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Health Insurance Coverage Policies As America Recovers From COVID-19
This issue brief contains a correction.
One year ago this month, the first wave of COVID-19 cases in the United States led to widespread job loss throughout the country. Early in the pandemic, there was serious concern that the impact of these job losses would lead millions of workers to lose job-based health insurance coverage, causing a dramatic spike in uninsurance.
Evidence to date suggests that the number of uninsured people has not risen as great as initially feared. Although the number of jobs in the United States remains about 9.5 million below pre-pandemic levels, workers in the industries that were most affected by the pandemic’s economic damage tended not to have job-based coverage, to begin with. Some of the estimated 3 million people who lost job-based coverage in 2020 gained other forms of coverage through public programs, including Medicaid and the Children’s Health Insurance Program (CHIP), and through the health insurance marketplaces established by the Affordable Care Act (ACA).
While total coverage losses were not as significant as projected last spring, federal action is needed to fill coverage gaps for the tens of millions of uninsured Americans and improve protection against medical costs for families facing the financial strain of the pandemic. This issue brief describes the extent of coverage loss during the COVID-19 pandemic, outlines the evidence for why the uninsured population did not increase as dramatically as expected, and explains how the American Rescue Plan — the stimulus bill that President Joe Biden is expected to sign this week — will alleviate uninsurance and underinsurance as the United States climbs out of the coronavirus crisis.
What happened to coverage during the pandemic?
Following the passing of the ACA in 2010, 20 million Americans got access to health insurance. The most significant increase in coverage occurred in 2014 when the law’s provisions extending Medicaid and opening the health insurance exchanges took full effect. During Trump’s presidency, this trend reversed, with the uninsured rate among the working-age population rising from an estimated 10.0 percent in 2016 to 10.9 percent in 2019. The COVID-19 epidemic and subsequent recession could worsen these coverage losses. During the Great Recession, the uninsured rate among the working-age population reached 18.2 percent, the highest level in decades.
In 2010, 60 million people reported being uninsured at some point in the previous year. Many analysts worried early in the pandemic that the high levels of job loss might lead to a similar increase in uninsurance. In their May 2020 research, the Economic Policy Institute estimated that more than 16 million workers had lost employer-sponsored insurance (ESI) due to job loss, while the Urban Institute predicted that 5 million to 9.5 million workers might become uninsured. Recent studies, on the other hand, have revealed a lesser — though still significant — loss of employer-sponsored coverage and a smaller net rise in uninsurance. According to data from the U.S. Census Bureau’s Household Pulse Survey, approximately 3.3 million people lost employer-sponsored coverage by mid-2020, while the number of uninsured climbed by 1.9 million, according to an Urban Institute estimate. 10 The same study discovered that Hispanic and non-Hispanic Asian individuals had the most considerable reductions in ESI coverage, as well as a rise in the uninsured rate of approximately 4 percentage points among Hispanic adults. Separately, according to a Kaiser Family Foundation examination of insurer administrative data, about 2 million to 3 million fewer people will have ESI by September 2020.
While the lower-than-expected number of workers losing health coverage during the coronavirus epidemic may appear to be good news, there are several reasons why the number of uninsured in the United States did not rise as much. Among them are the following: Many of the laid-off workers did not have coverage via their employer, and Americans who lost health insurance during the epidemic were able to obtain coverage through Medicaid or buy coverage on their own through the ACA marketplaces. Because of the ACA’s Medicaid expansion, the creation of markets, and safeguards for preexisting conditions, Americans now have many more options than they did before the Great Recession.
Furthermore, the net change in the uninsured population does not account for changes in the kind of coverage or how the economic effect of the pandemic affects households’ ability to afford out-of-pocket costs.
#lifehealthadvisors #ethos #healthcare#aretemarketing #areteautomation
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Life Insurance For Cancer Patients And Survivors
The ability to obtain standard life insurance will often be hampered if you have recently received a cancer diagnosis or treatment. A cancer diagnosis is not necessarily a surefire roadblock to buying life insurance.
After receiving a cancer diagnosis, is life insurance still an option?
Even though it could be pricey and restricted, you can still get some forms of life insurance if you presently have cancer.
Having a diagnosis of cancer usually makes it impossible to obtain insurance.
Basal cell carcinoma is a condition for which most insurers do not impose restrictions, according to Travis Price, an independent senior market insurance agent in Manton, Michigan (skin cancer).
However, given the nature of small cell lung cancer, there is a good chance that no life insurance would ever be placed with you.
What Kinds of Life Insurance Are Available to Cancer Patients?
Following a cancer diagnosis, you will probably be able to qualify for a guaranteed issue, group life, and final expenditure life insurance policy, which provides coverage for last expenses and burial fees. However, with a cancer diagnosis, you could not be eligible for the two most popular forms of life insurance — term and whole.
These forms of life insurance often don’t allow for application rejection, and the applications don’t typically even include any health-related questions.
The possibility of limited coverage quantities is one compromise. The fact that guaranteed issue and final expense life insurance sometimes have graded death benefits means that your beneficiaries won’t receive the total payout if you die away within two or three years of purchasing the policy. (The timetable will be specified and depend on the policy.) The nature of your disease will also impact what coverage you may qualify for.
How Long Does It Take to Regain Life Insurance Eligibility After Cancer?
Although each insurance provider is unique, you usually need to have been cancer-free for at least five years to be eligible for freshly issued term life insurance, whole life insurance, or other forms of coverage.
Depending on the type of cancer, its invasiveness, and the likelihood that it may return, there may be a waiting time for life insurance after cancer.
Waiting periods for life insurance following cancer. Certain insurers have higher underwriting requirements for specific diseases that need remission for at least a decade.
Life insurance waiting periods after different cancer types
Here are sample waiting periods for various types of cancer from Trusted Choice, a network of independent insurance agents:
Bladder cancer: 2 years
Bone cancer: 5 years
Breast cancer: 2 years
Cervical cancer: 1 year
Colon cancer: 2 years
Kidney cancer: 3 years
Leukemia: 10 years
Lung cancer: 3 years
Lymphoma: 2 years
Metastatic cancer: 5 years
Ovarian cancer: 3 years
Prostate: 1 year
Rectal cancer: 2 years
Skin melanoma: 1 year
What Kind of Life Insurance Is Best After Cancer?
Traditional life insurance may be possible if you have had cancer for at least five years. Here are a few potential choices.
Long-term care insurance If you’re eligible, term life insurance is often the least expensive method to get protection. You’ll probably have to undergo a life insurance medical examination, so be ready to discuss your prior cancer diagnosis and treatment when questioned.
You may lock in prices for term life insurance for a predetermined amount of time, such as 10 or 20 years.
Permanent life insurance Whole life insurance and universal life insurance are two options for permanent life insurance. If you pay the premiums, these plans can offer life insurance as long as you live.
streamlined life insurance issues While simple issue life insurance does not need a medical exam, you might be required to complete a brief health questionnaire.
A simplified issue might be an excellent decision if you are cancer-free but not in perfect health.
Life insurance with a guaranteed issue You cannot be refused guaranteed life insurance because of a medical exam, health standards, or medical history requirements. That may seem enticing, but the cost of the coverage you receive will be high, and the policy’s death benefits will be low.
Life insurance for burial Burial insurance, intended for life insurance purchasers over 50, is designed to cover expenditures associated with the end of life, such as funeral fees and unpaid medical bills. Obtaining this coverage doesn’t need a medical checkup.
How Does Cancer Affect the Price of Life Insurance?
For all plans, including those for cancer patients and survivors, most life insurance firms employ a categorization method to calculate the prices for life insurance. Following cancer, some suggestions to improve your chances of finding life insurance.
Work with a knowledgeable independent life insurance agent first and foremost. Independent brokers deal with various insurance providers and will be aware of those more receptive to covering cancer patients. Find an independent agent that specializes in impaired risk underwriting in particular.
With these techniques, you might be able to get affordable life insurance no matter when you become eligible for it after cancer.
By eating well and exercising, you may improve your general health. Avoid using tobacco. Quotes for life insurance are often substantially more expensive for smokers.
Choose a profession with less risk. Police officers, firefighters, pilots, and construction workers are among the occupations that might see increased costs.
Avoid dangerous pastimes, including scuba diving, skydiving, and mountain climbing. Your quotations will take them into account and increase the Price. Maintain a spotless driving and criminal history. DUIs, prior arrests, and other criminal convictions may impact your rate or ban you from coverage.
#lifehealthadvisors #ethos #lifeinsurance #lifeinsurancematters #mycoverage
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Customer Relationship Management Software’s Objective
A CRM Software’s Definition
An application used to manage and store customer data is known as CRM software. This data may include personal information, preferences, buying patterns, interactions with the business and other customers, and other things.
What Advantages Do CRM Software Offer?
Businesses use CRM software to cultivate and preserve relationships with their current clientele. CRM software enables businesses to better understand the needs of their customers, respond to those needs by improving services and products, attract new clients, and more.
What Purpose Does Customer Relations Management Software Serve?
Now let’s talk about some of the main objectives of CRM software. Including the following:
Find New Clients
CRM software is widely used by businesses to attract new clients. A business that sells goods and services online, for instance, can use its CRM software to entice new clients by emailing them and providing them with special discounts, coupons, and other offers.
Identify and Keep Your Customers
CRM software can assist businesses in learning more about their client's requirements so that they can enhance their products, services, and other aspects. In other words, by offering customers goods and services that are on par with or better than their expectations, CRM software can aid a business in keeping its current clientele.
Encourage Customer Loyalty
Many businesses use CRM software to reward existing customers for their loyalty by sending them emails with rewards, discounts, etc. These programs are also being used to collect customer feedback so that changes can be made in response to it.
How Does a CRM Software Operate?
Through the following three steps, customer relationship management software assists businesses in developing customer relationships:
Step 1: Gather Data on Customers. The first step of this process entails gathering data on clients using a variety of techniques. This data may include specifics like the client’s name, contact information (such as a phone number, email address, and mailing address), gender, age group, purchasing patterns, and preferences, among other things. It may also contain information about previous interactions between the business and the client (such as the most recent time the client purchased goods or services from the business).
Step 2: Store Information in a Database. In order to make the information easily retrievable at any time, the collected data is stored in a database in the second step. A company should be able to easily access this information from its database at any time during this six-month period, for instance, if it wants to send marketing materials to new customers once a month for the first six months after acquiring them.
Step 3: Produce Reports from Database Data. The third step entails obtaining pertinent data from the database for additional analysis and decision-making. For instance, if a business wants to analyze customer behavior to attract new ones (see step 1) or customer feedback to improve its business processes (see step 3), it should create reports based on the data stored in its database so that it can use such reports for analysis.
#areteautomation #marketingautomation #leadconnector #emailmarketing #contentmarketing
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What Is Covered by Life Insurance? What You Should Know
According to the 2020 Insurance Barometer Report, almost 41 million Americans live without life insurance despite wanting it. Most people have inaccurate views about the affordability of life insurance and are ignorant of its existence. When you pass away, your family may benefit from the life insurance payouts. We cannot dismiss its advantages even though talking about it is not pleasant. Your family can manage everyday expenses better and pay utility bills thanks to insurance coverage.
Therefore, it’s crucial to understand what insurance coverage will and won’t cover before making a purchase. In addition, you need to be familiar with the many insurance policy options and their prices. The life insurance policy coverage details are broken out below so you can make an educated choice.
What Is Covered by Life Insurance?
The finest insurance provider and the insurance policyholder enter into a contract for life insurance. The agreement requires the company to provide a death benefit to the policyholder’s family in the event of their passing. Depending on your preference, life insurance policies come in various forms and cover multiple costs. Typically, policyholders get life insurance to help their family with expenses like
Mortgage obligations
Funeral and burial expenses
Tuition costs and education
Costs of living, including rent and groceries
Unpaid credit card bills or personal loans
Additionally, you don’t need life insurance to fulfill your financial obligations. Further, some exploit this policy to create an inheritance for their grandchildren and offspring. Some individuals use this cash to cover their expenditures while still living. A life insurance policy can also be used to donate to a charity of your choice.
Remember that you may only fully profit from insurance coverage if you reimburse the premium before passing away. You can borrow money against your life insurance coverage if you’re making premium payments. However, if you default on these loans, your family will receive fewer death benefits. You can utilize life insurance to pay off loans if the death benefit is not a worry.
What isn’t covered by life insurance?
It would help if you considered a few aspects that make it challenging to acquire death benefits to benefit from a life insurance policy. The policy covers nearly all causes of death, including homicide, suicide, natural causes of death, and accidents. But according to Dr. Steven Weisbart of the Insurance Information Institute, there are two primary reasons why someone cannot purchase life insurance. These explanations include misrepresenting the death of the insurance policyholder or a pay gap.
Thus, providing the insurance provider with correct information regarding the policyholder’s health is crucial. The insurance company may reject the claim if the information is false. This applies to the contestability term, typically two years after the policy is purchased.
Aside from that, the insurance provider may reject the claim if the recipient was complicit in the policyholder’s murder. The beneficiary might plan to assassinate the policyholder to collect the death benefit, so the life insurance company is taking this action to deter crime.
Insurance providers also have guidelines for suicides because it is possible for a policyholder to end their life so their family can get benefits immediately. Because of this, life insurance providers usually give policyholders two years to claim their benefits.
Furthermore, the life insurance company may refuse death payments if the insured partakes in risky pursuits like mountain climbing or skydiving. Even though not all insurance providers offer these restrictions, you should consider them before purchasing an insurance policy.
How Do I Choose a Life Insurance Type?
You can select from various life insurance policy types, but you must first decide which ones best suit your needs. This covers your rationale for purchasing the coverage, financial objectives, and available resources. You can select from the following major categories of life insurance coverage, depending on your needs:
Term Life Insurance
What does that mean? As the name implies, term life insurance offers protection for a set period. Depending on the insurance provider, the period may include 15 to 20 30-year coverage. Term life insurance has low premiums but doesn’t have a cash value. For a death benefit during the period, the policyholder must pay premiums according to predetermined terms. This insurance coverage expires at the end; however, certain insurance companies may also let you convert it to a permanent policy.
This sort of life insurance may be helpful for people who desire protection in case their spouse cannot get financial security or their children are too young. Due to their low cost, term life insurance policies are thus the most popular. Therefore, the central concept is that the beneficiaries will receive the death benefit if the policyholder dies during the policy period.
Whole Life Insurance
A type of permanent life insurance is whole life. If the policyholder adheres to the terms of this life insurance, they will be protected for their lives. People buy this insurance policy, which is also highly popular, to get death benefits for their beneficiaries. Unlike term life insurance, this kind of insurance also delivers a cash value.
This insurance has many advantages, including the ability to borrow or withdraw existing cash. Additionally, the premiums are fixed and don’t alter regardless of how the market performs. If you pay your premiums on time, you are guaranteed to receive death benefits, which is a significant advantage. As you pay the premium, the separate cash value component keeps increasing. If the policyholder needs to use this money to cover expenses while still living, they can withdraw it from the cash value.
Term life insurance is less expensive than whole life insurance, nevertheless. However, it also has more advantages because it won’t have time restrictions like in-term life insurance. If you want your insurance policy to have a cash value component, whole life insurance is a suitable choice.
Universal Life Insurance
If you pay your premiums on time, universal life insurance, like whole life insurance, covers you for the duration of your life. Although the cash value of this particular sort of permanent life insurance is also subject to market fluctuations, unlike whole life insurance, it does not. Consequently, the cashback value of this policy will increase more quickly when market rates are high. On the other hand, the cash value will increase swiftly if the market is performing poorly.
Universal life insurance offers further advantages besides lifelong security. You may, for instance, withdraw your funds or borrow against the policy’s cash value. Additionally, you have flexibility with the premiums and can change the death benefits to suit your needs. Your monetary value is also still generating interest. Universal life insurance is attractive if you’re looking for a more adaptable plan. People opt for this insurance since they can alter the death benefits and set their premiums.
Other Types of Insurance
A life insurance firm also provides other options besides these primary insurance plans. For instance, some insurance firms offer no medical exam policies that let you buy insurance without undergoing a physical examination. In addition, variable life insurance works similarly to universal and whole life insurance in that it has a cash value and a death payout.
The primary distinction is that cash value grows with variable life insurance through investments like bonds, mutual funds, and stock options. This implies that the cash value will increase swiftly when the market is favorable but will also decline significantly when the market is unfavorable.
Some life insurance providers offer various life insurance products, such as term and universal life insurance. Additionally, this can be very helpful for policyholders who want to acquire the most excellent deals on various policies.
Is Life Insurance Really Important?
Life insurance may prove to be a wise investment depending on the type of insurance. It might not be the best option for everyone, even though it can help augment your current investment strategy. The investment may be advantageous for insurance with tax advantages and a cash value.
Your beneficiaries get life insurance as a tax-free investment, but in some circumstances, the beneficiary may be required to pay the taxes. The beneficiaries receive the total face value of the policy as a death benefit, and most of the time, the money is not taxed. If you’re considering life insurance work as an investment, it’s always a good idea to discuss everything with an insurance agent and a financial advisor.
When does life insurance become unnecessary?
Occasionally, purchasing life insurance coverage may not be a wise move. For instance, getting this policy is pointless if you don’t have any dependents. Additionally, you don’t have to worry about purchasing life insurance if you have sufficient assets and investments to demonstrate financial security for your dependents.
A Good Investment: Life Insurance
Depending on the type, life insurance may prove to be a worthwhile investment. It might not be the best option for everyone, even though it can help augment your current investment strategy. The asset may be advantageous for insurance policies with a cash value and tax advantages.
Your beneficiaries get life insurance as a tax-free investment, but in some circumstances, the beneficiary may be required to pay the taxes. The beneficiaries receive the total face value of the policy as a death benefit, and the money is not taxed most of the time. If you’re thinking about life insurance work as an investment, it’s usually a good idea to talk through everything with an insurance agent and a financial planner.
How Much Life Insurance Do I Need?
It will help if you ascertain the purpose of purchasing the policy to calculate the size of the life insurance coverage you require. If your primary goal is to make a purchase that will help your family when you pass away, you must consider the size of the insurance policy that will replace your current income.
Since your income provides your family with financial security while you are still alive, life insurance will take care of that following your passing. In addition, you must include the costs of the funeral and burial, which your family will be responsible for paying afterward.
It would help if you also considered any future expenses you might want to cover when determining the policy quantity. For instance, you must decide on the cost of the insurance policy by if you wish to make arrangements for your child’s educational expenses or to pay the mortgage.
The sum of money will ultimately rely on how much is required to satisfy the needs of your beneficiaries. A financial planner or advisor should always be consulted to determine the appropriate level of life insurance coverage.
How Much Does Life Insurance Cost?
The amount of life insurance varies from person to person and is based on several variables. Before buying a life insurance policy, you should think about a few things that could affect the number of premium payments:
Age
The cost of life insurance coverage is lower for young or healthy persons. However, the cost of the insurance policy goes up as the person ages. Therefore, it is wise to consider purchasing a life insurance policy when young because doing so would result in expensive premiums.
Health
The premium payments for healthy individuals are lower than for those who are unwell, which is too predictable. The insurance industry performs physical examinations because healthy people can purchase insurance policies at favorable rates. During this examination, the insurance company confirms that you have significant medical conditions, such as cancer or heart disease.
Gender
It may seem strange, but men indeed pay more significant premiums for life insurance than women. Perhaps this is because men are typically the only wage earners in the family and buy insurance to protect their families finances. Men also have a shorter life expectancy than women, according to statistics. Maybe the insurance companies have already read this and decided to charge males more excellent prices.
Insurance Type
Your experience as a policyholder could be made or broken by the kind of insurance policy you have. The primary aspect influencing premium payments is also the type of insurance. The least expensive type of life insurance is a term, with long-term policies costing slightly more than short-term ones. In addition, whole life and universal insurance, which are more expensive than term life insurance, are included in permanent life insurance contracts. However, the policyholder is covered for their entire lifetime.
Occupation
The cost of insurance also affects the policyholder’s profession and interests. The cost of life insurance will be higher for a policyholder with risky employment since some jobs are more dangerous than others. This is because some careers and pastimes are hazardous and often result in accidents. Because of the higher risk of fatality associated with specific jobs, insurance firms typically steer clear of or charge extra to those with such policies.
Smoking and Tobacco Usage
Smoking and using tobacco increases the chance of developing health problems such as lung ailments, asthma, strokes, and heart attacks. Therefore, according to the CDC, a policyholder who smokes or uses tobacco has a higher probability of passing away than a non-smoker. As a result, if you smoke, your life insurance premium will be higher.
#lifeinsurance #ethos #freewill #protectyourfamily
Sarah Jane Cadiz
August 26, 2022
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What can I do with my life insurance?
Life insurance is essential for safeguarding the individuals who depend on you. It’s a clever approach to ensure that your loved ones will be cared for in the event of your passing.
Of course, many factors to consider when figuring out how much life insurance you need. Additionally, the kind of life insurance you select — whole or term — depends on your financial circumstances.
You can begin paying your payments after the type and amount of your life insurance have been decided, secure in the knowledge that your loved ones will be kept safe and secure. But how safe and well-guarded will they be? What may be done with the proceeds from a life insurance payout, and how does it work? The answers to these inquiries will assist you in determining if the sort of insurance you now have or wish to upgrade to is enough.
Now is a beautiful time to start if you don’t have life insurance or if you want to increase the amount you currently have. You can start by getting a price estimate right now.
Whatever your level of protection under a life insurance policy, it’s essential to know what can be done with any future policy payout.
What might life insurance be used for?
Numerous purposes can be served by life insurance coverage.
Many people will spend a portion of their life insurance payout for funerals. People with wives or kids will typically purchase insurance so that their loved ones can afford the service fees after they pass away conveniently.
You can also put the money in a trust so that your beneficiaries won’t have access to all of the capital after you pass away. This could be useful if you have young children and want to make sure they handle money responsibly.
Sometimes people get life insurance to leave a legacy for those not dependent on them. If you’re unmarried and childless, you could wish to buy life insurance with your nieces and nephews as the beneficiaries. If you have pets, you can also buy a policy to ensure that your friend who will look after them has the money to do so.
Specific life insurance plans, like Universal Life Insurance, are bought by some people to use as investments. Sadly, these insurance frequently have exorbitant fees and will typically underperform the stock market. Investing in a traditional retirement account, such as a 401(k) or IRA, is frequently a superior choice. Only wealthy people typically stand to gain from obtaining one of these policies.
One thing to remember: although these situations are what life insurance is typically meant for, recipients are free to spend the payouts however they see fit. There are no set restrictions or specifications to follow. The money can be spent on whatever the recipient pleases.
There are things to consider if you don’t have life insurance or if, after discovering what it may cover, you want to increase what you do. An excellent starting point is requesting a life insurance quotation.
With life insurance coverage, you can adequately provide for your family.
However, it’s also helpful to have a better grasp of life insurance policies when looking to get a new one. This will ensure that you choose wisely when looking for insurance.
What is life insurance?
If you die away during your peak earning years, your family will be protected by life insurance. A suitable life insurance policy should provide enough money so your family won’t face financial hardship following your passing.
The only people who need to purchase life insurance are those who support others financially. For instance, you probably don’t need to buy insurance if you’re single and don’t have any dependents. But if you’re married and have two children, you’ll probably need a sizable coverage.
Policyholders of life insurance pay monthly premiums. The beneficiaries will get the payout, which is tax-free if they pass away while the policy is in force.
Term and whole life insurance are the two primary forms. Term life insurance, as the name implies, is only offered for a predetermined period, typically between 10 and 30 years. Whole life insurance is made to protect you throughout your entire life.
Because you are less likely to use the coverage, term life premiums are typically far less expensive than whole life premiums.
Because they don’t need coverage for their entire lives, most consumers don’t need full life insurance. For instance, your beneficiaries would receive any remaining investments and savings if you passed away while retired. You don’t need to replace that income source when you pass away because you weren’t generating cash through your employment.
As a workplace bonus, some firms provide life insurance coverage for free or at a reduced rate, but the total cost might differ considerably. The policy will be forfeited, and you won’t have coverage if you leave the company or are fired. Having your life insurance coverage outside of your employer is frequently advisable.
Are you thinking about expanding your current life insurance policy? Or do you wish to adopt a new approach from scratch? Get a price estimate right away by acting now.
#lifeinsurance #ethos #freewill #protectyourfamily
Sarah Jane Cadiz
August 25, 2022
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Is Purchasing No-Exam Life Insurance a Good Idea? Learn More Here
Do you need life insurance but hate having to have a medical examination? If so, you are not by yourself. No-exam life insurance plans are gaining popularity steadily. More people are deciding not to have a medical exam to get a life insurance policy. Is this a wise decision? To determine whether no-exam life insurance policies are a good fit for you, this article will examine them. In order for you to choose your coverage wisely, we will also go over the advantages and disadvantages of acquiring a no-exam policy. Let’s get going.
An explanation of No-Exam Life Insurance
The majority of life insurance policies demand that you undergo a medical examination. This is done to assess your insurance eligibility and determine the health risks you face. A life insurance policy that does not call for a medical exam is referred to as having no medical exam life insurance. There won’t be a physical checkup, but you will still be asked questions about your health and way of life.
The most excellent candidates for no exam life insurance are those who are in good health and do not have any serious medical issues. You may be eligible for a no-exam policy if you are in good health. No-exam policies are another excellent choice if you don’t want to take the time to arrange and finish a medical exam.
Life insurance policies without a medical checkup are more expensive than those that do. This is because the insurance company assumes more risk by forgoing a medical examination. Therefore, a no-exam life insurance policy might be a good choice if you are in good health and do not mind paying a higher premium.
Different Forms of No-Exam Life Insurance
Instant Life Insurance, Simplified Issue Life Insurance, and Guaranteed Acceptance Life Insurance are the three different forms of no-exam insurance policies. To collect the benefits you deserve from these plans, you need to understand the various qualifying rules that apply to each type of life insurance policy.
Among no-exam policies, instant life insurance is the most popular option. The most excellent candidates for this type of policy are those who are in good health and have no significant medical issues. This policy has rapid approval, so you may start using it immediately without waiting for a medical test.
Another sort of no-exam coverage is simplified issue life insurance. The ideal candidates for this type of policy are those who have a few health issues but are otherwise in good condition. A physical exam won’t be required, but you will be asked questions about your health and lifestyle.
The third variety of no-exam coverage is life insurance, guaranteed approval. People with serious health issues are best suited for this kind of policy. You will not be required to submit a physical examination or respond to any health-related questions, but you must disclose your medical history when applying for coverage.
Benefits of Exam-Free Life Insurance
The purchase of a no-exam life insurance policy has various benefits. Some of the most well-liked advantages of no-exam approaches are listed below:
You can instantly obtain coverage: Life insurance plans without a medical exam are often issued more quickly than policies. This is so that the outcome of your treatment does not delay the insurance provider. Your most excellent choice might be a no-exam policy if you urgently need life insurance.
There is no need for a medical examination: The most apparent advantage of no-exam life insurance is this. This policy might suit you if you detest needles or refuse to undergo a medical exam.
It’s simpler to qualify: You might have trouble getting approved for a traditional life insurance policy if you have health issues or take medication for a chronic condition. The insurance provider cannot refuse to cover you under a no-exam policy due to your health.
It’s Safer: Many consumers are reluctant to undergo a medical examination in light of the Covid-19 outbreak and other general health concerns. A no-exam policy can be your best choice if you are concerned about being exposed to sickness. It can be completed online with no face-to-face interaction required.
Drawbacks of Exam-Free Life Insurance
Although no-exam life insurance has many benefits, you should also be aware of some drawbacks. These consist of:
It will cost more: As we previously indicated, plans for life insurance without a medical exam are more expensive than those. This is because the insurance company assumes more risk by forgoing a medical examination.
Less coverage: A drawback of no-exam life insurance is that it is likely to provide less protection than a policy that calls for a medical examination. This is due to the insurance provider’s limited knowledge of your health.
It’s not for everyone: If you have health issues or need medicine for a chronic ailment, no-exam life insurance is not a good choice. This is so that the insurance provider may refuse to provide coverage for your health.
Is it a Good Idea to Buy No-Exam Life Insurance?
Knowing the advantages and disadvantages of no-exam life insurance will help you determine whether or not it is the best option. A no-exam policy might be your best choice if you require life insurance quickly and do not wish to undergo a medical examination. However, you might consider coverage that demands a medical exam if you have health issues or take medicine for chronic disease.
Although no-exam life insurance policies are more expensive than those that do, they have the benefit of being quicker and easier to qualify for. If you choose a no-exam policy, compare prices from various insurance providers to get the best deal. Before you buy insurance, make sure you comprehend the coverage limits and exclusions.
A no-exam policy might be the best option if you need life insurance but don’t want to undergo a medical examination. Be warned that these insurance include certain drawbacks, like higher premiums and less coverage. Before acquiring a no-exam coverage, be sure you are aware of its restrictions. If you follow this advice, you can determine whether a no-exam policy is appropriate for you.
#lifeinsurance #ethos #freewill #protectyourfamily
Sarah Jane Cadiz
August 24, 2022
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Five reasons to purchase life insurance immediately.
A sound financial strategy includes more than just investing and saving. Another essential component in reaching your objectives may be life insurance.
Paying off debt, setting up an emergency fund, investing in a tax-free savings account (TFSA), a registered retirement savings plan (RRSP), or placing your money in other savings vehicles are some ideas that may come to mind if you’re trying to better your financial status. All of these are crucial components of a solid financial strategy, but life insurance is an essential component that is sometimes ignored.
According to Randy Little, a Certified Financial Planner with Desjardins Financial Security Independent Network in Ottawa, “people who decide to put insurance in place typically have looked at their financial situation, often with the help of an advisor, and identified risks that they are uncomfortable with and want to address.”
Here are five reasons to consider purchasing life insurance if you’re not sure why.
Number 1: To shield your loved ones from financial harm. When someone passes away, their family must deal with that loss’s financial responsibility and emotional toll. Fortunately, life insurance can lessen your loved ones’ worry during a trying time and shield them from unwarranted financial difficulty.
Life insurance is essential if you have dependents who depend on your income, such as a husband or children, Little says. It can be a valuable financial tool regardless of your relationship status. “A young family with children in debt could be worried about the effects of losing one of the parents.”
The family’s surviving parent might require money to pay off debt or fund recurring costs like housing, bills, and groceries, to mention a few.
Your requirements might already be fully or partially met if you work for a company that provides group insurance. People must frequently look for insurance independently without job benefits, and self-employed people have additional difficulties.
Since employer-sponsored group insurance plans do not cover them, Little notes that business owners frequently have the greatest need for independent protection. However, they are hesitant to do so because it would require them to pay for the insurance.
Even if cash flow is a problem, Little advises business owners to talk with an insurance specialist to determine their goals. He suggests they also check into critical illness insurance to safeguard their way of life if they must take a leave of absence from their job due to illness. “It could be a good idea to have some safeguards in place that infuse capital into the business in the event of a health concern.”
Number 2: To assist in paying down a mortgage or other bills Life insurance can help cover the remaining mortgage balance if you co-own a property with your spouse, kids, or other close family members. This may allow your spouse or family to continue living in their existing residence despite the loss of your income, which is vital to many parents.
Additionally, life insurance can assist in covering funeral and burial costs and any unpaid credit card balances, loans, or other consumer debt. Your policy’s death benefit should be sufficient to enable your family to continue living in the same or a comparable manner without your income.
Number 3: To pass wealth on to future generations. Want to leave a legacy for your children or grandchildren? A tax-effective approach may be to purchase a life insurance policy.
According to Little, “someone approaching retirement may not have any obligations, and their children may be grown and independent, but they have the objective of transmitting riches to the next generation.” Life insurance can aid in this transfer of wealth, she adds.
Making your children or grandkids the beneficiaries of whole life insurance, a type of permanent life insurance, is the usual way to accomplish this. Whole life insurance ensures a payout after death, unlike term life insurance, which only provides coverage for a predetermined amount of time. Your beneficiaries won’t have to pay income tax on the money they receive because the death benefit is non-taxable.
Number 4: To have a positive impact on the charity. The ability of life insurance to effectively transfer money to a non-profit organization is one of its lesser-known uses. According to Little, some people are particularly enthusiastic about a particular charity and want to leave a legacy that helps other people.
By designating a charitable organization as the beneficiary of your life insurance policy, the proceeds pass from the insurance provider to the organization tax-free. Additionally, unlike when making a generous contribution through your will, the cash skips the probate process and goes directly to the charity; as a result, it cannot be disputed by beneficiaries or other family members.
Little advises inquiring about alternatives for charitable giving with your financial advisor or insurance provider. Your life insurance policy can make it possible to support causes such as cancer research, animal welfare, human rights, and alma mater donations.
Number 5: To bring you comfort. Life insurance should provide stability and peace of mind regardless of financial position. If you’re unsure whether or when to purchase life insurance, talk to your financial advisor to receive individualized guidance that considers your needs, goals, and spending capacity.
According to Little, obtaining insurance as soon as possible is generally preferable. You will be protected sooner in life, and your monthly premiums will probably be considerably cheaper. According to Little, the insurance cost is determined by the applicant’s age. It’s often advantageous not to delay the talk because of this.
Choosing the appropriate life insurance It can be difficult for many people to determine how much insurance their family needs. However, Little points out that a qualified advisor may talk to you about your goals and use reverse engineering to develop the best strategy. Just make sure you’re working with a respectable expert who will assist you in understanding your options and who will listen to you.
There are various reasons to purchase life insurance, but regardless of what inspired your choice, it will feel good to know that your most prized possessions are safe.
#lifeinsurance #ethos #freewill #protectyourfamily
Sarah Jane Cadiz
August 23, 2022
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Professional Advice on Life Insurance
Most people experience overwhelming feelings when considering life insurance. We understand because we have experienced it. We sought advice from a financial expert because of this.
At NFP, a renowned international insurance broker and financial services expert, Mike James serves as Executive Vice President and Head of Life and Wealth. Mike is a native Bostonian who was reared in the Roxbury district. His "give first" philosophy continues to have a beneficial influence on businesses, individuals, communities, and outcomes. Being able to link people with solutions is what drives him, and owning life insurance, in his opinion, is a fantastic opportunity for everyone.
According to Mike, most individuals believe that life insurance is only worthwhile when a loved one passes away. Permanent life insurance offers the option for cash accumulation in a savings-like way within the policy and death payments, which are undoubtedly significant. According to your circumstances, you might want several types of life insurance, including term or permanent coverage, he continues.
Here is some extra insight on Mike's " why " thinking about life insurance.
It's Important
Everyone should think about the value of life insurance. In the Black community, it is very crucial. Particularly for women, who statistically live longer and eventually take on the role of financial custodians for their families. Steve says. This puts individuals in control of their knowledge of the importance of life insurance. Therefore, even if you don't currently have life insurance, you should still consider getting it when circumstances change. Numerous life insurance options are available to suit your requirements at various times of your life.
It's Private
In times of uncertainty, life insurance provides certainty. Mike explains, "My dad, the head of our household, passed away. My mother received the proceeds of a life insurance policy he held, which helped us meet our family's financial commitments. He argues why his family's investment in permanent life insurance was beneficial. You can build up significant value if you purchase it at an early enough stage, and it includes a cash-building feature. Mike contributed to his children's college expenses with some of the cash worth from his life insurance policy.
His in-laws have long-term care coverage in their life insurance policy. He and his wife are now allowed to use the long-term care benefit if his in-laws ever need it, as they are their primary caregivers. Life insurance has changed along with me throughout my life, which is why I'm a fan, claims Mike.
It's Advantageous
Mike informed us that he frequently receives this question from family and friends: "Why do you want to pay for life insurance as opposed to saving, investing, or purchasing something else?" He also considers both the immediate and long-term advantages. "I aim to encourage broader thinking in others. It isn't easy, so you require a knowledgeable expert who can inform you of the true importance of life insurance.
He suggests, "If it is supplied through an employment, get as much as you can justify," as a starting point. It is usually simple and painless when purchased simultaneously with your employee benefits. It's imperative for individuals who can't obtain it through their employment to do so elsewhere. More people who can converse intelligently about the advantages of owning life insurance are needed in the community for our industry.
It's Easy
If you're prepared to learn more about life insurance ownership, there are several methods to start. "Ask about life insurance immediately if you have a connection to a financial institution or a professional. NFP is a leading international insurance broker, and we can assist you in connecting if you don't already have a connection. Steve says.
#lifeinsurance #ethos #freewill #protectyourfamily
Sarah Jane Cadiz
August 22, 2022
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What Happens to Your Debt if You Die Without Life Insurance?
Life insurance can provide money to repay creditors -- but what happens if there is no policy in place?
Key points
It's not unusual for people to have debts at the time of their passing.
The proceeds from a life insurance policy can provide funds to repay debt.
If someone dies without life insurance, some debts may still have to be paid.
Many people owe money to creditors, and when they pass away, that debt doesn't necessarily just disappear. As a result, it's important to understand what happens to it -- especially if someone dies without a life insurance policy.
What are the rules for debt after death?
When someone passes away, the consequences for their creditors vary depending on the situation.
If the debt was jointly held, such as when a couple takes out a mortgage loan together, the surviving spouse will be responsible for repayment.
If there is collateral attached to the debt -- such as a home, which acts as security for a mortgage -- it's also not possible for heirs to take the asset without repaying the loan. That's true even if the debt wasn't joint debt. The loan balance must continue to be paid, either out of the estate proceeds or by co-owners or heirs who inherit the house. Otherwise, the lender will begin foreclosure or repossession proceedings.
If there is unsecured debt with no collateral, though, then things become a bit trickier. Creditors can make a claim on the estate and try to collect the debt by taking a share of the deceased person's property. But if there are no assets in the estate to pay any remaining bills, heirs who don't share joint legal responsibility for the debt do not have to pay it. The debt just goes unpaid.
Do you have to pay debt with life insurance proceeds?
If there is a life insurance policy, it is possible that some of the proceeds of that policy could be used to repay debt. But there's not necessarily a requirement that this happen.
A person who buys life insurance will name beneficiaries who receive a payout upon death. The beneficiaries get this money and they do not have to use it to pay back the deceased person's debts if they do not want to.
Now, often, people use life insurance to repay a loan balance on jointly held debt or on assets they want to keep. For example, if a wife keeps the shared family home after her husband's death, she could use the proceeds of the life insurance policy to repay the mortgage in order to own the home free and clear. She might want to do this regardless of whether the mortgage was jointly held, as long as she inherited the home, since she'll have a place to live with no monthly housing bill.
The ability to repay shared debt or pay off the loans on assets is one key reason why people buy life insurance in the first place. If an individual wants to make sure that their family can keep assets the individual was borrowing money for, a life insurance policy can provide the funds to make that happen once the individual's income stops due to death.
If beneficiaries get proceeds from life insurance and choose not to pay unsecured debts, though, there's no mandate to make them for debts that aren't joint. And creditors will be left trying to collect from the estate or getting no money at all.
#lifehealthadvisors #areteautomation #financialfreedom #retirementplanning
Credits: Christy Bieber
Date: August 4, 2022
Source: https://www.fool.com/the-ascent/insurance/life/articles/what-happens-to-your-debt-if-you-die-without-life-insurance/
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How can business owners use life insurance to their advantage?
Life insurance is often considered a critical type of cover, helping grieving family members soften the financial impact of losing a loved one. With the right policy, this form of protection can aid families in paying off loans and debts and provide them with the monetary means to meet daily living expenses.
But there are several layers to this kind of coverage and this type of financial benefit is just one of its many elements. Business owners can also purchase life insurance inside their corporations, allowing them to protect their business interests and provide continuity at the time of their death.
Corporate ownership of a life insurance policy, however, has its share of advantages and drawbacks – and depending on how it is managed, this form of cover can play a crucial role in helping a business move forward.
How does life insurance for business owners work?
Corporate-owned life insurance can be tailored to meet the different needs of a business. Policies generally fall into two categories, with each type working differently.
1. Term life insurance
As the name suggests, business-owned term life insurance provides coverage for a specific period or “term,” typically five, 10, or 20 years. Premiums stay the same for the duration of the term and are relatively less expensive compared to those of permanent life insurance.
This type of policy is often used during working years, providing financial benefits when the business owner dies. The funds can be utilized to replace lost income and cover liabilities.
2. Permanent life insurance
Permanent policies offer guaranteed lifetime coverage and come in many forms, including whole, participating, and universal life insurance. Apart from financial protection, permanent life insurance provides a tax-deferred investment component – which is subject to a limit – and a cash value element that builds up over time and can be used as collateral if a business decides to borrow.
If the policy is voluntarily terminated before maturity or death, the insurance company pays the policyholder the cash surrender value. Permanent life insurance plans often play a key part in estate planning, allowing businesses to accumulate value long-term and cover estate taxes.
How can businesses use life insurance to their advantage?
There are several instances where companies can use business-owned life insurance to their benefit. These include:
1. Funding buyout agreements
A buy-sell life insurance agreement is designed to protect a business in the event a co-owner dies. In such an agreement, the death benefit is used to fund buy-sell transactions. Typically, the benefit amount depends on a relative portion of the company’s value. If there are two co-owners, for example, the death benefit will be 50% of the business’s worth. The money is then given to the late owner’s family, while their stake goes to the surviving partner.
A buyout agreement often happens when the remaining owners are not interested in having the deceased’s family stay involved in the business and the family likewise shows no interest in doing so.
There are several ways a buy-sell transaction goes. These include using the proceeds to redeem shares or paying a capital dividend to fund a personal purchase of shares from the deceased’s estate. To avoid confusion and potential conflict later, the buyout process – including the intended use of the life insurance benefits and the capital dividend account – should be documented in the co-owner's agreement.
2. Key employee insurance
This type of protection is essentially a life insurance policy that covers a vital team member and provides financial benefit to the company at the time of the employee’s death. It is particularly useful for small businesses that rely on specific workers for critical tasks. The payout is intended to provide monetary support as the company goes through a transition period to find and train a replacement.
3. Estate equalization
Business owners can also utilize life insurance if they want to pass along a company with multiple beneficiaries to a single family member. The process, called estate equalization, allows them to bequeath the entire business to one family member while still leaving something for their other dependents.
According to brokerage firm Life Insurance Canada, estate equalization operates this way: “The business owner takes out a life insurance policy worth the value of the business and names the other dependent (who isn’t inheriting the business) as beneficiary. If there are more children, additional life insurance policies worth the same amount can be purchased. This life insurance strategy also generates more wealth for the next generations, doubling or tripling the business owner’s estate value when they die.”
4. Rewarding key employees
Business-owned life insurance can be strategically used to improve employee experience and retain valuable workers. Companies can do this by rewarding key employees with a life insurance contract. This works with the business owners putting workers’ bonuses towards a permanent life insurance policy, giving them access to a death benefit and the policy’s cash value.
What are the drawbacks of taking out corporate-owned life insurance?
Taking out life insurance under a corporation exposes business owners to potential drawbacks. Limited liability partnership BDO Canada listed five risks businesses can face when investing in corporate-owned life insurance policies:
Risk of capital losses eroding the amount of life insurance proceeds that can be paid out tax-free to shareholders
Exposure of life insurance proceeds to creditors of the company
Coordination with other post-mortem planning
Permanent life insurance does not have the liquidity of marketable securities
Policies may affect the company’s ability to claim the lifetime capital gains exemption (LCGE) on their shares
How much life insurance do business owners need?
Life insurance needs of businesses can vary significantly depending on a range of factors, including the cost of replacing a key person, taxes incurred upon the death of the owner, ongoing business expenses, and outstanding loans. To work out how much coverage a company needs, the owners should get in touch with an experienced insurance professional.
#lifehealthadvisors #areteautomation #financialfreedom #retirementplanning
Credits: Mark Rosanes
Date: August 2, 2022
Source: https://www.insurancebusinessmag.com/ca/news/life-insurance/how-can-business-owners-use-life-insurance-to-their-advantage-415296.aspx
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Did you know you can donate your life insurance to charity? Here are four ways to do it
If your policy has limited use for you, you can maximize its impact by donating to a cause you care about
Life insurance can be an important part of protecting your family and their future. There are certain instances when you may no longer require your insurance policy. Maybe your dependents have reached an age where they no longer rely on you, or your financial status has grown to a point where a life insurance policy is no longer of great use.
Instead of cancelling your policy outright, you might consider donating your life insurance policy to a charity that is important to you. Not only are you able to receive a tax benefit for your donation, but you can also know that you’re continuing to support a cause that’s important to you.
There are four ways to donate your life insurance benefit to a charity, each of which has specific implications for you, your estate and your taxes.
Charity becomes the owner of a life insurance policy
If you have a term-life policy – that is, a policy that covers you for a certain number of years – that you’re not going to renew, gifting the benefit can optimize the investment you’ve made over the years.
Making the charity the irrevocable owner of your policy has a lot of advantages.
The main one being that you’ll receive a tax receipt to use in the year of the donation. The amount of this receipt is based on the fair market value of your policy which refers to the current value of your policy, taking into account factors like your age and health. This is generally greater than the cash surrender value (CSV), which is the value after a surrender fee is deducted.
If you make a charity the owner of your life insurance policy, they will be responsible for paying any ongoing premiums. If you choose to continue paying the premiums yourself, you can receive a tax receipt for the payments you make.
If you’re unable to claim the entirety of the tax credit in that year, the good news is you can carry it forward for up to five years.
When the policy matures, your chosen charity will receive the full benefit of your policy.
Name a charity as beneficiary
If you want your estate to have the benefit of a charitable tax receipt, naming the charity as the beneficiary in your life insurance policy is the optimal way to go.
In this instance, you will retain the ownership of the policy, and are free to name as many beneficiaries as you want. If the charity you name as a beneficiary isn’t irrevocable, that is they are not permanent, you can always remove them at a later date.
Upon your passing, the charity you have named will receive your policy’s benefit, while your estate will receive a tax receipt for the donation amount.
Take out a new policy in the name of the beneficiary
Another way in which to donate a life insurance policy’s death benefit to a charity is by taking out a new policy and naming the charity as the beneficiary from the start.
In this case you will be responsible for paying the premiums on a year-by-year basis. At the same time, each year you will receive a tax receipt from the charity to use against your income.
Charitable insured annuity
Annuities provide steady streams of income for individuals when they retire. You pay into it in advance, then will receive a designated amount as an income when the annuity period starts.
When you purchase a charitable insured annuity, you use part of the annuity’s income stream to purchase a life insurance policy. This life insurance policy will have the charitable organization as the named beneficiary.
Each year, part of your annuity will pay for the premiums on your life insurance policy. But because the policy has a charity named as a beneficiary, you can receive a tax receipt for the amount of your premiums.
This method gives you the benefit of receiving a steady retirement income and making regular and continued charitable donations.
By gifting your life insurance benefit to a charity, you can help an organization you support to continue to grow and thrive even after you’re gone. Speak to your financial advisor or charity of choice to find out what options are available to you.
#lifehealthadvisors #areteautomation #financialfreedom #retirementplanning
Credits: James Battiston
Date: July 27, 2022
Source: https://torontosun.com/moneywise-pro/did-you-know-you-can-donate-your-life-insurance-to-charity-here-are-four-ways-to-do-it
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3 Things 40-Somethings Need to Know About Life Insurance
It's not too late for many people to get covered.
Key points
Coverage from an employer may not be enough, and it could go away with a job loss.
A lot of people in their 40s and 50s can still buy a policy.
Term life insurance policies are often more affordable than we think.
Life insurance is an important purchase for people of all ages who want their surviving family members to be provided for in the event of their death.
But it can be especially essential for people in their 40s to make sure they are covered since many people in this demographic have lots of financial commitments and start to develop health conditions.
Here are three things people in their 40s need to know about getting covered.
1. Coverage through work may not be enough
Many employers provide workplace benefits that include life insurance. Unfortunately, these policies may not provide all the protection people need. For example, the death benefit might not be large enough to replace all of the deceased person's income nor big enough to make sure surviving family members can meet their financial obligations.
What's more, it's possible that a job loss could lead to a loss of coverage. If that's the case, it could be a disaster if their family is relying on their income.
Rather than depending solely on workplace life insurance, those who are in their 40s may want to look into buying a separate term life plan from an insurer that offers a death benefit large enough to take care of surviving dependents -- and that won't be lost if a job change happens.
2. It's likely not too late to get covered
Many people in or near their 40s assume it's too late to buy life insurance. But that's not the reality.
Many insurers will sell coverage to people who are well into their 40s and even into their 50s. And these are standard term life insurance policies -- not guaranteed issue coverage, which is available to anyone regardless of health status but provides much more limited protection.
Even for those who have medical conditions, standard coverage can still be obtained in many cases. While premiums may be higher, people generally aren't precluded from buying a life insurance policy unless they have a fairly serious health concern.
For those who can't get standard coverage because of major health problems, guaranteed issue coverage should still be an option. And it can offer at least some money to help surviving family members pay for funeral costs and other expenses after a death.
3. Term policies can be affordable for many
Finally, many people assume life insurance will no longer be affordable once they are in their 40s -- but that's also not true. Premiums on a standard term life policy could still be within many people's budgets.
Remember, though, that the longer a person waits, the higher premiums go and the more likely it is they will develop a condition that makes them uninsurable. To avoid this undesirable outcome, anyone in their 40s who doesn't already have life insurance coverage should consider buying a policy sooner rather than later.
#lifehealthadvisors #areteautomation #financialfreedom #retirementplanning
Credits: Christy Bieber
Date: July 28, 2022
Source: https://www.fool.com/the-ascent/insurance/life/articles/3-things-40-somethings-need-to-know-about-life-insurance/
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How Life Insurance Is Affected By Rising Interest Rates
With interest rates climbing, many investors are wondering how this will impact their financial portfolios, including their life insurance. The Federal Funds rate was 1.00% on June 9, and it is expected to climb to at least 2.62% by the end of the year in response to recent inflation.
The impact of rising interest rates can be directly correlated to the performance of many asset classes. For instance, when interest rates increase, the rates of treasury notes tend to increase where the price of fixed-rate bonds decline. But what about the performance of a cash value life insurance policy such as a whole life, universal life (UL) or indexed universal life (IUL) policy? Should a policyholder expect a policy’s crediting or dividend rate to move in tandem with interest rates? The answer is “yes”—but not right away and, with some types of policies, not for a while.
Your Existing Policies
A whole life or universal life policyholder can benefit from rising interest rates in the way of an increase to a policy’s dividend rate or crediting rate, respectively, in a few ways. First, the insurance company must benefit from greater returns from their investment portfolios where premiums are invested. In many situations, there could be a lag before these portfolios are able to invest the new money in the higher rate environment and pass along investment gains to policies. This may also assume that the carrier’s expenses and mortality costs/charges remain stable or decrease in order to receive the appreciation of higher returns.
Over the last several years, as interest rates have fallen and remained at historic lows, carriers were forced to adjust to the environment by lowering policy dividends and crediting rates. While this can be frustrating, policyholders can take comfort in that the process works in reverse when interest rates rise, albeit at a delay. As rates drop, insurance company portfolios have many long-term investments locked in at higher rates.
As a result, there is a lag in the reduction in policy dividend and crediting rates following the decline in interest rates. If a policy is held for several decades, it is likely to experience periods of both rising and falling interest rates. The good news is that several life insurance companies have already responded by increasing crediting rates and/or creating new money policies series.
For New Policyholders—New Money Products
According to a 2022 report from Oliver Wyman, “The Impact of a Rising Interest Rate Environment,” some carriers in the life insurance industry are likely to pivot toward “new money” products. These are policies that are supported by a life insurance company’s new or relatively new investment portfolio and include universal life and indexed universal life contracts. New portfolios can more easily take advantage of current interest rates, whereas existing portfolios, usually those backing in-force whole life contracts, may have a drag from prior, low interest rates.
These new money types of policies will likely not only be attractive for those looking to purchase life insurance but also for those with existing policies. The richer benefits and reduced cost of new money products may likely drive some whole life policyholders as well as owners of older UL and IUL to consider surrendering or conducting a tax-free IRC Section 1035 exchange to reinvest the proceeds either elsewhere or in new life insurance products.
Premium Finance
A rising interest rate environment allows purchasers of new cash value life insurance policies the ability to apply leverage and finance their policy’s premiums.
Premium finance allows a qualified purchaser to preserve cash and keep funds invested elsewhere where they earn a higher return. The process is typically accomplished in six steps.
1. The lender makes a loan to the policyholder.
2. The lender makes the premium payment.
3. The policy is pledged as collateral with the gap between the loan amount and cash value secured by pledging other assets.
4. The policy owner makes debt service payments to the bank.
5. Either the policy’s cash value or its death benefit in excess of the loan balance is payable to the owner or beneficiary, respectively.
6. Cash value disbursements from the policy may be used to repay the loan at some point while the policy is in effect.
Since the premiums are being borrowed, two risks to premium finance are interest rate increases and policy underperformance. While borrowing rates are increasing, utilizing various forms of fixed rates will help mitigate these increasing interest rates.
IUL policies are popular for having both downside protection and upside potential when it comes to performance. By tying policy performance to available indices, an IUL crediting rate can far exceed the crediting rate of standard UL policies as well as the dividend rates declared for whole life policies. A guaranteed minimum crediting rate may prevent a negative return should the selected indices perform poorly.
Rising interest rates can positively impact IUL policies in at least three ways, all of which enhance a premium finance arrangement. First, the insurance company may be able to quickly increase the minimum crediting rate on new money IUL policies, contributing to better performance. Second, some carriers may forgo new money products and raise caps and participation rates on enforce policies. Third, as interest rates have risen, more insurance companies are investing in volatility control index choices that reduce option costs and allow for the raising of performance ceiling caps, permitting increased performance potential.
Take Advantage Of Rising Interest Rates
By understanding how interest rates affect life insurance, existing policyholders and prospective ones can take steps to make sure their policies are performing optimally. Premium finance may be one of those steps. Given its complexity and risk, when considering premium finance, it is important to work with an experienced team of qualified financial, legal and tax experts when implementing this strategy.
#lifehealthadvisors #areteautomation #financialfreedom #retirementplanning
Credits: Michael Seltzer
Date: July 19, 2022
Source: https://www.forbes.com/sites/forbesfinancecouncil/2022/07/19/how-life-insurance-is-affected-by-rising-interest-rates/?sh=75b5809fc561
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4 Steps to Get Your Life Insurance on Track
It happens to all of us. That's true, whether you are on a quest to accomplish tasks at work or home. I'd venture to say that we have all reached the end of a day and wondered, "What happened? I got nothing on my list accomplished."
Unfortunately, this phenomenon can negatively impact your family's finances, as well as your productivity at work or on the home front.
Life insurance is a great example. Discussions and plans related to this touchy subject are easily sidetracked because of its perceived complexity or a general discomfort surrounding the topic. With that in mind, here's an easy-to-implement, four-step process for your family to tackle life insurance.
1. Determine the right amount of coverage
Begin with the end in mind. Literally. Figuring out what you will need, given your unique situation, if something happened to you or your significant other is a key step in making family decisions about life insurance. Yes, it's likely there would be major financial implications for your family if either of you passed away. Things like paying off debts, covering final expenses, raising kids and then sending them off to college, replacing lost income, and giving you or your spouse time to get back on your feet if something happened to the other can come with a significant price tag.
There are online calculators to help you figure out what you need. The VA has one. There is an easy-to-use calculator at lifehappens.org. And, of course, an insurance agent could help you find the answer.
2. Analyze what you have.
Once you know what you need, it's time to stack that up against what you have. First, for those in uniform, you likely have $400,000 of Servicemembers' Group Life Insurance (SGLI), the military's group term life insurance. Spouses may have Family SGLI coverage of up to $100,000. Employers outside the military typically provide group coverage as well. In or out of the military, you can see how a job change could impact your life insurance coverage. That's one reason why it can make sense to diversify the sources of your life insurance coverage.
And that's where things can get more complicated. You must choose the type of coverage. What's the right type of insurance? In general, there are two broad types of coverage, term or permanent.
Temporary needs -- those that go away, like mortgages and raising kids -- are nicely covered by term insurance. For example, if you have a couple kids, ages 3 and 5, you could buy a 20-year level term policy (this type of policy has a level premium and death benefit throughout the 20-year period) that would provide coverage until your kids are out on their own -- knock on wood.
On the other hand, for a policy that you intend to have "forever," a permanent policy might make sense. For example, there may be a sum of money you want your spouse or family to have when you're gone or life insurance that is part of complex estate plans or a special needs situation.
Now that you've determined what you need and closely examined what you have, it's time to …
3. Fill the gaps
If you've crunched the numbers and there are no gaps -- in either amount or source -- your work is complete for now. On the other hand, if you need additional coverage, it's time to shop.
A few things to keep top of mind as you do so: First, big coverage needs don't necessarily mean big premium payments. Life insurance can be surprisingly inexpensive. Second, as I noted earlier, align the type of coverage you shop for with the reason for the coverage. Finally, it's getting easier and more convenient to buy life insurance. Digital applications, automated underwriting, and technology and data are making it easier and quicker to acquire life insurance. Don't let fear of the process get you sidetracked.
4. Rinse, wash and repeat
The ability to set and forget a strategy or process is nice. Unfortunately, life insurance isn't suited for that type of approach. A new baby, new house, divorce or a job change are all examples of common life events that could change your life insurance situation. Keep that in mind and, when those types of things happen, make sure to revisit your life insurance coverage with these easy steps.
#lifehealthadvisors #areteautomation #financialfreedom #retirementplanning
Credits: J.J. Montanaro
Date: 2022
Source: https://www.military.com/money/insurance/supplemental-life/4-steps-get-your-life-insurance-track.html
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Planning to buy life insurance policy? Must consider these POINTS - Your checklist
Before you buy a life insurance policy, it is necessary to equip yourself with some basic understanding of insurance plans to help yourself identify a perfect plan that fulfills your needs.
Checklist For Buying Life Insurance Policy: It is a fact that a life insurance policy provides great financial security for an individual and the family. It is always advisable to go with a good and affordable plan that promises greater benefits. But buying a life insurance policy for yourself or your family is not an easy task. It is necessary to equip yourself with some basic understanding of life insurance policies since life insurance companies offer several plans based on the requirements of the customers and also promise different benefits.
The list of plans and their offerings are so exhaustive that a common customer gets confused. In such a situation, identifying a perfect policy that fulfills your need and fits within your budget could be a daunting task in the absence of basic knowledge.
To make your task easier, we are providing a checklist that you must consider before buying a life insurance policy:
OBJECTIVE: First of all, the main objective of buying a policy should be clear. So, once the goal- short-term or long-term- is defined, a policy seeker or buyer will be in a better position to choose the right and the best-suited policy. If the goal is long-term like a financial distress-free retirement life, one should opt for a policy that gives good returns in the long term.
LIFE INSURANCE COVERAGE: For a long-term goal, it is advisable to go for a life cover that should be at least 10 times the yearly income.
TAX SAVING: Kavinder Khurana, MD, Bharat Claims, said that planning, liability mapping, tax saving and innovative products are other key parameters to selecting a policy. "One should always look for innovative products at the best price," he said.
CLAIM SETTLEMENT: Ease of buying and claim settlement is driving the growth of the life insurance sector. India is now the second-largest insurance technology market in Asia-Pacific. A buyer should always check the claim settlement ratio of the insurance company from which he/she is buying a life insurance policy.
"Claim settlement ratio is very important. The percentage determines how many claims the company settled in a year out of all the claim raised. It is better to look for companies that have a consistently high claim settlement ratio," Khurana said.
He added that 'insurtech offers ease of not only buying policies but also provides a seamless process of claims settlement - a major pain point for the policyholders'. "Such companies decode customers' insurance policy and also help in filing claims directly with the insurer."
PROVIDE CORRECT INFORMATION: A policy buyer should pay serious attention while providing information to insurers. Always provide true and exact information or facts to them with valid documentary proof or rejections. Providing incorrect or false information may result in serious problems at the time of claim.
#lifehealthadvisors #areteautomation #financialfreedom #retirementplanning
Credits: Abhinav Ranjan
Date: July 22, 2022
Source: https://www.zeebiz.com/personal-finance/in-depth-life-insurance-policy-buying-checklist-details-calculator-steps-to-consider-190767
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Here’s the type of insurance you’ll need at each stage of life, experts say
What type of insurance should you have at different stages of your life? When asked, financial advisors pointed to disability and life insurance as most important kind of coverage at any stage, as they apply throughout our lives.
In addition, advisors discussed often overlooked considerations for different points in your adult life. Here’s a look at some age-specific insurance advice, from your days at university to your golden years of retirement.
College days
“If you take out a private student loan … and that loan is co-signed by a parent and is not discharged upon your death, then you need some life insurance to cover the loan,” said certified financial planner David J. Haas, owner of Cereus Financial in Franklin Lakes, New Jersey.
Because the need is temporary, for the life of the loan only, term life would be appropriate, he said.
On the job
“If you are working, you almost certainly need disability insurance,” said Sean M. Pearson, CFP, associate vice president with Ameriprise Financial in Conshohocken, Pennsylvania. “Most large employers offer it as a benefit, but that does not mean that you have enough.”
It’s important to understand your coverage, he said. Plans may cover total disability, which is defined as when the worker is unable to work, or they may only cover a situation where the worker is unable to perform part of a job or requires reduced hours.
“For example, if you are earning $100,000 per year before an injury or illness, and after a change in your health you could still accomplish a job that pays $40,000 but are unable to continue in your current role, you may not be able to collect insurance,” Pearson said.
Family time
Getting married and starting a family is when things get more complicated, said CFP Robert Fragasso, CEO of Fragasso Financial Advisors in Pittsburgh.
“If you have a mortgage and need two incomes and want to start saving for college, term life insurance would be appropriate until those debts are paid,” he said. “For obligations occurring after you pass, such as death taxes, a business buyout, or supporting a disabled child, you should look into permanent insurance.”
“It is most important the younger you are, because it covers a lifetime of earning which will be in jeopardy if you become disabled,” he said.
Pearson said to be sure to look into “porting” your disability coverage, or taking it with you, if you take a leave of absence to care for a child or family member. “If a stay-at-home parent wants to return to work but has a health change during time spent as a caregiver, that person may be unable to return to work as quickly or at the salary expected,” he noted.
Getting ready to retire
Preretirement is the time to plan for protection against chronic illness that might require care in retirement, Pearson said.
“There are more choices [at that age] … that may be less expensive if you plan early,” he added. ”‘Early’ could be a married couple in their late 30s who don’t plan on having children and have extra cash flow after retirement savings, or [in their] late 50s, when education expenses are mostly over,” he said.
Long-term disability insurance is often overlooked at this stage, Cereus Financial’s Haas said.
Your golden years
If you are newly retired or in retirement, one option to protect against outliving your money is a single premium immediate annuity, said Ivan Illan, founder of Aligne Wealth Preservation in Los Angeles.
This simple form of annuity requires a lump sum upfront, which is generally irrevocable, and pays you a lifetime stream of income immediately. (This contrasts with a deferred annuity, which begins payments at a future date).
It’s important to note that they don’t address inflation risk, he said.
“Annuities in and of themselves are not evil — it’s all in the application,” Illan said. “But there’s no free lunch — you’re in essence giving away this lump sum, but the cash flows can be significantly better than bonds.”
#lifehealthadvisors #areteautomation #financialfreedom #retirementplanning
Credits: Deborah Nason
Date: April 18, 2022
Source: https://www.cnbc.com/2022/04/18/heres-the-insurance-advisors-say-youll-need-at-each-stage-of-life.html
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Applications for life insurance are on the rise—here’s what you should know before you buy
Life insurance applications have been on the rise during the coronavirus pandemic. During the first half of 2020, application activity for life insurance rose 1.5% from the previous year, according to the MIB Life Index.
Application activity for Americans under 44 rose about 3.4% year-to-date, while activity for ages 45 to 59 was up 0.5%, the industry group reports.
While protecting yourself and your family from financial fallout is never a bad thing, a fear of contracting Covid-19 should not be the determining factor for buying life insurance, Barbara Ginty, a certified financial planner and host of the “Future Rich” podcast, tells CNBC Make It. “I only would recommend buying life insurance if you have a need for life insurance,” she says.
Generally, the questions to ask yourself before buying life insurance are: Will there be a financial hardship for your loved ones if you pass away? Do you have a spouse, partner or child depending on your income? Did you buy a home with a spouse or partner that is based on two incomes? Did a parent co-sign a student loan that will not be discharged if you die?
“You don’t want a loved one to experience the tragedy of losing a loved one in addition to a financial tragedy,” Ginty says. “A financial tragedy is preventable.”
If you do have a need for life insurance beyond just fear that the pandemic may affect you and your family, here’s a look at what you should know about this type of protection before you dive into any purchase.
The difference between term and permanent policies
If you do feel you need life insurance, you should first understand the different policies available to you. There are two basic types: term and permanent. Whole life insurance is an example of a permanent policy.
Term life insurance covers you for a specific period of time, typically 10, 20 or 30 years. If you die while the policy is in place, you’re covered. Once the term expires, you’re no longer covered. Term life insurance is best for those who may only need coverage during a certain period of time, such as when you’re raising kids or paying off your mortgage. Or for those who want some coverage, but don’t want to pay a lot for it.
Permanent life insurance — which includes universal life, variable life and whole life — covers you throughout your life. Unlike term life, which is pure insurance that simply offers a payout if you die, permanent policies essentially create a savings account where you can earn a minimum guaranteed interest or a dividend. These earnings are generally tax-deferred and referred to as the “cash value.” Over time, this builds up and you can borrow against it, but you’ll typically need to repay it. With some policies, you can even use it to cover your premiums. This may be ideal for those who want to cover any kind of inheritance or estate taxes, or if you need to take care of a lifelong dependent, such as a child with special needs.
But keep in mind that those extra perks on permanent policies also increase the price. They can cost up to 10 times more than term, which can lead to people missing a payment or abandoning them all together. Many people may not need the extra benefits, so term life insurance is the way to go for most, Ginty says.
“Term insurance provides the most coverage for the least amount of money, allowing most people to continue to work toward other more fun goals like buying a house, saving for vacation, saving for retirement — I swear this is fun — and paying off student loans,” she says.
Whether you buy term life or permanent life policy, you can specify the amount that will be paid out if you die, which is called the “death benefit.” Your monthly payment is the “premium.” As long as you keep up with the premiums, your insurer will pay your beneficiaries when you die, usually as a lump sum.
To put the difference in cost into perspective, a 30-year-old, relatively healthy woman who’s considering buying a $500,000 policy will typically pay roughly $32 to $55 a month for a 30-year term life policy, as opposed to $300 to $400 a month for whole life coverage, Ginty calculates.
Within that, experts advise taking out level term life insurance, which guarantees you pay the same rate throughout the life of the policy. If you’re worried about being covered later in life, you usually can convert a term policy into a permanent policy up until a year before it expires, Ginty says.
What to keep in mind when buying life insurance
“There is a big difference between buying life insurance and being sold life insurance,” Ginty says. “I recommend people educate themselves and then go shop for what they need.”
Once you settle on what type of policy to get, decide how much life insurance you need to buy. Most standard policies range from $250,000 to $1 million. How much you need depends on how the money will be spent. Do you need the policy to help pay off any funeral costs? Your mortgage? If you’re not sure, non-profit insurance information organization Life Happens offers several calculators that can help you figure out how much coverage you may need.
Some employers offer group life insurance as part of a benefits package. But those policies usually end when your job ends, so if you quit or are let go, you’ll be left with zero coverage. That may be OK if you don’t really need life insurance, but if you do, you may want to consider buying your own additional coverage.
Keep in mind that the buying process may take some time, especially since some policies require you to get a physical or medical exam before you’re approved. Typically, it takes about four to six weeks to get a traditional application approved, Adam Winslow, chief executive officer of life insurance at AIG Life & Retirement, tells CNBC Make It. For policies that don’t require an exam, you can be approved (or denied) in as little as five days.
During the pandemic, the application process has changed a bit, especially when buying a policy that requires a medical exam. Some insurers are extending deadlines, using previous doctor’s visits or even sending a medical professional to your home. Other life insurance companies are expanding the number of policies that don’t need an exam.
Before starting an application for life insurance, it may be helpful to gather up some documents and information in advance. Most insurance companies will ask you for general information, such as your name, age and address, as well as personal questions about your height and weight, your history of smoking and/or drug use and any diseases or medical conditions that may run in your family. If you don’t know this information, it may help to call your parents or a family member to ask. It’s also likely that you’ll be asked for your driver’s license number to verify your recent driving record. If you’ve been in a lot of accidents, you may be considered more of a risk.
When you’re ready to start your application, it can pay to shop around and compare different policies and providers, Ginty says. Sites like Policygenius and LendingTree’s QuoteWizard can help you compare your options.
You should also work with someone who isn’t an insurance salesperson or use a marketplace so you can ensure you’re getting unbiased help and a plan that fits your needs. “I always tell clients that if you go to a Ford dealership, the salesperson is going to sell you a Ford ... they aren’t going to say, You know, you really ought to get a Volkswagen,” Ginty says.
#lifehealthadvisors #areteautomation #financialfreedom #retirementplanning
Credits: Megan Leonhardt
Date: September 20, 2020
Source: https://www.cnbc.com/2020/09/01/what-to-know-about-buying-life-insurance-during-the-covid-19-pandemic.html
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