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Archive for the ‘Life Insurance’ Category

You need life insurance to provide for your family in case of your death. This means you need to choose a company with a top rating so you can count on that company being around to pay the insurance benefit when your family needs it.

Rating Insurance Companies

Insurance companies receive financial ratings that let you know how financially strong that company is. The ratings are letter grades just like you would see on a report card, with A being the best. To find out the rating of an insurance company, you can …

* Go to an independent rating service such as A.M. Best (ambest.com), Standard & Poor’s (standardandpoors.com), or Moody’s (moodys.com)

* Check their consumer ratings at J.D. Power and Associates (jdpower.com)

* Check your state’s Department of Insurance website

In fact, you may want to check and compare multiple sources, as one rating service may give a company a different rating than another company does.

Shop A-Rated Companies

When it’s time to purchase life insurance, one way to ensure you’re dealing with only A-rated insurance companies is to work through a reputable insurance comparison website. These websites only contract with A-rated companies, so you know that any quotes you receive will be from financially sound companies that will give you good service.

Another advantage to using an insurance comparison website is that it allows you to easily and quickly compare rates from different companies. Did you know that rates from different companies can vary by hundreds of dollars for the same coverage? But when you shop through a comparison site, you automatically get quotes from several companies, allowing you to compare them and choose the best quote.

In addition, the best insurance comparison websites let you talk with experts who can answer your insurance questions.

When you apply for a life insurance quote online, or when you are filling up a life insurance policy application form, you will be asked which rate class you wish to apply for. What exactly is “life insurance rate?” It is the price you have to pay monthly, quarterly or annually for insurance coverage.

The underwriting process and life insurance rate classes

There are several rate classes, and every person who applies for life insurance wants to qualify for the best rate class so that their premiums are kept low. However, other than going over the criteria for different rate classes, and determining which one you qualify for, there is little you can do than hope that you qualify for a good rate class.

The rate class is determined after an underwriting process. During this process, the outcome of your physical exam, along with supporting health and other documents, your driving history, family health history, your age, sex, lifestyle habits and the nature of your profession is scrutinized closely. Remember never to lie on your insurance application because if your lie is unearthed, it could permanently affect your chances of getting a insurance policy. The worst-case-scenario would be if your lie is discovered after you are dead and gone and the life insurance company, would rightly, refuse to issue any pay-out benefits to your family. Based on the scrutiny, the underwriters come to a conclusion about your likely life expectancy. The longer you are expected to live, the better your rate class will be.

Different rate classes and their qualification criteria

Life insurance buyers should spend some time understanding the qualifications associated with the most common rate classes so that they can apply for the right one. Doing so will assure them of an appropriate rate quote, and prevent disappointment later on. Remember that qualifications will vary to some extent between different companies. However, let’s take a look at common criteria in each category.

Preferred-Plus Term Insurance Rate – The criteria to qualify for the ‘preferred-plus’ life insurance rate requires that you cannot use tobacco in any form, have no history of drug or alcohol abuse, and you cannot engage in any hazardous activities. According to actuarial tables, these are the people who are likely to live the longest, and therefore qualify for the lowest available premiums. Preferred Life Insurance Rate – Most insurance companies require that you are in excellent health, and do not participate in hazardous activities in order to qualify for preferred life policy rates. Standard Life Insurance Rate – People who have minor health problems like cholesterol or someone who is moderately overweight will most likely qualify for these rates. Substandard Life Insurance Rate – “Substandard” risks refer to persons who have major health problems. Since their longevity is in question, most whole life and term insurance companies charge higher premiums on them, so that they recover their costs faster.

Remember that even if you are in the best of health, there is a chance that you won’t qualify for the best rate class, because underwriters look at several factors in tandem before coming to a conclusion. In fact, only 5%-40% of all applicants get this “preferred-plus” life insurance rate. Typically, about 60% can qualify for the regular “preferred” life insurance rate. The rest, fall into the “standard” category, or below.

With a little effort you can improve your rate class

A person may qualify for standard rate with one insurance company, but be in the preferred rate class with another. Unless a person shops around extensively for life insurance, or knows the intricacies of each life insurance company’s rate class criteria, it is very difficult to individually get in touch with a company which will offer you a better rate class. The solution to this is to get in touch with an online insurance agency that deals with thousands of policies every year. Such companies have a database of insurance companies, and they closely monitor each company’s criteria so that they can offer the best advice to every customer. Getting in touch with them is sure to improve your chances of getting a better rate class.

You can also attempt to qualify for a better rate class by stopping tobacco usage, losing weight, exercising, driving more carefully, etc. Sometimes only a small change is required to qualify you for a better rate class.

Whenever you try to decide on which life insurance companies you would like to deal with, you will surely find a lot of reliable life insurance companies. It will not be fair to mention only a few because there are literally thousands of them. But there is way to find the best and most reliable insurance company. Finding the best and most reliable is sometimes tricky so need to know a few things in order to get the best results.

The first thing you have to do is decide on what type or form of life insurance you want or need at present. Do you need a term life, a whole life or a universal life? A term life insurance will only cover you for specified period of time and renewals can get more expensive as you aged. While whole life gives you the flexibility and protection as well. With these type you can change the amount that you want to be insured and as well as the premiums. Then see if the company you are interested is offering them.

You may now need to contact your government insurance department or the better business bureau and inquire if they are legitimate. Also if they are allowed, authorized or licensed to sell insurance in your state. If they are licensed in your state, then they are reliable. The main reason for this is if something wrong happens and they are not licensed to do business in your state, you cannot get help from your state or local government.

Research and compile a list of life insurance companies that you may be interested. Check with the better business bureau if they have any reported business misconduct. This can be red flag if someone has complained against them. Check too with the consumer advocates on better business conduct if they have a clean sheet. You may also want to check with friends and family members if they know anything about your list of insurance companies. You can also check with your co-workers if they have any good or bad experiences with your probable insurer.

Find an independent research firm that rates insurers. These research firms can provide you more accurate and honest rating of any insurer you may have on your list of probable life insurance companies. Finding their financial ratings can give you a better look and understanding of well you are going to be protected. Because what is the use of insuring yourself if the company may close their doors in a year or two.

Finding the best and most reliable life insurance companies is not as difficult as you may think. All it takes is some few basic steps and voila, now you have it.

Let us define variable life insurance, also referred to as Variable Appreciable life insurance. It is a form of whole life insurance that provides the beneficiary of the plan with permanent protection. This type of policy is termed “variable” because of the root nature of the monies used to fund the policy. This plan allows the holder to set aside a certain sum of money to be invested in equity funds, money market funds, bond funds, or any combination of the said funds. These investments, just like any other form of monetary investment, will fluctuate with the movement of the market and the stock exchange. Therefore, the value of this policy will be determined by the set value of the uninvested monies plus the value of the monies invested in the market.

Many variable life insurance policies allow for a hold on the value of the policy. This hold ensures that the total value of the policy will not fall below a certain amount. This amount on hold only pertains to the death benefit and has nothing to do with the total cash value of the policy. The cash value of the policy, which is the amount of money the holder can draw upon during their lifetime, will have no cash minimum.

The Benefits of a Variable Life Insurance Policy

This insurance policy allows the holder to invest untaxed monies. These monies will remain untaxed until the life insurance policy is used. Potentially, any monies earned by the investments can be used to lower the premiums on the life insurance policy.

The Potential Hazards of a Variable Life Insurance Policy

This type of life insurance policy holds a certain amount of risk. As with any monetary investment, the cash value is not guaranteed. Thus, gambling with the cash value of the variable life insurance policy can render the policy worthless aside from the guaranteed death benefit. The death benefits as stated when the holder begins the policy may also be reduced. Variable life insurance companies will offer a guaranteed death benefit, but this amount may be significantly lower than the amount obtained at the inception of the policy.

This is a policy which holds the potential for great gains but you can also stand the chance of losing the overall value of the death benefit to the point of a minimum value as we define the variable life insurance policy.

Best life insurance policy helps to secure your life risks. So, always buy better to have better life. Various factors which are required to be considered in buying process are:

Life insurance need:
The suggestion behind this is to make your family financially independent in case of your absence. This insurance is necessity if you are only bread winner in the family and you have some liability to pay out like bank loan, mortgage etc. Best policy supports your family financially if something happens to you. In addition to this it also act as a money saving strategy.

Understanding types:
Term Life Insurance: In this policy you pay fixed amount premium every month and your life is secured for a particular period of time. When your policy lapses you loose all the money you put in. This policy is cheaper and covers risk but it has no pay out.

Whole life insurance: This policy secures your entire life. The amount you pay is put into an investment fund, your premium usually remain same for the first few years before going up. This policy is expensive but pay out is there.

Calculate Sum Insured:
This is critical factor which need to be considered carefully. Calculate your assets and debts value and also compare your annual income and expenditure. Then find out by how much amount your family will face financial crisis if something happens to you. Then this amount difference would be your sum insured money.

Compare & Buy Cheap Life Insurance:
Insurance quotes comparison is must before buying. To save your time compare insurance quotes online it hardly take one minute to get quotes by various companies on your computer screen. Insurance rates comparison also saves your money because every company has its own strategy and it may possible one company is charging fewer premiums in comparison to other.

A no-load life insurance policy is a cash value building life insurance policy life whole life, except the premiums are lower and your cash value grows faster. This is because the parts of the traditional whole life insurance policy premium that pay for advertising, agent commissions, and corporate overhead are cut out–hence, it is “no-load”.

No-load life insurance policies are almost always sold by life insurance brokers. Because these agents are licensed to dozens of companies, they don’t depend on making a killer commission with every sale just to put bread in their mouth. What’s more, the insurance companies who offer the no-load life policies can still find it profitable to sell these policies through brokers because the companies don’t have to pay for the broker’s advertising, telephone bill, training, any base pay, office supplies, benefits, or utility bills.

Insurance brokers are usually compensated on no-load life insurance sales by receiving a flat, one-time fee from the company. Their fee is part of the one-time set up fee that you will pay should you buy such a policy.

These no-load (sometimes referred to as “low-load”) life insurance policies aren’t sold in every state, so if you consider buying one you’ll first have to check to see if you can even get one in your state. And, don’t think that any of the usual other stipulations are waived. There are still medical questions to be answered and, if the face amount is high enough, a medical exam.

No-load life insurance policies are variations on the theme of traditional whole life insurance the one great appeal of which has always been its ability to grow cash value totally tax-sheltered, meaning you pay no income tax and no capital gains taxes unless and until you withdraw some of the cash value. With the rise of more sophisticated life insurance consumers thanks to increased knowledge spread by modern financial advisors and the Internet, the faultiness of whole life has been revealed.

Whole life takes many years before the cash value inside it even equals the premiums you’ve paid in, and then many more years before the cash value is anything to get remotely excited about. And the returns are only like those of a good corporate bond–very stable, yes, but today’s financial consumer knows about the power of Variable Universal Life Insurance which is a tax-sheltered and payment-bundled way of “buying term and investing the difference”, which has always been the countervailing answer of whole life skeptics and critics to whole life lovers. These VUL policies have premiums as cheap as those for term of the same face value but the rest of the premium, which is flexible, gets invested in general vehicles of your choice–and they can make substantially more money for you than the best corporate bond.

Therefore, people looking for stable cash value returns that amass more quickly while they also seek the lowest quality life insurance premiums might find no-load life insurance appealing. However, they should keep in mind that these policies have next to zero customer service attached to them.

While there are many critics of this, financial advisors and planners generally agree that the right kind of life insurance policy is a magnificent part of a good investment portfolio. You should consult with such a professional on such matters as tax bracket, your needed face amount, amount of premiums you can afford, and so on to determine if you should try to take advantage of the tax-sheltered growth that life insurance can offer you.