Why is Life Insurance More Expensive for Men?

Why is it that life insurance is more expensive for men than women?

The answer is pretty simple.

Men tend to take more risks with their lives than women and generally don’t take care of their health as well as women.

The statistics tell the story quite dramatically.  In 2016, the CDC (Center for Disease Control) reported that deaths from all age categories and for all causes show quite a discrepancy between the genders.

In 2016, the total number of accidental deaths for men from both accidents and disease for all age groups amounted to 11,288,114 deaths for males. For women, the total number of deaths in 2016 for all ages and causes was 7,266, 441.

But when it comes to driving, the numbers are skewed even more to the peril of men.  CBS News recently reported that men die in car accidents at a 2-1 clip over women.  Unfortunately, alcohol is involved in many of these fatal accidents.  For God sakes men!  Take an Uber next time instead.

(And when it comes to driving for Uber, you may only want to take a ride from a woman!)  :)

The disparity is quite telling.  Needless to say, women also tend to live longer than men. The U.S. Census Bureau reported that in 2015, the average life of a female in the U.S. was 80.5 years of age while for men the average life span was 75.5 years of age.

Life insurance companies keep close track of these statistics and in great detail as they use these statistics in their analysis in how they determine the premiums they charge.

There are a lot of variables which are used by life insurance companies as they determine the probability of how long they expect you to live and they most certainly note the disparities of the life spans between the genders.

How Can a Man Save Money on Life Insurance?

It’s a bit tough going against the grain and save money on your life insurance if you’re a male, but there are some ways that can help save you a lot of money on your life insurance policy.

Here are some simple steps to show how a male can save money when they go to buy life insurance:

1. Buy Your Life Insurance Policy When You’re Younger

Regardless of gender, it’s a plain simple fact that life insurance is a lot cheaper to buy when you are younger.  Life insurance becomes exceedingly more expensive as you get older.  Since life insurance is a long term investment and something you will need, then the best approach is to buy it now while you’re still younger.

2. Use An Independent Insurance Agent

Using an independent agent such as myself is the best strategy to find cheaper life insurance rates.  Why?  The answer is simple really, because an independent agent has access to dozens of life insurance companies and can shop around to find competitive quotes for you. 

3. Take Better care of Yourself

Even if you are bit older, you can get a better rating and lower premiums if you are in better health. 

This does not mean you should put off getting life insurance until you improve your health, because if you need coverage now, then buy a policy now.  Even if you are a bit unhealthy now and a policy costs a bit more, you may be able to get a better rating and lower premiums when your health improves. continue page 2…….

How Much is Enough?

How much life insurance do I really need?

That’s the one of the toughest decisions to make.

Here’s some tips to answer this question.

How Do I Decide on How Much Life Insurance to Carry?

The amount of life insurance that you need  really boils down to answering 3 basic questions.

1. What do I want the life insurance to accomplish?

2. What are my assets?

3. What are my debts?

The formula is basically (Needs and/or Assets) – Debts x Length of Time = Amount of Life Insurance Coverage

These sound like simple questions, but let’s examine each step in a lot more detail.  Each of you will have your own unique objectives and different circumstances.

1. What Do I Want the Life Insurance to Accomplish

This boils down to one thing –NEED!

Buying life insurance isn’t about making anyone rich, it’s about taking of the people who depend on you and their future financial survival. If your income is vital for the financial maintenance of your family, you have to figure how your survivors are going to manage when you’re gone.

So, take a look at where you are now and cast your gaze into the future. Let’s start with where you are right now.

You might be single and about to get married.  You could be already married and are thinking about having children, or you might already have 1 or 2 little ones and are maybe expecting another bundle of joy.

You might be currently renting but saving up to buy a house or condo, or you already own your home.  You could be a young professional in the first year of your new budding career.  Or, you might own and have been building your own business for several years.

What do you want a life insurance policy to cover?  What do you foresee down the road such as 5, 10, 20 or even 30 years for yourself and your family – existing and future?

Here are some objectives to consider how much life insurance you might need, and what objectives you want to use a policy to cover.

  • Income replacement for (x) number of years
  • Maintaining the standard of living for your family for (x) number of years
  • All of your current debts and even future ones
  • Your burial expenses
  • Your living circumstances such as a mortgage
  • Taxes
  • Inflation (assume 2-3%)
  • Current needs and future needs
  • Children’s college tuition
  • Medical expenses (if you currently have or anticipate health problems down the road – is your current health insurance going to be sufficient?)
  • Leave a financial legacy for the kids or grandchildren
  • Donate the life insurance proceeds to your favourite charity(s)
  • Business debts – if you are a sole proprietor or in partnership

That’s step 1 – figuring out your needs or objectives of what you want a life insurance policy to cover.

Now, lets get down to some dollars and cents questions.continue page 2……

Inexpensive Life Insurance for Seniors

Where can seniors find inexpensive life insurance?

You’ve come to the right place.

Here’s the scoop on affordable term life insurance for seniors.

What Kind of Insurance Can Seniors Buy?

If you’re a senior you can pretty much qualify for any type of life insurance policy if you’re in good health.  You can choose between term and permanent life insurance.

However, since you’re here looking for senior life insurance that isn’t expensive than your best choice is term life insurance.

What is Term Life Insurance?

Term life insurance is the most basic form of life insurance policy offered by insurers.  This type of policy is especially ideal for many seniors who are looking for insurance coverage for a specific period of time.

What Are the Benefits of Senior Term Insurance?

There are a number of benefits and positive reasons for a senior to consider why term insurance is the best option.  These include:

1. Term insurance covers death benefits only.  You can choose the amount of death benefits you need in just about any amount from $25,000 to over $1,000,000 dollars.

2. Term insurance is the most affordable type of policy a senior can buy.

3. You can select the length of term you need.  This policy is sold in periods of time such as 5, 10, 15, and up to 30 years and can even be age specific such as age 65 for example. However, you should be aware that there are cut-off age dates for longer terms which are age specific.

For example, a 60 year old may be able to buy a 30 year term, but may only be eligible to buy a 10 or 15 year term when they hit age 69 and older.

4. The premiums are locked in for the period of the term for most policies, but this can vary from company to company.

5. The proceeds from a term life insurance policy are paid in a lump sum.  These proceeds which are paid to your named beneficiary are also non-taxable so your loved ones can use the money in any manner they choose.

A Senior Should Buy a Term Policy as Soon as Possible

The one thing to keep in mind about life insurance is that it becomes more expensive as you age.  So, it’s important that if you are coming close to a birthday, you will save yourself more money by buying a policy now before you reach that birthday.

Some insurers are also more lenient when it comes to age than others.

What if I’m Not Very Healthy?

This may or may not be too much of a problem depending on the health issues involved.  First off, you should know that life insurance companies use dozens of variables in how they rate people when determining how much they will charge for a premium.

Some of these variables include your age, whether you smoke, the state of your current health, family history and many other factors.

Even though you might have health issues, you should be aware that you can still qualify for a policy but you might receive a lower rating which could impact the cost of your premium.

But, again it’s important to know that each insurance company rates health issues differently.  Choosing a company that is more lenient can also help save you money on your premium.

Even if your health issue prevents you from being approved for a policy, you do have other options such as Guaranteed Acceptance, but you should phone me to discuss your options beforehand so we can discuss your health issues.

Are There Other Life Insurance Options for a Senior?

Yes, there are other options.  Many seniors only want a small policy which will cover their funeral expenses and to pay for small debts they owe.

This type of policy is known as Burial Insurance or Final Expense insurance.  These policies start as low as $2,000 dollars and as high as $50,000 in coverage.  This policy would stay in effect until you actually die.

Where Can I Find a Life Insurance Policy For Parents Over Age 60?

You always want to talk to an independent agent like myself.  We can access and research dozens of companies so you are assured we will find the best policy at the most affordable rates.  If you have health concerns, don’t let that dissuade you because we can give you valuable advice and help you to find a policy that suits you.

Whatever your needs or questions then please call me direct at 877 – 966 – 9383.

What Pilots Should Know About Life Insurance

Are you a pilot and having trouble finding affordable life insurance?

Most life insurance companies will charge you higher rates simply because you like to fly recreationally or even because you do so as a profession.

But, pilots shouldn’t all be lumped into the same category because every pilot knows that it’s likely more of a hazard just driving to and from the runway than piloting a plane or jet.

There are more life insurance carriers who have come to realize that flying is statistically safer than operating an automobile and have become more lenient when looking at pilots. There are even companies which specialize in providing life insurance to pilots.

Although things have begun to change in how some of the more lenient life insurance companies have come to view issuing policies to pilots, it all depends on how you use your flying craft.

What Pilots Should Know

Pilot Life Insurance Rating Considerations – Realistically, an occasional pilot who uses their craft on weekends is going to be viewed differently than a stunt flyer. And, a commercial pilot will also be viewed differently than a recreational pilot. It also depends on where you fly as well and the type of plane you pilot.

Another very important consideration is how many hours you have logged or your level of experience, and what sort of training you have received. Those companies which insure pilots have some specific questionnaires that relate specifically to your piloting activities.

Always be up front about your piloting activities, because life insurance companies take a dim view of deceitful responses and could cancel a policy or contest the payment of a claim if they discover you were deceitful in your questionnaire. Most policies have a 2 year ‘contestability’ clause where they can thoroughly investigate your background.

Other Life Insurance Rating Factors – It’s a simple fact that life insurance is less expensive when you purchase at a younger age than when you are older. Life insurance becomes progressively more expensive as you age regardless of whether you are pilot or not. Your lifestyle such as smoking, the state of your health and family history can also come into play when the insurance companies rate you.

Pilots tend to be on average healthier than those who don’t fly because of the more stringent medical requirements to hold a pilot’s license.

Flat Fees – Many insurers consider piloting as being a hazardous occupation or hobby and will charge a flat fee surcharge if you fly more than a specific number of hours per year such as say 200 hours.  This flat fee is added onto the premium at a cost of a specific number of dollars per thousand dollars of coverage.  So, make sure you ask about this flat fee as it can vary from carrier to carrier.

Always State That You Are a Pilot Right Away – When speaking with an agent, the best approach is to mention that you are a pilot right away.  Make sure the agent is savvy about life insurance for pilots and knows that they should be selecting an insurer and a policy that can be more tailor-made for your hobby or occupation as a pilot.

Always Use An Independent Life Insurance Agent – Independent life insurance agents such as myself are the best way to go because we work for you and not the insurance companies.  We have access to numerous companies so we can research those companies which offer life insurance for pilots.continue page 2……

The Tax Benefits of Life Insurance

Did you know that life insurance proceeds are not taxable?

For the most part, and there are a few exceptions, your beneficiary will not have to pay income tax on the death benefits they receive.

This applies to both term and permanent life insurance policies.

In the majority of cases, a named beneficiary will receive the death benefits as a lump sum payment and these proceeds are not subject to income tax.  Your beneficiaries can use the life insurance proceeds immediately and in any manner or purpose they choose.

There are a few situations where life insurance proceeds can be taxable and I explain later where you might get dinged by the IRS if you make a mistake.  However, I’ll tell you how you can avoid making these mistakes.

Naming your Beneficiary

This is one of the most important things you need to think about when you buy a life insurance policy.  When you decide on the person or persons, as you can name more than one beneficiary, you should do the following:

  • Give Full Names – Provide the full names of the person(s) as the beneficiary.  It’s also a good idea to specify their birthdates or Social Security Number to clarify their identity.  This is just in case there are other family members who happen to have the same name.  This will avoid potential legal complications if 2 people with the same name challenge the payment of the death benefits.
  • Spouse and Relatives – If you are naming your spouse, then make sure you clarify the name of the spouse and do not simply put a generic reference such as ‘spouse’.   The same should apply to siblings such as brother or sister.  People divorce and re-marry and sometimes neglect to alter the beneficiaries on their life insurance policies.  I can guarantee that this can result in legal complications. Be specific!
  • Estate – Do not name your beneficiary as your ‘estate’, unless you intentionally mean to do so.  This should really never, ever be done on a term life insurance policy and especially if you do not have a will.  If you name your estate as beneficiary, then the proceeds could end up in probate and the proceeds could be subject to estate taxes at both the federal and state levels.
  • Third Party Purchases – Beware of purchasing life insurance as a third party.  This is a common situation which happens when a parent buys a life insurance policy for one of their children, who happens to be grown up and already married, who then designates their spouse as the beneficiary.  The parent is the owner of the policy, while the child is the insured and their spouse is the beneficiary.  Should the child die, then it is very possible the IRS may view the life insurance proceeds which the spouse receives as a gift from the parent who purchased the policy and who is the owner of the policy, but not the named insured.

Tax Benefits of Permanent Life Insurance Policies

Permanent life insurance policies such as whole life, universal life and variable life are a little bit more complicated because of the cash value accumulation feature which is not found in term life insurance policies.

Permanent life policies consist of two parts which includes both death benefits and the cash value accumulation feature.

Now, in some instances, some people will deliberately name the beneficiary on their policies as their ‘estate’.  This is fine if they meant to do so and it is done so on the advice of their tax advisor or financial advisor.  The same applies to situations where you are setting up a trust but this should only be done with the advice of a tax consultant or financial advisor.

You cannot and should not name your ‘estate’ as beneficiary if you do not have a will as the both the proceeds from the death benefits and the cash value accumulation will end up in probate, and could be subject to having to pay estate taxes to both the federal and state governments.

Other Taxable Benefits of Permanent Insurance

Permanent life insurance policies come with a cash value accumulation feature.  On a whole life and universal policy, the cash value is generally guaranteed to grow at a minimum amount of interest.  The interest you earn in the cash value accumulation portion of your policy is also not taxable.  You do not have to pay taxes on the interest or on the proceeds payable to your beneficiary.

Variable life insurance policies allow you to make investment choices as you can opt to have you money invested in bonds, stocks or a money market fund.  If you were to invest on your own, you would be subject to capital gains, but this does apply to the money invested in a variable life insurance policy.

(Disclaimer – There are tax pitfalls that you have to be careful about when it comes to buying life insurance.  It is always best to talk to tax consultant or your financial advisor so you aware of any potential problems which might arise).

Need More Information?

You always want to talk to an independent agent like myself.  We can access and research dozens of companies so you are assured we will find the best policy at the most affordable rates.  If you have health concerns, don’t let that dissuade you because we can give you valuable advice and help you to find a policy that suits you.

Whatever your needs or questions then please call me direct at 877 – 966 – 9383.

Getting Life Insurance with High Cholesterol

Buying life insurance and are concerned because of your cholesterol levels?

If you have high cholesterol, or even if you are taking medication for high cholesterol, the first thing you should know is that not all life insurance companies are the same.

The underwriting requirements used by different life insurance companies vary considerably.

So, don’t be discouraged if you’ve had problems when applying for life insurance.  I’ll give you the scoop on how life insurance companies treat people who have cholesterol issues.

What do the Cholesterol Numbers Mean?

Many people are confused in how their cholesterol numbers are interpreted.  Life insurance companies are concerned about your cholesterol scores and especially if you happen to taking medication to control the levels.

Since cholesterol is usually expressed as LDL, HDL and Triglycerides, I’ll explain what they mean first since many people aren’t really sure.

LDL Cholesterol – LDL stands for low-density lipoprotein and is often known as ‘bad cholesterol’.  With LDL, if you score less than, or between 100 -129, this is considered optimal.  Anything more is considered too high and ideally you want to score less than 70.

Most Doctors prefer your numbers come in at less than at least 100

HDL Cholesterol – HDL stands for high-density lipoprotein and is considered the ‘good cholesterol’.  A score of 60 or more is considered optimal.  For males, a score of less than 40 is considered a high risk, and a score of less than 50 for females is considered a high risk for heart disease.

Triglycerides – These are the fats which are transported in the blood after we consume food which then become triglycerides and are stored in the fat cells.  Less than a 150 score is considered normal.  Anything more puts you into the higher risk category.

The majority of doctors prefer that your total score for all 3 levels be no more than 200.  For those people who have cholesterol numbers which put them at risk, there are a variety of specialized medications that doctors can prescribe to control and lower these numbers.

It is also vital that people look at their nutrition intake and help the process of lowering their cholesterol numbers through dieting, exercise and eating healthier foods.

Many, if not most life insurance companies are most concerned with both the LDL and HDL levels, but a few life insurance companies focus just on HDL levels.

What if Are Taking Cholesterol Medications when Applying for Life Insurance?

You might be wondering how life insurance companies react if you have already been prescribed medication to control your cholesterol.  The first thing I have to tell is never to lie to the insurance company and say you are not taking medication.  Life insurance companies routinely research Rx (prescription) data bases so they will know about your medication.

How the life insurance will view you if you are taking medication will depend on the type of medication you have been prescribed, the length of time you’ve been taking it, and the dosage.

I’ll be quite frank and say that some companies will shy away from you completely when reviewing a life insurance application, while other companies will rate you higher which means a higher premium.  However, the good news is that there are plenty of companies that have more tolerant underwriting approaches when it comes to cholesterol.….(continued on page 2)

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.

How to Find Low Cost Term Life

Low Cost Term LifeIf you’re looking to learn about how and where to find low cost term life insurance, then read on.

Term life insurance is clearly the cheapest and most affordable life insurance available.

However, since life insurance is an investment you will want to spend your money wisely, so I’m going to give some valuable tips and advise on how to find low cost term life insurance.

 

Brief Overview of Term Life Insurance

Many people are under the misconception that term life insurance only covers you for a certain amount of years.  That’s not really quite right.  Term life insurance covers you for your entire life.  However, you buy it in packages of time such as 10, 20 or 30 years for example, and that is why is called term.

At the end of the term, you will have the opportunity to purchase another term, or even it to convert your policy to a permanent insurance policy such as whole life, universal life or variable life.

Some companies allow you to buy term insurance until a specific age such as 55 or 65 years of age.

Term life insurance is purchased with certain strategies which you should keep in mind.  Since it covers death benefits only, you can consider the reasons for buying term life to include:

  • Income replacement to cover the needs of your family.  You might only need or want a policy to last you until a certain age or a certain period in your life such as when the kids leave home or up to a certain age such when you plan to retire.
  • You might to use a term life policy to use in place of mortgage insurance to pay for your home.  By the way, using term life insurance in place or mortgage of life insurance tends to also be much cheaper.
  • You might buy the policy to cover debts or use as a form of coverage for your own personal business to cover expenses, debts and whatnot.
  • You might want to have just enough to cover your children’s education.

So, as you can see, your reasons for wanting low cost term life can vary considerably and is dependent on individual needs and reasons.

Tips on Finding Low Cost Term Life Insurance

There are many companies offering low cost term life insurance policies, so keep the following in mind to find the best deal and at the best rate.

  • Buy only from reputable life insurance companies that are financially stable.  Many non-insurance companies exist out there selling cheap low cost term life insurance but you want to be very wary of these companies.  The company may not financially last the life of the term you bought, or they may not be reputable in paying out their claims.  It is vital you have confidence in the company from whom you are buying the policy.
  • Remember that although it might appear to be cheaper to buy a shorter term at the moment, it will cost you a lot more to renew that same policy as you age because life insurance becomes expensive as you age.  If you need the term insurance for 20 years, then buy the policy for that period because the monthly or annual premiums will be the same for the life of the term.
  • It is also cheaper to pay an annual premium over a monthly premium so you can save some money.
  • If you are married, and you both want to carry a term life policy, it is cheaper to buy a joint policy than two separate policies.
  • Remember that life insurance is based on your health, your lifestyle habits and your family history.  You may not be able to change your family history, but you can change your lifestyle such as losing weight, quitting smoking and other changes that will give you a better rating and save you money.
  • Get multiple quotes to compare costs.  Use an online quote calculator such as you will find on my site to get a look at how companies compare in terms of costs.
  • Be careful about being drawn in to buy extra riders on your term life insurance as that can raise the costs significantly and you may not necessarily require these riders.
  • Don’t buy directly from an insurance company or an agent that only represents one or a couple of companies.  Always use an independent agent to help you find the best rates and coverage that suits your needs.  An independent agent can research dozens of companies and find you cheaper rates even if you have health concerns or are a little older.

Bottom Line

Low cost term life insurance is available and can be easily found, but like any investment of your hard earned money, you should take the time to do some careful research to ensure you are getting the best buy.

 

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.

Why Consider “10 Year Term” Life Insurance?

The most affordable type of life insurance is 10 year term.

This insurance is perfect for a young family, who needs some protection, but can’t afford to pay much.  It’s also great for short term needs.

It’s amazing how much life insurance someone in their 30’s or 40’s can purchase for less than $20 bucks per month if they’re in good health, and applying for 10 year term.

10 Year Term Explanation

Most term policies actually guarantee coverage up to age 95 or longer.  However, the premiums are only guaranteed to stay level for the first ten years.  That means your premiums will stay fixed during the initial 10 years, and in most policies, will rise annually thereafter.

There are various term lengths, such as 20 or 30 year term, which means the premium stays fixed for a longer duration, and remember, the lower the term duration, the lower the premiums.  For more information on alternatives to the ten year term, see our post on Types of Life Insurance.

10 Year Term Life Insurance Quotes

Age $500,000 $1,000,000
30 Year Old Male *$14 $21
40 Year Old Male $17 $28
50 Year Old Male $43 $78
60 Year Old Male $117 $217
70 Year Old Male $339 $625

*Note: All prices are MONTHLY as of 2/17/12, based on healthy, preferred plus, non smoker, and are subject to change.

Using Term for Buy/Sell Agreement or Key Man Insurance

Many business partnership arrangements require term life insurance on each partner, in the event that if he or she dies, the remaining partner/s will have liquid cash from the life insurance benefit to buy out the decedent’s family and or heirs of his or her share in the company.

10 year term life insurance is a popular choice for buy/sell contracts, since it’s the most affordable, and most businesses figure they either won’t be working together that long, or will probably restructure the ownership agreement by the end of 10 years anyway.

Estate Planning using Term Life Insurance

With the current “Band-aid” on estate taxes and the exclusion amount, some people aren’t sure what their long term estate tax implications could be.  A 10 year term policy with a conversion to permanent insurance may be a good solution for high net worth individuals whose estate value is approaching the current taxable threshold, but now quite there.

For example, a married couple with an 8 million dollar estate, with a properly structured AB Trust or bypass trust, may not owe any estate taxes if they were to both die in 2012.  However, if the current estate tax exemption (currently 5 million per individual) were to drop to, say, 3 Million per individual, then this couple would have an estate tax problem.

Since we don’t know what the future holds for estate tax legislation, some affluent families are purchasing 10 year term as a “wait and see” type strategy.  If the exclusion amount gets permanently set at 5 million per individual, or if estate taxes are done away with completely, then these wealthy individuals may decide to drop their coverage.

On the other hand, if the exclusion amount is permanently decreased, at least the policyholder will already have a policy in place (the 10 year policy), and could decide to convert it to a permanent policy such as guaranteed universal life or whole life.

You may also want to see this article for more information on using life insurance to avoid estate taxes and life insurance trusts.

Companies Who Sell 10 Year Term

Just about every company offers a guaranteed level 10 year term policy.  In my opinion, the 3 companies who are most consistently among the list of “low price leaders” for term insurance are Banner Life Insurance, ING-Reliastar Life Insurance, and Genworth Life Insurance.

Keep in mind, however, that some companies commonly show up in the top 3 in price quotes, but aren’t quite as lenient in underwriting, so it’s harder to actually qualify for their best ratings.  Two companies that come to mind here are Savings Bank Life (SBLI) and Ohio National.  On the contrary, you have a company life Prudential, who is usually not in the top 10, but maybe top 15 or 20, but are very fair on underwriting .

Apply for Term Life Insurance

To get started, simply call us at 877-996-9383 or get an instant quote using the form on the right.

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