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Which Keanu Reeves character would struggle the most to get insurance?
Keanu Reeves has been a meme multiple times throughout his career. This includes three decades of saying “woah”, a transcendent cameo in “Always Be My Maybe” and photos of him just generally looking sad.
Keanu broke out in 1986 with “Bill & Ted’s Excellent Adventure” and cemented his starhood with major action roles like “The Matrix” and “John Wick.”
As the internet’s obsession with this elusive man grows stronger, it seemed only natural I ask the experts here at Policygenius the burning question we’ve all had about Keanu Reeves: Which of his characters is the least insurable?
I turned to Jake Roszkowski, a senior case management associate at Policygenius who has seen “Point Break” dozens of times, and Patrick Bell, a senior sales associate who has never seen “Point Break,” but knows a lot about buying life insurance. With the advice of these experts, I dove in.
Methodology
I bet you didn’t expect a methodology section. Some of us take these things seriously. Keanu Reeves has 99 acting credits to his name, according to the Internet Movie Database. To narrow it down, I stuck to his most popular films, based on box office gross. I also threw out movies in which Keanu plays himself (sorry “Always Be My Maybe” fans) — I assume he has insurance IRL. I also tossed out movies that took place so far in the past that insurance didn’t exist (sorry “47 Ronin” fans).
That got us to the following 11 characters, whom I ranked from most to least insurable.
11. Kevin Lomax, ‘The Devil’s Advocate’
Kevin Lomax is an attorney who takes a job at a big-time New York City law firm. Also, his boss is Satan.
Aside from that, Lomax is an excellent candidate for insurance.
“As a lawyer, he’s going to get the top occupation class for disability insurance on any carrier,” Roszkowski said. “That means his rates will be super affordable.”
He can also expect to get good life insurance coverage.
10. Alex Wyler, ‘The Lake House’
Alex Wyler is an architect staying in a lake house who is corresponding with a woman two years into the future. While that’s weird, Wyler should be fine insurance-wise.
“White collar occupations like that get good rates,” Roszkowski said.
“I don’t think there’s any issue with time travel,” Bell said. Good to know!
9. Shane Falco, ‘The Replacements’
Shane Falco is a disgraced college quarterback that lives on a boat and collects scrap metal for a living, until he gets signed to play for a professional football team during a players’ strike.
As a professional athlete with a high income, Falco would have to go to a specialty carrier for disability insurance, Roszkowski said. As a football player, he should be able to get life insurance, but may pay a higher rate because of the health risks of the job. (Learn more about how star athletes do insurance.)
8. Thomas Anderson aka ‘Neo,’ ‘The Matrix’
Thomas Anderson works a regular old desk job inside the shared simulation of the world known as the Matrix. So he’s probably be a good candidate for both life and disability insurance, Bell and Roszkowski said.
On the other hand, Neo escapes from this illusion into a post-apocalyptic society in which he’s leading a desperate battle against evil machines.
In this scenario, “We can assume insurance companies don’t exist,” Roszkowski said.
7. Jack Traven, ‘Speed’
Jack Traven is a SWAT officer for the Los Angeles Police Department. While police officers don’t usually pay extra for life and disability insurance, SWAT officers are an exception. While Traven wouldn’t be denied outright, he’ll have to pay extra for both life and disability insurance.
6. Johnny Utah, ‘Point Break’
Like Shane Falco, Johnny Utah is a former college quarterback. Unlike Falco, Utah has found success in his adult life, as a rookie FBI agent. Utah goes undercover, and as part of assignment, takes part in surfing and skydiving, dangerous hobbies that are frowned upon by many disability insurance carriers, Roszkowski said. Plus, Utah has a pre-existing condition: A college knee injury that still bothers him.
At best, Utah will be limited in any attempt to get disability insurance and any coverage he gets will exclude knee injuries, Roszkowski said. Skydiving will make life insurance more expensive as well.
“The knee injury depends on if he takes pain medication for it,” Bell said. If he does, it could lead to higher rates.
5. Ted, ‘Bill & Ted’s Excellent Adventure’
Ted is a high school student who uses a time machine to improve his grades in history class. As Bell said before, time travel is no big deal when it comes to insurance. But Ted is a minor, which makes him a bad candidate for insurance because he has no income to protect.
“So the only coverage he’s eligible for is whole life,” Roszkowski said.
4. Klaatu, ‘The Day the Earth Stood Still’
Klaatu is an alien.
“We can assume that he’s not a United States citizen, which may cause barriers to coverage,” Roszkowski said.
Green card and visa holders can get life insurance, but I don’t believe Klaatu applies for a travel document in the movie. Maybe it’s in the deleted scenes.
3. Conor O’Neill, ‘Hardball’
Conor O’Neill is a gambler who is deeply in debt. To repay it, he coaches a kids’ baseball team, for some unknown reason. Coaching is fine, but most insurance companies will likely frown on O’Neill’s gambling.
“That’s probably something they consider pretty risky because if he loses all his money they’re not going to get paid,” Bell said.
2. John Wick, ‘John Wick’
John Wick is a former assassin who gets sucked back into his old life because his dog dies. Over the course of three movies, he gets shot or stabbed many, many times.
“That’s a hazardous occupation,” Bell said. So hazardous, Wick would get declined outright for life insurance or pay an exorbitant price, bulletproof suit notwithstanding.
1. John Constantine, ‘Constantine’
John Constantine is a detective who specializes in the occult, which I guess is a job? He’s got a lot going against him when it comes to insurance: One, he’s attempted suicide. A history of depression isn’t a complete road block to life insurance, but severe cases can lead to denial. Two, he has terminal lung cancer. Three, he is a chain smoker.
In general, the healthier you are, the better a candidate you are for life and disability insurance. Without (spoiler alert) divine intervention John Constantine has terrible odds of getting coverage.
“That’s a decline,” Bell said.
Credits: Myles Ma
Source: https://www.policygenius.com/life-insurance/news/keanu-reeves-insurance/
Date: July 5, 2019
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Beneficiary
What Is a Beneficiary?
A beneficiary is any person who gains an advantage and/or profits from something. In the financial world, a beneficiary typically refers to someone eligible to receive distributions from a trust, will, or life insurance policy. Beneficiaries are either named specifically in these documents or have met the stipulations that make them eligible for whatever distribution is specified.
KEY TAKEAWAYS
1. A beneficiary is an individual who receives a benefit, which is typically a monetary advantage.
2. The distributions typically come with tax consequences and sometimes various stipulations.
3. If the distribution is in the form of a retirement account, then there are many factors to consider, such as time frame and distribution amounts, depending on the type of account.
4. The owner of a life insurance policy can change the beneficiary at any time, though doing so typically requires completing the necessary paperwork with the life insurance company
Understanding a Beneficiary
Typically, any person or entity can be named a beneficiary of a trust, will, or life insurance policy. The individual distributing the funds, or the benefactor, can put various stipulations on the disbursement of funds, such as the beneficiary attaining a certain age or being married. Also, there can be tax consequences to the beneficiary. For example, while the principal of most life insurance policies is not taxed, the accrued interest might be taxed.
One of the most important things to determine after retiring, if not before, is that all assets will end up in the right hands. Failing to name beneficiaries could have disastrous effects on a family’s financial health should you or your spouse die without making the necessary plans.
A Beneficiary of Qualified Accounts
Qualified retirement plans, like a 401(k) or an individual retirement account, (IRA), give the account holder the ability to designate a beneficiary. Upon the qualified plan holder’s passing, a spousal beneficiary may be able to roll the proceeds into their own IRA. If the beneficiary is not the spouse, then there are three different options for distribution.
The first is to take a lump-sum distribution, which makes the entire amount taxable at the beneficiary’s ordinary income level. The second is to establish an inherited IRA and withdraw an annual amount based on the life expectancy of the beneficiary, also known as a “stretch IRA.” The third option is to withdraw the funds at any time within five years of the original account owner’s date of death.
The Stretch Option for Inherited Retirement Accounts
The stretch option is no longer available for an inheritance received in 2020, due to the passing of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. Only the lump-sum and five-year rule options are available going forward. The SECURE Act stipulates that most non-spousal beneficiaries of an IRA must take distributions equal to the entire account balance within 10 years.
If the beneficiary is either an estate or a trust, then the distribution rules are more limited. Any proceeds left to the estate also make it subject to probate.
A Beneficiary of Life Insurance
Life insurance proceeds are considered tax-free to the beneficiary and are not reported as gross income. However, any interest received or accrued is considered taxable and is reported as any other interest received.
Life insurance beneficiaries can be individuals, such as a spouse or adult child, or entities, such as a trust. For example, if you have minor children, then you may choose to establish a trust and name it as the beneficiary of your life insurance policy. If you were to pass away, then the policy’s death benefit would be paid to the trust. The trustee would then be charged with managing those assets according to the terms of the trust on behalf of its beneficiaries (e.g., your children).
Tip: Minor children can’t directly receive the proceeds of a life insurance policy, but you could name a trust or your children’s legal guardian as a beneficiary.
Revocable Beneficiary vs. Irrevocable Beneficiary
Life insurance beneficiaries can be revocable or irrevocable. Revocable beneficiaries can be changed if necessary at any time during the policy owner’s lifetime. This is similar to a revocable living trust, which can also be changed as long as the trust grantor is still living.
An irrevocable beneficiary is permanent. If there are multiple beneficiaries named to a life insurance policy (e.g., a primary beneficiary and several contingent beneficiaries), then they would all need to consent to any changes involving an irrevocable beneficiary.
Who Can Change the Beneficiary on a Life Insurance Policy?
In the case of a life insurance policy that has one or more revocable beneficiaries, the owner of the policy can change the beneficiary designations at any time. This is something that may be necessary if a beneficiary passes away or if the primary beneficiary is a spouse and the marriage ends in divorce.
If irrevocable beneficiaries are named to a life insurance policy, then the policy owner would need the consent of the beneficiary and any contingent beneficiaries to make a change. For that reason, it’s important to think carefully when choosing policy beneficiaries.
A Beneficiary of a Nonqualified Annuity
Nonqualified annuities are considered tax-deferred investment vehicles that allow the owners to designate a beneficiary. Upon the death of the owner, the beneficiary may be liable for any taxes on the death benefit. Unlike life insurance, annuity death benefits are taxed as ordinary income on any gains above the original investment amount. For example, if the original account owner purchased an annuity for $100,000 and then passed away when the value was worth $150,000, then some or all of the gain of $50,000 may be taxed as ordinary income to the beneficiary.
Important: If you have been designated as the beneficiary of a nonqualified annuity, consider talking to an accountant or other tax professional about the potential tax implications.
Credits: Julia Kagan
Published: April 10, 2021
Source: https://www.investopedia.com/terms/b/beneficiary.asp
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Major trends in American life
2022 insurance market
Millions of people make New Year’s resolutions every year. While the start of a new year traditionally provides a fresh start or a chance to identify new goals or plans to eliminate old negative habits, the stress and fatigue associated with the pandemic have influenced how we approach life, relationships, and perhaps even our resolutions.
ReMark’s latest Global Consumer Report (GCS) provides powerful insights into the changing attitudes of American consumers as a result of the pandemic. Life insurers and other players in the insurance ecosystem may want to incorporate the report’s valuable insights into their marketing and product strategies. The study identified the following key trends.
Americans are interested in learning more about life insurance.
Don’t be surprised to see the word “life insurance” in people’s New Year’s resolutions list this year. Americans’ interest in life insurance has dramatically increased in the past couple of years, mainly driven by COVID-19. 61% of the surveyed U.S. respondents say they need more education about life and health insurance. That is exceptionally high among Millennials.
One-third say COVID-19 has changed their perspective on risk and the value of insurance. This is especially true for those who knew someone who died from COVID-19 (70%). The United States ranked 11th out of 22 countries surveyed by ReMark’s insurance literacy score. Americans want to learn more about life insurance, but they lag behind other advanced countries such as Canada, Sweden, the United Kingdom, and Singapore. It is both an opportunity and a responsibility for the life insurance industry in the United States to increase American consumers’ life insurance literacy.
CONCLUSION:
We recommend that life insurers make their own New Year’s resolutions this year. With rising consumer interest in and selling life insurance, life insurers face enormous opportunities and challenges, including the ongoing insurance protection gap.
Every insurer’s action plan should include items to empower consumers to improve their life insurance literacy. Companies with visionaries and innovative consumer-focused approaches will gain a competitive advantage — and a leading industry position — in the coming years.
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7 reasons why you could end up with multiple life insurance policies
Life insurance needs change as you age, and starting a family triggers the need for more coverage.
A divorce can also require additional life insurance as security for child or spousal support.
Life insurance can be used to cover private student loans and business debts.
Your life insurance needs change as you age — and having children, getting married, divorced, or retiring can also have an impact on the coverage you require. Some people start off with a simple term life policy in their 20s and then expand their coverage as they start families and businesses.
Therefore, it’s common to end up with multiple life insurance policies and some overlapping coverage. In fact, some financial advisors even recommend a combination of term life and permanent life insurance policies for maximum coverage.
That said, you’ll want to avoid applying for multiple insurance policies at the same time. Otherwise, insurance companies may think you are committing fraud to get more coverage than you qualify for. This is the benefit of having an insurance specialist or financial planner help you go over life insurance options.
Below are the most common reasons people have multiple life insurance policies.
1. Your employer-provided insurance is not enough
Most employers offer some sort of group life insurance, usually equal to your salary, for free or at a low cost. One disadvantage of employer-provided group life insurance is that if you leave your job — resign, retire, or are terminated — you lose coverage.
Another disadvantage is that it may leave you underinsured. Half of Americans who have life insurance are underinsured, meaning their death benefit would not cover expenses like mortgage, college, food, debts, and clothing for dependents.
Typically, group life insurance won’t allow you to get 10 times your income. That’s why it is recommended that you have a personal individual life insurance policy outside of your work group life insurance. Many people may start off with a group life plan and then get an individual policy that offers a larger death benefit.
2. Your family is growing
If you purchased life insurance while you were single, you probably selected a lower death benefit because it was affordable. But if you now have dependents or a partner and a mortgage, you will want a larger death benefit to take care of your family and cover expenses like the mortgage and college if you die.
If you have a term life policy that you’ve been paying on for years, unless you have a “return of premium” rider, you do not get any of that money back. So if the policy is still affordable, most people just get a new policy with a larger death benefit. The overlapping coverage will be welcomed should tragedy happen.
3. You have health concerns
If you have certain health issues, you may not qualify for traditional life insurance, because traditional life insurance policies require underwriting that includes a medical exam. However, no medical exam life insurance is an option. It typically has a low death benefit amount, known as final expense insurance or funeral insurance.
Individuals with health concerns or recent nonsmokers may have annual renewable term policies until they qualify for cheaper rates from a traditional life insurance policy. There may be overlap between the annual renewal term policy and when coverage for a traditional life insurance policy starts.
4. You’re looking to build wealth
If you want to build wealth, there are life insurance products to help you do just that. Although most people probably have term life insurance, permanent life insurance products — like whole life, universal life, and variable life — never expire and have a cash value component that you can use during your lifetime.
It’s wise to consult a financial advisor, accountant, and estate planning attorney to make sure you have the proper insurance coverage you need for your goals and budget. They will provide a comprehensive assessment that includes whether you need long-term care life insurance, disability insurance, and a combination of permanent and term life insurance.
A combination of term life and permanent life insurance offers maximum coverage because at some point term life insurance expires, but your permanent life insurance lasts for your lifetime.
5. You’re planning for retirement
“A financial plan is built on a strong foundation of life insurance and risk management holding everything up — premature death, and loss of income due to illness or disability,” said Silvia Tergas, a financial planner with Prudential.
Ask yourself where you’re going to be in 5, 10, and 35 years. Tergas said this exercise requires an understanding that the decisions you make today will impact you down the road. Planning for retirement should start when you’re young and healthy.
Your life insurance should complement your other retirement planning accounts like 401(k)s and IRAs. Those who start planning for retirement later in life may already have a life insurance policy, but not one that helps them in retirement.
6. You’re getting married — or divorced
“A prenuptial agreement is like a life insurance policy in itself — you don’t need it until you need it,” said divorce lawyer Kimberly A. Cook, principal mediator at Dovetail Conflict Resolution. She noted life insurance in the early stage of premarital planning offers some level of protection.
Cook said cash value life insurance policies (permanent life insurance) are counted as an asset for financial disclosures and property allocation for spousal and child support during divorce proceedings. She noted that in certain states life insurance is actually required as security for child support or spousal support.
You may already have life insurance, but a divorce decree may require separate life insurance as a guarantee for child support and alimony payments, in which case you’d end up with multiple policies.
7. You have large loans or private debt
If a person has substantial private student loans or private debt, life insurance is often used to wipe the slate clean for the surviving business partner, spouse, or estate. Some lenders may require separate life insurance to secure your business or personal loan. This will cause you to have multiple policies.
Decreasing term life insurance policies are connected to a mortgage, business loan, or personal loan. The amount of the death benefit is equal to the mortgage or loan, with the length equal to the timeframe of the debt. If you die, it pays off the remaining debt.
The bottom line
If you want to build wealth, plan for your retirement, or protect a family-owned business, life insurance can provide the protection you need. Consult an accountant and financial advisor to determine which policies are best for you and the tax benefits and implications.
Find someone you trust with knowledge of the different types of life insurance products along with a background in estate planning. See Insider’s guide to finding a financial planner, and our picks for best term life insurance companies.
Credits: Ronda Lee
Date: Feb 27, 2021
Source: https://www.businessinsider.com/personal-finance/can-you-have-multiple-life-insurance-policies
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How does smoking affect your life insurance?
Have you ever thought of how much impact smoking has on your finances? Health Canada’s cost calculator finds that smoking half a pack a day can cost up to $2,500 per year. Meanwhile, on a nationwide scale, the Canadian Cancer Society reported that smoking generates $6.5 billion in health-care costs yearly. And the expenses don’t end there — not if you’re looking to get life insurance.
What does life insurance have to do with it? Your life insurance rate depends on how healthy you are right now. But it also depends on whether you’re putting your health at risk with lifestyle choices like smoking. Here’s how this costly habit can affect your life insurance premium.
How smoking can affect your life insurance premium
To start, let’s look at the basics of life insurance. You buy a policy that provides financial protection and pay for it with monthly or annual fees, called premiums. What happens if you die while the policy is still active? Your beneficiaries get a specific amount of money stated in the policy, known as the death benefit. They can then use that money to help pay off debts, mortgages, loans and other living expenses.
Basically, life insurance can help give your family financial assistance and security after you die. So, how do insurance companies put a price on that security? A lot of the cost of life insurance depends on your current state of health and your family history. But what’s one of the biggest factors insurance companies look at when assessing your health risk? Whether or not you’re a smoker.
Paula MacMillan is a Sun Life Financial advisor in Winnipeg. “The health hazards of smoking and the risks it puts on your life are well-known,” she says. So what happens when an insurance company reviews your life insurance application? “They’ll want to know if, among other things, you’ve been smoking cigarettes or using any tobacco or smoking cessation products in the past year.” Underwriting is when an insurance company reviews your health risks after you’ve applied for life insurance. This process lets an insurer calculate the coverage you’re eligible for. It also ensures your premium reflects the level of risk.
Simply put: Your risk level affects your premium. “Being a smoker puts people at a higher risk of smoking-related illnesses,” Macmillan says. “And this translates to higher premiums.”
How much more do smokers have to pay for life insurance?
Smoking comes with a price. But exactly how much higher are life insurance rates for smokers? “A lot of people I’ve worked with were surprised to find that compared to non-smoker premiums, life insurance rates can be much more costly for smokers,” MacMillan says.
For instance, let’s take a 30-year-old, non-smoking man with a $700,000, 20-year individual term life insurance policy. He might get quoted a monthly premium of $50.13. But if he turns out be a smoker, his monthly premium could become $98.01. And what happens if he takes up smoking before it’s time to renew his policy? Then he can expect to pay a lot more than if he had remained tobacco-free.
From her experience, MacMillan finds that it helps to show smokers what their non-smoker rates would be. “Just knowing how much they could be saving gives them one more reason to quit,” she says.
Who’s considered a smoker on a life insurance application?
Most insurers would categorize people as smokers if they regularly use tobacco or nicotine in any form. This includes the following products:
Cigarettes, cigars and cigarillos
Chewing tobacco
Smoking cessation products like nicotine gum and patches
Does vaping affect your life insurance?
An application might not ask about vaping. But many applications require medical tests. These tests can detect the nicotine in your blood or urine regardless of how you consume it. So if you vape, you could still be listed as a smoker.
Does cannabis affect your life insurance?
What if you’re a casual cannabis user, who doesn’t combine marijuana with tobacco? “Then you could fall into the non-smoker category for life insurance,” MacMillan explains.
But what if you’re consuming cannabis regularly or more than once a day? “Then it’s likely that you’ll pay a higher rate,” she says.
What happens when a smoker buys life insurance online?
“Online coverage can’t distinguish between smokers and non-smokers, so the rates are usually blended,” MacMillan says. In other words, you could pay somewhere between the smoker and non-smoker rates even if you don’t smoke.
What happens to your life insurance premium if you quit smoking?
Ready to butt out? The year you quit smoking, you’ll see a drastic improvement in both your health and your finances. In terms of your life insurance policy, you may be eligible for non-smoker rates if you can:
Sign a non-smoking declaration stating that you’ve been a non-smoker for the last 12 months. This means you no longer smoke, consume or use cigarettes, cigars, chewing tobacco, nicotine patches or gum.
Have a urine test to prove there’s no trace of nicotine in your system.
Confirm that there haven’t been any significant negative changes to your health.
MacMillan finds the last point could pose a problem in certain cases. “Insurers want to know what made you decide to quit,” she says.
What if you choose to quit because you’ve just had a serious health complication and your doctor advised it? “Then they’re not going to categorize you as a non-smoker,” she adds.
Let’s say you bought a permanent individual life insurance policy as a smoker. But you’ve decided to quit smoking after surviving a heart attack. At this point, your health still puts you in a high-risk category. This means your insurer is unlikely to remove the smoker rating from your policy — even if you quit.
Getting a premium reduction can be difficult if you have other health risks holding you back. But it’s still possible — especially if you quit smoking while you’re still healthy. Bottom line: If you can quit smoking, you can start saving.
CREDITS: Farhana Uddin
DATE: July 04, 2019
SOURCE: https://www.sunlife.ca/en/tools-and-resources/money-and-finances/understanding-life-insurance/how-does-smoking-affect-your-life-insurance/
#AreteAutomation#LifeHealthAdvisors#LifeInsurance#LifeInsurancePolicy#FinancialAdvisors#Knowledge#BestForHealth#HealthIsWealth#Life
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The Basics of Life Insurance
Life insurance is an important part of a responsible financial plan, and can provide many benefits.
Providing for your loved ones
Life insurance policies can provide for your loved ones in the event of your death. You can choose a plan that helps to offset your income so your loved ones don’t have to worry about maintaining their current standard of living.
Covering final and ongoing expenses
Funeral expenses and final taxes resulting from the ownership of high-value assets, like a seasonal property or investment portfolios, can be significant. A properly tailored insurance policy will cover these and other expenses that your family may not be expecting.
Life insurance can mean more than making sure your loved ones are provided for and final expenses are paid. Some policies can also cover you as you recover from a critical illness, protect a business, or provide funds you can use or borrow against for major life expenses.
Cash value for lifelong expenses
One of the great features of permanent life insurance plans is the potential for building up tax-advantaged cash values in your policy. These values can be used in conjunction with loans as financial instruments to supplement retirement planning, assist with a down payment on a property, start or expand a business, or provide long-term or home care when you retire. This equity in your life insurance policy is a versatile financial asset that you can use in many different ways.
At The Co-operators, we have life insurance products to provide coverage for all the stages of your life:
Term life insurance is an affordable option for those looking for coverage for a predetermined length of time to cover needs that are often short-term.
Our permanent life insurance policies are life-long coverage to meet long term needs. Most permanent policies have fixed rates, which make them a great choice for those who like to plan their budgets with fixed costs.
To give your kids a head start on a great financial future, give them the gift of life insurance. Take advantage of their good health now to give them level premiums throughout their life.
If you encounter a serious illness, it’s nice to know that a critical illness policy will help pay the bills. All you’ll need to focus on is getting better.
We also offer a wide range of business life insurance plans for businesses to insure business owners, partners, key employees and debt obligations.
SOURCE: https://www.cooperators.ca/en/insurance/life/basic-life.aspx
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The Newlyweds’ Guide to Life Insurance
It’s officially wedding season! As the US continues to open back up, it seems that everywhere you look someone is getting married, with a double whammy of postponed 2020 nuptials and regularly scheduled 2021 events kicking off.
If you’re one of the many couples getting married this year — or perhaps you’ve already tied the knot (congrats!) — chances are there are a few high priority life items on your list to tackle. While life insurance may not be the first thing on your mind post-wedding, it is definitely worth thinking about as you tie your futures together.
Marriage is a partnership
For most people, marriage is a commitment on many levels: emotional, ethical and spiritual just to name a few, but also financial and practical! For one, there are usually beneficial, fiscal implications to tying the knot. There is even a fancy financial term that describes the relationship between spouses (and business partners): you share an insurable interest, that is to say, one of you will suffer hardship if the other passes away. Having a life insurance policy will help to ensure your spouse is taken care of financially, should something happen to you.
Just married? Now’s a good time for life insurance
It can’t be overstated that the best time to buy life insurance is always “yesterday” or, failing that, “right now.” That is because the younger and healthier you are when you purchase your policy, the lower the rate you can get. This is all the more important as you and your spouse likely share great plans for the future: you might be looking to buy a house and raise kids. If you choose to combine your finances, you will also be sharing your debt. All the more reason to plan carefully.
At Ladder, we believe in making life insurance personalized, simple, and flexible. If you want to lower your coverage during the lifetime of your policy, you can decrease your coverage amount with just a few clicks or taps in the app, which decreases your premiums by the same proportion.
A quick look at joint life insurance
The insurable interest defined earlier is a prerequisite for a type of life insurance known as “joint life insurance.” Such policies can be “first to die,” i.e. pay out to the beneficiary when the first spouse dies, or “second to die,” i.e. pay out when both insured parties die. The former can be practical because it involves just one policy that ensures a payout for the other party regardless of circumstances. “Second to die” policies typically don’t involve spouses as beneficiaries, but instead protect extended family members like grandchildren. Most people won’t benefit much from joint life insurance, unless one spouse cannot be insured due to a health condition — in which case the policy is calculated based on the healthy spouse.
*Sample pricing for healthy, 40-year-old, non-smoking male with a 10-year term life policy.
The benefits of separate policies
Ideally, we would recommend both spouses get a separate life insurance policy. Going separate, for one, ensures each policy is tailored to each spouse and their financial situation, not just now but also in the future. For instance, if you and your spouse decide to buy a house and get a mortgage together, one of you might take on the mortgage payments while the other covers the expenses of managing your household. You may also choose different life insurance policies that reflect your respective incomes to maintain the same standard of living for your significant other.
Credits to: Liana Corwin
Date: June 29, 2021
Source: https://finance.yahoo.com/news/newlyweds-guide-life-insurance-142738778.html
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Why Is There a Waiting Period?
The length of time an insured must wait before some or all of their coverage takes effect is known as a waiting period. Benefits for claims filed during the waiting period may not be paid to the insured. Elimination and qualifying periods are other names for waiting periods.
Important:
Before insurance coverage starts, there is a waiting period, also referred to as a qualifying period.
There may be waiting periods for a number of insurance policies, including short-term disability, auto, and homeowners insurance.
Companies with high turnover rates frequently implement waiting periods.
For cancer or maternity care, some private health insurance plans have longer waiting periods.
How to Use a Waiting Period
Depending on the insurer, policy, and type of insurance, different periods must pass before the insured can file claims. The price of a premium could be slightly lower for longer waiting periods before coverage becomes active. There are several different types of waiting periods in health insurance.
An employer waiting period mandates that an employee wait a predetermined amount of time, like three months, before they are eligible to receive health services that are covered by the employer. A clause like this will frequently be present for a business that anticipates a high rate of employee turnover. A further waiting period may apply after an employee enrolls before they can submit a claim for benefits.
There are waiting periods for affiliation with Health Maintenance Organizations (HMO). Affiliation wait times are governed by the Health Insurance Portability and Accountability Act (HIPAA) and are limited to two months (three months for late enrollees). One to 18 months can pass during the exclusionary period for pre-existing conditions. These waiting periods refer to particular medical conditions that a person might have in the six months prior to signing up for a health insurance plan.
The pre-existing condition may result in coverage restrictions or exclusions. That coverage, however, can count toward the pre-existing condition exclusion if the insured can show uninterrupted insurance prior to switching policies. Exemptions permit people to avoid this requirement if they have had group health insurance for at least a year at a single job and a period of no more than 63 days.
Certain types of coverage under some private health insurance plans have lengthy mandatory waiting periods:
There may be a two-year wait for cancer and cardiovascular care.
Wait times for maternity care can range from 30 to 90 days, but they are typically 10 to 12 months. There is typically a 6- to 12-month waiting period for dental services.
The frequency with which the insured may receive particular dental treatments is also governed by restrictions or additional waiting periods imposed by some insurance companies. Denture replacement, for instance, might only be permitted once every five years.
Choosing the length of the waiting period for a policy, policyholders must take their ability to pay for expenses into account.
Different Waiting Times
Typically, there are 30- to 90-day waiting periods before homeowner insurance takes effect. Policyholders may submit claims against the policy following the expiration of the waiting period. The insurance company will have different waiting times. Additionally, in some areas, such as coastal zones, when a named storm is nearby, new regulations won’t take effect until the storm has passed.
Other insurance products may be subject to wait periods in some states. For new auto insurance policies, Texas will impose a 60-day waiting period. During this time, the provider can determine whether the driver fits their risk profile or not. If the insurance provider has reservations about the risk profile or unreported issues during the 60-day period, they may cancel the auto policy.
Wait times for short-term disability insurance can be as little as a few weeks, but the premiums for these policies will be higher. The majority of short-term policies delay coverage for 30 to 90 days. Wait times for long-term disability benefits can range from 90 days to a full year. No benefits are payable during the trial period, just like with other insurance products. Disability payments from Social Security will also have a five-month waiting period.
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Making Health Care Systems Better
As health insurance companies increasingly shift health care costs onto patients through high deductibles and coinsurance, more than one-third of insured Americans report spending more in out-of-pocket expenses than they could afford in the last month. That’s not how insurance is supposed to work.
Many patients may not know it, but there are tens of billions of dollars in rebates and discounts on medicines that are given to insurance companies and other middlemen. Too often, these rebates and values don’t get to patients who need them. As a result, some patients pay more for medicines than their insurance company pays.
Unlike government price setting, which threatens Americans’ access to crucial, breakthrough medicines, we should ensure the rebates and discounts insurers receive get passed on to patients at the pharmacy counter — not pocketed by the insurance companies, hospitals, and middlemen.
Putting an end to the pandemic and strengthening the system
Our first order of business is to end the COVID-19 pandemic. We must also prepare for the challenges ahead. To do so, we need more of the innovation and discovery that led to the COVID-19 vaccines and treatments and a more muscular scientific delivery system from top to bottom.
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Making Health Care Systems Better
As health insurance companies increasingly shift health care costs onto patients through high deductibles and coinsurance, more than one-third of insured Americans report spending more in out-of-pocket expenses than they could afford in the last month. That’s not how insurance is supposed to work.
Many patients may not know it, but there are tens of billions of dollars in rebates and discounts on medicines that are given to insurance companies and other middlemen. Too often, these rebates and values don’t get to patients who need them. As a result, some patients pay more for medicines than their insurance company pays.
Unlike government price setting, which threatens Americans’ access to crucial, breakthrough medicines, we should ensure the rebates and discounts insurers receive get passed on to patients at the pharmacy counter — not pocketed by the insurance companies, hospitals, and middlemen.
Putting an end to the pandemic and strengthening the system
Our first order of business is to end the COVID-19 pandemic. We must also prepare for the challenges ahead. To do so, we need more of the innovation and discovery that led to the COVID-19 vaccines and treatments and a more muscular scientific delivery system from top to bottom.
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How to Take Out a Loan Against a Life Insurance Policy
A perpetual life insurance policy’s cash value is readily available for borrowing. The money can be used for any purpose and repaid anytime you choose, and a life insurance policy loan has comparatively low-interest rates. There are no loan restrictions or prerequisites (other than the amount of cash value). The drawback? You run the risk of losing your policy (and its cash value) if you don’t pay the loan’s interest, plus you’ll probably owe a lot of money in taxes. It’s simple to get cash by borrowing against your life insurance policy, provided you can make your payments on time.
Can you borrow against your life insurance policy?
How much can you borrow?
How do you take out a life insurance policy loan?
Pros vs. cons of taking out a life insurance loan
Does your life insurance coverage allow for borrowing?
The amount of money you would get if you surrendered your life insurance policy is its cash value. A portion of the premium you pay for a life insurance policy with a cash value, such as whole or universal life insurance, goes toward the cash value each time you make payment.
The policy’s terms specify the interest rate, which is how the cash value increases over time. You can borrow cash from the insurer if your permanent life insurance policy builds cash value by using the cash value as security. This choice is usually only accessible until the cash worth of your life insurance policy has grown to a certain level, which might take five to ten years of premium payments.
Due to the absence of a cash value component, term life insurance plans are less expensive than permanent ones. They cannot be used as collateral for loans, and if you decide to surrender a term life insurance policy, you will not be compensated.
How Much Can You Borrow from a Life Insurance Policy?
How much you can borrow from a life insurance policy varies by insurer. Still, the maximum policy loan amount is typically at least 90% of the cash value, with no minimum amount.
When you take out a policy loan, you’re not removing money from the cash value of your account. Instead, you’re taking a loan from the insurer and using the cash value as collateral. This is a significant benefit, as the cash value remains within the life insurance policy and continues to accumulate interest.
You don’t need to pay back the loan in a set period, as many other forms of loan are required. However, if you don’t pay the insurer the annual interest, which can be fixed or variable, what will add the interest payment to the value of your outstanding loan?
Length of the loan
You’ll get hit with compounding interest if your loan stretches over many years. And if the total outstanding loan exceeds your policy’s cash value, the policy will lapse. If this happens, you will lose coverage and hit a high tax bill if the outstanding loan exceeds the amount you’ve paid in premiums.
There is a risk in borrowing nearly the total amount of the policy’s cash value, so if you take out a policy loan, continually carefully monitor its size compared to your cash value. In addition, we would recommend making interest payments whenever possible.
How do you take out a life insurance policy loan?
The process of taking out a life insurance loan is straightforward. You fill out a form from the insurer and often get the money deposited in your account within a few days. You may need to confirm your identity, sign a confirmation document or provide a notarized confirmation before receiving your loan if:
You provided new account information to the insurer in the last month
The policy changed ownership recently
The loan exceeds a specific size, such as $50,000
Pros and cons of taking out a life insurance loan
Life insurance collateral loans are a simple way to get money on short notice with few restrictions. You must be very careful about managing the account’s cash value and paying off interest as required.
However, besides the risk of the policy lapsing, there are a few downsides to borrowing against your whole or universal life insurance.
There are no qualifiers for a policy loan.
You can borrow against your life insurance policy without having to meet the requirements for conventional loans. The loan does not reflect on your credit report because there was no credit check. You also don’t need to present any income documentation. You will need to provide identification and evidence of your loan request at most.
If you need money immediately, as for an urgent medical need, life insurance collateral loans might be a perfect alternative because there are no requirements or checks. They can also be used as a bridge loan while you wait for a loan from another source to be authorized. It usually works in your favor to repay an insurance loan as soon as possible. The loan’s interest accrues annually, and the policy will expire if the balance is too high. If this occurs, you would have paid premiums totaling thousands of dollars with nothing to show (no coverage). You can also owe taxes if the loan balance is more extensive than your paid premiums.
Another justification for repaying the policy loan is that the outstanding sum will be subtracted from the death benefit that will be distributed to your dependents after your passing.
Pay it back anytime
You do not have to repay a debt against your life insurance policy. Additionally, if the total amount owed (initial loan + accrued interest) does not exceed the policy’s cash value, you are exempt from paying the yearly interest. Therefore, if you’re unsure how long you’ll need the money, borrowing from your life insurance policy is a great choice.
It usually works in your favor to repay an insurance loan as soon as possible. The loan’s interest accrues annually, and the policy will expire if the balance is too high. If this occurs, you would have paid premiums totaling thousands of dollars with nothing to show (no coverage). You can also owe taxes if the loan balance is more significant than your paid premiums.
Another justification for repaying the policy loan is that the outstanding sum will be subtracted from the death benefit that will be distributed to your dependents after your passing.
Credits: Marianne
Date: August 16
Source: https://medium.com/@MarianneLifeBlogs/how-to-take-out-a-loan-against-a-life-insurance-policy-dbbe47a256f8
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Life Insurance For Cancer Patients And Survivors
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 final 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.
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Can You Have More Than One Life Insurance Policy?
Owning multiple life insurance policies makes sense if you have different goals for the coverage.
In short, yes, you can have multiple life insurance policies, but insurers may limit the total amount of coverage you can buy. You need life insurance if your death would place a financial burden on others. For many people, one policy is enough.
But two or more policies can make sense if you have various coverage goals. Your needs should drive the number and type of policies you buy.
How many life insurance policies can you have?
You can own multiple life insurance policies from the same or different companies. But when you apply, insurers tend to look at any existing coverage you have to make sure the policy you’re buying won’t cause you to exceed your insurability limit. This limit is typically set at 20 to 30 times your annual income.
The insurability limit exists because life insurance is designed to replace your earning power, not to considerably increase the wealth of your beneficiaries. In short, insurers don’t want your death to look too appealing to others.
Buying multiple life insurance policies: How it works
Having more than one life insurance policy is often referred to as laddering. This is when you buy multiple policies to cover different needs. Term life insurance is often used for laddering as it’s cheaper than permanent life and you can buy different term lengths.
For example, say you’re the breadwinner and want to cover your income, your mortgage payments and your kids’ college debt. Instead of buying a $1 million life insurance policy, you could buy three term policies of different lengths and amounts to match each need:
A 10-year, $500,000 term life policy.
A 20-year, $300,000 term life policy.
A 30-year, $200,000 term life policy.
If you die within the first 10 years, all three policies will pay out, providing your family with a $1 million death benefit. These funds can help replace your income and pay off large debts like a mortgage while your kids are still at home.
If you die within the second decade, the first policy has expired but the other two have not, and your family will receive $500,000. The payout can help cover college costs or living expenses for anyone who still relies on your income.
If you die within the third decade, only the third policy remains in force, and your beneficiaries will receive $200,000. By this time, your financial position may have reduced how much life insurance you need. Your kids may be financially independent, and the smaller life insurance payout can cover any remaining costs like mortgage payments.
This laddering strategy can save you money if you know your coverage needs won’t change. For example, if a 30-year-old in excellent health bought the above three policies, they’d end up paying a total of $10,470 in premiums after 30 years, according to Quotacy, a brokerage firm. To compare, if the same applicant bought one 30-year policy with $1 million of coverage, they’d end up paying $16,260 after 30 years.
However, if your coverage needs aren’t as straightforward or predictable, you may be better off buying one policy and adjusting your coverage over time. Many insurers will let you decrease the coverage and pay less, within limits. You can also buy more coverage if your needs increase, but you may have to complete a life insurance medical exam or answer questions about your health to do so.
Why you may need more than one life insurance policy
Here are some examples of when you may want to buy more than one policy.
You own a small business. You may want a term policy to take care of the family and another to cover business loans or operational costs were you to die unexpectedly.
You need to cover final expenses. You may want a separate burial life insurance policy to cover final expenses like funeral costs. These policies are a type of permanent life insurance and pay out a small death benefit regardless of when you die, as long as the premiums are paid.
You want to leave an inheritance. If you want to leave a lump sum to someone no matter when you die, you may want a separate permanent policy, such as whole life insurance.
Credits: Georgia Rose
Date: Apr 25, 2022
Source: https://www.nerdwallet.com/article/insurance/can-you-have-more-than-one-life-insurance-policy
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Types Of Life Insurance Policies
For the most part, there are two types of life insurance plans — either term or permanent plans or some combination of the two. Life insurers offer various forms of term plans and traditional life policies as well as “interest sensitive” products which have become more prevalent since the 1980’s. In New York State, the Department of Financial Services must approve any life insurance policy before a company can issue it to consumers and New York Insurance Law provides for standard provisions that must be included in every policy.
Term Insurance
Term insurance provides protection for a specified period of time. This period could be as short as one year or provide coverage for a specific number of years such as 5, 10, 20 years or to a specified age such as 80 or in some cases up to the oldest age in the life insurance mortality tables. Policies are sold with various premium guarantees. The longer the guarantee, the higher the initial premium. If you die during the term period, the company will pay the face amount of the policy to your beneficiary. If you live beyond the term period you had selected, no benefit is payable. As a rule, term policies offer a death benefit with no savings element or cash value.
Premiums are locked in for the specified period of time under the policy terms. The premiums you pay for term insurance are lower at the earlier ages as compared with the premiums you pay for permanent insurance, but term rates rise as you grow older. Term plans may be “convertible” to a permanent plan of insurance. The coverage can be “level” providing the same benefit until the policy expires or you can have “decreasing” coverage during the term period with the premiums remaining the same. If you do not pay the premium for your term insurance policy, it will generally lapse without cash value, as compared to a permanent type of policy that has a cash value component. Currently term insurance rates are very competitive and among the lowest historically experienced.
It should be noted that it is a widely held belief that term insurance is the least expensive pure life insurance coverage available. One needs to review the policy terms carefully to decide which term life options are suitable to meet your particular circumstances.
Types of Term Insurance
Renewable Term. Renewable term plans give you the right to renew for another period when a term ends, regardless of the state of your health. With each new term the premium is increased. The right to renew the policy without evidence of insurability is an important advantage to you. Otherwise, the risk you take is that your health may deteriorate, and you may be unable to obtain a policy at the same rates or even at all, leaving you and your beneficiaries without coverage.
Convertible Term. Convertible term policies often permit you to exchange the policy for a permanent plan. You must exercise this option during the conversion period. The length of the conversion period will vary depending on the type of term policy purchased. If you convert within the prescribed period, you are not required to give any information about your health. The premium rate you pay on conversion is usually based on your “current attained age”, which is your age on the conversion date. This type of policy often provides the maximum protection with the smallest amount of cash outlay.
Level or Decreasing Term. Under a level term policy, the face amount of the policy remains the same for the entire period. With decreasing term, the face amount reduces over the period. The premium stays the same each year. Often such policies are sold as mortgage protection with the amount of insurance decreasing as the balance of the mortgage decreases. If the insured dies the proceeds of the policy can be used to pay off the mortgage.
Adjustable Premium. Traditionally, insurers have not had the right to change premiums after the policy is sold. Since such policies may continue for many years, insurers must use conservative mortality, interest and expense rate estimates in the premium calculation. Adjustable premium insurance, however, allows insurers to offer insurance at lower “current” premiums based upon less conservative assumptions with the right to change these premiums in the future. The premium, however, can never be more than the maximum guaranteed premiums stated in the policy.
Permanent Insurance (Whole Life or Ordinary Life)
While term insurance is designed to provide protection for a specified time period, permanent insurance is designed to provide coverage for your entire lifetime. To keep the premium rate level, the premium at the younger ages exceeds the actual cost of protection. This extra premium builds a reserve (cash value) which helps pay for the policy in later years as the cost of protection rises above the premium. Whole life policies stretch the cost of insurance over a longer period of time in order to level out the otherwise increasing cost of insurance. Under some policies, premiums are required to be paid for a set number of years. Under other policies, premiums are paid throughout the policyholder’s lifetime. The insurance company invests the excess premium dollars
This type of policy, which is sometimes called cash value life insurance, generates a savings element. Cash values are critical to a permanent life insurance policy. The size of the cash value build-up differs from company to company. Sometimes, there is no correlation between the size of the cash value and the premiums paid. It is the cash value of the policy that can be accessed while the policyholder is alive.
The Commissioners 1980 Standard Ordinary Mortality Table (CSO) is the current table used in calculating minimum nonforfeiture values and policy reserves for ordinary life insurance policies. This table provides the minimum cash values that must be guaranteed in your policy.
The policy’s essential elements consist of the premium payable each year, the death benefits payable to the beneficiary and the cash surrender value the policyholder would receive if the policy were surrendered prior to death. You may make a loan against the cash value of the policy at a specified rate of interest or a variable rate of interest but such outstanding loans, if not repaid, will reduce the death benefit.
In 1984 a new federal tax law required that for permanent insurance to enjoy preferred tax treatment it must provide coverage up to at least age 95, limit the amount of premium that may be paid in relation to the face amount of coverage and establish a minimum ratio between cash value and face amount of insurance. Many permanent policies will contain provisions, which specify these tax requirements.
There are two basic categories of permanent insurance, traditional and interest-sensitive, each with a number of variations. In addition, each category is generally available in either fixed-dollar or variable form.
Traditional Whole Life
Traditional whole life policies are based upon long-term estimates of expense, interest and mortality. The premiums, death benefits and cash values are stated in the policy.
There are six basic variations of traditional permanent insurance:
Non-Participating Whole Life: A non-participating whole life policy will give you a level premium and face amount during your entire life. The advantages of such a policy are its fixed costs and generally low out-of-pocket premium payments. The disadvantage is that it pays no dividends.
Participating Whole Life: A participating whole life policy pays dividends. The dividends represent the favorable experience of the company and result from excess investment earnings, favorable mortality and expense savings. Dividends can be paid in cash, used to reduce premiums, left to accumulate at interest or used to purchase paid-up additional insurance. Dividends are not guaranteed.
Indeterminate Premium Whole Life: An indeterminate premium whole life policy is like a non-participating whole life plan of insurance except that it provides for adjustable premiums. The company will charge a “current” premium based on its current estimate of investment earnings, mortality, and expense costs. If these estimates change in later years, the company will adjust the premium accordingly but never above the maximum guaranteed premium stated in the policy.
Economatic Whole Life: An economatic whole life policy provides for a basic amount of participating whole life insurance with an additional supplemental coverage provided through the use of dividends. This additional insurance usually is a combination of decreasing term insurance and paid-up dividend additions. Eventually, the dividend additions should equal the original amount of supplemental coverage. However, because dividends may not be sufficient to purchase enough paid-up additions at a future date, it is possible that at some future time there could be a substantial decrease in the amount of supplemental insurance coverage.
Limited Payment Whole Life If you want to pay premiums for a limited time the limited payment whole life policy gives your lifetime protection but requires only a limited number of premium payments. Because the premiums are paid over a shorter span of time, the premium payments will be higher than under the whole life plan.
Single Premium Whole Life Single premium whole life is limited payment life where one large premium payment is made. The policy is fully paid up and no further premiums are required. Many such policies have substantial surrender charges if you want to cash in the policy during the first few years. Since a substantial payment is involved, it should be viewed as an investment-oriented product.
Interest in single premium life insurance is primarily due to the tax-deferred treatment of the build-up of its cash values. Taxes will be incurred on the gain, however, when you surrender the policy. You may borrow on the cash value of the policy but remember that you may incur a substantial tax bill when you surrender, even if you have borrowed out all the cash value.
Interest Sensitive Whole Life
While insurers guarantee stated benefits on traditional contracts far into the future based on long-term and overall company experience, they allocate investment earnings differently on interest sensitive whole life in order to better reflect current fluctuations in interest rates. The advantage is that improvements in interest rates will be reflected more quickly in interest sensitive insurance than in traditional; the disadvantage, of course, is that decreases in interest rates will also be felt more quickly in interest sensitive whole life.
There are four basic interest sensitive whole life policies:
Universal Life The universal life policy is actually more than interest sensitive as it is designed to reflect the insurer’s current mortality and expense as well as interest earnings rather than historic rates. Universal life works by treating separately the three basic elements of the policy: premium, death benefit and cash value. The company credits your premiums to the cash value account. Periodically the company deducts from the cash value account its expenses and the cost of insurance protection, usually described as the mortality deduction charge. The balance of the cash value account accumulates at the interest credited. The company guarantees a minimum interest rate and a maximum mortality charge. Some universal life policies also specify a maximum basis for the expense charge. These guarantees are usually very conservative. Current assumptions are critical to interest sensitive products such as Universal Life. When interest rates are high, benefit projections (such as cash value) are also high. When interest rates are low, these projections are not as attractive.
Universal life is also the most flexible of all the various kinds of policies. Because it treats the elements of the policy separately, universal life allows you to change or skip premium payments or change the death benefit more easily than with any other policy.
The policy usually gives you an option to select one or two types of death benefits. Under one option for your beneficiaries received only the face amount of the policy, under the other they receive both the face amount and the cash value account. If you want the maximum amount of death benefit now, the second option should be selected.
You generally pay a planned premium designed to keep the policy in force for life, and accumulate cash value, based upon the interest and expense and mortality charges you assume. It is important that these assumptions be realistic because if they are not, you may have to pay more to keep the policy from decreasing or lapsing. On the other hand, if your experience is better than the assumptions, than you may be able in the future to skip a premium, to pay less, or to have the plan paid up at an early date.
You do not have to pay the planned premium, but if you pay less, the benefit may be more like term insurance, which is only in force for a limited time and builds no cash value. On the other hand, if you pay more, and your assumptions are realistic, it is possible to pay up the policy at an early date.
If you surrender a universal life policy, you may receive less than the cash value account because of surrender charges which can be of two types. A front-end type of policy will deduct a percentage of the premium paid, while a back-end type policy will deduct a more substantial charge but only if the policy is surrendered before a specified period, generally 10 years but which could be as long as 20 years. A back-end type policy would be preferable if you intend to maintain coverage, and the charge decreases with each year you continue the policy. Remember that the interest rate and expense and mortality charges payables initially are not guaranteed for the life of the policy.
Although this type of policy gives you maximum flexibility, you will need to actively manage the policy to maintain sufficient funding, especially because the insurance company can increase mortality and expense charges. You should remember that the mortality charges increase, as you become older.
Excess Interest Whole Life If you are not interested in all of the flexible features of Universal Life, some insurers offer fixed premium versions called excess interest whole life. The key feature is that premium payments are required when due just like traditional whole life. If premiums are paid when due, the policy will not lapse.
With the premium level fixed, any additional or excess interest credited, or better life insurance experience, will improve the cash value of the policy. The premium level will probably be comparable to traditional whole life policies. Cash value may be applied to pay future premium payments. This type of product maximizes the deferred tax growth of your cash value.
Current Assumption Whole Life Current assumption whole life is similar to a universal life policy, but your company determines the amount of premium to be paid. The company sets the initial premium based upon its current estimate of future investment earnings and mortality experience and retains the contractual right to reevaluate its original estimates to increase or decrease your premium payments later. If premiums are increased, some policies let you decrease the face amount of coverage so that you can continue to pay the original premium. Current mortality and experience and investment earnings can be credited to the insurance policy either through the cash value account and/or the premium or dividend structure (depending on whether it is a stock or mutual company). Regardless, this type of policy has the following characteristics:
The premiums are subject to change based on the experience (mortality, expenses, investment) of the company. The policyowner does not exercise control over the changes.
The policyowner can use the cash value to make loans just as he/she would with any traditional ordinary life insurance policy.
A minimum amount of cash value is guaranteed, just as with traditional ordinary life insurance.
The death benefit does not fluctuate.
Single Premium Whole Life There are a few single premium life products, which determine the premium using the current interest rate assumption. You may be asked to make additional premium payments where coverage could terminate because the interest rate dropped. Your starting interest rate is fixed only for a year or in some cases three to five years. The guaranteed rate provided for in the policy is much lower (e.g., 4%). Another feature that is sometimes emphasized is the “no cost” loan. Companies will set the loan interest rate to be charged on policy loans equal to the rate that is being credited to the policy.
Variable Life
Most types of both traditional and interest sensitive life policies can be purchased on either a fixed-dollar or variable basis. On a fixed-dollar basis, premium, face amount and cash values are specified in dollar amounts.
On the variable basis, face amount and cash value are specified in units, and the value of the units may increase or decrease depending upon the investment results. You can allocate your premiums among various investment pools (like stock, bond, money market, mutual funds and real estate pools) depending on the amount of risk you are willing to assume in the hope of a higher return.
Traditional variable life provides a minimum guaranteed death benefit, but many universal variable life products do not, and should investment experience be bad, coverage will terminate if substantially higher premium payments are not made. Variable life is also made available on a single premium basis but if investment experience is poor additional premiums will be required.
Other Coverages (Variations on the Basic Plans)
>Credit Life Insurance
Although you can obtain credit life insurance (term) as an individual, it is usually sold on a group basis to a creditor, such as a bank, finance company or a company selling high priced items on the installment plan. The policy generally pays the outstanding balance of the debt at the time of the borrower’s death, subject to policy maximums. Debts covered in this way include personal loans; loans to cover the purchase of appliances, motor vehicles, mobile homes, farm equipment; educational loans; bank credit and revolving check loans; mortgages loans; etc.
When you borrow from an organization that has a group credit life policy, the organization may require you to purchase credit life insurance, or it may simply offer the protection as an additional service. In either case you must receive a certificate of insurance describing the provisions of the group policy and any insurance charge. Generally, the maximum amount of coverage is $220,000 for a mortgage loan and $55,000 for all other debts. Credit life insurance need not be purchased from the organization granting the loan.
If you are covered under a group credit life policy and you terminate coverage by prepaying or defaulting on the loan, or if the group policy itself is terminated, you may be entitled to a partial refund of the premium you paid so check your certificate. If life insurance is required by a creditor as a condition for making a loan, you may be able to assign an existing life insurance policy, if you have one. However, you may wish to buy group credit life insurance in spite of its higher cost because of its convenience and its availability, generally without detailed evidence of insurability.
Monthly Debit Ordinary Insurance Debit insurance
is insurance with premiums payable monthly which are meant to be collected by the agent at your home. In most cases, however, home collections are not made, and premiums are mailed by you to the agent or to the company.
There are certain factors that tend to increase the costs of debit insurance more than regular life insurance plans:
Certain expenses are the same no matter what the size of the policy, so that smaller policies issued as debit insurance will have higher premiums per $1,000 of insurance than larger size regular insurance policies.
In some companies, more debit policyholders allow their policies to lapse than is generally the case with policyholders of regular life insurance. Since early lapses are expensive to a company, the costs must be passed on to all debit policyholders.
Since debit insurance is designed to include home collections, higher commissions and fees are paid on debit insurance than on regular insurance. In many cases these higher expenses are passed on to the policyholder.
As a general rule the combination of smaller amounts, higher lapse rates and higher commissions and fees on debit insurance tends to make it more expensive than comparable regular life insurance plans.
Where a company has different premiums for debit and regular insurance it may be possible for you to purchase a larger amount of regular insurance than debit at no extra cost. Therefore, if you are thinking of debit insurance, you should certainly investigate regular life insurance as a cost-saving alternative.
Modified Life Plan
A modified life plan is similar to whole life except that you pay a lower premium for the first few years and a higher than regular whole life premium in later years. This plan is designed for those who cannot initially afford the regular whole life premium but who want the higher premium coverage and feel they will eventually be able to pay the higher premium.
The Family Policy
The family policy is a combination plan that provides insurance protection under one contract to all members of your immediate family husband, wife and children. Usually, family policies are sold in units (packages) of protection, such as $5,000 on the main wage earner, $1,500 on the spouse and $1,000 on each child.
Joint Life and Survivor Insurance
Joint Life and Survivor Insurance provides coverage for two or more persons with the death benefit payable at the death of the last of the insureds. Premiums are significantly lower under joint life and survivor insurance than for policies that insure only one person, since the probability of having to pay a death claim is lower.
Joint Life Insurance
Joint Life Insurance provides coverage for two or more persons with the death benefit payable at the first death. Premiums are significantly higher than for policies that insure one person, since the probability of having to pay a death claim is higher.
Endowment Insurance
Endowment insurance provides for the payment of the face amount to your beneficiary if death occurs within a specific period of time such as twenty years, or, if at the end of the specific period you are still alive, for the payment of the face amount to you. Due to recent tax law changes many endowment plans no longer qualify as life insurance for tax purposes and are generally not being offered by insurers.
Juvenile insurance
Juvenile insurance provides a minimum of protection and could provide coverage, which might not be available at a later date. Amounts provided under such coverage are generally limited based on the age of the child. The current limitations for minors under the age of 14.5 would be the greater of $50,000 or 50% of the amount of life insurance in force upon the life of the applicant. The limitations on a minor under the age of 4.5 would be the greater of $50,000 or 25% of the amount of life insurance in force upon the life of the applicant. Juvenile insurance may be sold with a payor benefit rider, which provides for waiving future premiums on the child’s policy in the event of the death of the person who pays the premium.
Senior Life Plans
Senior life insurance, sometimes referred to as graded death benefit plans, provides eligible older applicants with minimal whole life coverage without a medical examination. Since such policies are issued with little or no underwriting they will provide only for a return of premium or minimum graded benefits if death occurs during a specified period which is generally the first two or three policy years. The permissible issue ages for this type of coverage range from ages 50 75. The maximum issue amount of coverage is $25,000. These policies are usually more expensive than a fully underwritten policy if the person qualifies as a standard risk.
Pre-need Insurance
This type of coverage is for a small face amount, typically purchased to pay the burial expenses of the insured. As previously mentioned within the discussion of monthly debit ordinary insurance, this coverage often carries a higher premium per $1,000 of coverage than larger size policies.
CREDITS: New York State
DATE: 2022
SOURCE: https://www.dfs.ny.gov/consumers/life_insurance/types_of_policies
#AreteAutomation#LifeHealthAdvisors#LifeInsurance#LifeInsurancePolicy#FinancialAdvisors#Knowledge#BestForHealth#HealthIsWealth#Life
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How Critical Illness Insurance Helps
Critical Assist
Critical Assist from The Co-operators gives you the comfort of knowing you will have financial stability if you are diagnosed with a covered life-altering illness. We take standard critical illness coverage further with our Early Assist benefit and the Teladoc Medical Experts.
How critical illness insurance helps
Critical Assist from The Co-operators will give you and your family a tax-free1 financial cushion that will be there for you when you most need it. If you are diagnosed with a covered illness, you'll receive either a full lump sum payment or a partial payout of the coverage amount if your illness falls under our Early Assist program. You can use the benefit payment any way you wish. For example, it can help you:
pay for mortgage and loan payments if you are unable to continue working
pay for child care so that you can concentrate on your recovery
subsidize additional necessary health care not covered by provincial plans
cover housekeeping costs or other day to day expenses
keep up contributions to RRSPs and RESPs
What would you do if your child were diagnosed with a critical illness?
One of our biggest concerns as a parent is our child’s health and well-being. If your child were ever diagnosed with a serious illness, you’d want to be with them and do everything you could to comfort and care for them. Critical Assist – Head Start helps provide financial peace of mind to parents of a child diagnosed with a Covered Condition, so they can focus on what matters most: being with their child and helping them get better while maintaining their family’s needs.
Available plans
The Co-operators offers four Critical Assist® plans to suit your needs:Level premiums for 10 years and renewable for successive 10-year periods to age 75 (CA 10)
Level premiums for 25 years and renewable for successive 20-year periods to age 75 (CA 25)
Level premiums to age 75 (CA 75)
Level premiums for 20 years with coverage to age 75 (CA 20-Pay)
Critical Assist
Critical Assist provides coverage for 25 full payout conditions, and 4 Early Assist partial payout conditions. Benefits are paid in a tax-free lump sum and can range from $25,000 to $2,000,000, depending on the level of coverage you choose. This policy is available to issue ages 18 through 65 (CA 10 and CA 75) or ages 18 through 50 (CA 25 and CA 20-Pay). The policy expires at the anniversary nearest age 75.
Critical Assist – Head Start for children
Critical Assist – Head Start provides coverage for 32 full payout covered conditions (including 7 childhood-specific conditions), and 4 Early Assist partial payout conditions. Benefits are paid in a tax-free lump sum and can range from $25,000 to $250,000, depending on the level of coverage you choose. Children are eligible for the plan at 30 days old until age 17 and the policy expires at the anniversary nearest age 75. So, not only are you covering them when they are young, but also providing protection for years to come.
Other featuresPremium Payback at Death
If you pass away while the Critical Assist® policy is in force and no full payout claim has been paid, we will refund the premium payments you have made for this coverage to your beneficiary. This embedded feature is included with all Critical Assist policies.
Conversion privileges
If you decide you would like longer term protection, we make it easy. Policyowners may convert a 10-year or 25-year term policy to a policy with level premiums to age 75 or level premiums for 20 years without any additional underwriting requirements or proof of insurability.
Teladoc Medical Experts
Critical Assist includes access to the Teladoc Medical Experts. Teladoc Medical Experts gives you instant access to a global network of over 50,000 leading medical specialists and subspecialties. They can provide confirmation of your diagnosis, support through information and guidance, and help you find a specialist in your area.
Counselling benefit
Upon diagnosis of a covered condition, the policyowner will receive access to up to 3 hours of over the phone counselling to be used by themselves or their family members.
Optional riders and other benefits
You may customize your Critical Assist plan by adding the following optional riders and other benefits:
Premium Payback at Expiry Rider
Premium Payback at Surrender Rider
Disability Premium Waiver Benefit
Automatic Waiver of Premium on Owner’s Death or Disability Benefit
Which illnesses are covered?
The illnesses listed below are covered through full payouts and our Early Assist program. If you have questions, your Financial Advisor can take you through what is covered so you can make an informed decision.
Full payout covered conditions
Coverage for the full payout conditions (except for Loss of Independent Existence) begins on the policy date and ends at expiry (age 75). Once you've received payment for a full payout condition, your Critical Assist® coverage ends.
Eligible Conditions
Alzheimer’s Disease
Aortic Surgery
Aplastic Anemia
Bacterial Meningitis
Benign Brain Tumour
Blindness
Cancer (Life-Threatening)
Coma
Coronary Artery Bypass Surgery
Deafness
Heart Attack
Heart Valve Replacement
Kidney Failure
Loss of Independent Existence
Loss of Limbs
Loss of Speech
Major Organ Failure on Waiting List
Major Organ Transplant
Motor Neuron Disease
Multiple Sclerosis
Occupational HIV Infection
Paralysis
Parkinson’s Disease
Severe Burns
Stroke
Additional childhood covered conditions
In addition to the 25 full payout covered conditions, Critical Assist® – Head Start also provides coverage for the following 7 childhood conditions until age 18
Eligible Conditions
Autism
Cerebral Palsy
Congenital Heart Disease
Cystic Fibrosis
Muscular Dystrophy
Rett Syndrome
Type 1 Diabetes Mellitus
Early Assist covered conditions
A partial benefit equal to 10% of the face amount, up to a maximum of $50,000, is payable if you are diagnosed with an Early Assist covered condition. The policy will continue to cover you after the partial payment is made. You are eligible for only one Early Assist payment. There is no reduction of the policy face amount if an Early Assist benefit is paid.
Eligible Conditions
Coronary Angioplasty
Non-Life-Threatening Cancers:
Ductal Carcinoma in Situ of the Breast (DCIS)
Stage T1a or T1b (Stage A) Prostate Cancer
Stage 1A Malignant Melanoma (melanoma less than or equal to 1.0 mm in thickness)
Talk to your local Financial Advisor today to get a quote on critical illness insurance from The Co-operators.
SOURCE: https://www.cooperators.ca/en/insurance/life/critical-life.aspx
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From Generation X to Generation Z: A Guide to Life Insurance For Every Age Range
The need for life insurance is a given. Always. But what does this mean? When and why? What's the right time or age to purchase life insurance, and what will it cover?
Thinking about life insurance is not fun - it's not an uplifting or encouraging topic. It may seem utterly unrelated to the young and healthy, and when considering it, thoughts can lead towards gloomy observations about what would happen if.....
But things happen. And at some point, earlier than later, there's a real need to be prepared. Disasters, illness, and accidents can cause financial hardships though these can be avoided with the proper planning at any age. The key is knowledge and education, knowing what to ask and who to turn to for coverage.
The following are life milestones for purchasing life insurance policies:
Life Insurance for 20s Age Range
Status: Great health, young, optimistic outlook
Responsibilities: College, first time living independently, first job, marriage, first investment, children
The most affordable age to buy life insurance is during the 20s. Most people don't need it at this age as they are healthy and young, but precisely this poses less risk to the insurer, which can offer the most affordable rates.
At this age, one's health history is at its best without any future red flags, and there are usually no financial dependents to which funds need to be allocated.
For beneficiaries of 20-something, the life insurance proceeds can cover mortgage or housing payments, debts like student loans, childcare expenses, and final expenses.
Life Insurance for the 30s Age Range
Status: Good health, new responsibilities
Responsibilities: Family, mortgage, aging parents, independent businesses, education, children
For a wide audience range still healthy, statistically, during these years, there can already be financial responsibilities and dependents - spouse, children, and even aging parents. Their economic well-being relies on an external income that needs to be protected, and life insurance is one of the most straightforward methods.
The recommended coverage at this age can be term life insurance for a fixed amount of time, 10, 20, or 30 years. Purchasing it at a young age can help lock in an inexpensive rate for the entire coverage duration.
For those covered by life insurance in their 30s, proceeds can help cover a mortgage a spouse is left with, income for a partner that stays home with the children, childcare and education expenses, as well as medical bills and final expenses.
Life Insurance for the 40s Age Range
Status: Overall good health, responsibilities, and long term plans
Responsibilities: Mortgage, debt, non-working partner, medical bills, dependents
Today, Americans live longer, but the recent unexpected circumstance has shifted the estimated age-adjusted death rate; This stretch of years is still a great time to readjust or acquire life insurance policies before rates start to increase. It's essential to find insurance providers that can offer affordable life insurance coverage aligning with each person's needs and abilities.
Policies may have a wide range of options, and it's important to carefully review the policy details, apply candidly, and make a note of pricing to save money.
The policy's proceeds can cover the following for beneficiaries:
The remainder of a mortgage
Cover a salary gap due to increased earnings
Protect a spouse dependent on a sole provider's income
Childcare present and future expenses
Financial cushion for medical and final expenses
Life Insurance for the 50s Age Range
Status: Health issues may occur, financial responsibilities
Responsibilities: College expenses, investments, aging parents, outstanding debt
Purchasing life insurance is crucial here but will cost more though still a price that is feasible for most. During these years, the majority may already have financial dependents, more family members who may need more funds for support, assets required for shelter, or a steady income. The overall sentiment is to protect these.
Health and well-being are critical factors to obtaining the coveted coverage at a reasonable rate. However, insurance companies may be more hesitant and careful about providing low-cost policies within this age range.
Like in previous years, life insurance coverage supports beneficiaries with the policy's proceeds. In addition to what the proceeds have been able to cover in the past, these may also cover medical bills, which may be more prevalent now.
The advantage of acquiring life insurance is apparent at any age, during some age ranges a bit less than others, at a time when the future is far and long. However, in today's climate and actual current world events, it's clear the need for protection is high.
Often the choice between investing in life insurance and other expenses may be a bit murky, especially when funds are limited. Fortunately, life insurance companies are now more sensitive than ever to their audience's needs and abilities. As a result, there are ample flexible coverage options based on lifestyle, health, and financial limitations.
Where in the past, the process of life insurance acquisition deterred people due to a lengthy bureaucratic process, today companies, like Sproutt.com, are making it easier than ever to secure life insurance at any age.
The digital revolution and emphasis on user experience and customer service now allow this process to be at every person's fingertips - from online inquiries, short online health questionnaires, personal preferences and choices, various policy choices, application, and quick approval from the insurers—all online, many without the need for medical examinations, and within minutes.
Life insurance at any age is feasible, accessible, and provides peace of mind. Acknowledging the present day circumstances, having life insurance coverage can provide some stability in an unstable world.
Credits to: Annie Dudkiewicz
Date: June 28, 2021
Source: https://finance.yahoo.com/news/generation-x-generation-z-guide-144348092.html
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