really need.
  2. Choosing your auto insurance provider.

Phase 1 – Make You Decision on What Auto Insurance Provisions You Really Need.

· Road-side Assistance

If your car is not a new one you might find this feature very attractive as it could save you some money and a lot of nerves if your car gets broken in the middle of the road.

· Accident Forgiveness

Some insurance carriers offer accident forgiveness to its drivers. This valuable feature would protect your insurance rate from increase after your car gets involved into a traffic accident even if the accident was at your fault.

· Collision Coverage

With Collision Coverage your Insurance Company will pay even if the accident happened at your fault. Make sure that coverage is sufficient in funds, if not – you will be liable to pay the rest.

· Uninsured/Underinsured Motorist Coverage

With this feature in policy your Insurance Company will pay for injuries to you and all your passengers in the case of any traffic accident which happened at other motorist fault and that motorist had no insurance at all or had insufficient insurance.

· Deductible

Deductible is the amount of money you agree to pay from your pocket in the case of a traffic accident; the rest will be paid by your Insurance Company. Higher deductible always translates to lower insurance rates. However don’t over-indulge on this feature – it is you who will be requested to pay that money if anything happens.

· Medical Coverage

This feature defines how much money you will get in the case of your auto accident-related injury.

· Comprehensive Coverage

With this feature in policy your insurance company pays a damage repair to your car for the reasons other than a collision. This includes windstorm, hurricane, fire, theft, vandalism etc. This type of coverage is often required if you lease or use multi-year financing for your car, but it would also be very valuable for every driver who wants to get fully protected.

Phase 2 – Choose your auto insurance provider.

· Get a second opinion – use the word-of-mouth approach – ask colleagues, neighbors or friends, visit web forums or any other available channels to get an initial list of insurance provider candidates.

· Narrow it down to 5-10 short-listed insurance companies which you believe will meet your needs well.

· Visit your state’s “Department of Insurance” web site. Yes, many of us don’t know that fact, but every State has “Department of Insurance” which keeps track of insurance providers under state’s jurisdiction. Check consumer complaint ratio for each company in your short-listed companies list and narrow it down to 3-5 best candidates.

· Get your preliminary quotes for each insurance company in your short list.

To simplify this step use Get Instant Quote resources available for free in the Internet.

· Choose the final company with the best insurance policy for you and your vehicle.

Conclusion

With the detailed selection check list provided above getting the auto insurance policy which would be right for you becomes a relatively easy task.

Using the knowledge about insurance policies and their features covering you and your vehicle you will always be able to get the right decision. Protect yourself on the road and save your money in the case of auto accident by purchasing the right car insurance for you and your family.