Life Insurance Tips
Hi readers ,When you are buying a life insurance policy, you are not doing it for yourself but for those who are close to you and who would be directly affected by your death. It is not that having a life insurance would in any way alleviate the grief your family would go through in the event of your passing. But it would be some sort of financial security which we are sure you would want your family to enjoy even after your death. Death – one of the most obvious events of life and yet an event which is never easily accepted. But you cannot avoid death. So it is better to be prepared and find life insurance tips. Once you have bought life insurance you can focus on other kinds of savings. You have some sort of a platform to work from. Following are a few life insurance tips.
Assess Your Needs
Every individual and family has separate needs. And the life insurance companies have understood this fact. So they are also offering scores of different kinds of policies many of which can be personalized to your needs. Be clear as to how much money would be good enough for your family in the event of your death. If your spouse has a job, you would need less insurance. Again if you have a large family with kids yet to finish school, you would require a larger insurance. Make sure you know exactly what you want from your insurance. You might not be getting all of them in one single policy. However, see to it that most of your important needs are covered.Your Budget
When you buy life insurance you obviously got to figure out how much you can spend. And it is not just a one time up front payment. You will have to keep paying the premiums throughout your life. So you must consider that aspect as well. It helps if you are young. The more your age is the higher becomes the premium. Habits like smoking and drinking would also raise the premium cost. And of course your health history would play a major part in determining the premium.The Insurance Provider
Before you buy your life insurance, find out exactly what the credentials of the company you are buying from. A life insurance is a long term investment. You need the insurance provider to survive those long years. The companies which have been in the business for a considerable period of time and have a very sound financial base are the ones that could be easily trusted. One should be a bit careful in dealing with new companies.The Policy
You are buying an insurance policy remember. So the one thing you definitely need to check on is the policy. Read the contract thoroughly, and if you need help ask a lawyer or an insurance agent. Never sign before you fully understand all the clauses and are satisfied with the same. You can’t avoid death, but with great life insurance advice you will be prepared.From my own experience in the insurance industry, and knowing how representatives are trained, I wouldn’t trust many insurance sales reps either. Here are some steps you can take to ensure you get the right product for the right price:
- Understand your needs. No one understands your financial situation better than you. That means you should avoid letting someone else tell you how much protection you need. You can get a rough estimate of your insurance needs by adding together your debt, estimated funeral costs, and six months to a year of income replacement. [J.D.'s note: One common rule of thumb is to multiply your yearly income by between 5 and 10, using the lower level if you don't have many dependents and few debts, and the higher level if you have larger debts and multiple dependents. But Ray is right: understand your own needs.] Taking stock of your financial policy can allow you to select the right policy for your needs. As sales representative, we were trained to sell large policies. Remember, you may not need an exorbitant policy — you need the policy that’s right for you and your family’s financial situation.
- Understand term insurance versus permanent insurance. Understanding the difference between term and permanent life insurance (such as whole life) can help you make an informed decision about your insurance needs. Today, a term insurance policy should be able to cover most of your debt and financial needs. In turn, you may not need to purchase a whole life policy. Try not to be sold by the “what if” scenario you might hear from an insurance sales rep. Insurance companies traditionally make more profit from whole life policies than term policies, so be prepared to hear a sales representative promote whole life as the best possible choice (even though it might not be the best fit for your needs). Remember, buy what you need and make adjustments as changes become necessary. Term insurance is typically renewable and should have a convertibility clause which allows you to make changes in the future. There are certain situations where a whole life policy maybe more advantageous than term; however, do not purchase it simply because your sales representative told you should.
- Speak with an independent broker. These brokers will have access to many more products than just one firm can provide. When I worked as an independent broker, I was able to offer much more to my clients than just a company product.
- Avoid one-meeting recommendations. If your broker makes a recommendation in the first meeting, you know that they have not really analyzed your situation and looked for best options. So just say, “No, thank you” and keep researching.
- Understand how the advisor gets paid. Find out if they are compensated through commission, fee-plus-commission, or fee only. If there is any commission involved with the sale, make sure to look at all alternative products available. With commissions, the advisor may have a conflict of interest. Just because your advisor is commission-based doesn’t mean they are bad — just ask more questions with them. I always worked on 100% commission, but I would give my clients several options and disclose if I got paid differently.
- Recognize that insurance is for protection — not investing. Term insurance provides protection only, without a savings component. Whole life and universal life policies have a savings component and are much more expensive. You are almost always better off just paying for term insurance, and using the cost savings to invest elsewhere.
- Ask the tough questions. Don’t be afraid to ask the advisor questions. You should know the product inside out before buying it. Is the policy renewable and non-cancelable? How long are premiums guaranteed for? Is there an accidental death rider? What are the exclusions?
- Watch out for “know-it-all” advisor. If the advisor answers all your questions without referring to anything, or pretends she “knows it all”, chances are that she does not. Insurance policies are complicated, and even the best advisors do not know every product 100 percent and may have to look things up. There is nothing wrong with that.
- Compare similar products. When you price shop, make sure you compare similar products.
- Don’t replace old whole-life policies. If you have had a whole-life policy for several years, try not to replace it. You may lose all the premiums you have paid. You may also have to pay new administration fees (if applicable), and reset some clauses (such as the suicide clause). If your situation has changed and you need more insurance, just buy more. (This warning does not apply to term life.)
- Do not buy expensive riders. The advisor might ask you to add on all types of riders. Stay away from them unless you fully understand them and need them. Again, in training there was always an emphasis on selling riders. Often I didn’t see any benefits to the client.
- Do your homework. Make sure you do your homework before purchasing an insurance product. Make sure it fits your needs and budget, and make sure you understand the contract. The advisor is obligated to explain it to you. Don’t sign until you understand the contract.
- Take a 30-day free look. You have 30 days to look at the policy and understand it. If you are not satisfied with it during that time, cancel the policy and you will get your premium back.
- Keep it simple. Do not make your insurance planning complicated. Because it is based on protecting your family, it should be based on your needs. Don’t fall for all the bells and whistles the company may try to sell to you.
Read more below,
How much you pay for auto insurance depends on several factors, including your age and marital status, where you live, and what you drive. You can't do anything about your age, and few people will move just to lower their insurance premium. You can, however, choose a vehicle that costs less to insure.
In this article, we'll give you all of the helpful tips you need when getting car insurance. When you`re taking out home insurance, it pays to take your time and make sure all your information is correct – and stays correct. If you don`t, the Daily mail warns, you could find your insurance is invalid when you try to make a claim.
An article in the paper reminds readers just how easy it is to make a mistake without even realising it. The number-one `pitfall` is one which typically takes place when a policy is up and running and the homeowner`s circumstances change. They might start working from home, for example, or take in a lodger – something which may not seem too significant to them, but which the insurance company might could easily see as increasing risk.In some cases, this can actually invalidate the homeowner`s insurance policy.
Credit Care America
If you feel that you are losing control of your finances and that your debt has become impossible to manage, then a debt relief program can help. Constant creditor calls and harassment make debt more than a financial problem, but also a burden that can negatively affect many elements of your life, including your social and family life. Before you give up or pursue bankruptcy or CCCS, speak with one of our courteous representatives about ways to regain control and to put debt behind you in a way that you may never have been aware was possible. There is no obligation, so even if you should choose not to use one of our debt relief services, the knowledge and insight that you gain is yours to keep with no payment or risk.CreditCareAmerica provides debt relief and debt settlement services
Debt Settlement USA
Providing services to consumers throughout the last six years, debtsettlementusa.com has managed over $25,000,000.00 of consumer debt. In the process of working with creditors, collectors, debt buyers and law firms who collect these debts, DSUSA and its negotiators have made connections within these organizations and gained insight into the collection process that helps to negotiate settlements for its clients. Creditors are willing to negotiate a debt on behalf of its clients with the understanding that the settled amount will be paid in a timely manner. Furthermore, creditors are always looking to avoid the ineffective and costly efforts of an outside collection company. Debt Settlement USA continues to develop relationships with creditors throughout the country.
Net Spend
Prepaid Debit Cards are issued by Inter National Bank or MetaBank, members FDIC. (Please see back of card for your issuing bank.) NetSpend is an authorized Independent Sales Organization ("ISO") of Inter National Bank and MetaBank. Subject to funds availability. Transaction fees, terms and conditions apply. All trademarks, service marks and registered marks are the properties of their respective owners.NetSpend Savings Accounts are issued by Inter National Bank, member FDIC. Interest is calculated on the average daily balance of your All-Access Savings Account and paid quarterly. Annual Percentage Yield (APY) is accurate as of July 16, 2008. No minimum balance is necessary to open the account or obtain the yield. Fees could reduce the earnings on the account.
"Life begins at 40" is a saying of the past now, it seems. With www.senior-life-insurance.org, you can sit back and enjoy your life even at the age of 50, 60, or 70. With your assets and everything including you yourself insured, you need not bother about the events of the future. Even in your absence, your loved ones would be taken care of. Doing a bit of research in getting the best plan for yourself will help you enjoy added benefits, too. Sitting in the comfort of your home, you can hunt for a senior life insurance policy online.
Looking to buy life insurance for the first time? If so, you're probably asking yourself questions such as "How much do I need?", "What kind of policy is best?" and "Which company should I buy from?" There's no question buying life insurance for the first time, like any other new experience, can be more than a bit daunting. Below are six important tips that we hope will make the process smoother, eliminating frustrating false starts and unnecessary bumps in the road.
Six tips for the First-Time Buyer
1. Understand Why You Need It
While most people may need life insurance at some point in their life, don't buy a policy just because you heard it was a good idea. Life insurance is designed to provide families with financial security in the event of the death of a spouse or parent. Life insurance protection can help pay for mortgages, a college education, help to fund retirement, provide charitable bequests and of course is a key element in estate planning. In short, if others depend on your income for support, you should strongly consider life insurance. Even if you don't have any of these needs immediately, you still may want to consider purchasing a small "starter" policy, if you anticipate you will have them in the future. The reason: the younger you are, the less expensive life insurance will be.
2. Determine the Amount of Coverage You Need
The amount of money your family or heirs will receive after your death is called a death benefit. To determine the proper amount of life insurance an online calculator, like the one available at this site, can be helpful. You can also get a ballpark figure using any number of formulas. The easiest way is to simply take your annual salary and multiply by 8. A more detailed method is to add up the monthly expense your family will incur after your death. Remember to include the one-time expenses at death and the ongoing expenses such as a mortgage or school bills. Take the ongoing expenses and divide by .07.That indicates you'll want a lump sum of money earning approximately 7% each year to pay those ongoing expenses. Add to that amount any money you'll need to cover one-time expenses and you'll have a rough estimate of the amount of life insurance you need.
As useful as calculators and rough estimates are, there are some things they don't do.
They cannot provide you with any final answers. Calculators only allow you to perform "hypotheticals," recalculating and generating new results as you make and input new assumptions. Using these tools and educating yourself on the workings of life insurance and other financial products, however, can help you feel more comfortable when discussing your needs with such professionals as a New York Life agent.
3. Find the Right Type of Policy
Once you've got an estimate of how much insurance you'll need, it's time to think about the type of policy that best fits your needs. Today life insurance comes in many varieties, but there are four basic types term, whole life, universal life, and variable life. As a first-time buyer, one will more than likely fit your needs.
Term Life Insurance
As its name implies, term insurance provides life insurance protection for a specific period of years. Benefits can be used to help pay off mortgages and other outstanding debts in the event of a premature death. Generally the least expensive form of life insurance, term provides pure insurance protection only. It does not accumulate cash value, and generally does not receive dividends.
Term may be an ideal choice when you need life insurance coverage for a well-defined period of time. It can be used to protect needs that last for a predictable period, such as a student loan or mortgage. People in their 20s and 30s often purchase a term policy and later convert it to a permanent plan (see Whole Life, below). The conversion privilege in their term policies guarantees their insurability at a later date-even if they become uninsurable.
New York Life Insurance Company makes a variety of term policies available, including five-, ten-, and 20-year policies.
Whole Life
In contrast to term insurance, whole life, also known as permanent insurance, protects you throughout your lifetime, from the day you purchase the policy until you die, as long as you pay the premiums. Another difference between the two is that permanent insurance builds cash value. Through policy loans, you can access the cash values and use them for a host of purposes such as education funding and supplemental retirement income. However, policy loans against the cash value accrue interest and reduce the death benefit and the cash value by the amount of the outstanding loan plus interest. Guaranteed for life, your policy will be renewed every year, regardless of your health for as long as you live, again, as long as required premiums are paid.
Permanent policies are also eligible to receive dividends, a portion of the company's surplus that is distributed to the owners of participating policies. (Dividends can be taken in cash, used to reduce the premium, left to accumulate at interest, or used to purchase paid-up additional insurance. Dividends are not guaranteed.) Whole life can provide a permanent solution to several financial concerns including:
Looking to buy life insurance for the first time? If so, you're probably asking yourself questions such as "How much do I need?", "What kind of policy is best?" and "Which company should I buy from?" There's no question buying life insurance for the first time, like any other new experience, can be more than a bit daunting. Below are six important tips that we hope will make the process smoother, eliminating frustrating false starts and unnecessary bumps in the road.
Six tips for the First-Time Buyer
1. Understand Why You Need It
While most people may need life insurance at some point in their life, don't buy a policy just because you heard it was a good idea. Life insurance is designed to provide families with financial security in the event of the death of a spouse or parent. Life insurance protection can help pay for mortgages, a college education, help to fund retirement, provide charitable bequests and of course is a key element in estate planning. In short, if others depend on your income for support, you should strongly consider life insurance. Even if you don't have any of these needs immediately, you still may want to consider purchasing a small "starter" policy, if you anticipate you will have them in the future. The reason: the younger you are, the less expensive life insurance will be.
2. Determine the Amount of Coverage You Need
The amount of money your family or heirs will receive after your death is called a death benefit. To determine the proper amount of life insurance an online calculator, like the one available at this site, can be helpful. You can also get a ballpark figure using any number of formulas. The easiest way is to simply take your annual salary and multiply by 8. A more detailed method is to add up the monthly expense your family will incur after your death. Remember to include the one-time expenses at death and the ongoing expenses such as a mortgage or school bills. Take the ongoing expenses and divide by .07.That indicates you'll want a lump sum of money earning approximately 7% each year to pay those ongoing expenses. Add to that amount any money you'll need to cover one-time expenses and you'll have a rough estimate of the amount of life insurance you need.
As useful as calculators and rough estimates are, there are some things they don't do.
They cannot provide you with any final answers. Calculators only allow you to perform "hypotheticals," recalculating and generating new results as you make and input new assumptions. Using these tools and educating yourself on the workings of life insurance and other financial products, however, can help you feel more comfortable when discussing your needs with such professionals as a New York Life agent.
3. Find the Right Type of Policy
Once you've got an estimate of how much insurance you'll need, it's time to think about the type of policy that best fits your needs. Today life insurance comes in many varieties, but there are four basic types term, whole life, universal life, and variable life. As a first-time buyer, one will more than likely fit your needs.
Term Life Insurance
As its name implies, term insurance provides life insurance protection for a specific period of years. Benefits can be used to help pay off mortgages and other outstanding debts in the event of a premature death. Generally the least expensive form of life insurance, term provides pure insurance protection only. It does not accumulate cash value, and generally does not receive dividends.
Term may be an ideal choice when you need life insurance coverage for a well-defined period of time. It can be used to protect needs that last for a predictable period, such as a student loan or mortgage. People in their 20s and 30s often purchase a term policy and later convert it to a permanent plan (see Whole Life, below). The conversion privilege in their term policies guarantees their insurability at a later date-even if they become uninsurable.
New York Life Insurance Company makes a variety of term policies available, including five-, ten-, and 20-year policies.
Whole Life
In contrast to term insurance, whole life, also known as permanent insurance, protects you throughout your lifetime, from the day you purchase the policy until you die, as long as you pay the premiums. Another difference between the two is that permanent insurance builds cash value. Through policy loans, you can access the cash values and use them for a host of purposes such as education funding and supplemental retirement income. However, policy loans against the cash value accrue interest and reduce the death benefit and the cash value by the amount of the outstanding loan plus interest. Guaranteed for life, your policy will be renewed every year, regardless of your health for as long as you live, again, as long as required premiums are paid.
Permanent policies are also eligible to receive dividends, a portion of the company's surplus that is distributed to the owners of participating policies. (Dividends can be taken in cash, used to reduce the premium, left to accumulate at interest, or used to purchase paid-up additional insurance. Dividends are not guaranteed.) Whole life can provide a permanent solution to several financial concerns including:
- Mortgage protection: Benefits can be used to help pay off mortgages and other outstanding debts in the event of a premature death.
- Estate preservation: Whole life insurance can provide funds to cover estate expenses and help avoid the need to sell assets and or borrow money to cover these expenses.
- Retirement funding: If the need for death benefit protection has decreased, cash values can be accessed through policy loans or surrenders to supplement a retirement income. Loans will reduce the death benefit.
- Charitable giving: A whole life insurance policy can enable you to make a significant donation to your favorite charity upon your death.
- Business needs: Whole life can be an attractive executive and employee benefit and a means to assure a business's financial future.
