What is the Process to Apply for Life Insurance?

Getting your life insurance application approved and in place doesn’t happen overnight.

If you’re applying for life insurance there is a process that takes place before you get approved for coverage.

There are 3 different ways that you can apply for life insurance and they each have their own timelines which you should know about.

Before I describe them in detail there are a couple things you need to remember before you apply for life insurance

1. Never let an existing life insurance police lapse when you apply.  Until you are approved, which will take some time, because you won’t be covered.  You will leave yourself exposed.

2. Always make sure you give yourself sufficient time for the policy to be reviewed, approved and put in force.

Life Insurance Application Waiting Periods

There are 3 waiting period scenarios for the 3 different ways a life insurance application can be made and they include:

  • Life Insurance Application with No medical Exam
  • Life Insurance Application with Medical Exam but No Medical Records Required
  • Life Insurance Application with Medical Exam but Medical Records Are Required

Let’s look at them in more detail.

Life Insurance Application with No medical Exam (7- 10 Days Before Policy is Effective)

There are 3 steps when applying for a life insurance application which does not require a medical exam and they include:

1. Applying for Life Insurance

You have to phone and obtain an application form which would be sent to you the same day. Ideally, you will fill out the application and FAX it back to me the same day.

2. Phone Interview

A no-exam life insurance application requires a brief questionnaire be completed which is generally done over the phone.  This generally occurs within 1-3 days from when we receive your application

3. Issuing the Life Insurance Policy

The life insurance company is sent the application and phone questionnaire and then has to review and approve the application. This takes roughly about 2 days.

The life insurance company, upon approving your application, will send you the policy by mail which could take 2-3 days for you to receive. You may then be required to sign the policy and either mail it back, or return by Fax or email. The policy will then come into effect either the same day of the following day.

(NOTE) You should be aware that no medical exam life insurance policies tend to cost more than life insurance policies which require a medical exam. The reason is because a medical exam gives the life insurance company more medical information which makes you less of a risk.

If you want a cheaper policy then you should follow the application process described in the steps below.

Life Insurance Application with Medical Exam but No Medical Records Required. (Takes up to 2 Weeks before Policy in Place)

The quickest time frame this process could take place as follows and occurs only when the life insurance company does not require any medical records.

1. Applying for Life Insurance

This considers same day application that you request which is sent to you and returned by you on the same day.

 2. Taking the Medical Exam

When we receive you application, we will contact a medical examiner and they will phone you to set up an appointment which is generally done within 1-2 days to make the appointment.. (continued on page 2)

Life Insurance for 18-30 Years: Important Considerations

If you’re between the ages of 18 and 30 years old, now is the perfect time to buy life insurance.

Why? Because life insurance is incredibly cheap and affordable for anyone in this age group.

Life insurance is an investment for your future, and even though you don’t think you need any right now, you’ll be sorry if you wait too late in life to buy it.

How Expensive is Life Insurance?

I did some research on term insurance. I looked at what it would cost per month to buy a $100,000 term life policy and compared the rates which you would pay for a 10 year term, a 20 year term, and a 30 year term policy. These rates are for someone who is a non-smoker and in good health

$100,000 Term Life Insurance Quotes for Ages 18 – 30

Age                               10 Year Term        20 Year Term          30 Year Term

18 Year Old Man                   $7.26                 $9.43                        $12.51
20 Year Old Man                   $7.27                 $9.43                        $12.51
22 Year Old Man                   $7.27                 $9.43                        $12.51
24 Year Old Man                   $7.27                 $9.43                        $12.51
26 Year Old Man                   $7.27                 $9.43                        $12.60
28 Year Old Man                   $7.27                 $9.43                        $12.78
30 year Old Man                   $7.27                 $9.43                        $12.86

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

As you can see from the above quotes that when you’re young, life insurance is very affordable whether you buy a 10 year term or a 30 year term life insurance policy.

Why do I Need Life Insurance if I’m Between 18 – 30 Years of Age?

There are plenty of good reasons to buy life insurance at a young age. First and foremost is the simple basic fact that life is uncertain. Accidents happen, and anyone at any age can be stricken with a life threatening illness.

Many people in your age group are just finishing your education and are just starting your careers. This also the time in a young person’s life when you begin to settle down, marry, have children and invest in buying a home.

You also begin to rack up debt through personal loans such as to buy a car and other big ticket items. You also begin to use credit cards.

So, the question you have to ask yourself is this – What would happen if I were to suddenly die in an accident or get a fatal illness? Who’s going to pay for the funeral and death expenses, medical bills, credit cards, the mortgage and my loans?…(continue to part 2)

Are You Between The Ages of 31 – 35 and Looking for Life Insurance?

I can give you the answers you want and find you the right life insurance policy that will suit your particular life insurance needs.

At this stage of your life you are most likely getting well settled into your career and have likely started a family and bought a home. You need to protect your family should something unfortunate happen.

That’s the best reason to keep reading and learn more about what type of life insurance to buy so your family can keep on going. It’s about giving your family security and financial protection.

Some Examples of Affordable Life Insurance

You might be wondering first off about how much life insurance costs. Well, it depends on the type you buy and the amount of coverage in your policy. But, I did some research and I have some quotes for what it would cost you monthly to buy a $100,000 term life insurance policy for someone in your age bracket.

The following quotes are for a person in good health and who doesn’t smoke. These quotes show what it would cost you monthly for a 10 year term, a 20 year term and a 30 year term.

$100,000 Term Life Insurance Quotes for Ages 31 – 35

Age                                 10 Year Term        20 Year Term       30 Year Term

31 Year Old Man                 $7.26                         $9.45                   $13.21
32 Year Old Man                 $7.27                         $9.47                   $13.48
33 Year Old Man                 $7.27                         $9.49                   $13.83
34 Year Old Man                 $7.27                         $9.50                   $14.09
35 Year Old Man                 $7.27                         $9.52                   $14.35

(Disclaimer – These rates are effective as of February 1, 2013)

Types of Life Insurance Policies for Someone Ages 31 -35

If you’re not sure what type of life insurance would suit your particular needs then I will explain the differences.

Life insurance comes in 2 main types which are known as term insurance and permanent insurance. Permanent insurance is further broken down into whole life and universal life.

Term Insurance

Term insurance is a life insurance policy that covers you for life but is sold in periods of time like the samples shown in the quotes above. There are other term options available because you can get a term policy to cover you to specific age in you life such as age 65 which is when most people often retire from working.

Term insurance is ideal if all you’re looking for is income replacement. It can also be used to pay for your death and funeral expenses, pay off your mortgage, your other debts such as loans and credit cards. continue page 2…….

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.


Term Life Insurance Comparison – Which Term Should I Buy?

 Term Life Insurance ComparisonIf you’re thinking about buying term life insurance, there’s a few key things you should keep in mind.

For example, what period length of term insurance should you buy and why?

These are very important issues you need to give some thought about before you buy a term life insurance policy.

Determing Type of Term Policy

The main question you want to ask yourself is why you want the insurance in the first place.  The second question you need to answer is how long you will need it.

Term life insurance can be bought in increments of time such as 10, 15, 20, 30 years or it can be bought as being age specific such as when you reach age 65 for example.  The first thing to remember is that term life insurance is relatively cheap to buy when you are younger.

The older you get, the more expensive it becomes.  The premiums you pay when you choose a term remain the same for the life of the term.

So, if you’re thinking that you will start with a 10 year term policy for now, and will renew it later, it’s going to cost you a lot more when you renew than what you’re paying for it now.

How Long do You Need Coverage?

If you want to have a policy for a specific length of time, then it is best to buy the policy for that the entire length of that specific period that you need it.

For example, if you want to provide coverage to your family until you reach the age of retirement at age 65, and you’re currently 35 years old, you would best be advised to buy a 30 year term.

Another reason for buying a longer term life insurance policy, if that’s what you feel you will need, is that the policy will continue to be in force even though your health deteriorates.

On the other hand if you had bought a shorter term, and planned to renew just as your health deteriorated, you will likely not get the best rating and this will cost even more in monthly premiums.

Requirements for Policies at Certain Ages

When you’re young, and you buy a term life insurance policy, you will likely only have to fill out a medical questionnaire to not only get coverage, but to also get the best possible rating (assuming you are in perfect health at the time you fill out the questionnaire).

As you get older, the medical examination requirements of insurance companies become more stringent.  They may require much more detailed information about your health.  If you have a longer term policy, you don’t have to worry if your health deteriorates in the meantime because you are covered regardless and won’t face a lower rating or higher premiums.

Another scenario you might want to factor in when deciding on how long a term is the age of your children.  You might be in your early twenties now, and if the children were just recently born, you might want to policy that lasts until they reach the age of majority.  In this case you might opt for a 20 year term policy instead.

On the other hand, you might be buying life insurance in place of mortgage life insurance, which is required by the lender before they will approve your application.  Most banks or mortgage lenders sell their own form of mortgage life insurance, but the beneficiary is the lender. The cost to get this type of insurance is much more expensive than what you pay for term insurance.

Term Life to Cover a Mortgage

Instead of buying mortgage life insurance, you have the option of buying term life insurance instead.  If you’re outstanding mortgage is for $200,000, and is for 30 years, than you could buy a term policy for that amount and for a 30 year term.

The monthly premiums are actually a lot cheaper than what these lenders charge.  Also, you name the beneficiary of your choosing so the proceeds don’t automatically go to the lender but rather to your named beneficiary.

If you do have health concerns and are thinking of buying term life insurance, your best bet is to use an independent agent like myself.  If you go directly to a company or use a company agent who only represents one or a couple of companies, you aren’t going to find the best rates.

Not all insurance companies are the same, so an independent agent will be able to find you the best coverage and the best rates especially if you have a health concern, a weight problem, are a smoker, or have a questionable family health history.

If you need more information in deciding your reasons for term life insurance, how long a term to get, or have health issues, I suggest you give me a call because I can offer you some valuable advice and find you the best rates for your particular situation.

The best way to compare term life insurance rates is to use our quote form on the right and compare prices from over 30 top life insurance carriers.

Who Should I Name as My Beneficiary?

Life Insurance BeneficiariesWho should you list as a beneficiary when you buy a life insurance policy?

This is an important question and the following should help guide you in making this very key decision.

What is a Life Insurance Beneficiary?

When you buy a life insurance policy, you will be asked to name a beneficiary. A beneficiary is one who will receive the death benefits and/or the cash value accumulation of the policy (only applicable for permanent insurance policies such as whole life, universal life and variable life insurance policies), upon the death of the insured person.

You have two options when choosing a beneficiary. Your first option in choosing a beneficiary can be one or more persons which could be your spouse, your eldest child, spouse and children, some other relative or any other person you designate. Your second option is to choose an entity such as your estate, a trust, or a charitable organization.

What’s the Difference between Choosing a Person or an Entity as Beneficiary?

There are differences in how the benefits will be treated by choosing a person over an entity.

Choosing a Person as Beneficiary

When you select a person as a beneficiary, all the proceeds from a life insurance policy are paid directly to that individual or apportioned to the person’s named (if more than one). The benefits paid are given as a lump sum and are not generally taxable.  A person who is the beneficiary can also spend the funds in any manner they choose.

You do not have to draw up a will to ensure they receive your life insurance benefits.  This is one nice feature about life insurance.  You get to quickly and simply name who gets the money without the need for lawyers and lawyer fees.

Additionally, you also have the option of changing the beneficiary.  However, there are two types of beneficiary types which are either revocable or irrevocable beneficiaries.  A revocable beneficiary means you can change the named beneficiary anytime during the life of the insurance policy.  An irrevocable beneficiary means that both the owner of the policy and the beneficiary must agree to make any changes to the policy beneficiary.

Choosing an Entity as a Beneficiary

Some life insurance owners may decide on an entity to act as their beneficiary.  The most common choices include the estate or a named trust, such as the family trust with a lawyer acting as trustee.

A will is normally required and recommended for this situation.  If you do not have a will, it is possible a state-appointed trustee might assume responsibility in determining how the proceeds will be doled out and to whom.  If you do draw up a will, it is also highly recommended that you keep it current and make changes as they occur.

The reasons why some people opt to use an entity as a beneficiary normally entail the following reasons:

  • To set up a trust if you have young children, or to ensure the funds are paid in a specific manner, or to be paid out when they reach a certain age.
  • To ensure that the life insurance proceeds are designated to some other party or parties.  This could be some combination where a family member, close friend and/or one or more charitable organizations are designated to receive funds which should be clearly specified in the terms of your will.
  • You may also need to name an estate as beneficiary if you have no spouse or children.

The legal aspect of how funds are distributed is also somewhat different when choosing an entity as a beneficiary. This includes:

  • All insurance proceeds are paid to the estate.  This in turn becomes part and parcel of the probate process.
  • How the money is paid will be determined by the terms you have designated in your will.
  • These insurance proceeds must also be available to creditors if there are any outstanding debts.
  • As the insurance proceeds may be distributed through probate, there are usually lawyer probate fees involved.  The amount may vary from state to state, but the maximum is usually in the neighborhood of 5% of the total amount of the estate.
  • If you wish to change your beneficiary in this instance, you will have to use your lawyer and will need to change the terms of the will.

Primary Beneficiaries vs. Contingent Beneficiaries

The difference here is quite clear.  You primary beneficiary is the person (or people) who is intended to receive the death benefit upon the insured’s death.  If things don’t go as planned, though, and the primary beneficiary(ies) predeceases the insured, or dies at the same time as the insured, for example in the case where a husband and wife are killed together in an accident, then the contingent beneficiary(ies), also known as secondary beneficiary, receives the funds.

One key point to make here is that if two or more primary beneficiaries are selected, and one or more of them is dead upon the passing of the insured person, the money will be distributed to the remaining primary beneficiaries, rather than any of the funds going to the secondary beneficiaries.

Some Key Points to Remember

It is vital that you make changes if your circumstances change.  This could especially be important in a divorce situation or if your named beneficiary dies before you do.  It is very important that you don’t procrastinate making beneficiary changes.

If you name more than one beneficiary, make sure they are individuals who are compatible because horrendous legal battles have broken out between family members who were named as beneficiaries.

Also, never buy an insurance policy as a third person, or what might be described as a 3 way policy.  What I mean is that you should never buy a policy where you become the owner of a policy but have bought the policy for another person such as your daughter, and a third individual is named as the beneficiary, such as her husband.  In this instance, it is very likely that the beneficiary will be considered as receiving a gift from the purchaser of the policy by the tax people and the proceeds will be taxed.

Give some careful thought to who you want to name as a beneficiary, and consider the pros and cons from the above information to make an informed choice.  As always, call us with any questions or for a life insurance quote at 877-996-9383.

Sample Life Insurance Quotes Ages 36 to 40

Young Married Couple Needing Life InsuranceWelcome to Huntley Wealth Insurance, where we offer affordable term and whole life insurance coverage to individuals of all ages.

In this article, I’ll be discussing the cost of life insurance for individuals ages 36 to 40. 

We’ll also cover the factors that influence your premium, how much you need, the appropriate type of insurance, and how to apply.

Sample Cost of Insurance, $500,000 Life Insurance, 36 to 40 Years Old

Age                                    10 Year Term             20 Year Term             30 Year Term
Male Age 36                          $14                                $24                             $39
male Age 37                          $16                                $25                             $42
Male Age 38                          $16                                $27                             $45
Male Age 39                          $17                                $28                             $49
Male Age 40                          $17                                $31                             *$53

*All Premiums per Month – and based on rates available as of June 1st, 2013, and are subject to change.  Rating class quoted above is Preferred Best Non Tobacco.

Factors Affecting Cost of Insurance – Ages 36, 37, 38, 39 and 40

The primary ingredients built into a life insurance premium are your age, sex, health, and type of policy you purchase.  Males cost a bit more, generally, than females, since on average, they die younger.  Age should be easy to understand.  A man who is 40 years old will pay a bit more than a male age 37 for the same amount of coverage.

Generally speaking, the healthier you are, the lower cost of life insurance you’ll pay.  So a 36 year old male with no medications and no history of health issues should be approved at a better health classification than the male, age 36, who applies for guaranteed term life insurance, but has a history of a seizure disorder, just as one example.

We routinely help clients purchase low cost life insurance between the ages of 36 to 40 with varying medical histories.  So please don’t be intimidated to apply for coverage if you have a history of high blood pressure or cholesterol, obesity, heart disorders, diabetes, cancer, any many other ailments.

Importance of Independent Agency

The most important factor in getting life insurance at age 36 or 37, or any age for that matter, is using an agency who can shop your case amongst many insurance carriers.  As independent agents, this is our specialty.  Some insurance companies may penalize you for certain medications, family history, or other medical issues.  The key is applying to the company who will offer you the most attractive rate classification.

For example, let’s say you’re a 38 year old seeking 10 year level term insurance, male with sleep apnea and use a CPAP.  Most insurance companies will rate you at standard non tobacco, even if the apnea is under good control, but if you apply to Pruco Life Insurance, you’ll have a fair shot at a Preferred rate, assuming you can otherwise qualify.  If you used an agent who was a captive agent for, say, MetLife, you would probably end up being approved at Standard rather than Preferred, and would pay approximately double the premium for the same amount of coverage.

But if you’re not careful, you might even be penalized for a family member’s health history.  Assume you are a 39 year old man applying for 30 year term life insurance, who takes no medications, completely healthy, but your father had prostate cancer at age 56.  Most companies will not allow you to qualify for their best rating, since cancer is proven to be passed genetically, but we do know of at least one company who won’t even ask about your family’s cancer history on the application, making them the ideal company to apply to for this 39 year old healthy man.

So no matter where you purchase your life insurance, be sure to ask your life insurance agent if he or she is an independent broker or captive to one life insurance company.

Which Type of Insurance and How Much?

Ninety percent of our insureds in their late 30’s will need term life insurance.  In most cases, I’ll recommend 20 or 30 year level term.  This means your premium will stay level during the initial 20 or 30 year term, and prices are guaranteed not to increase until after the initial term has ended.  Term insurance is the most affordable type of coverage, making it ideal for young families who simply need the death benefit protection at a low cost.

There are types of life insurance that provide additional benefits, such as guaranteed coverage throughout your entire life and building cash values, such as whole life insurance or universal life insurance.  We do offer these plans, but we find them inappropriate for most of our clients age 36 to 40.

To calculate how much life insurance you need, please use our income replacement calculator.

Applying for Life Insurance

Simply get started by getting a quote using our instant quote form to the right or calling us toll free at 877-996-9383.  In some cases, a medical exam will be required, as well as authorization for the insurance company to obtain your medical records.  We handle all of this and there’s no cost to you to apply.

25 Year Term Life Insurance – Quotes and Description

25 year term life insurance is a type of policy that offers guaranteed level premiums for a 25 year term duration.

After the initial term has expired, the premiums will increase mightily, so if you need coverage longer, you might consider a 30 year term or guaranteed universal life contract as an alternative.

Interesting Fact… Who Sells 25 Year Term Life Insurance???

Very few.  I represent dozens of life insurance companies, and many of the large carriers do NOT offer a 25 year term option, such as Genworth, Prudential, and Met Life.  All of the above offer 20 or 30 year policies, but not 25.

The companies who do offer a 25 year term policy are:

  1. Savings Bank Life – the product name is “25 Year Term Guaranteed 25”
  2. American General – Product name is “Select-A-Term 25”
  3. ReliaStar/ING – Product name is “TermSmart 25”
  4. Transamerica – “TransTerm UL 25”.  Note: this is a term/universal life hybrid, which means at the end of the 25 year initial term, the policy automatically “converts” (you might say) to the underlying universal life policy structure on which it is built.
  5. Protective Life – Product’s name is “Secure T 25 Year No Lapse UL”, and the same note applies here as to the TransTerm UL 25 above.

… and there may be a few more, but I don’t represent them.

Cost of a 25 Year Term Policy

As for cost, it will probably cost a bit more than 20 year term life insurance and a bit less than 30 year term.  You can quickly get a quote using our form on the right.  We have dozens of companies to compare, so you can be sure you’ll find the most competitive rate.

Be Careful! — Fewer Options means Less Competition

One word of advice.  If you have any type of health history or any other risk factors such as hazardous occupation, travels, or hobbies, a history of drug or alcohol abuse, or mental health disorder such as PTSD, bipolar disorder, anxiety/depression, be very careful about being narrow minded about “having to have” a 25 year term life insurance policy.

Remember that since only a handful of companies offer it, you may be shooting yourself in the foot by only having these companies to apply to.  It’s very possible that a different company (such as Prudential, Genworth, or Met Life) would offer you a lower rate class than the companies offering 25 year term.

That could mean that for the same price or lower, you could purchase a 30 year term policy instead.  Keep your options open and be sure to speak with a knowledgeable agent about your needs, as well as your health history.

We at Huntley Wealth Insurance are also happy to help with how to buy 25 year term insurance if you call us at 877-996-9383.

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Indexed Universal Life

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

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

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

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

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

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

What if the Index goes down?

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

Life Insurance Approval with Congestive Heart Failure

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

Two Types of Approval

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

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

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

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

Graded Death Benefit

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

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

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

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

Types of Life Insurance Offered by Fidelity

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

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

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