Life Insurance for Businesses

There are many obstacles a business must plan for and overcome if it is to be successful in the long term.  One event that can seriously harm, and even put a company out of business, is the unexpected death of a key employee, salesperson, partner, or executive.

That is why many companies formulate contingency plans for such deaths, and even design thorough succession plans for owners and key executives, managers, or board members.  A term life insurance policy purchased on one or more of these key individuals helps to solve the difficult problem about how business will go on without this important individual.

How Business Life Insurance Works

The corporation, LLC or partnership should be the applicant, own and pay for the policy premiums, and name itself as the beneficiary.  The key individual must agree to the insurance policy be taken out on his or her life.  This individual would need to, at the very least, help complete the application with answers about health history, and depending on the policy, may also need to take a medical exam.

Please note if you are purchasing life insurance on a key employee or individual, this is commonly referred to as “key man life insurance” or “key person life insurance”.

How Much Life Insurance Should a Business Apply For?

It’s difficult to measure the exact value an individual brings a business, but some questions you’ll want to consider in helping you quantify the value of your employee are:

1. Potential Lost Clients: In the case of the loss of a founder or great salesperson, consider the relationships that individual has fostered with your clients.  You might even write down a list of key clients that may be doing business with you due to a great relationship they have with your key employee.

2. Cost of Replacing an Individual: Key employees or owners are not easily replaced.  Finding and attracting a candidate with the necessary experience and qualifications may cost the companies thousands upon thousands of dollars.

Depending on what level of candidate you’re trying to hire, these costs may include job listings, hiring agency cost, wining and dining, as well as other accommodations.  If a member of your own staff does the searching, you have that employee’s time as an expense as well.

I think I can come off this point… every business understands the high cost of replacing an employee, and dreads having to replace a KEY member of the team.

3. Intangible Losses:  Your key man or woman may be an idea trailblazer.  Some people’s ingenuity simply cannot be replaced.  Be sure to insure this person accordingly.

What Can the Proceeds Be Used for?

Once your policy face value is approved and your business insurance is effective, if death occurs, the death benefit can be used for anything.  The insurance carrier does not monitor this.  On the front end, they do ask for details on why the business is apply for X dollars, but on the back end, they simply cut a check.

Which Type of Life Insurance is Most Suitable?

In 90% of these cases, a term policy should do the trick.  Some term policies offer coverage for up to a 30 year period, with the ability to renew or convert the coverage to a permanent policy at the end of the initial 30 year term.

You will also have the occasional case where a business says, “Hey, we don’t care if this person lives to 50, 80, or 100… we will ALWAYS need coverage on him.”  In this case, term won’t suffice.  It would be better to purchase a universal life insurance or whole life policy that guarantees protection for life.

Another use for permanent insurance would be for employee retention.  Some companies may want to add an additional layer of benefits to the employee, and might use the life insurance policy as a makeshift deferred benefit plan, dedicating a certain percentage of the death benefit to the employee’s beneficiaries, rather than just the company.  The company can even add a vesting schedule to the cash value, putting the cash in his hands as time goes by, therefore incentivizing the employee to stay with the company longer.

Click here for more information on types of life insurance that may be used for business purposes, and if you have any questions, please call us at 877-996-9383.

Buying life insurance in your sixties absolutely requires the assistance of a life insurance agent guiding you through the process.  I say that for several reasons:

Health Concerns

We don’t meet too many men over age 60 in perfect health.  Most of them at least take medications for high blood pressure or cholesterol, and since we specialize in life insurance for men, many have experienced more serious health histories such as diabetes or heart disease.

Trust me… you won’t find the best deal on life insurance by going to your local State Farm or Farmers Insurance agency.  You need to speak to a broker who can shop your case out amongst the companies who specialize in impaired risk underwriting.

Estate Planning – You are buying life insurance at a crucial time in your life.  If you buy a short duration term policy, you may end up with a policy in your 70’s or 80’s with outrageously high premiums and increasing every year.

But if you buy a whole life or universal life policy, we also need to consider staying within your budget, as we don’t ever want to recommend an option you can’t afford.  I just can’t emphasize enough the fact that you ought to discuss your goals for the insurance and your budget with a qualified agent who can recommend the most suitable product for you.

Social Security Planning

Everyone reading this post is either currently on Social Security benefits or will be within the next few years.  Do you understand Social Security survivor benefits?  If you’re married, how much of your income will go to your spouse?  This information is stated in your annual summary of benefits mailed to you.  Be sure to factor this into your life insurance needs analysis.

Life Insurance Policy Options

Once you turn 60, a lot of options disappear to seniors.  For example, if you were to try to go to your local Farmers Agency, you may not have many options.  You certainly would not have a 30 year term available to you, as their cutoff for 30 year term is 50 years old.

Their cutoff for 20 year term is 60 and 10 year term is 65 years old!  So you can see your options would be very limited if you didn’t know the insurance market well.

We, on the other hand, can offer 30 year term policies all the way up to age 65, and 10 year term policies at a max age of 80, so you won’t have any problems choosing from a wide range of options that fit your needs if you use an independent life insurance agency.

How to Apply for Life Insurance

Most of our policies require an application and medical exam (at no cost to you).  We would love to speak with you and walk you through the process of getting you quotes, and helping you with an application.  Call us at 877-996-9383 or get started with a quote by using our quote form to the right.

Men, if you are over the age of 50 years old and need term life insurance, that’s great.  I’ve written this post just for you!

The primary reasons men purchase life insurance in their fifties are:

1.  Family Protection

2. Business Protection

3. Estate Planning

Let’s cover each of these below in terms of how much protection you need, and which type of policy suits you the best.  Please note if you are unfamiliar with the various options available to you, you may want to visit our article about Types of Life Insurance, and you can also use our handy calculator to help determine How Much Life Insurance You Need.

Term Life Insurance for Family Protection

Most of our clients over 50 years old who need coverage are purchasing it because they are still working, and need to protect their wife or children from financial ruin in the event of their demise.  If we take the example of a 51 year old man who makes $70,000 per year and has a $500,000 mortgage, here’s what I would recommend.

This man will probably work another 15 to 20 years before retiring.  That’s over 1 Million dollars his wife would miss out on if he were to die unexpectedly.  In his case, I don’t normally add in the balance of the mortgage, but recommend replacing his income for at least 15 years.  This way, his wife will be able to continue paying the mortgage and other bills if he dies.

If we assume a 3% inflation, and 6% earnings on the funds, our handy life insurance calculator shows he needs approximately $865,000 to provide an annual income to his wife of $70,000 for 15 years.  So in his case, we would probably look at quotes in the $750,000 to $1 Million range.

Business Life Insurance Over 50 years Old

Another popular reason men purchase life insurance in their fifties is for business insurance needs.  The most common business insurance policies are sold for:

• Key Man Insurance – If you own a business with a key executive, board member, or salesperson who your business just could not survive without, your business should consider taking out a policy on that individual.
• Buy-Sell Agreement – Many partnership agreements mandate life insurance be taken out on each partner for a quick and easy buyout in the case of one of the partner’s passing.
• Non Qualified Deferred Compensation – Many owners set up cash value policies for themselves (executive bonus plans) and for their employees, since they are so simple to administer and to comply with ERISA.  Plus the plans can discriminate between which employees will receive the benefits.

You won’t use the life insurance calculator to determine the amount of coverage needed in the above situations.  For partnerships, the amount is typically already pre-determined in the buy-sell agreement.  In the case of key man insurance, the value of the employee or executive may be measurable, in which case 5-10X annual production is appropriate.  But in the case of a founder, director, key board member, etc., their value may be more intangible, and will depend if your company has planned for an unexpected death, has a succession plan in place, etc.

For company deferred comp plans, the level of death benefit is usually irrelevant.  Instead, a policy is usually chosen for its cash accumulation features and outlook.

If you own a business and have any of the needs above, call us at 877-996-9383 or you can get started by filling out the quote form to the right.

Estate Planning and Life Insurance

When I refer to estate planning, I’m speaking specifically of advanced planning you may do with your attorney to provide for liquidity upon death, as well as putting a life insurance policy in place in preparation for estate taxes.

We don’t typically deal with this level of planning for individuals who are in their 30′s or 40′s, as under current estate tax law, and estate is not taxable at the federal level until it is valued at over $5 million dollars, and you can imagine that very few individuals in their 30′s and 40′s have accumulated that sort of money.  But we do get quite a lot of estate planning type cases from people over 50 years old, many of whom have done well in business or real estate.

Let’s take an example of a wealthy, 55 year old single man, who will enjoy a estate tax exclusion amount of $5 million dollars upon his death, per C. Tucker Cheadle, a renowned California trust attorney, and how life insurance can help him.  If we assume he has a net worth of $6 Million dollars, the excess $1 million above the estate exclusion amount would be taxed at a federal rate of 35%, according to Cheadle, if this man were to die.  That sort of estate would generate a $350,000 tax bill.

So our 55 year old gentleman has two choices now.  Will he allow his estate to be reduced by $350,000 upon his death?  That’s his first choice.  Or alternatively, if he is a healthy non smoker, he could purchase a guaranteed universal life insurance policy with a $350,000 death benefit for as little as $3,708 per year, which would generate an tax free, cash benefit of $350,000 upon his death.  (Please note most people use some sort of permanent policy for estate planning needs, rather than term life insurance).

With proper planning, even the $350,000 death benefit would be separate from his estate, effectively solving his estate tax problem.  Even if our 55 year old lives to age 85, he will have only paid $111,240 in premiums (thereby reducing his estate value by the same amount), and paying his estate tax bill for pennies on the dollar.

Life Insurance Questions for Men Age 50 and Older

Please feel free to contact us with your questions at 877-996-9383.  You might also see C. Tucker Cheadle’s article on gifting, trusts, and avoiding estate taxes here.

If you’ve been following this site, you know that I may be the perfect person to offer an unbiased review of Farmers Life Insurance for two reasons.

First, I have been a licensed life insurance agent for over 7 years, primarily selling insurance for Prudential, Genworth, and Ohio National.  Read our other life insurance reviews here.  We specialize in helping individuals with medical impairments.

To be clear, I am not a Farmers agent.  I am an independent agent.

My Personal Experience with Farmers

Second, I own a Farmers Life Insurance policy on myself, as well as my wife.  In fact, we have nearly all our insurance with Farmers, including our home and auto, my business policy, and an umbrella policy.  So I have experienced Farmers from an insider’s perspective, as well as from a competitor’s stance.

Multi-Policy Discount for Life Insurance

To be honest, when I was sitting in our Farmers agent’s office to sign up for auto and home coverage, having switched from Allstate Insurance, I never expected to purchase a 10 year term life insurance policy for my wife and myself.

But when our agent quoted us a total of $278 per month for our property & casualty coverage, or we could add $50,000 of life insurance each for the same monthly premium, I was shocked.  Our agent explained that by adding the life policies, we would qualify for a discount on our home and auto, essentially making it free to add our life insurance policies.

So the first lesson when considering  whether to add or drop a life insurance policy with Farmers is to inquire if you’ll be able to qualify for a multi-policy discount by adding “life” coverage, or if you’ll potentially lose a multi-policy discount by dropping a life policy.

Review of Farmers Life Insurance History and Ratings

Farmers has been in business for over 80 years, as it was founded in 1928.  They do business in 41 states.  It’s a bit odd that I could not find Farmer’s ratings on their site, but was able to find them at ambest.com.

A.M. Best rates Farmers New World Life Insurance Company at “A”, which is assigned to companies that have an “excellent ability to meet their ongoing insurance obligations”, in the opinion of A.M. Best.  It is the 3^rd best of 16 ratings given by A.M. Best.

Only the strongest companies in the world, such as State Farm Insurance and GEICO Indemnity Company earn better ratings.

Types of Life Insurance Policies Available

Farmers offers your typical term policies, 10, 20 and 30 year, which have guaranteed level premiums throughout the initial term period.  They also offer whole life and universal life insurance, known as “Farmers Essential Life”, which offers the advantage of a permanent plan and cash accumulation, but with the flexibility to adjust when you pay premiums and the amount you pay.

They offer a traditional term policy (Level Term), which requires a medical exam, and also the “Farmers Simple Term Life Insurance”, which simplifies the underwriting process and does not require a medical exam.

They also offer a couple valuable riders, such as the waiver of premium rider and accidental death benefit rider, as well as the accelerated death benefit rider, which pays up to 50% of the death benefit while you are still living if a physician diagnoses you with a terminal illness.

One unique thing about their term policies is their minimum face value is $150,000 for their Level Term product ($75,000 for the Simple Term), whereas most life insurance carriers have just a $100,000 minimum.  From an agent’s perspective, I can tell you this can make it a bit tricky when all a client wants is $50,000 or $100,000 of coverage, but the minimum for the Level Term policy is $150,000.

Decreasing Term

My clients occasionally ask me if there’s a type of policy with a decreasing death benefit.  In this case, they are usually interested in covering a mortgage, or similar amortized loan, which makes complete sense, because as your loan balance decreases, some people don’t want to continue paying for the same amount of insurance, when it’s no longer needed.

Farmers is one of the only companies who offers this.  I know none of my carriers offer it, so they get a big star in this part of their review for being a trendsetter.

Low Maximum Ages for Term

See the max ages who can qualify for their term.  If I can say one negative thing about Farmers, their max ages are really low to be able to qualify for term insurance.  You can see their max age is 50 for their 30 year term, where most companies will issue it to age 60, and a couple carriers will even issue it to age 65.

30-Year:
18-45 Nicotine Class
21-50 Non-nicotine Classes

20-Year:
18-60 Nicotine Class
21-60 Non-nicotine Classes

10-Year:
18-65 Nicotine Class
21-65 Non-nicotine Classes

Customer service

Their customer service is ranked highly, and I find few complaints in other reviews that Farmers Life Insurance is a scam or ripped people off.  You can always find people complaining on the internet, but I find that only the unhappy clients go off venting on the computer, where you never hear from the millions of happy clients.

Come on, people.  They’re a highly reputable company with over $2 Billion in assets.  Do you really think they’re in business to rip people off?

If you’ve been turned down for life insurance due to sickle cell anemia or sickle cell, there is hope.  We represent some carriers who will offer affordable coverage to certain individuals, depending on age of diagnosis, history of complications, and they type of sickle cell you have.

As medications and treatment plans have improved recently, individuals with sickle cell or SS now have markedly better life expectancies into their 60’s and beyond.

Best Case Scenario – Sickle Cell Trait or Sickle Cell

With merely the trait, no penalty will be applied to your health classification.  You can qualify for preferred rates, in fact.  If you have sickle cell (SC), and you have a mild to moderate case, you may only get a mild substandard rating.  To get an idea of the premium you’ll pay, just run some quotes at Standard class and add approximately 50% to the premium.  Not too bad.

Mild to moderate sickle cell would be defined as current Hb readings 10 or more, and HCT more than 32%, with only mild history of complications.  Severe cases will be declined for traditional types of insurance, but policies with graded death benefits may be available.

As you know, some complications of sickle cell disease may be painful crises, lung scarring, thrombosis, necrosis of the bones, and leg ulcers.  Obviously, the absence or minimization of these affects will increase your odds of approval.

In a best case scenario, if there is no evidence of any history of anemia or crises, you could qualify for the best preferred classes.

Sickle Cell Anemia (SS)

With sickle cell anemia, and we’re talking adults here (as children under 15 will be declined due to elevated risk), again, it will depend on your Hb and HCT levels being high enough.  If they are, you’re looking at a substandard case, such as Table D.

If you would like a personalized quote, it will be important for us to collect information on the history of your painful crises.  Although almost everyone with SS or SC has experienced a painful crisis, the severity and frequency varies greatly among patients.  Some individuals can go years without experiencing an episode.

Your best scenario is it’s been more than a year since your last episode, and if your symptoms have never been so severe as to land you in the hospital.

After Bone Barrow Transplant

You still may be able to qualify for life insurance if you’ve needed a bone marrow transplant or stem cell transplant in the past to control your sickle cell anemia.  In fact, you can be a mildly substandard case as early as 6 years post treatment, assuming no complications and Hb consistently over 10.

Other Medical Conditions

Obviously, the presence of other health issue presents a problem.  Just because you may qualify for, say, a Standard rate with controlled sickle cell disease, does not mean you will still qualify for Standard if you’ve also had a history of heart disease or obesity, for example.

Since smoking is so bad for people with sickle cell, it will be nearly impossible for you to be approved if you also smoke, so don’t do it!

Controlling the Complications

Your goal as someone who suffers from SS or SC, and who wants life insurance, should be to be compliant with every recommendation your doctor makes.  If you are supposed to drink 8 glasses of water every day, and take Hydrea, antibiotics, or whatever else is prescribed to you, a life insurance underwriter is going to want to see that your medical records reflect you are following those orders to the tee.

For a personalized quote with sickle cell disease or any other impaired risk case, please call us at 877-996-9383.  If you liked this post, please like it on Facebook or share it on Google +1.  Thank you!

By far, the most common type of life insurance purchased is on a single individual.  But in the right circumstance, a second-to-die life insurance policy may be exactly what you need.

A second-to-die policy is unique in that there are two insureds (usually spouses) and a death benefit is only paid out upon the second insured’s death.  So we have two lives covered, two deaths, but only one death benefit.

In most traditional types of life insurance sales, the proceeds are left to the surviving spouse for various financial needs.  Obviously, that’s not the case here, so let’s take a look at why someone would purchase a second-to-die policy.

The top reasons to purchase second-to-die life insurance are:

Estate Planning Purposes – Approximately 90% of these policies are purchased by couple’s with large estates, who may have an estate tax problem.  This is really a simple concept.  The first spouse passes an unlimited marital deduction upon his or her death to the surviving spouse.  Upon the second spouse’s death, their entire estate is subject to various forms of taxation (income tax, possibly estate tax, etc.)   So what better way to pay the estate tax bill than with a life insurance policy, which cost pennies on the dollar, and pays out an income tax free death benefit?

Support of Children – Since the death benefit does not pass to the surviving spouse, it is usually purchased with a married couple’s children in mind.  Perhaps there are unpaid bills or debt such as a mortgage to be willed to the children, and the parents don’t want to pass away leaving their children with a loan on the house.

Affordability – Second-to-die policies are, on average, 25-40% cheaper than purchasing a policy on just one individual.  The savings could be even more drastic if one of the spouses has some health issues, but the policy is issued anyway based on the good health of the other spouse.

Sample Quote for $1 Million Death Benefit

70 Year Old Male Individual Policy through Prudential, Preferred Health = $30,305 Annually

70 Year Old Male/Female Second-to-Die through Prudential, Preferred Health = $16,907 Annually

Cash Accumulation – Since the cost of insurance (COI) in these policies is so low, some people leverage them as investment vehicles to grow its cash value account.

Charitable Bequests – Perhaps you have a favorite charity or educational institution.  Many libraries have been named and scholarship funds have been created due to the proceeds of second-to-die policies from generous benefactors.  Perhaps you can’t afford a $500,000 outright gift, but you can pay $10,000 per year.  Leverage your dollars and buy a 2nd-to-die policy with your favorite charity as beneficiary.

Types of Second-To-Die Policies

The most common type of second-to-die policy sold is universal life.  All the big carriers such as Prudential, Met Life, and ING offer a 2nd-to-die option.

Protective Life is the only life insurance company I’m aware of that has term policy with this option.  You can purchase 10, 20, or 30 year convertible second-to-die term, and boy, is it ever affordable.

The only downside with Protective’s term policy is the best health class they’ll offer is Standard.  So if you’re both in excellent health, you get somewhat of a downgrade in health classification here, as the best you can qualify for is standard.

Do the two Insureds have to be Husband and Wife?

No.  You can have second-to-die policies with mother and son, siblings, 2 business partners, etc.

For example, I used to volunteer on the board of a private school in San Diego, which had been co-founded by two wonderful women.  You could make the argument that a 2nd-to-die policy would be appropriate for the school to purchase on them for succession planning.

You see, if one were to die unexpectedly, the other could take over her responsibilities, but when they’re both gone, you could argue the school could suffer from decreased attendance while the successor moves into his or her new job.

How to Get a Second-to-Die Quote

You may notice in the quote results, you won’t find an option for second-to-die policies, so to get a quote, you’ll need to call us directly at 877-996-9383.

*If you enjoyed this article, please share on Facebook or Google Plus 1 it.  Thank you!

The factors I always recommend my clients consider when trying to determine which life insurance company to pick are the company ratings and the premium.

How to Choose a Life Insurance Company

It is of utmost importance that the company you choose is a financially viable and stable organization.  A couple ways I use to measure this are by seeing how long a company has been in business.  You have some companies like Genworth Life Insurance or Ohio National, that have been in business over 100 years.  They’ve been through recessions and depressions and are still going strong.  That’s a good sign.

Also, be sure to ask your agent what ratings the insurance carrier has earned from a 3^rd party financial rating company, such as A.M. Best.  You should aim for one that boasts an “A” rating, such as A++, A+, A, or A-.

Insurance Company Reviews

You can do a google search for just about any company you want to do business with, or agency for that matter.  You might try googling something like what I wrote about recently, State Farm Life Insurance Review.

Life Insurance Quotes

Then, as I said, pricing must obviously be a consideration.  What’s really interesting here is that finding the best price for life insurance is not as simple as putting your date of birth and amount desired into a quote form, and then picking the company who comes up at the top of the list as having the lowest life insurance quotes.

Instead, you should really discuss your case with an agent before determining which company to apply to.  If you have any history of medical impairments such as diabetes, cancer, or heart issues, you will want to apply to the company who will approve you at their best rating classification.

Types of Life Insurance

Another factor affecting your life insurance quote will be the type of insurance you apply for.  We represent companies with the full spectrum of term and permanent products.  For a general explanation of your choices, please see our post about the types of life insurance, or for a more specific explanation on a particular type, you can go directly to the articles below.

10 Year Term Life Insurance

20 Year Term Life Insurance

30 Year Term Life Insurance

Universal Life Insurance

Whole Life Insurance

How Much Life Insurance Do I Need?

A general rule of thumb is at least 10X your income.  However, this answer has many variables.  If you have a lot of debt, such as a large mortgage or credit card debt, you may want to add the balances into your policy benefit.  If you have cash and investments that could be liquidating in the case of your passing, then be sure to take that into consideration as well.

If you’re buying life insurance for income replacement purposes, you may want a lot more than just 10X your earnings if you are in your 30’s or 40’s, since you still have at least 20 years more to work before you retire.  For help calculating how much you need based on your income and how many years you have left to work, please use our life insurance calculator.

Where to Start

As I explained above, every life insurance company has its sweet spot, where it may be more forgiving of a certain heath condition than others.  It’s really best to speak to a knowledgeable agent who can sort through all the options and recommend the best fit for you.

Call us for a free life insurance quote or for assistance choosing a life insurance company at 877-996-9383.  And if you found this article helpful, please “Like” us on Facebook or “Google Plus 1” us.  Thank you.

If you go to your run of the mill agency like State Farm or Farmers Insurance, you won’t have a chance at being approved for life insurance with congestive heart failure.  We have, however, obtained many successful approvals with this heart condition and many other types of impaired risk cases.

Two Types of Approval

An individual with congestive heart failure may qualify for two types of insurance:  traditional life insurance or graded death benefit life insurance.  Traditional coverage will require a medical exam and is usually much less expensive.  You will need to be in better health to qualify for this type.

The key to a traditional policy approval will be a recent echocardiogram, treadmill stress test, or cardiac catheterization showing that the heart is not overly enlarged, and the left ventricular ejection fraction (LVEF) is still within acceptable levels.

The ejection fraction measures how efficiently the left ventricle pumps the blood.  Normal is around 50% to 60%.  But in people with heart failure, the ejection fraction drops, sometimes into the 40’s, 30’s or even 20’s.  It will need to be in the 40’s to have a chance at a traditional policy.

Your odds are also better of being approved if you are a non smoker, at a good weight, with no other health issues, such as diabetes.  The insurance carriers will expect that you will be on medication to control your blood pressure, so that’s okay.

Graded Death Benefit

If your heart failure is in later stages, your ejection fraction may be lower than this, and your only option will be to apply for a graded death benefit type of policy.

This type of life insurance is far easier to qualify for.  As long as you haven’t been confined to a nursing home or had a heart attack or transplant in the past 2 years, or currently hospitalized, you can potentially qualify for this coverage.  There are other qualifying questions related to other medical conditions, but those are the only conditions as it relates to your heart.

A graded death benefit policy works a bit differently than traditional, in that you don’t need to have a medical exam, and they won’t order your medical records, so it’s much quicker.  However, it is also more expensive than the traditional variety.

The term “graded death benefit” is also very important.  It means your death benefit is reduced during the first 2 years of the policy.  For example, if you have a policy with a $50,000 death benefit, the benefit might only be $5,000 in the first year, $10,000 in the second year, and then $50,000 thereafter.  The most popular and reputable company offering graded death benefit life insurance is Fidelity Life Association.

Types of Life Insurance Offered by Fidelity

One of the nice things working with Fidelity’s impaired risk products is they have their graded policy, which is a whole life policy, which builds cash value.  But what is unique is they also offer a lower cost type of insurance called term, which keeps the premiums fixed for the duration of the term.  For example, they offer 10 year term, 20 and 30 year term policy, which also has the first 2 years as a graded benefit.

To get started with a life insurance quote with congestive heart failure, simply fill out our quote form on the right, and tell the representative who contacts you about your entire health history.

Thanks for reading our article.  If you liked it, please share on Facebook or Google Plus 1.

It is not impossible to be approved for life insurance after having a blood clot, although many variables must be considered.  At Huntley Wealth Insurance, we specialize in life insurance for impaired risk cases such as blood clots, so if you want a personalized quote, call us at 877-996-9383.

Of course, the main concern with blood clots is that a piece may break off, flow to the brain, and cause a stroke.

Standard of Better Approvals

In the best case scenario, if you had just one occurrence of a blood clot, small, which was treated with a blood thinner such as Coumadin.  In many cases the clots dissolve after 6 months to a year.  Once your doctor confirms the clot is gone, you may be able to qualify for preferred rates, and possibly the best health class rating as soon as 2 months after the clot is confirmed gone.

If your clot was treated with a clot buster, a catheter-directed thrombolysis, or thrombectomy, which is the surgical removal of a clot, you can still qualify in many cases 2 months after successful treatment.
The good news is that blood clots are among the most preventable types of blood conditions, so if you manage the risk factors, the insurance carriers are willing to take a fair look at insuring you.

The next best scenario is if your clot has not yet resolved, but is a small clot, and in a safer location, such as a clot in the Leg, Arm, or Pelvis.  The most common client I get with a history of clotting had a clot in his or her leg.  While there are few companies willing to make an offer with a current clot, there are insurance carriers who will consider.

Best Chance for Life Insurance Approval

You’ll be a much better life insurance prospect if you exercise regularly and are in good shape.  That’s because obesity and lack of physical activity are two key risk factors for venous clots.
Another risk factor is smoking cigarettes, so non smokers are more likely to be approved with blood clot history.  Of course, a person with well controlled blood pressure and good cholesterol levels are also lower risks than those with elevated levels.

Blood Clot in the Lung

When a piece of a deep vein thrombosis that starts in the leg, or less commonly the arm or pelvis, breaks off, it flows through the circulatory system until it gets lodged somewhere.  It commonly stops in the lung, known as a pulmonary embolism and is life threatening.

No insurance companies will offer insurance until it has been dissolved, except perhaps a graded death benefit policy.  Even if it has been dissolved, it may be difficult to be approved for life insurance if you have had multiple clots.

Managing the High Price of Life Insurance

If you do get insurance after multiple clots, the cost may be very high, particularly for a permanent type of policy such as universal life or whole life insurance.  You might consider purchasing a shorter term solution in this instance, such as 10 year term or 15 year term to keep the cost down, with the goal being that the longer it has been since your last clot dissolved without reoccurrence, you may be able to qualify for a better rating down the line.

Thanks for reading our article.  If you liked it, please share on Facebook or Google Plus 1.

Before reading this article about indexed universal life, you’ll want to read and understand the basics of my previous article titled Universal Life Insurance Premiums, which offers an explanation of how universal life works and some sample quotes.

When you read about indexed universal life, what you’re dealing with is a particular method that the interest is credited to your cash value, which may offer a greater opportunity for interest earnings. When you’re dealing with universal life, the higher your cash value grows the better, since that ultimately means you can pay less premiums down the line, or pull more cash out of the policy, whichever you want.

What is Indexed Universal Life?
Many universal life contracts now offer an interest crediting strategy that’s tied to a major equity index, like the S&P 500. For example, rather than earning a non-guaranteed 4% per year, which is set by the insurance carrier, you might elect to try your odds in an indexed strategy, where you could earn as much as 8% or 10% in a given year, depending on the performance of the stock market.

One Year Point to Point Strategy with Cap
The most common indexed strategy is a one year point to point with a cap or participation rate. Say you pay $500 into your policy this year, and only $200 is needed for policy costs, and you’ve elected the one year point to point indexed strategy with a 8% cap, tied to the S&P 500.

In this case, your company would mark the current index value of the S&P. Say it’s at 1300 today. Then a year from now, one year after the $300 was allocated to the indexed strategy, the S&P’s level is marked again. Say it went up to 1360. That’s a gain of 4.6%. Your $300 would be credited with 4.6%.

But what if the S&P went up to 1500, a gain of 15.3%. Here your cap of 8% would come into play, and your $300 would be credited with 8%.

What if the Index goes down?

In most cases, the money allocated to a strategy tracking an index that stays flat or decreases during a segment, will make 0 gains for the year (or however long the segment is).  In some cases, a minimum guaranteed interest rate, such as 1%-2%, is available for index strategies over a 5 or 6 year segment.  This is the way Aviva Life Insurance’s 1 and 2 year point to point strategies work, which currently offer a 2% guaranteed minimum during the 5 or 6 year segment, respectively.  (As of the time of this writing, 3/1/12)

But you’re definitely gambling because in a non indexed strategy, the company may pay you 3% to 5% per year, whereas you could get a 0% in any given year if the stock market goes down.  Over the long run, the statistics show you’ll probably earn more interest in a index strategy than in a non indexed.

Please note I am not aware of any whole life policies that offer indexing strategies.  Neither does term, such as 20 year term or 30 year term, since these have no cash value.

Participation Rates and Spreads
A few other popular ways to credit the indexes gains are based on participation rate (you might get 50% of the index’s earnings in a given time, for example), or a spread may apply. So there may be a 4% spread. Whatever the index gains, you’ll need to subtract the spread from the gains to calculate your interest.

My least favorite is monthly cap. With monthly cap, your potential for gain is usually very high, but would almost never happen in real life. Say you have a 2.5% monthly cap. If you hit the cap every month, you could make 30% in a year. But what they don’t like to point out is that while you are limited every month to a cap, there is no limit in the months the index decreases.

So say the index went up 30% in a year. Usually in a case like this, a lot of the gains are made in just a few months. The problem here is that the market goes up 15% over a course of 3 months, you only get your cap each month. So let’s say the index gained 2.5% in 9 of the 12 months in a year, but in the 3 down months, the index decreased 4%, 3%, and 6%. In this case, you would get 2.5% X 9 – 4 – 3 – 6 = 9.5%.

Call us at 877-996-9383 for a quote.

Thanks for reading our article.  If you liked it, please share on Facebook or Google Plus 1.