Purchasing life insurance does not have to be difficult or disconcerting. Though there is a wide-range of life insurance options available, your Brandywine Insurance Group trusted advisor is familiar with how to coordinate the best available options into a solution that is right for you.
Our first step is to gain a complete understanding of your personal needs. Using the information learned during our initial conversation, your advisor will begin putting together recommendations as to what type and amount of life insurance would provide you optimum coverage.
It is common for those purchasing life insurance for the first time to have a number of questions. Below are some questions that are frequently asked of our advisors.
Personal Life Insurance Questions
- How much coverage do you need?
- What are the different types of life insurance?
- Does the insurance company I choose matter?
- How long does the policy last?
- What happens if I become disabled?
- Does this policy require a medical exam?
- Are there any particular exclusions I should be aware of?
- How are premiums handled throughout the life of the policy?
- Is the policy renewable or convertible?
- What happens if I can’t pay the premiums?
- Does my policy adjust for inflation?
- Are living benefits available with the policy?
Personal Life Insurance & Estate Planning
For many providing for those they care about most, is the most important reasons for including life insurance in their current investment management strategies.
In fact, death can dramatically affect the financial security of your loved ones, and if they don’t have adequate resources, the financial consequences to them can be devastating. In addition to providing financial security, many purchasers of life insurance do so to meet more complex tax or estate planning needs such as funding a trust.
Before you buy any life insurance policy, it’s important to analyze your situation and your family’s financial needs.
Have You Thought About Life Insurance
Carrying life insurance is something that we all need to do. While many of rely on the life insurance policies that are issued to as part of our employment, it is important to remember that building up a life insurance policy over the years does several good things for us. Here are some of the reasons why taking out a life insurance policy and maintaining will make a big difference in the years to come.
One of the main points of life insurance, in general, is to provide for those you leave behind, should you pass away unexpectedly. Naming a spouse or a child as your beneficiary can ensure that your loved ones are provided for when you are no longer around to care for them. This can also be a great way to provide funds for any obligations that you may leave behind, such as joint credit card accounts or burial expenses. Because the funds will be paid directly to the beneficiary and in many states are totally tax-free, the life insurance can take a lot of worries off the shoulders of those that mean the most to you.
Having a good life insurance policy is one way to slowly build a financial asset. Whole life insurance allows for part of the monthly premium to build up cash value over time. Having that life insurance policy not only ensures there are assets to leave for loved ones after you go, but it also means you have an asset to borrow against should you need funds for an emergency situation. From this perspective, even a cheap life insurance policy that provides whole life coverage can be a great idea.
Another important factor about life insurance is that because it is a tangible asset, you may be able to use it as collateral for a bank loan, without having to borrow from the life insurance policy itself. This can be a great idea when you need a short-term loan that will be paid off in a couple of months. You do not decrease the payout on your life insurance policy, and you still have enough assets to satisfy the lender that you can repay. It is a win-win situation for you.
Many reliable companies offer different types of insurance, from term life to no load life insurance to whole life policies. Some of these are structured as guaranteed life insurance, which often means you will not be turned down due to health conditions or have your policy terminated early for any reason other than non-payment of the premiums. Guaranteed issue life insurance is an option for persons who are starting out late in life when it comes to getting insurance coverage, so don’t think you are ever too old to get life insurance coverage. Such life insurance companies as Met Life, Florida Life Insurance, New York Life Insurance have plans that will work for just about any situation. In fact, you can get a Florida Life insurance quote in just a few moments online.
Why not begin gathering life insurance quotes today? Check out the Internet for life insurance leads. Be sure to specify whether you want whole life, term life, or no-load life insurance. That will allow the search engines to pull up companies that offer the type of life insurance quotes that are of interest. Check out the life insurance rates, terms, and limits closely, and compare several companies before you make a decision. In the long run, you will be very happy that you took the time and provided this valuable source of safety and protection for your family.
Term Life Insurance
Many people choose term life insurance for a number of reasons. In fact, there are some very good reasons why term life insurance would be the best solution within certain sets of circumstances. Here are some examples of when term life insurance may be in your best interests, as well as some tips on how to find the right term life insurance provider.
For young people that are just starting out and not making a lot of money yet, term life insurance can be a logical solution to providing some protection for loved ones. While there are those that champion the cause of whole life insurance no matter how little income may be present, the fact is that some forms of insurance do not fit into the monthly budget very well. Instead of making life hard at the very beginning, why not go with an affordable term life insurance policy? You can always upgrade to something more robust when you are making more money.
People that are going through a rough time financially yet still feel the need for life insurance may want to think about term life insurance coverage. Persons who are laid off from work or temporarily unemployed may find that they are suddenly without any life insurance at all. Cheap term life insurance can fill the void without adding much in the way of financial hardships to the situation. The sense of security that it brings can help you to think more clearly as you begin to create a new job or career.
Health matters sometimes influence the type of insurance that an individual can obtain. Term life insurance generally accepts most people, so it makes the need to compare term life insurance with whole life insurance in these types of scenarios more or less a waste of time. No load term life insurance will provide something for your loved ones once you are gone, which is probably your main reason for wanting insurance anyway.
Finding a good term life insurance company may take some time. There are quite a few of them on the market. Look for term life insurance quotes that offer the most coverage for the amount you can afford. Look far and wide at your options, not just near the home. You may be surprised at what you find.
Gather as many term life insurance quotes as you want. The more information you have about term life insurance rates, the better your chances of finding the right term life insurance quote for your budget. Keep in mind that a free term life insurance quote is easy to come by. In fact, it is easy to get an online term life insurance rate in just a matter of minutes. Once you find the best term life insurance quote for your situation, sign up and begin the paying the premiums. Remember no one can determine what is the best term life insurance rate in your situation but you. Take all factors into consideration before you commit to a policy, and you will find that you will be perfectly happy with your choice.
Life Insurance Services
At LifeInsuranceAdvisors.com, we empower you with the life insurance information you need in order to make an informed decision about your life insurance.
There is never any pressure or obligation with our life insurance service. You get the information you need in order to make an informed decision about your life insurance.
With LifeInsuranceAdvisors Service, You Get:
You get multiple life insurance companies to choose from and the information you need in order to make an informed decision about your life insurance. You get quality life insurance companies and prices to choose from.
An independent life insurance agent that offers multiple life insurance companies! You get dozens of the best and most competitive life insurance companies to choose from. You decide which life insurance company is best for you.
You can submit your life insurance request online, call us, email us, etc..Whatever works best for you. We’ll send you your life insurance quotes via email, fax, mail….However you decide!
When you receive life insurance quotes, you get an easy to read format, providing a comparison of multiple life insurance companies, life insurance premiums, life insurance ratings and life insurance company information.
You get a professional and efficient service. LifeInsuranceAdvisors understands the impaired risk life insurance business better than anyone.
Whether you need term life insurance, universal life insurance or whole life insurance, LifeInsuranceAdvisors will help you get the best life insurance policy based on your needs.
Types of Life Insurance Policies Available:
- Term Life Insurance
- Universal Life Insurance
- Whole Life Insurance – Both Dividend and Non-Dividend Types
- ROP – Return of Premium Life Insurance
- Survivorship – Also known as Second to Die life insurance
- Guaranteed Issue Life Insurance Policies
- Simplified Life Insurance Policies
- Group Life Insurance Policies
Whatever your life insurance need is, LifeInsuranceAdvisors can help you get the right life insurance policy based on your specific life insurance needs.
LIFE INSURANCE FOR INDIVIDUALS
Income Replacement: To replace an individual’s income in the event of death, life insurance companies use various financial guidelines based on your income to determine how much coverage they will make available to you. A typical life insurance company will offer you general guidelines similar to the following to let you know how much life insurance coverage may be available to you.Age 20-30 = Up to 20x annual incomeAge 31-40 = 16x incomeAge 41-50 = 12x incomeAge 51-60 = 8x incomeAge 61& up = 6x income
Keep in mind that these are general guidelines and each life insurance case is unique. Some of you may qualify for more life insurance and some will qualify for less coverage.
Mortgage Protection: To cover mortgage debt on property. There are still some life insurance companies out there that sell “decreasing mortgage term life insurance" Watch out!!. The death benefit decreases each year but the term life insurance premium remains the same. Most times you will be able to get a level term life insurance policy at a more competitive life insurance rate than a decreasing death benefit.
Pension Maximization: Many pension plans offer retirees two options on their pension when they retire – Life Only or Life with Survivorship.
Life only offers a greater benefit to the retiree but leaves the spouse of the retiree with no income if the retiree dies.
A pension max plan using life insurance allows the retiree to get the maximum benefit and still protect their spouse by buying a life insurance policy to cover the spouse should the retiree die early.
Your agent can provide you with comparisons of both options in order for you to make an informed decision about your life insurance and if it makes sense for you to consider the Life Only option or the Life with Survivorship Option.
Estate Planning: Life insurance is used for estate planning to preserve the estate for the insured’s heirs. Life insurance allows the insured to leave their legacy intact.
Your agent may work with your estate planning attorney, CPA, and other advisors to obtain the right life insurance policy for you. Your agent will help you obtain the life insurance needed to complete the Estate Plan designed by your attorney.
LIFE INSURANCE FOR BUSINESS OWNERS
Buy/Sell Coverage: Gives business partners the ability to buy each other out in the event of death of one of the partners.
The amount of the life insurance coverage should be directly related to the proposed insureds ownership interest and the fair market value (FMV) of the company.
The number of life insurance policies needed is based on the following simple formula.
n = the number of owners. The number of policies needed will be n(n-1). Although less common, there are also entity buy sell plans available which are typically used by larger companies.
Do you have a buy-sell agreement in place? Have you taken the time to fund the buy-sell agreement with life insurance?
Business Continuation: Gives a business the ability to buy out a deceased owner’s interest. In the event of the owner’s death, life insurance proceeds can be used to adjust and continue on with the business.
Key Person Coverage: Many businesses have a key employee such as the owner or a top employee. If that person died, the business would suffer.
A key person life insurance policy provides coverage for the business to regain its momentum after a death. 5 times a person’s income is reasonable and there are situations where up to 10 times income is available. A cover letter detailing the person’s unique talents to the company is beneficial towards getting the amount of life insurance you want.
Creditor Life Insurance: Most life insurance companies will typically allow life insurance coverage up to 80% of the loan amount. The company debt, the collateral securing the loan, the financial position of the company, current insurance inforce are all considered as part of the underwriting.
It is possible to also obtain life insurance coverage for businesses that work with revolving lines of credit in order to have coverage available when loans are needed.
Life Insurance Definitions
The person(s) named in the life insurance policy to receive the life insurance proceeds upon the death of the insured.
You will see on your life insurance application that there is typically space for both primary and secondary/contingent beneficiaries.
The primary beneficiaries receive the death benefit proceeds if you die. The contingent beneficiaries receive the death benefit proceeds only if the primary beneficiaries are deceased before the insured.
Build Cutoff Limits
Each life insurance company has its own set of life insurance underwriting guidelines, including height/weight charts, BMI index, and build cutoff limits by life insurance rate class.
Life insurance companies have different build cutoff limits depending on the life insurance rate class you are applying for and approved at.
Burial Life Insurance
Some life insurance companies advertise a certain type of life insurance policy where if you die, the burial life insurance policy will pay for your funeral. Be careful as many times you can buy a traditional life insurance policy with a greater death benefit for less money than a burial life insurance policy.
Cash Surrender Value
cash surrender value is the amount of cash available for loans and that may be available for withdrawals from your life insurance policy.
Term life insurance policies do not have a cash surrender value.
Accessing Cash Surrender Value may reduce the death benefit of your cash value life insurance policy and may increase the risk of lapse of your life insurance policy. Cash surrender value only applies to permanent life insurance, not term life insurance policies.
A Child Rider is an option available on many term life insurance policies that allows you to buy a small amount of life insurance on the life of your child without putting your child through life insurance underwriting. Child riders are also available on permanent life insurance policies.
Typically when child riders are available on life insurance policies, the rider may allow up to $10,000 of life insurance coverage per child at an annual cost of $60 – $100.
Interesting to note is that with most child riders, the $60-$100 is the total cost for all children.. If you have one child the rider costs $60- $100…if you have 4 children, the rider still only costs $60-$100.
Convertible Term Life Insurance
Term life insurance which can be exchanged or converted to permanent life insurance at the option of the policy owner and without evidence of insurability for the new conversion life insurance policy.
When considering term life insurance it is important to ask what the conversion privilege is for your term life insurance policy as life insurance companies conversion privileges vary.
If available with your term life insurance policy, look for a conversion privilege that lasts as long as the term length of your life insurance policy.
For example, a 20 year term life insurance policy may offer a 20 year conversion privilege while another 20 year term life insurance policy may only offer a 10 year conversion privilege.
While most people will never convert their term life insurance policy, it is a good option to have and typically does not cost extra.
Do you need help converting your term life insurance policy? We will help you with the conversion of your term life insurance policy.
A return of part of the life insurance premium you paid on a participating whole life insurance policy that is based on the insurer’s investment, mortality, and expense experience.
Dividends are not guaranteed by the life insurance companies and are subject to change. Term life insurance policies do not offer dividends.
The amount stated on the face of the life insurance policy that will be paid in case of death. This is also known as the death benefit.
The face amount does not include additional amounts payable under accidental death or other special provisions, or acquired through the application of policy dividends where policy dividends may increase the death benefit of the life insurance policy.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance is a type of life insurance policy that requires little to no medical life insurance underwriting. It is important to note that in many life insurance cases, a fully underwritten life insurance policy may be available at a lower price than guaranteed issue life insurance even if you think that you are uninsurable due to a health problem!
Guaranteed issue life insurance policies may be the best option for people with health impairments that have been declined for life insurance and are truly uninsurable. We’ll work with you to find the best life insurance option for you.
High Risk Life Insurance
High risk life insurance is also known as impaired risk life insurance. If you have a health issue or participate in risky occupations or activities, a high risk life insurance company may be your best bet. Term life insurance, universal life insurance and whole life insurance policies are available.
We help many individuals who have had health problems such as prostate problems, prostate cancer, diabetes, heart disease and more obtain term life insurance.
Click here for information on high risk life insurance companies.
ILIT – Irrevocable Life Insurance Trust
An ILIT is a trust that is setup to be the owner and beneficiary of your life insurance policy. The purpose of the ILIT is to keep the life insurance policies out of your estate and to avoid potential tax issues with your life insurance.
Always consult your attorney or CPA to determine if an ILIT is right for your needs.
Impaired Risk Life Insurance
If you have a health issue currently or have had one in the past, life insurance companies may consider you to be an impaired risk life insurance candidate.
What that simply means is that you need to get to the right life insurance company based on your specific medical issue.
It is important for you to work with an expert in impaired risk life insurance as some life insurance companies will do a better job underwriting you than other life insurance companies.
A person has insurable interest in a life insurance policy when a death would cause that person to suffer a financial loss.
Acceptability to the life insurance company of an applicant for life insurance.
Insured or Insured Life
The person on whose life the life insurance policy is issued.
Level Premium Term Life Insurance
Life insurance for which the premium remains the same from year to year.
The premium is normally more than the actual cost of protection during the earlier years of the life insurance policy and less than the actual cost in the later years.
The building of a reserve is a natural result of level premiums. The payments in the early years, together with the interest that is to be earned, serves to balance out the underpayment of the later years.
Life Insurance Cost
Life insurance cost is the total price that you will pay for your life insurance coverage. Life insurance costs vary by company, by your life insurance underwriting class, by the amount of life insurance you purchase as well as whether you are buying term life insurance, universal life insurance, or whole life insurance.
Life Insurance Declined
Have you been declined for life insurance? One of the most common reasons why insureds are declined for life insurance is that the insured was underwritten with the wrong life insurance company!
Every life insurance company is different, some life insurance companies do a fine job underwriting health issues such as diabetes, prostate cancer, heart disease, skin cancer, and more…
Other life insurance companies are a complete disaster to work with if you have a health issue. Let us help you get to the right life insurance company based on your individual health issues.
Life Insurance Rates
Life insurance rates, also known as the life insurance premium you pay for life insurance, will vary by life insurance company. Life insurance rates for term life insurance, universal life insurance, and whole life insurance are available.
Life insurance rates are determined by your age, the health class you qualify for and the amount of life insurance you need.
Life Insurance Ratings
There are a number of life insurance companies that provide life insurance ratings.
The main life insurance ratings companies are AM Best, S&P, and Moody’s. Each life insurance ratings company has its own formulas and life insurance ratings standards that they use to rate a life insurance company.
Life Insurance Table Ratings – See our Table Ratings Chart
Life insurance table 2 – Adds 50% to your life insurance rate
Life insurance table 4 – Adds 100%
Life insurance table 6 – Adds 150%
Life insurance table 8 – Adds 200%
Feel free to ask us any questions about life insurance table rating charts when we speak.
Life Insurance Underwriters
A life insurance underwriter is the person at the life insurance company who is assigned to review your application and medical history.
When a life insurance underwriter reviews your file, the underwriter will assign “debits" and “credits" to your file. Once the life insurance review is complete, the life insurance underwriter will add the debits and credits to determine the life insurance rate class that will be offered to you, unless you are postponed or declined.
Debits are negative factors such as smoker, overweight, health issues such as heart disease, diabetes, prostate cancer, etc..
An example of a credit might be weight loss, diabetes that is now controlled, a recent stress test with favorable results.
Life Insurance for Seniors
Life insurance for seniors is available with a number of life insurance companies. Life insurance underwriting for seniors will vary by life insurance company.
There are a few life insurance for seniors companies that will require less in the way of stress tests, underwriting exams, and cognitive testing.
If you have a life insurance policy that is no longer wanted or needed, the traditional options available to you would be to either cancel the policy if it was a term life insurance policy, or to cash it in for the cash surrender value if it was a permanent policy.
Another option that may be available for older insureds is to sell their life insurance policy to a life settlement company. The life settlement company would pay you a lump sum of money now, and in turn take over ownership of your policy, making all future premium payments and receiving the death benefit upon your death.
For the right situation, a life settlement may be a viable option for some insureds.
Loan (Policy Loan)
A loan made by a life insurance company from its general funds to a policy owner on the security of the cash value of a policy. You may be able to borrow money against the cash value of your life insurance policy subject to life insurance company limitations.
No Lapse Guarantee
A feature available with some universal life insurance contracts. Universal life insurance contracts are dependent on having a certain amount of cash value in the policy to keep it inforce. When a life insurance policy offers a no lapse guaranteed universal life insurance, the life insurance policy provides a guaranteed death benefit as long as premiums are paid regardless of cash values.
A no lapse guarantee universal life insurance policy may provide you with a lifetime guaranteed life insurance policy with little cash value build up…similar to a term life insurance policy in many ways.
Paid-up Life Insurance
Life Insurance that will remain in force with no need to pay additional premiums. This is most common with certain types of whole life insurance policies that receive dividends.
The dividends may be used to purchase additional paid up life insurance on the existing life insurance policy.
Participating Life Insurance Policy
A life insurance policy that is eligible for the payment of dividends by the insurer (see also Dividend.) This is a whole life insurance policy.
Permanent Life Insurance
Any form of life insurance except term life insurance. Generally speaking, life insurance that builds cash value, such as universal life insurance or whole life insurance.
Pre existing life insurance, or pre existing conditions life insurance
If you have a history of health problems, this is considered to be a pre existing condition. Impaired risk life insurance companies are usually best for pre-existing conditions.
Premium Financed Life Insurance
There are instances when someone with significant net worth may have to buy life insurance. Rather than paying the life insurance premiums out of pocket, the owner of the life insurance policy may choose to finance the life insurance premiums instead, paying only the interest expense rather than the life insurance premium.
This is an option available to wealthy individuals only, typically with a minimum net worth of $5 million or greater.
The person or entity that owns a life insurance policy. The owner of the life insurance policy controls the policy and is able to change the ownership, beneficiaries, policy features, etc.
Life insurance premiums are the payments made to the life insurance company to buy a life insurance policy and to keep the life insurance policy in-force.
Renewable Term Life Insurance
Term life insurance which can be renewed at the end of the initial term, at the option of the Policy owner and without evidence of insurability. Not all term life insurance policies offer this feature.
The term life insurance rates generally increase at each renewal as the age of the insured increases.
Return of Premium – ROP
A term life insurance policy where the term life insurance premiums paid into the policy are returned at the end of the term life length.
An example would be a 10 year term life insurance policy that costs $500 per year. At the end of 10 years, the insured would receive a refund of $5,000 from the life insurance company.
Single Premium Life Insurance – A type of policy which can either be a universal life insurance policy or whole life insurance policy. In certain cases, single premium life insurance is used as an annuity alternative.
Table Shave Program
A table shave program is when a life insurance company offers a program to reduce the price of life insurance for people with health problems. Typically if the insured would be table rated due to a health issue, the table shave program may save them money.
Stands for Stranger Owned Life Insurance. Other variations of this are SOLI and IOLI. There are instances where insureds have purchased life insurance on themselves and as soon as the life insurance coverage is placed inforce, the insured sells their interest in the policy to an investor.
The insured receives a lump sum of money upfront, and the investor takes over the premium payments, receiving the death benefit proceeds upon death of the insured…there are many legal challenges taking place regarding STOLI and its legitimacy with a number of insureds being sued by the life insurance carriers over this practice.
Term Life Insurance Rates
Term life insurance rates will depend on the amount of term life insurance you buy, your age, health, etc.
Term life insurance rates are typically guaranteed for a certain period of time such as 10, 15, 20, or 30 years.
Term Life Insurance
Term Life Insurance does not build up cash value. A typical term life insurance policy will have a level premium for a period of years – 10 year term, 15 year term, 20 year term, 30 year term.
The term life insurance premium stays the same for the term life period. At the end of the term life period, the term life insurance is still available, but the term life insurance premium will increase each year thereafter.
Universal Life Insurance
A flexible premium universal life insurance policy under which the Policy owner may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments.
Life insurance premiums (less expense charges) are credited to a universal life insurance policy account from which mortality charges are deducted and to which interest is credited at rates which may change from time to time.
Whole Life Insurance
A basic type of permanent life insurance which can provide lifetime protection at a level premium. Life insurance premiums must generally be paid for as long as the policy is in force.
Approval – After you have submitted all requirements to the life insurance company for underwriting, that information will be evaluated and if accepted, you will be approved for life insurance coverage at the underwriting class you applied for or the life insurance company may approve you at a different rate class.
Decline – If the life insurance company evaluates your information and considers you to be a risk that is not acceptable, they will decline you for life insurance.
Life Insurance Declined – Many times an insured may be declined for life insurance due to a health issue that is not controlled, or simply due to the fact that the life insurance agent put you with the wrong life insurance company.
Postpone – If you have had a recent health issue, or enough time has not passed since treatment for a health condition, the life insurance company may postpone your application for a period of time.
When we see an insured postponed, the life insurance companies will typically indicate that the person is postponed for a period of time such as 6 months or 1 year, and that after the postponement period, the life insurance company would consider the insured at an underwriting class of whatever the insured would have qualified for if no postponement existed.
You will typically see this if you are a prostate cancer survivor, had a heart issue recently, or recovered recently from an alcohol or drug rehab facility.
Life insurance table ratings – If you suffer from a health issue, the insurance company may charge you more for your life insurance. A table rating is a percentage increase above the standard rate. Each table is typically equal to a 25% increase in price.
As an example, if you received a table 2 offer from a company and the standard rate is $1000, a table 2 rating would add an additional 50% or $500 to the cost of the policy.
A table rating may last for 20 years and then drop off, OR the company may specify how long the rating will last.
Flat Extra – A flat extra is an additional cost added to the price of a policy. Typically a flat extra is used for people who have had some form of cancer.
A flat extra will last for a certain number of years and drop off. Flat extras are expressed as a cost per thousand dollars of coverage. As an example, flat extras may be $2.50 – $15.00 per thousand.
As an example, if someone bought a $100,000 policy and was given a flat extra of $2.50/1000. $100,000/1000 = 100 x $2.50 = $250 additional cost to the policy.
Take a few minutes now to get a FREE Life insurance quote. There is never any pressure or obligation with our life insurance service and life insurance quotes are always free. Thank you.
How much life insurance do I need?
If you are providing financial support for people who are depending on you, you need life insurance.
There are some old and dated rules that no longer apply to life insurance….In the past, you may have heard that a good rule of thumb is 5-10x income for life insurance. The reality is that many insureds in this day and age will need 15-20x income.
A great independent source for determining your life insurance needs is LIFE – Life and Health Insurance Foundation for Education. This is an independent organization that focuses on providing educational information to consumers about life insurance.
In today’s environment, a detailed needs analysis will factor in your income, assets, survivor needs, education needs, retirement needs and more and will provide you with a custom tailored plan. You can then choose the amount of coverage for you.
How is my “Health Class" and resulting life insurance rate determined?
Each life insurance company uses their own underwriting criteria to determine which health class you will qualify for and your resulting life insurance rates.
In fact, it is entirely possible for the same person’s health class to rate as “Standard" with one life insurance company and “Preferred" with another life insurance company! Some factors such as smoking can have a direct impact on determining your health class.
Life insurance for health problems
There are many life insurance companies available that specialize in getting you coverage. If you have a health problem, we have a number of companies, called impaired risk life insurance companies, that will do a great job at underwriting you based on your specific health issue. We are the impaired risk life insurance experts.
EVEN if you have been declined for life insurance in the past, you may be able to obtain life insurance coverage. It definitely pays to try. We can help.
What’s the difference between term insurance, whole life insurance, and universal life insurance?
Term Insurance is typically the least expensive of life insurance policies and allows you to obtain the maximum benefit for the lowest cost. In the majority of scenarios, term insurance may be the best way to go.
Whole Life Insurance is also called permanent life insurance. Whole life insurance can be kept in force for as long as you live provided that the life insurance policy performs according to assumptions and projections and you have paid sufficient premiums into the policy.
The face amount of the life insurance policy and the premium are fixed at the time you buy your policy and stay the same as you age, BUT be careful! Certain assumptions are built into this type of life insurance policy such as interest rate assumptions, projected dividends, etc. If the assumptions are correct, the policy may build cash values over the course of time.
If these projections are wrong, you will end up with an unpleasant surprise such as an additional premium notice or a lapse notice!
Universal Life Insurance is also called permanent life insurance. With this type of life insurance policy, there is the potential for cash value to build up over time, but the real focus is to provide a guaranteed death benefit to age 100 and beyond. It is very similar to a term life insurance policy that does not end.
In many life insurance cases where the insured is age 60 or greater it may pay to compare universal life insurance to term life insurance as the life insurance premiums may be similar.
Does it make sense to replace a life insurance policy?
It ALWAYS makes sense to shop around, and it may make sense to replace your life insurance policy if:
- Your life insurance premium increases each year. Even though you are older now then when you first purchased your life insurance policy, a term life insurance policy with level premiums may be less expensive than the increasing term life premium policy. It pays to shop.
- Your original policy was issued at a higher rate due to health issues. Each life insurance company uses different underwriting guidelines, if you are with the wrong life insurance company you may be able to save money. This may be especially true if you were table rated for life insurance.
- Your health status has improved: If your health has improved through exercise, weight loss, better blood pressure or cholesterol control, etc. you may be able to obtain a better life insurance rate.
- You quit smoking or changed your smoking habits. If you are a former cigarette smoker, you should definitely shop around for a better life insurance rate. As soon as you have been a non-smoker for 12 months or more, non-smoker rates are available to you. If you have always been an occasional cigarette smoker, there is a life insurance company available that may offer you non-smoker rates.
- Other tobacco use: cigar, pipe, chew, snuff users. If you are paying a smoker/tobacco rate, you are paying too much for life insurance as non-tobacco rates are definitely available to you.
You may find that after shopping for life insurance, your best option is to keep your existing life insurance. There is NEVER any obligation or pressure with our life insurance service. We’ll show you the information you need in order to make an informed decision about your life insurance.
If you do shop around for a new life insurance policy, NEVER let your existing life insurance coverage expire until the new coverage is effective.
When will the policy begin?
The date that the life insurance goes into effect could be different from the date the life insurance company issues the policy. If you decide to purchase the policy, the life insurance becomes effective when you have accepted the policy and the home office has received all necessary documents and premium required and indicates that your life insurance is in effect.