Life Insurance for My Mother

Life Insurance for My MotherPerhaps you’ve been thinking about buying life insurance for your mother who might be getting on in years.

You probably wonder whether it’s feasible or even worthwhile to do so.

Buying life insurance for your mother is not only possible it might also be a worthwhile investment not only for her but for you as well.  I will explain what you need to know and how to make an informed decision on what type of insurance you can consider that would suit your mother’s needs.

Why Should I Buy Life Insurance for my Mother?

It can be a very good idea to buy life insurance for your mother if the beneficiaries have to take care of debts in the event of your mother’s death.  In addition to potential debts, you may have to consider the funeral and other expenses that could be incurred when she passes away.  There may also be estate and trust issues involved as well.

Is There an Age Limit?

In most instances you can buy life insurance for your mother up until the age of 85.  After age 85 the premiums can be very costly.

Ownership of your Mother’s Life Insurance Policy

The person who owns the own will be dependent on who buys the policy.  If you are simply making inquiries on her behalf and your mother will be paying for the policy, then she will be owner of the life insurance policy.

On the other hand if you wish to purchase the policy so that your mother is the named insured, then you will be the owner of the policy since you are the one paying the premium.

You should also consult with a tax advisor if you are paying for the policy and are the beneficiary as there may be tax considerations that can impact you when the policy is paid out.

Do I have to Tell My Mother?

The answer is yes.  In most states you legally obligated to do so.  In any event, your mother will also have to sign the policy since she will be the named insured and will obviously become aware of that you have purchased a policy.

Can I be Restricted from How Much Insurance I Want on My Mother?

The amount of insurance you can buy will vary from company to company.  Up to certain levels of insurance you can buy the policy without restriction.  For higher policy amounts you will have to prove that you have what is called an ‘insurable interest’.

An insurable interest simply means that you must show the insurance company that you have a financial stake in the amount that will be paid to you if you or some other person as the named beneficiary.  The financial stake is the financial burden that you might have to incur when your mother passes away such as debts like credit cards, mortgage and car payments, death benefits and similar expenses.

In most cases you can apply up to around $100,000 for a policy before you have to prove an insurable interest. So don’t expect to buy a million dollar policy without showing justification that you need this amount.

Will my Mother Have to Take a Medical Exam?

It depends on the type of policy and the amount of insurance you are buying, her age, habits, her current health and family history.  In most instances and for lower amounts such as $10,000 or $25,000 you may only have to fill out a questionnaire.  The older a person gets, the insurance company may have more restrictions.  These medical exam requirements also vary from company to company.

Policies which are for higher amounts will very likely require a medical exam.  These exams are fairly straightforward, performed quickly and are non intrusive.

Types of Life Insurance Available for Your Mother

There are several choices you can make when considering what type of policy to buy for your mother.

Term Insurance

The cheapest and easiest to purchase life insurance available is called ‘Term Insurance’.  This type of life insurance pays death benefits only.  It is called term insurance because you purchase it for a specific number of years.  So, you can buy term insurance for say 5 years or 20 years.  The premiums are fixed for the period of the term.

You decide on what length of term by considering your needs and reasons for buying the life insurance.  It may also depend on the life expectancy of the person.

Permanent Insurance

A more expensive form of insurance is also available and is known as ‘Permanent Insurance’.  There are 3 varieties available, but for most people who are purchasing life insurance for their mother, the best options are called ‘Whole Life’ and ‘Universal Life’.

The main difference between term life and permanent insurance is that a whole life or universal life insurance policy not only pays death benefits but also has a cash value accumulation feature which grows over time.  Universal is considered the cheaper of the two and might be the best approach in many instances where an estate or trust is involved.

Second to Die Policy

This type policy can only be purchased if both parents are still living.  It is a policy that is also often used in estate and trust planning.  The key feature of this type of life insurance policy is that it is only payable when the second person passes away.

Impaired Risk Insurance

If your mother currently suffers from a relatively serious health condition, you can still possibly buy life insurance.  I suggest you call us for more information as this form of life insurance is something we specialize in providing.

You can use our quote form on the right site of this page to get a quote to see how much a policy might cost.

If you would like to learn more buying life insurance for your mother than you may also want to read Can I Purchase Life Insurance on My Parents.

For the best term life insurance prices on your mother, or any other type of life insurance, it’s best to speak with a knowledgeable professional, who can discuss your options and pricing with you.  You may get a quote using our form on the right or by calling us at 877-996-9383.

Review of Lincoln National Life Insurance Company

Lincoln National Life Insurance ReviewIn this article, I’m going to provide you with a review of Lincoln National Life Insurance Company.

Knowing more about an insurance company will help you make an informed decision in considering whether this life insurance company is the right choice for you.

Lincoln Life Insurance Company Overview

Lincoln National Life Insurance Company is part of the Lincoln Financial Group.  The company has its headquarters in thePhiladelphia region.  The company has its origins going back to 1905 and has risen steadily as a financial group and as an insurance company since its inception.

The services provided to individuals by this company include annuities, life insurance, long-term care, and employee benefits.  Additionally, the company also provides retirement plans, group insurance and executive benefits for employers, and also provides presidential funds for investment management.

Lincoln Financial Group is ranked number 247 in the Fortune 500, and as number 220 on Baron’s 500.

Financial Assessment of Strength of Lincoln National Life Insurance Company

One of the ways a person can determine whether an insurance company is suitable is to know how strong the company is considered financially.  A financially stable company will able to fund its payments and since this is a long term investment for you, it is vital you pick a company which is financially secure.

You can always learn about the financial stability of any listed company by checking a company through the rating companies such as A.M. Best, Standard and Poor’s, Moody’s, and Fitch, just to name a few. These companies perform a detailed analysis of the financial strength of a company and rate how stable it considers the company.

If you’re wondering how Lincoln National Insurance company rates with these companies, I just happen to have the information available.  At the present time, A.M. Best gives Lincoln a rating of A+ (Superior), while at Fitch it is rated as A+ (Strong), and at Moody’s it has a rating of A2 (Good), and finally at Standard’s and Poor’s it is rated as AA (Very Strong).

Overall, Lincoln National Life Insurance Company could be considered as being very financially sound.

Life Insurance Products Provided by LincolnNational Life Insurance

Lincoln National Life Insurance provides the following life insurance products:

Term life insurance

Term life insurance is the most affordable form of life insurance available.  This type of life insurance covers death benefits only, and can be purchased in periods of time which is why it is called ‘term’.

AtLincolnyou can buy term insurance for 5, 10, 15, or 20 years.  When you buy a term policy, the premiums are fixed for the life of the term.  It’s always better to buy a longer term because the premiums get progressively more expensive each time you renew the policy.

Permanent Life Insurance

Permanent life insurance combines 2 features which include the death benefits but also has the added advantage of a cash accumulation feature.  The cash accumulation is often used as a complement to your retirement plan and has the added advantage that you can borrow against a portion of the amount which you accumulate.

At Lincoln National Life Insurance Company, you have 2 types of permanent life insurance policies to choose from and they include:

  • Universal Life Insurance – Also provides you with a cash value and death benefits but has the added advantage by giving you the option for you to make monthly premiums which are more flexible.  You are also allowed to determine the amount of your death benefit while the policy is still in force.  Your cash value accumulation growth can be set at a set rate.

Your earnings are not taxed until they are paid out (tax-deferred)

  • Variable Life Insurance – Provides all the benefits which you find with universal life insurance.  The main difference is that your cash value accumulation has the potential to grow and based on the market performance of the portfolio you have selected.  You can choose where your premiums will be invested.  Like universal life insurance, your earnings are tax deferred until they are paid out.

Complaints against Lincoln National Life Insurance Company

Any company of any size will experience its share of consumer complaints.  The best place to check out a company and how it rates is through the BBB (Better Business Bureau).  Lincoln National Life Insurance Company isn’t listed but Lincoln Financial Group is listed with the BBB and it has been a member since 1939.  This company has a rating of A+ which is the top rating.



Types of Pennsylvania Life Insurance Policies – Term, Whole Life, and more…

If you’re thinking of buying life insurance in Pennsylvania and not sure what you need or what to do, you’ve come to the right place.

I’ll give you some vital tips on what you need to know about buying life insurance.

Let’s start with life insurance basics.

How to Find the Best Pennsylvania Life Insurance

Buying life insurance is a 3 step process which breaks down into the following:

Step 1Decide How Much Life Insurance you Need

Consider first any existing policies you might have such as a company plan, what you might receive with social security, or possibly a veteran’s pension, and take inventory of the other assets your family could live on in the event of your passing (investments, home equity, etc.)

Then, decide on how you family would need to keep them financially viable and to keep their standard of living if you were to die now.  Also, include future financial considerations which your family might need such as tuition costs and other possible financial needs such as funeral expenses, existing debts and your mortgage or rent.

If you’re working, many people simply chose a multiple of their income, such as 10 or 20x annual income.  Here’s a helpful calculator for more on how much you need.

This will give you a ballpark figure.

Step 2Decide on a Life Insurance Policy

Take a look at the different types of life insurance policies available and decide on which one suits your needs best. Your choices include Term life insurance, and Permanent Insurance which includes Whole Life, Universal Life and Variable Life. I’ll explain their differences later on in the article.

Step 3Compare the Costs for the Policy

To find the most affordable insurance policy, your best bet is to consult an independent agent like myself.  An independent agent has access to a vast range of insurance companies so I am able to research them and find one that suits you best and at the best price.

Types of Pennsylvania Life Insurance Policies

As I said earlier, there are 2 types of life insurance which you buy being Term or Permanent Life Insurance.  Let’s look at the differences.

Term Life Insurance

Term life insurance covers you for death benefits only.  It is the most economical type of life insurance available.  Although term life covers you for life, you buy term life insurance for a periods of time in increments such as 10, 20 or 30 years.

It’s best to buy term insurance for as long a term as you can.  The reason is that the premiums become significantly higher if you re-new a policy when you become older.  The premiums are fixed for the period of the term.  The death benefits which are payable are also not taxable.

You also have the option of converting a term life policy into a permanent policy if you would like to factor in a permanent policy into a retirement vehicle as your income increases.

Permanent Life Insurance

Permanent life insurance has 3 basic types of policies which include whole, universal or variable life insurance. Let’s look at them in brief detail.

Whole Life Insurance

A whole life policy lasts you for your entire life, or until you decide to cancel the policy.  Or, you also have the option of buying a whole life policy which only lasts until you reach age 65 or some other time period.

A whole life policy is more expensive than a term policy. The reason is that this type of policy not only covers you for death benefits but it also has a cash accumulation feature as well.

The cash accumulation feature will be paid to you if you cancel the policy.  Otherwise, it will go to your beneficiary.  You can borrow against the cash accumulation if have the need to do so, or use it pay for your premium for a certain period of time.

Universal Life Insurance

Universal life insurance is very similar to whole insurance except the cash accumulation earns interest that is based on the market rate of interest.  Also, you can vary your premiums with this type of policy, and vary the death benefits which you can increase or decrease.  You can also skip premium payments as well.

Variable Life Insurance

In this type of policy both the death benefits and the cash value accumulation will be based on the performance of the investments.  These policies can only be sold by an agent who is a registered securities dealer.

Pennsylvania Insurance Tips

  • Always make sure the agent you select is licensed to sell policies in Pennsylvania.  The reason is that policies sold by licensed agents are covered against insurer’s default and are covered under the PLHIGA (Pennsylvania Life and Health Insurance Guarantee Association) which will cover up to $100,000 in death benefits and up to $300,000 for death and annuity benefits.
  • I also suggest that you discuss your insurance needs with your financial advisor, lawyer and members of your own family.
  • Always carefully read all the information contained in your insurance application to ensure its accuracy.  A simple typo could end up causing you an endless amount of unwanted headaches.  Also, never lie on your application form.  Insurance companies have the right to fully investigate your application should you die within the first two years of signing a policy, and could void or cancel any policy which is inaccurate.
  • Also, remember that you have a ‘free look’ or ‘right to examine period of 10 days or more to determine if you want to change your mind and cancel the policy.  Pennsylvania law warrants you must be given a full refund if you cancel within this period.
  • Always take the time shop around and compare premium prices.  I also highly suggest that you use the services of an independent agent to get the best quotes and the most suitable policies.

Special Considerations for PA

One of the whacky things about Pennsylvania is that their department of insurance makes consumers and life insurance agents jump through hoops sometimes to get a policy.

Here’s an example.  Our main office is in California, but we are licensed in over 35 states.  We’re also contracted with a couple dozen life insurance carriers.  Let’s use Banner Life Insurance, for example.

If a client calls me up from out-of-state like Texas, I can go ahead and sell him a Texas policy.   Contracting with insurance companies is a bit weird as you can’t just be contracted with the insurance company in general, but you have to be contracted with them in every state where you want to do business.

This is usually no problem in most states. Usually, you can take the application, and then get contracted with the carrier in that state.  But in Pennsylvania, I can’t just sell a PA policy, even if I’m contracted with the carrier already in other states.  I have to be contracted with that carrier IN PA in order to be able to take the application.

Sometimes this causes delays, and there are a few other examples like this that PA is a bit of a pain to do business in, but it’s nothing compared to New York, and we love all our PA clients.

Get a Term Life Quote

We are an independent agency, licensed with over 30 life insurance companies, so when you come to us for help, you’ll know the quotes we provide you are the absolute lowest prices available.  For more information or to get started with an application for Pennsylvania life insurance, sign up for some quotes using our instant quote form on the right or call us at 877-996-9383.

Tips for Buying Life Insurance in Colorado

Colorado Life Insurance QuotesIf you want to know where to find the best deals on low cost life insurance policies in Colorado, then read on.

We’ll show you what’s available and explain the differences to help you make an informed choice.

Also, we’ll give you some valuable tips on how to find the right policy that suits your individual needs.

Life Insurance Policies Available in Colorado

Colorado is what I would call a “no exclusion” state.  For example, if an insurance company comes out with a new 10 year term policy and they want to sell it in all 50 states, there are usually a few problem states like Washington or New York, where the product might not get approved in (every state has to separately approve the new 10 year term product to be sold there.)

But I rarely ever see policies being offered in certain states, but not Colorado.  You pretty much have access to just about every company’s policies that are available in any other state.

Having said that, let’s review the types of policies you do have available to you.

There are 2 types of life insurance policies which can be found in Colorado.  The types of life insurance are known as term insurance and permanent insurance.  They both have some similar features with when it comes to death benefits, but permanent insurance has a cash value feature which I’ll explain about later on.

Term Life Insurance Explained

The cheapest form of life insurance you buy is term insurance.  Term life insurance covers you for life but you buy the policy in chunks of time such as 10, 20, or 25 years.  You will be given the option of renewing the term, buying a different term or may even be given the option of switching over to permanent insurance such as a whole life policy or a universal policy.

Another good thing about the premiums is that they are fixed for the life of the term policy so what you’re paying per month in year one, will be the same that you will be paying in the final year of the policy.

Life Insurance Shopping Tips in North Carolina

North Carolina Life InsuranceWant to find a good deal on your life insurance in North Carolina?

The 2 questions you want answered are:

1. How do I buy affordable life insurance? and

2. Where can I find it?

You will find the answers to most of your questions in the following paragraphs..

Types of North Carolina Life Insurance Policies

You might be wondering what kind of life insurance is available in North Carolina if you live here or just moved to this state.

The good news is that the types of life insurance policies you find in North Carolina are just like you will find in any other state.

North Carolina offers 2 different basic varieties of life insurance.  These 2 varieties are Term Life Insurance, and Permanent Life Insurance.

Term Life Insurance

The first type of life insurance you will come across is known as ‘Term’ life insurance. This is the most inexpensive type of life insurance that can be found.

They call it term insurance is because it will cover you for life, but insurance companies sell it in specific periods or batches of time such as for 10, 20. 25 years.  These periods of time are called terms.

As you approach the end of the term, you have the option of renewing the policy, or switching to another form of life insurance known as ‘permanent insurance, which I’ll discuss shortly.

Term life insurance is your most basic form of life insurance because it covers you for death benefits only. The death benefits go to your named beneficiary, and they are non-taxable, so your loved ones can use the benefits as they deem fit.

Term life insurance is the easiest life insurance to buy because in some instances, you may even not require a medical exam, or at the very least only have to answer some medical questions over the phone or online.

The one thing to know about term life insurance is that the premiums become more expensive as you get older.  That’s why it’s a good idea to buy it for a longer period of time or term, than a shorter term, because the monthly premiums get much more expensive if you renew.

You can use term life insurance in a variety of ways. Term life insurance makes a substantially cheaper option than buying mortgage insurance through a bank to cover a mortgage.  Banks don’t tell this though – big surprise, hey?

Term life insurance is also a good buy if you own a business and need funds to cover your business expenses if you die prematurely so your loved ones don’t have to be burdened with the leftover business costs.  It’s also good if you have a business partner.

Call me and I can explain more about how term life is a good buy for these and a variety of other reasons.  877-996-9383

Permanent Life Insurance – (Whole Life and Universal Life)

The other type of life insurance you can buy in North Carolina is called ‘Permanent’ life insurance.  You have 3 choices when buying permanent insurance.

Your choices are whole life, universal life, and variable life. Whole life insurance and universal life are generally the most common of the 3 policy choices that people buy.

Permanent life policies are more expensive than term life insurance policies. They not only include the death benefits, but also have a cash value accumulation feature that builds up over the life of the policy.

To qualify for a permanent life insurance policy you will likely have to take a medical exam.  You should be prepared to answer some very detailed questions about the state of your health. The insurance company will also very possibly get a medical report from your doctor if you have a serious medical condition.

It’s a bit complicated to go into too much detail about these policies because they also vary slightly from company to company. The thing to remember is that it pays to use an independent insurance agent to shop around and find you the best deal that suits your individual needs.

How Much Will You Pay for North Carolina Life Insurance?

The good news is that you won’t have to pay anymore to purchase life insurance in North Carolina than you would in any other state.

To learn more about the cost of buy life insurance in North Carolina, I suggest you use our online quote menu on this site.

Or, you could also give me a call at 1-877-996-9383 and I would be happy to take you through the process and discuss your options.

How to Buy Life Insurance in North Carolina

Life insurance in North Carolina can be purchased in several different ways. You could research it online such as at my site and compare quotes, and see how much different companies charge.

Your other option is to talk to a service representative at a company.  I don’t suggest this because you are only going to get their quote and no others, so you won’t get the best deal

Your other option is to talk to an insurance agent. Be careful though because there are 2 types of insurance agents and you want to get the best one.

Some insurance agents only represent a single company, while others may only represent several companies. This limits your choices and options.

The best type of insurance agent to talk to is an ‘independent’ agent like myself. An independent agent in North Carolina has access to a whole range of companies. They can shop around and find the best deal to save you money.

Tips on Buying Life Insurance in North Carolina

The best advice I can tell you about buying life insurance in North Carolina is to always tell the truth about your health.  Never lie because life insurance companies have been doing this for a long time and they know all the tricks.

You can end up getting your policy cancelled or having your claim denied if they find out you lied about your health.

The second biggest piece of advice I can offer is to get at least a number of quotes from 2 or more agents.

We are one of these independent agencies, licensed with over 30 life insurance companies, so when you come to us for help, you’ll know the quotes we provide you are the absolute lowest prices available.  For more information or to get started with an application for North Carolina life insurance, sign up for some quotes using our instant quote form on the right or call us at 877-996-9383.

Life Insurance for College Planning

 You can use a life insurance policy to finance your children’s college education.

 I’ll bet many of you folks out there didn’t even realize that you could.

College and university tuitions have skyrocketed over the past 2 decades, and many of your kids who take out loans start off life with a huge debt looming over them.

 How Expensive Is College and University Tuition?

 If you have young or teenage children, you want them to get the best start in life.  A college or university degree is pretty much the way to go if you want your kids to have a successful and financially comfortable life.

 But, it’s not cheap!

The National Center for Educational Statistics has some pretty startling news about how much education costs.  The average cost for a 2 or 4 year undergraduate program which includes tuition, and room and board for the academic year of 2010 – 2011 breaks down as follows:

Average Annual Cost for Public Institutions                                 $13,600
Average Annual Cost for Private (For Profit) Institutions             $23,500
Average Annual Cost for Private (Not for Profit) Institutions       $36,000

This is a heck of a debt load that both you and/or your children will be facing as the cheapest 4 year program would be $54,000. 00 while the most expensive college program would work to $144,000.00.

 We all want out kids to have the best in life and give them a helping hand because that’s what every parent wants to do.  But many people simply can’t save enough, if anything at all, especially with all their other debts such as a mortgage, personal loans and credit cards.

 So!  How can a life insurance policy help solve this dilemma?

Permanent Life Insurance as an Asset

Everyone wants to protect their family financially which is the reason they buy life insurance in the first place.  First of all, forget about term life insurance policies altogether.  They can help, but only if you die because they pay death benefits only.

You want to help the kids while you’re still alive right?

The way you can help finance your kid’s education is to buy a permanent life insurance policy.  The big difference between a term life insurance policy and a permanent life policy is that the permanent policy has a cash value accumulation feature.  It is also an asset because it has liquidity which I’ll explain about further on.

There are 3 types of policies which you can buy which include whole life, universal life and variable life.  All 3 types of these policies have a cash value accumulation component.

How does the Cash Value accumulation Work?

When you pay your premium the money is divvied up 3 ways.  A portion goes towards your death benefits.  A portion goes to the administrative costs of managing the policy.  And the third portion goes towards the cash value accumulation portion. continue page 2……

What are the Different Types of Life Insurance

Which type of life insurance is best for me?There are two main types of life insurance policies, which are term and permanent life insurance.

Within the two main types, there are sub-types as well.

Which is best for you?

Here’s a general explanation for each different type of life insurance policy we offer, and who is best suited for each type.

Term Life Insurance

90% of our clients purchase term life insurance.  Most term life insurance policies provide guaranteed coverage to age 95, with an affordable initial premium for a period of years (the term), such as 10, 20, or 30 years.

It is the most affordable type of life insurance because of the low cost premiums during the initial term.  Generally speaking, the shorter the term, the lower the premium, so 10 year term is the cheapest and 30 year term costs the most.

After the initial term, the policy moves to an “annual renewable rate”, which will be determined by the insuring company at the end of the term.  I typically see renewal rates at 4 to 8 times the premium during the initial term, so be sure to lock in as long of a term policy as you can afford, because you DO NOT want to pay those renewal rates.

A lot of people never anticipate paying the renewal rates.  They may only need coverage for a short period of time, perhaps to cover a loan, a business agreement, or to replace employment income.  In this case, term is the perfect solution, since its initial premiums are so low.  Why pay whole life pricing if you only need the coverage for a short duration?

Note: Life insurance is not to be confused with Medicare Supplement Plans, which covers gaps in medicare coverage for insureds age 65 and older, as well as drug prescription plans and advantage plans.

For more information about Term Life Insurance, see our articles on 20 Year Term Life Insurance and 30 Year Term Life Insurance.

Permanent Types of Coverage – Whole Life and Universal Life Insurance

Whole Life Insurance

This policy is designed to cover you for your “whole life”.   The premiums are higher than in term or universal life, but that’s because it has superior benefits. It actually builds some very nice cash value, and pays dividends, so the benefits are much better.

Two important benefits of whole life are:
1. Cash value is available for loan or withdraw
2. Dividends can be paid to you in case, used to reduce your premium, or to buy additional insurance, known as “paid up additions”.

Whole life illustrations usually show two columns with for guaranteed cash values and death benefit, as well as “projected” or “assumed” cash value, dividends, and death benefit. The premium is much higher than term or universal life, but you have a lot more benefits with this policy.

Take note that not all whole life policies pay dividends. If they do, they will be illustrated in the “non guaranteed assumptions” column as “Projected Dividends”. They are not guaranteed.

One benefit of the dividends, if available, is you could take them in cash, thereby reducing your total outlay. Or dividends could be taken as cash in your pocket, or for other purposes as I mentioned above.

For more information, see our article on The Cost of Whole Life Insurance.

Universal Life Insurance

This type of policy is similar to whole life, as it may provide coverage for life, but the coverage and premiums are much more flexible.  Like whole life, there must be sufficient premiums or cash value to pay the policy costs and keep the universal life policy in force.  But since the costs of insurance and rate of interest the cash value may earn are both variable, universal life is usually purchased and premiums are determined by “illustrating” these variables to see how the policy will perform.  In other words, we guess.  Then every year or two, a new illustration with “current” policy costs and interest rates is usually requested to see how the policy is performing.

The benefit to universal life is you may be able to pay far lower premiums to keep the policy in force for life than in whole life.  For example, if you buy a UL policy in times of high interest rates, your cash values may accelerate rapidly, outperforming your original expectations, and allowing you to pay less in premiums in future years.  But it can also work in reverse.  If the cash values don’t grow as originally expected, you’ll have to pay higher premiums than initially illustrated to keep your coverage in force.

Two popular types of UL’s are Guaranteed UL’s, which I will cover below, and indexed universal life policies.

“Guaranteed” Universal Life Insurance

This type of policy is built on a universal life base, but acts more like a term policy to age 100 or 120.

Most companies offer their UL policies with an optional “No Lapse Guarantee” feature, which essentially cancels out the “adjustable” features of a universal life policy and the need for cash value to sustain the policy.  So you may have a no lapse guarantee to age 100 on your policy.  In this case, you will pay the minimum premium necessary to keep your policy in force through age 100, and you will probably accumulate little to no cash, but with the “no lapse guarantee”, that’s okay.  You don’t need it.

The problem with guaranteed universal life is that since you have no cash value to sustain the policy, you’re in trouble if you miss a premium.  With regular universal life, no big deal if you skip a premium, but with guaranteed, you must stay on schedule or your “guarantee” could be in jeopardy.

Variations of Term Life Insurance

Hybrid Policies

Term/Universal Life Hybrids – A few companies have come out with a form of guaranteed universal life with options for very short “no lapse guarantee” riders.  The “no lapse guarantee” portion of the policy may only last for a duration such as 10, 20, or 30 years.  Just like guaranteed universal life policies do to age 100 or 120, these riders mandate that even if the policy has no cash value, the death benefit and premium are still guaranteed to stay fixed during the initial term selected.  After the initial term, the policy reverts back to a plain universal life policy where higher premiums and cash value will be needed to sustain the policy.

Return of Premium Term Life Insurance

These policies charge you an additional premium so that at the end of your term, 100% of all premiums pay (for the base policy as well as the return of premium rider) are paid back to you if death has not occurred.

See our article on Return of Premium life insurance.

“Odd” Term Durations

While almost every company offers 10, 15, 20, and 30 year term, some companies offer other term lengths, but this is not the norm.  Some offer 5 year term, but I have yet to find a 5 year term policy any cheaper than my 10 year term options, so I don’t sell them.

American General offers almost any term length you can imagine with their Select-A-Term product line, such as 16 year term, or 24 year term, etc.

Prudential (Pruco Life) has a term policy that offer insurance to age 65, regardless of your age, with the intention of providing coverage through your working career.  This can lead to odd term durations.  For example, if you’re 38 and purchase their Workforce 65 policy, it is essentially a 27 year term policy.

What’s the Difference?  Which one is right for me?

If you only need life insurance for a short period of time such as 10 to 30 years, term is the way to go.  If you want coverage in place for the rest of your life at the lowest premium available, you want guaranteed universal life.

If you want the flexibility of paying your premiums when you want, and are okay with constantly monitoring your policy values, then a vanilla universal life may be appropriate for you.  And if you want coverage for life with guaranteed cash accumulation, then you should consider whole life insurance.

For more information, please visit our category about Types of Life Insurance or call us at 877-996-9383.

Pros & Cons of Mortgage Life Insurance

Is mortgage life insurance really a good investment?

Some people think it is and buy mortgage life insurance to protect the mortgage on their home.

It’s offered through the banks or other lenders when you are buying a home and apply for a mortgage.  But, did you know that mortgage insurance has a number of different disadvantages you might not know about?

There is a better alternative that has plenty of more benefits and can actually save you money as well.

What is Mortgage Insurance?

Mortgage insurance is generally offered by a mortgage lender such as the bank.  This product is not issued by the bank but rather through them and is a policy offered by an insurance company.

Many people buy mortgage insurance on the premise that it sounds like a good idea.  If something happens to you then the mortgage is paid for and you are protected.

In many instances the mortgage insurance policy is relatively easy to obtain as many of these policies do not require that you take a medical exam.  Others require that you do.

Why Mortgage Insurance is NOT a Good Buy

There are several reasons why mortgage insurance is not a worthwhile investment and for the following reasons:

1. The Policy is Not Beneficial

Mortgage insurance is a form of decreasing term life insurance.  This means that as your mortgage diminishes, then the amount on your policy also diminishes.  You continue to pay the same premium throughout the lifespan of the policy until at least about 80% of the mortgage is paid down.

2. The Beneficiary

The beneficiary to a mortgage life insurance policy is the bank, not you.  You’re paying for a life insurance policy that gives you no control whatsoever.

3. Mortgage Life Insurance is Expensive

Mortgage life insurance is often provided without a medical exam being required.  Any type of life insurance policy which does not require a medical exam is always more expensive than one which requires a medical exam.

The reason why mortgage life insurance policy is more expensive is because the insurance company is taking more of a risk to insure because they have less medical information on you than they would have with a medical exam.

4. Fine Print

These policies have a lot more fine print in them and there have been plenty of horror stories of people trying to collect on a policy only to find they have been turned down because of some exclusion that was written into the policy.  The bank won’t help you either because they can’t and probably don’t really care anyway.

Term Life Insurance Better Alternative to Mortgage Life Insurance

You want your mortgage to be protected, so is there a better alternative?

The answer is yes and it can be found with a term life insurance policy.  Let’s take a look at the advantages you can get if bought a term life insurance policy instead.

Benefits of a Term Life Insurance Policy

1. Fixed Level of Benefits

With mortgage life insurance, the amount of coverage decreases.  With a term life insurance policy the death benefits you buy remains constant until the term expires.  It gives you full coverage so it provides better overall financial protection for your family.  Even though you are paying the mortgage down, the difference in potential insurance proceeds gives your family added financial security in the long run as you age.continue page 2……

Should I Buy Single Premium Life Insurance

If you’ve ever gotten a quote from a life insurance agent, you’ve probably been quoted monthly or annual rates.

For example a 45 year old might expect to pay $50 to $100 per month for $100,000 policy with level premiums for life.

But what if your agent came back to you and said… “OK, that will just cost $12,257.”

You, my friend, may have been quoted a single premium life insurance rate!

What is Single Premium Life Insurance?

It is just what it sounds like.  You pay one single premium, and your policy is guaranteed to offer a level death benefit for as long as you live without having to pay another premium.

It can only be used to purchase permanent policies such as guaranteed universal life or whole life.

Buying a single premium policy can offer you fantastic savings over paying premiums for the rest of your life, so if you think you’ll live a long time and can foot the bill, it could make sense for you.

The downside is that if you pay your single premium, and get hit by a truck tomorrow, you will have grossly overpaid for your life insurance, since the death benefit does not change regardless of premium mode.

Due to its high cost and the fact that you can’t get a “single premium term” policy, it’s not very commonly used, except in estate planning.

When Does a Single Premium Policy Make Sense?

Let’s compare two quotes:

  • Male, Age 40, Best Health Class Non Tobacco – For a $500,000 Policy with Guaranteed Level Premiums for Life – $2,493 per Year
  • Male, Age 40, Best Health Class Non Tobacco – For a $500,000 Policy with a Single Premium - $45,402 Single Premium

In this instance, I would say the single premium policy makes a lot of sense.  A 40 year old in great health will live on average 45 years.

So rather than paying $2,493 for 45 years, which would be over $110K, our 40 year old pays a single premium of $45,402.

Using a Single Premium Policy in Estate Planning

Ok, here comes the fun part.

If you’re an affluent individual, you’re probably aware of the estate tax laws.

Let’s assume you’re, 50 years old, in good health, married and have a net worth of $11 million dollars.  With proper estate planning, you should only have to pay estate taxes on $1 million dollars, by using both your and your spouse’s unified tax credit.

But that $1 Million is going to cost your estate $350,000!  So that last million becomes $650,000 after taxes.

Here’s an idea for you.  You won’t believe this.  Life insurance is such an incredible leveraging tool.

If you have the liquid cash to pull this off, here’s what you could do:

  1. Purchase a $1 million dollar guaranteed universal life insurance policy with a single premium of $133,114.
  2. You could have the policy owned by a life insurance trust, therefore separating the $1 million death benefit proceeds from your estate.

The results:

  • Your taxable estate would be reduced by the amount of premium you spent on life insurance, so your new taxable estate would be $866,886 and estate tax due would be $303,410.  So your estate tax is almost reduced by $50K!
  • Then your family takes your $1 million death benefit to pay the estate tax, which leaves them with $696,590.
  • Now your family inherits both your estate of $866,886 and the life insurance proceeds (after paying the taxes) of $696,590.  Add them together and that’s $1,563,476.

So the question is whether your family would prefer to have $1.5 Million or $650,000.

Of course, you could buy other amounts than $1 million of life insurance.  You could take the entire $1 million that is taxable and put that into a life insurance policy.

A $1 million premium would buy you the following amounts at the following ages:

40 years old -approx. $12 Million
50 years old – approx. $8.5 Million
60 years old – approximately $5 Million
70 years old – approximately $3 Million

To sum it up, single pay life insurance is a way to quickly reduce your taxable estate, and leverage that money into a life insurance policy whose death benefits may be estate tax free.

Alternatives to Single Pay

Since some people don’t like the idea of the single pay, but might also not like the idea of paying life insurance premiums the rest of their lives, you could look at a 10 pay policy or 20 pay policy.  These are excellent alternatives.

For a single premium life insurance quote, please call us at 877-996-9383 or get started with a quote request using our form on the right.

Life Insurance for the Elderly

Life insurance isn’t just for young people. This is a common misconception.

If you an elderly person, and here I mean between the ages of 60 – 85 years of age, there can be a variety of valid reason why you need or will want to have life insurance.

It just so happens that at Huntley Wealth Insurance, we specialize in helping the elderly find affordable life insurance.

If you’re wondering if you can still be accepted for life insurance coverage because of your age or health issues, or whether you will able to afford life insurance, then I have some good news to share with you.

Please read on as there is a good chance that I can help you find the coverage and at a price you can afford.

Important Points for the Elderly to Consider When Buying Life Insurance

If you’re in your sixties, seventies or even eighties, here is some valuable information for you consider about buying or renewing your life insurance policies.

The most important thing you need to know is that not every insurance company is the same.  Some insurance companies are much more lenient than other companies when it comes to hitting a milestone birthday, or in how they rate you for insurance coverage based on your health issues.

The second most vital thing to know is that you should always use the services of on an ‘independent’ agent to find the best rates and coverage for your particular situation. Some company agents only represent one or a couple of insurance companies which means you are restricted only to their products. And, going direct to a particular insurance company limits you to only a single line of products so you have no options at all.

An independent agent has access to dozens of companies and can shop around for a company that will cover you, regardless of your health issues (there are exceptions and situations where we might not be able to help). We can shop around and find you the best coverage and at the most affordable rates.

Let’s break it down into more specific age groups.

Life Insurance for the Elderly – Aged 60 – 69

It’s often in this age bracket that health factors begin to have a greater impact on how well and for what policies a person can qualify when applying for life insurance.  This is a time in our lives when many of us are faced with such health issues like cholesterol, have cardiac issues or high blood pressure that needs to be controlled with medication. You could have developed Type2 Diabetes, or maybe you still like to smoke cigarettes or enjoy an occasional cigar. These are all issues that have an impact on your insurance and how the insurance company rates you.

Life Insurance Options for the Elderly

Basically you can choose between Term life insurance and Permanent life insurance (includes whole life, universal life and variable life insurance).

Term insurance

Term insurance is the most affordable forms of life insurance policies available. It covers death benefits only and is often chosen as income replacement. Although it covers you for life, you buy it in packets of years such as 10, 15 or 20 years and that is why it is called term.

Permanent life insurance will cover you directly up to age 120 and includes a cash value accumulation feature.  Permanent policies are available for whole life, universal life and variable life.

How Long a Term Insurance Should a Sixty Something Buy?

If you’re thinking of buying term, you are most likely thinking you just need the death benefits to replace any loss income that could result should you die unexpectedly.

The general rule of thumb is to simply consider how many years you plan to continue working and buy a term policy to cover that period. You should also know that the shorter the term you buy – the cheaper it will be.

Another reason to consider term is that if you want to include your life insurance in an estate planning scenario, you could need to buy a longer term so you might need a term policy that covers you into your 80’s or even longer. You can actually buy up to a 30 year term, but the majority of life insurance companies won’t let you do this pass age 65.

Your other option available might be to consider permanent life insurance.

Permanent Life Insurance for the Elderly in their Sixties

For some folks, a term life insurance policy isn’t going to meet all their insurance needs, and they require something more substantial for their particular situation.

People are living longer these days and passing age 100 is becoming increasingly common. One big advantage of a permanent life insurance policy is that it will cover you up to at least age 100, and even up to 120 with some other companies.

Permanent life insurance policies have one big difference than term life policies.  They all offer a cash value accumulation feature which is absent in term life policies.  This affects the premium so you should be aware that a permanent life insurance policy will involve a more expensive premium

For whole life insurance quotes, call us at 877-996-9383.

For universal life insurance quotes, Term Life Insurance Rates, or return of premium quotes, use the Instant Quote Form on the right.

Life Insurance for People in their Seventies

As mentioned above, health factors begin to have a significant impact on how a person is viewed by the insurance company. Different companies have those milestone birthday years where things can change when buying or renewing a policy.

If you tried to renew a policy and were denied, or were going to be charged an exorbitant premium because of a lower rating, don’t give up.  You still have options because like I said earlier, every company is different and has different qualifications and restrictions

Term Life Insurance Versus Whole Life Coverage Over Age 70

Term life insurance is definitely more affordable for someone in this age group, especially if a tighter budget is involved.

What kind of term insurance is available for someone in this age group? Well, you can get a 20 year term policy with some companies all the way up to and including age 75. Between 76 and 80 years of age, the longest term you will find is 15 years.

If you need a policy which is more substantial than you might want to consider permanent life insurance such as whole life, universal or variable life.  My personal recommendation when considering permanent insurance is called ‘guaranteed universal life insurance’.

It covers you for the rest of your life but doesn’t encumber you with the all the cash accumulation value that you would have to pay towards such as is required under a whole life policy.

I have found that most people who require life insurance in their seventies aren’t buying insurance for income replacement which is the reason why most people pick term insurance in the first place. Instead, many people in their seventies need coverage for their entire life, and that’s why I will often recommend a permanent policy in many of these situations.

Life Insurance for People in their Eighties

Insurance becomes somewhat more restrictive as you get older. Term life insurance policies are still available when someone turns 80 or older. However, the length or period of term that you can buy becomes much more limited.

Mostly, you can still buy a 10 year term policy all the way up to and including age 85. If you need insurance that lasts you longer or more extensive coverage than your best bet would be consider buying permanent life insurance which can cover you all the way up to age 120.

If you have any questions or need assistance selecting the appropriate type or amount of life insurance coverage, please feel free to call the office at 877-996-9383.