How to Buy Life Insurance

There are a few ways to explain how to buy life insurance.  Some people prefer using their local insurance agent from State Farm, Farmers, AAA, etc.  Others needing life insurance might see an advertisement from an insurance carrier such as Met Life, and call the company directly.

How to Buy Life Insurance

The best way to buy life insurance, in my opinion, is to get multiple online life insurance quotes from a company that offers quotes from several different carriers.  For example, a company such as Select Quote or Accuquote will be able to provide quotes from multiple companies.

Selecting the Amount You Need

The two questions you need to know before purchasing life insurance are “how much do I need?” and “what type of insurance is right for me?”  We’ll first address the amount of death benefit needed.

Most people purchase life insurance to cover a specific financial need.  One of the most common is when an income producing spouse and/or parent wants to protect against his or her loss of income due to an unexpected death.  This is a wonderful reason to have life insurance in place on your life.

Say you make $60,000 per year and you’re a 38 year old male.  You might be working for another 20 to 30 years before you’re able to retire.  Just imagine how much future income is lost if something happens to you before reaching retirement age!

Since income replacement is a very common reason to purchase life insurance, we provide an income replacement life insurance calculator on our site for free.  Just go to: How Much Life Insurance Do I Need?

If the life insurance calculator is too complex for your needs, a good rule of thumb is to carry 5 to 10 times your annual income on your life.  Of course you’ll need to take your current assets and debts into account.  The individual who has $500,000 in a personal IRA may have a decreased life insurance need in comparison to an individual with nothing in the bank and $100,000 in credit card debt, all things equal.

Other valid insurance needs are to cover debts, a mortgage, a business loan, to cover a key employee (known as key man insurance), to pay for estate taxes or death taxes, and to pay for death and funeral  expenses.

Which Type of Life Insurance is Right for Me?

Please read the section above before this section.  If you’re need is for income replacement, you almost certainly need term insurance and nothing more.  Term life insurance covers you for a specific period of time, and is typically much less expensive than whole life or universal life insurance.

On the other hand, if your need life insurance protection for the rest of your life, or if you are interested in the ability to grow cash value (from which you can borrow or withdraw funds), then you will need to consider a whole life insurance or universal life insurance quote.

If you’ve read the sections on selecting the amount you need and what type of insurance to buy and are still confused, call us at 877-966-9383 to tell us your situation and we’ll help you.

How Much Will I Pay?

This question depends on several factors.  Life insurance companies charge different rates to males and females of the same age and health status, so sex is the first variable.  They take mortality risks into account such as health problems (heart disease, cancer, diabetes, high blood pressure, etc) or other risks not related to your health such as occupational risks, hobbies and activities, and family health history.(continued on page 2)

Insurance for Billionaires

Billionaires have a lot of money and don’t need to bother with buying life insurance right?

Wrong!

There are plenty of sound economic reasons why even billionaires should include life insurance when planning an estate.

Life insurance can provide valuable and convenient financial liquidity for your estate and has value as the life insurance proceeds can be used in a variety of ways.  This includes not only for the structure of your estate, but also for your heirs.

Advantages of Including Life Insurance in Estate Planning

The first thing to consider is that a permanent life insurance policy such as whole life or universal life can be used as a valuable financial instrument because it gives you the ability to use a permanent life insurance policy as a form of tax-free investment growth.

A life insurance can be included as a segment of any portfolio which has non-registered investments for the ultra wealthy.  The life insurance proceeds can provide your heirs with non-taxable death benefits and is an excellent vehicle to transfer wealth through more than one generation such as both your children and grandchildren.
Along with the death benefits, permanent life insurance policies also include a cash value accumulation component which can be considered as an asset. Why? If the policy is owned by the insured billionaire or through their company, the cash can be accessed while the billionaire is still alive.

Life Insurance is a Stable Investment

The cash value accumulation segment is a stable investment because there is a long history of life insurance investments providing a fairly stable return which is advantageous in unstable economic times.

Life insurance policies can also be used in a variety of ways with trusts.  This is a detailed topic in itself so you should raise this issues with your financial or tax advisor to get the details.

Another interesting strategic use of a life insurance policy is to combine it with a life annuity, also called an insured annuity, which can offer even higher yields. This approach is better suited for those who older than 65 and have assets which are non-registered.

Life Insurance for Succession Planning

If a billionaire is planning to transfer shares of their business enterprise to their children, then these assets can be subject to taxable capital gains.  This requires that cash reserves may have to be accessed which might require the selling of assets or to borrow money to pay for the capital gains tax.  The proceeds from a life insurance policy allows the children to access cash liquidity through the proceeds of the policy to pay for the capital gains tax.

There is another advantage for this same scenario as some siblings may no longer be interested to be shareholders in the company, and the life insurance proceeds can be used to buy out these non-interested family members.

Other Ways Billionaires Can Defer Taxes with Life Insurance

It’s all about the two indelible truths – Death and Taxes.  When you die there will be estate and other taxes that have to be paid.  When you have this kind of money the taxes can be huge.

With a life insurance policy, the proceeds such as the death benefits also have to be paid to the beneficiaries who can use these assets as immediate liquidity to cushion the effect of the taxes that have to be paid.  This means that they may not have to use the estate’s assets to cover these taxes or can soften the bill.

Many billionaires are also benevolent and have charities which they like to support.  A charity can be named as a beneficiary on a policy and can be used as a non-taxable bequest to one or more charities.  A life insurance policy might be a preferable vehicle instead of simply transferring wealth from the estate to a charity.

Benefits of Life Insurance in Wealth Transference

There are also tax advantages if a billionaire wishes to transfer their wealth to either their children or grandchildren.  Since the proceeds are non-taxable, a life insurance policy is a convenient means to pass financial security to their children, or grandchildren…(continued on page 2)

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……

Term Life Insurance for Men Over Age 50

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

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

1.  Family Protection

2. Business Protection

3. Estate Planning

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

Term Life Insurance for Family Protection

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

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

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

Business Life Insurance Over 50 years Old

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

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

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

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

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

Estate Planning

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

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

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

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

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

Questions for Men Age 50 and Older

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

3 Essential Tips for Buying Life Insurance on Your Parents

In most cases, you can purchase life insurance policies for your parents with their knowledge and approval.

But how do you go about doing this, and what is the appropriate amount and type of coverage?

We will cover these questions and more in this article.

The most popular types of policies for parents are term life insurance, whole life insurance, and second-to-die policies.  See below to determine the best type of coverage for your parents.

Essentials for Buying Life Insurance on Your Parents

1.  Is Buying Life Insurance on My Parents a Good Deal?

Prior to age 85, it seems life insurance can still be purchased for a relatively affordable premium.  As you can see, the older your parents get, the higher the cost for the same coverage.

Here are a few quotes for $100,000 of coverage:

60 years old $72 per month
65 years old $132 per month
70 years old $229 per month
75 years old $395 per month
80 years old $767 per month

Please note the quotes above are for a 10 year term policy for a healthy male, who can qualify for non tobacco rates, and are accurate as of 6/10/2013.  Actual rates will depend on your parents’ health.

…Ok, back to question #1 – “Is it a good deal?”

Obviously, life insurance can still be quite affordable if your parents are in their 60′s or 70′s, and they’re only getting $100,000 of coverage, as in the example above.

But let’s say you need more coverage than that, and they are over age 80…  Is it still worth the cost?

For example, you would pay $14,560 per year for an 83 year old mother in good health for a $250,000 policy guaranteed for life with North American Co for Life and Health.

If we assume our 83 year old has a life expectancy of 10 years, you will have paid $145,600 into the policy after 10 years.  If she were to pass away at any point before that, it seems to be a great rate of return on your premium.  You certainly wouldn’t be able to match that kind of return in any alternative investment.

If your parents are younger than 80 and in good health, life insurance is an incredible leveraging tool, and makes even more sense than in the example above.

Honestly, life insurance loses leveraging power after age 85 and is pretty expensive.  See the quote form on the right for an instant quote.

Quick ”Life Insurance for My Parents” Video Tips

 

Ownership of Policy: One of the first things I ask the child when he/she calls me is who would be the owner and payor of the policy.  In some cases, children are simply calling on behalf of their parents who are not internet savvy, and are doing nothing more than helping their parents, who don’t know how to buy life insurance, with the quoting and application process, but that the parents will be paying for the policy.

In other cases, you have children who will be the owner of the policy, pay the premiums, and also be the beneficiary of the death proceeds.  Usually this is okay as long as the child can prove an insurable interest. This is 100% legal, but will require approval by the insurance company.

An insurable interest means that the child would be somehow financially affected by the death of his or her parents.  So if your parents have a big mortgage on their home, and you don’t want to inherit their debt, life insurance may be in order.  Or if you are responsible for your parents funeral and burial arrangements, life insurance may be used for this…(continue to part 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.

Do Celebrities Need Life Insurance?

You bet they do! No matter how much fame and fortune a celebrity might have, even our popular icons which we see on stage, screen and over the air waves need life insurance.

Why?  Because people who make lots of money have to spend some quality time on estate planning.  There is also an abundance of smart reasons why one or more life insurance policies can be advantageous.

How a Permanent Life Insurance Policy Can Benefit a Celebrity

A permanent life insurance policy allows you to first of all, accumulate money in a cash value accumulation plan which has conservative but steady growth.  Even better is that you won’t have to pay any capital gains.

The cash value accumulation portion of your policy is also an asset.  This means that you can borrow against it which gives you instant cash liquidity at your disposal when you need it.

Also, the death benefits which you can pass onto your heirs such as your children or even your grand children, or other beneficiaries such as you favorite charity, will receive the  benefits in a tax deferred lump sum.

Your children for example, will be able to cover the expensive tax costs which can occur on your estate without having to sell off valued assets such as property, art, and other collectibles.

A celebrity will also be able to set up their estate and protect their beneficiaries in cases of divorce.  Additionally, you can also use a life insurance policy in setting up a trust which also has many tax advantages.

There are plenty of reasons in how a celebrity can benefit by including life insurance in setting up tax shelters within their estate.  As the methods and opportunities are fairly extensive, they would be best advised to take up the matter with their financial or tax advisor to learn more about the benefits of celebrity life insurance.

How Much Will Life Insurance Cost a Celebrity?

Many celebrities have large estates worth a bundle.  They would want large policies to reflect their worth as that is the best way to factor it in as they plan their estates and gain liquidity in the process.….(continued on page 2)

What’s the Best Type of Policy for You?

How to Choose the Best Life Insurance PolicyThe factors I always recommend my clients consider when trying to determine which life insurance company to pick are the company ratings and the premium.

How to Choose a Life Insurance Company

It is of utmost importance that the company you choose is a financially viable and stable organization.

A couple ways I use to measure this are by seeing how long a company has been in business.  You have some companies like Genworth Life Insurance or Ohio National, that have been in business over 100 years.

They’ve been through recessions and depressions and are still going strong.  That’s a good sign.

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

Insurance Company Reviews

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

Life Insurance Quotes

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

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

Types of Life Insurance

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

10 Year Term Life Insurance

20 Year Term Life Insurance

30 Year Term Life Insurance

Universal Life Insurance

Whole Life Insurance

How Much Life Insurance Do I Need?

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

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

Where to Start

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

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

10 Year Term for Over Age 60

If you are between 60 – 69 years of age and need to get some inexpensive life insurance, then I have the a solution that might be ideal for your circumstances.

The answer would be a 10 year term life insurance policy that should meet most of your needs and cover the reasons why you want to get some life insurance.

As you well know by now, life insurance does get more expensive the older you become, but even in your sixties you can still find term life policies that you can afford.

Just to give you an idea of how affordable a 10 year term policy can be, I’ve provided a few samples to give you an idea of how much your monthly premium would cost for someone in their 60’s.  These rates are for someone does not smoke and is in reasonably good health.

$100,000 Term Life Insurance Quotes for Ages 60 – 69
Age 10 Year Term (Monthly)
60 Year Old Man $29.00
65 Year Old Man $53.41
69 Year Old Man $82.25

(Disclaimer – These rates are effective as of January 15, 2013)

You can see from the rate differential between someone who has just turned 60 compared to someone who has just turned 69 that there is a fairly significant variance between what you would pay for a monthly premium.

So, if you are in your sixties and coming close to another birthday, don’t delay in getting your 10 year term policy because it will cost you more when you have that birthday.

Why a 10 Year Term Life Policy?

Most people in their sixties are getting close to retirement age.  You may not be there yet, and perhaps you plan to work even up to age 70 or even beyond. In any event, you still want to make sure your loved ones have that financial security blanket in case something happens before you retire.

If a serious life threatening illness, or even were you to die unexpectedly, your family will need that extra protection to get through the difficult times.

Another reason why a 10 year term life policy is the best way to go is simply because term life insurance is the cheapest to buy and the easiest to get.  The other main thing to keep in mind is that the monthly premium the company charges you will remain the same during the life of the term so you can budget accordingly.

Finally, you should also know that the death benefit that your beneficiary receives will be tax deferred so the money can be used any way they need to use the death benefits.

Reasons to Buy a 10 Term Life Insurance Policy for Someone in Their 60’s

The reasons why you will want a 10 year term policy will vary from person to person, but most people who are looking to buy term insurance do so for income replacement.  If you need to consider estate taxes, estate planning or setting up a trust you might be better off to look at buying a whole life or universal life insurance policy…….continue page 2……

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……