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Term life insurance: What you need to know before you start shopping

Estate PlanningYou certainly aren’t alone if you find shopping for Life insurance a perplexing, frustrating process. Even for those with a basic understanding, the intricate details of many Life insurance products can be overwhelming for consumers.

Term Life insurance is one of the simpler policies, and it also happens to be a product that meets the insurance needs of a variety of family types. It offers you protection for a specified time, or term. The policy’s term can be set at anywhere from one to 30 years. Your named beneficiary will receive a specified death benefit should you die within the term of the policy. Since Term Life insurance is designed for protection purposes, it’s usually less expensive than Permanent Life insurance. A large percentage of Term Life consumers are opting for it because they feel their need for Life insurance will shrink as they age. For example, a person might feel the need to protect their children by having a Term Life insurance policy, but feel that this need will decrease or end once their children reach a certain age.

Although Term Life insurance sounds simple and straightforward enough, there are still a few additional points that you should be mindful of as you begin shopping:

  1. Determine your objective. Don’t start shopping before you answer the following question: What am I trying to accomplish with a Life insurance policy? As you assess your goals, you might find that Term Life insurance is ideal for your needs, or maybe not. In most cases, a consumer will outlive the Term Life insurance policy’s term, meaning that benefits are never realized. This element can be problematic if you’re looking to protect your family long-term, or ensure future adult children or grandchildren receive a benefit. However, it can be ideal if you’re looking to protect your family for a limited amount of time and/or would like to ensure debts are covered should you pass away in the near future.
  2. Individual or Group? A Group Term Life insurance policy is usually an employee benefit through an employer. In most cases, a short health history questionnaire is all that’s involved in the application process. Those that qualify will have the monthly premiums automatically deducted from their paychecks. On the other hand, an Individual Term Life insurance policy requires you to apply for the coverage on your own. Unlike group, you will need to have a physical exam nd provide the insurer with your medical history during the application process. Some insurers may also require a background check and permission to examine your medical records.It might seem like the Group Life insurance policy process is easier and less invasive, but he individual policy can offer you some advantages that the group doesn’t. First, you’ll own the individual policy and be able to retain it should you leave or be fired from your urrent employment. Second, rates on group policies typically increase every five years, but individual policies typically offer level premiums that don’t increase during the duration of the policy. Third, group policies are typically less flexible than individual ones.
  3. Know what you’ll do next. There will be a couple of different options available when the Term Life insurance policy nears expiration, including:
    • Allowing the coverage to expire, which may be an option for you if you don’t see the policy as a necessity any longer.
    • Retaining the policy, which might be an option for you if you feel you still need the policy or couldn’t qualify for a different policy for health or other reasons. Just keep in mind that your premiums could increase when you extend the term of your existing policy.
    • Obtain a new policy through an alternative insurer, which might be an option if you’re healthy and would like to still have a Term Life insurance policy, but don’t want to pay the increased premiums associated with extending the term of your existing policy.
    • Upgrade to a permanent policy, which might be an option if you’d like to convert to a more permanent coverage.

     

  4. Understand how you can upgrade. Upgrading is one of your options when your Term Life insurance policy nears expiration. Should you choose this option, you need to read the fine print in your contract. Upgrades are usually allowed under a conversion privilege, but the fine print may place limitations on the upgrade. For example, a policy might not allow you to convert to a permanent policy after you reach 70-years-old, or might only allow you to convert to a specific type of policy.

Keeping these tips in mind as you shop can make the process much easier and help you obtain the right policy for your family’s unique insurance needs.

Content Provided by Transformer Marketing.

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Life Insurance and Obesity: Just One More Reason to Lose Weight

If you’re overweight, you may already have a few reasons for wanting to lose weight. You might want to shop in regular clothing stores, feel more attractive, and have more energy. Losing weight can improve your health, too. As if these reasons weren’t enough motivation to lose weight, the effects of obesity on your life insurance policy can also inspire you to lose a few pounds.

Why Obesity Affects Life Insurance Rates

Life insurance is based on your risk of dying. Obesity can drive up your life insurance rates and affect your policy category because the extra pounds increase your risk for chronic conditions. These dangerous and potentially fatal conditions include the following.

* Heart disease.
* Type 2 diabetes.
* Gallbladder disease.
* Asthma.
* Sleep apnea.
* Liver disease.
* Stroke.

Are You Overweight?

Being as little as 10 pounds over your ideal weight increases your health risks, making life insurance more expensive and keeping you out of a preferred policy. About two-third of American adults are overweight or obese, and you can find out whether you are overweight or obese using a BMI calculator. Just enter your height and weight. If your BMI is over 30, you are considered obese.

Make Modest Lifestyle Changes to Lose Weight

Crash diets are not fun and they don’t work. For lasting weight loss, think about small changes that you can make throughout the day to eat fewer calories and exercise a little more.

* Grab fruit instead of cookies for dessert.
* Have raw cut vegetables for a crunchy snack instead of potato chips.
* Serve yourself smaller portions.
* Drink water instead of soda.
* Go for a walk after dinner.
* Choose lean meats and cut skin off of chicken before cooking it.

These small changes can help you lose weight and get healthier. You’ll feel better and look better, and you may be rewarded with lower life insurance rates!

 

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Life Insurance Risk Classifications and Your Policy

When you decide to take out a life insurance policy, the life insurance company looks at a few factors to decide what your premium rates will be. One factor is your level of coverage, or the amount that the company would pay in benefits were something to happen to you. A higher level of coverage costs more.

Companies also consider your level of risk when figuring out your premium costs. They evaluate the chances of something happening to you and forcing them to pay out. Life insurance companies comes up with its own exact value for your monthly or annual fees, but they use standard risk categories to guide their decisions.

Preferred Class

Premiums in Preferred are relatively low. You may qualify for preferred coverage if you are healthy and have few risk factors.

* Your weight is within the normal range for your height.
* No immediate family members died before age 60 from cancer or heart disease.
* Your cholesterol, blood pressure, and other values are normal.
* You have no chronic conditions.

Qualifying for Preferred Plus is even more difficult than Preferred, and your premiums in this class would be lower.

Standard and Substandard

Premiums in standard are more expensive than Preferred because you have some risk factors, such as the following.

* Mildly elevated blood pressure or slightly high LDL/HDL cholesterol ratio.
* Slightly overweight.

The cost of life insurance if you fall within the Substandard class can be three or more times as high as the cost of Standard. If you have an uncontrolled or advanced chronic condition or you are very overweight, you may be in this category. 

Classes Consider Nicotine

Smoking is a risk factor for many health conditions, including oral, esophageal and lung cancers, cardiovascular diseases, and respiratory conditions. Since these increase your risk of dying, life insurance companies charge smokers extra. 

You’ll need to get estimates from specific life insurance companies before making a decision, and being informed before you get quotes can help you make smarter decisions. You can have some idea of your expected rates by checking with risk class you are in.

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Go Play! How Having Fun Outdoors Can Lower Your Life Insurance Rates

Playing outside isn’t just for kids. It has tons of benefits for adults. One of the unexpected ones may be that it can lead to lower life insurance rates. It’s not always easy to make yourself go outside and exercise, but knowing that the effort can keep you healthy and save you money can be enough for you get off the couch. The more fun you have exercising, the better the results will be.

Benefits of Exercise

Exercise burns calories and improves your health. Since life insurance rates are based on your health risk factors, regular physical activity can help lower your life insurance rates. These are some of the benefits of exercise.

* Lower risk for heart disease and stroke.
* Lower blood pressure.
* Lower blood sugar levels and risk for diabetes.
* Stronger bones.
* Better mood.
* Clearer mind.

Make a Commitment to Exercise

Set aside some time to exercise most days of the week. Aim for 30 to 60 minutes, but even 10 minutes is better than nothing. The trick is to find some activities that you love, and any activity that is fun and gets you moving is a good choice. These are some options.

* Walk, jog, bike, swim laps, or hike.
* Join a local sports league. On the days your league doesn’t meet, train for your sport by doing drills, lifting weights, and getting in some cardio. 
* Take Zumba, boot camp or kickboxing in the park.
* Go surfing.

Take Advantage of Your Kids!

If you have children, they’re probably a significant reason why you have life insurance in the first place. Why not use them to help you get in shape? They’ll keep you laughing while you exercise.

* Play Tag, Follow the Leader, or Hide-and-Seek with younger children.
* Play catch, shoot hoops, or kick a soccer ball with older children.
* Walk around the field at your children’s sports practices, and run to chase any stray balls.

Everyone can find an activity that they love as long as they keep searching for it. Keeping yourself in shape will give you more energy and can keep your life insurance rates down.

 

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Life Insurance and Diabetes: What You Should Know

When you apply for life insurance, your level of risk determines which policies you may qualify for and your rates. If you have type 2 diabetes, your premiums are likely to be higher than for someone without diabetes. In addition, the insurance company may only offer you a standard plan instead of a preferred plan. However, you can take some steps to lower your rates.

The Dangers of Diabetes

Diabetes increases your risk for heart disease, stroke, and hypertension, or high blood pressure, and kidney disease. Complications from diabetes are the leading cause of blindness and amputations in the United States. These complications are the result of having uncontrolled blood sugar levels.

Your insurance company will ask you about your A1C levels, which your doctor has likely already tested for in a routine diabetic blood test. A1C, or glycated hemoglobin, is a good long-term measure of how well you are controlling your blood sugar. Lower A1C levels lower your chances of having diabetic complications.

How to Get a Better Policy

The insurance company looks at your risk factors when determining your rates. Keeping your blood sugar levels under control can give you a better evaluation, since lower levels put you at lower risk for diabetes complications. Also, maintain a healthy body weight for your height, or try to lose weight if you are overweight.

Maintain a Healthy Lifestyle

A healthy lifestyle can go a long way toward reducing your health risks. In addition to taking any medications that your doctor prescribes, quit smoking if you are a smoker. Exercise regularly to improve your insulin sensitivity and lower your blood sugar levels.

Your diet is another important factor. Limit sweets and sugar-sweetened beverages because they drive up your blood sugar levels and do not provide many nutrients. Try to reduce your sodium intake and avoid fatty meats to lower your risk for high blood pressure heart disease. Instead, emphasize vegetables, lean proteins like chicken and fish, low-fat dairy products, beans, nuts, and whole grains, such as whole wheat bread and oatmeal.

 

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