Life Insurance Introduction
Life insurance is one of the most versatile financial products in existence. Most people think of life insurance for the death benefit. You can pay a small amount, e.g. $20/month, and know that your heirs will receive $500,000 tax-free if you pass unexpectedly.
Uses of Life Insurance
The loss of a loved one is hard enough. Life insurance will at least provide some financial support to help the family carry on. Life insurance proceeds can be used to help a family keep living in the same house, pay off debt and pay for college.
Life insurance can also be used to provide:
- A legacy for your family
- Money to cover estate taxes
- Business insurance for Key-man or Buy-sell
- Supplemental college funding
- Tax-free income for retirement
- A strategy to maximize charitable giving
- Help with long term care expenses or medical bills
- Protection for student loans
- An improved alternative to a Roth IRA, and much more…
Who Needs Life Insurance?
If anyone depends on you financially, you probably need life insurance. It is most often needed on the breadwinner of the family. What if that person wasn’t here tomorrow? How would the family pay its bills?
Perhaps you need life insurance on your parents to cover their debts. Singles, same-sex couples, fiances, parents and business partners may all be good candidates for coverage. Maybe you are looking to supplement your your 401(k) with a tax-free vehicle. An indexed universal life policy is a great option.
What About Your Company Life Insurance?
Do you have group life insurance through work? It’s probably not enough. While it’s a nice perk, there are a few issues with group life insurance:
- Group life insurance is usually 1-2x your salary. If something happens to you, the coverage will only support your family for a year or two. You need more coverage, especially if you have a large family and/or your spouse does not work. See you how much coverage you should have here.
- If you leave your job, your coverage usually ends. You should own and control your policy. That way if you leave your company, you still have your family protection in place.
- Your company may cancel or change the benefits. Just look at what happened to the Sears group life insurance. Your family’s financial well being is too important to leave up to someone else.
Types of Life Insurance Agents
There are 2 general types of agents: Captive and independent.
- A CAPTIVE agent represents one company and only sells insurance products from that one company. Examples of captive include State Farm, Farmer’s and Liberty Mutual.
- An INDEPENDENT agent represents multiple companies. At Abrams Insurance, we are independent agents and represent over 70 different insurance companies.
The challenge with a captive agent is that they only have 1 company to sell. That means their insurance is one price and they have one underwriting manual. (Underwriting is how the insurance company will rate and price a policy for a certain health condition or lifestyle choice).
What if that company is more expensive or does not cover a certain illness? Then that client may not get approved for coverage or is paying way too much.
As independent agents, we can do much more for our clients. We will shop all 70+ of our companies to find a company that will cover our client’s health conditions. If you have been declined for coverage with another agent, we probably have an option that will approve you.
We compete against captive agents all the time. When it comes to price, I can’t remember a time when we have lost to a captive company. If you don’t want to pay too much, have us shop all of our companies to find you the best rate on your coverage.
Rates are set by each insurance company. Therefore, you won’t find a lower cost any where else for the same policy. Since the prices are fixed by the company, you don’t need to get rates from 5 different websites. Think of us as your personal shopper for life insurance. We will shop every company to save you time and money on your insurance.
To compare life insurance rates from the nation’s leading life insurance companies, use the Instant Quotes form on this page or contact us with any questions.
What Type of Life Insurance Policy is Right for You?
Life insurance can be confusing if you don’t shop for it often. We are here to simplify it and make recommendations based on your goals. We’ll need answers to the following questions to help you make the best choice:
Do you want the lowest possible premiums, or would you prefer to pay more and build up your policy’s cash value? Do you need insurance for just a few years, or do you view it as a long-term addition to your overall financial strategy?
Life insurance policies also offer options called life insurance riders which are additional benefits that can be added to your policy for an extra cost. The children’s term rider is one of my favorites because it insures that your child will always qualify for life insurance, regardless of any health issues that arise.
It’s very likely that your needs will change over time. You may start with a low cost term policy when you are newly married. Then as your career begins to take off, you might be looking to add a second policy to help save for retirement. Any good agent will stay in touch and review your policy(s) with you at least annually. We often find during review that clients need to make changes to their policy or financial planning.
At Abrams Insurance Solutions, we can help you identify the best type of policy for your needs. Remember that we work for you and not the insurance companies. Our goal is to find you the right policy for your unique circumstances at the lowest price.
Term Life Insurance
Term insurance, the most affordable type of insurance when initially purchased, is designed to meet temporary needs. It provides protection for a specific period of time (the “term”) and generally pays a benefit only if you die during the term.
Terms are usually 10 to 30 years, with 20 being the most common. Some policies can be automatically renewed at the end of the coverage period, and some can be converted to permanent insurance without need for a medical exam.
Term conversions are common for those people whose health has deteriorated during the term and may otherwise be uninsurable. Please use the quote calculator on this page for an instant term quote.
Life Insurance Without a Medical Exam
Are you short on time or looking to obtain a life insurance policy as fast as possible? If so, then Life Insurance without a Medical Exam is the right option for you. You can get $1,000,000 of no health exam life insurance quick and easy when you work with us.
A fully underwritten life insurance policy requires you to take a short exam (blood, urine, height and weight) and wait around 4-6 weeks to receive your policy. We have a wide selection of no exam life insurance companies and will guide you to the best policy without an exam today.
Indexed Universal Life Insurance
Indexed Universal Life Insurance is the same as traditional universal life except for how interest is credited. It is based partly on the upward movement of a major stock market index, so when the market does well, so do you. Over the life of the policy, this could mean more cash value and more supplemental income to use for college funding, retirement funding, or other needs.
The tax-deferred and potential tax-free benefits of a universal life policy still apply. You also get a guaranteed minimum interest rate, which means while you are taking advantage of the market going up, you will never suffer losses due to the market going down.
The combination of tax-free, no stock market risk and access to your money makes this an excellent retirement planning asset.
Final Expense Life Insurance
Final Expense life insurance, also called burial or funeral expense insurance, provides a death benefit to use for expenses like medical bills, credit card debt, and funeral costs.
These are simple and affordable life insurance policies that can provide peace of mind and protect your loved ones from future financial burdens. These policies have a smaller death benefit that ranges from $2,000 up to $100,000 and the coverage lasts for life.
Some of these policies are guaranteed issue which means there is no medical exam and limited health questions (if any).
Whole Life Insurance
Whole life insurance is a type of permanent life insurance in which the coverage and the premiums remain the same your entire life. As long as your premium payments are made as agreed, your insurance coverage lasts throughout your life, and the death benefit is a guaranteed amount.
When you pay the premiums on a whole life policy, part of each payment accumulates as a cash value. Dividends are also typically paid on whole life contracts and can be used to either increase the death benefit or reduce the premiums.
Hybrid Life Insurance and Long Term Care
A hybrid policy includes two types of benefits – life insurance and long term care insurance – all rolled into one package.
The long term care benefit amount is typically several times greater than the single premium paid. This allows you to maximize the value of your long term care premium dollar and free up assets that may have been earmarked for other purposes.
If long term care is not needed, a life insurance death benefit is paid to your beneficiary. This way you are guaranteed that a benefit will be paid – a life insurance death benefit, a long term care benefit or some combination of the two. A hybrid policy is usually more cost-effective than buying two separate policies and can help you maximize your assets.
What Do Insurance Companies Check When Applying?
You have decided what type of policy to purchase and how much coverage you need. (Hopefully with our help). Now it’s time to start the application process for insurance.
Most companies require all or some of the following when applying:
- MIB – Medical Information Bureau Report
- Prescription Database Check
- Motor Vehicle Report
- Medical Records from your doctor
- Exam (blood & urine sample, height/weight, possible EKG)
This sounds like a lot, but it’s not really too bad. You only need to complete the application. This may be with us over the phone or we can email you a link (depending on the company). Behind the scenes, the insurance company will order the other information.
Many companies are offering no exam policies these days so you don’t need to worry about the exam. Just because it’s no exam, does not mean no health questions. If the insurance company is going to be on the hook to pay your heirs $500,000 or more, they want to get a pretty good idea of your health.
Some options are simpler than others. That’s why we are here to guide you to the best policy for your needs. Need a policy to cover a business loan in 48 hours, we can do that. Need a quick $50,000 policy with a 5 minute application? We can do that as well. Contact us with your questions and we’ll guide you to the right policy for you.
How Do Health Issues Affect Life Insurance?
It is imperative to work with an independent agent if you have health issues. We know how each life insurance company will rate certain health conditions. The goal is to have you apply with the company that will offer the best health rating and therefore lowest premium on your coverage.
We work with everyone from marijuana users looking for insurance to clients with Hodgkin’s Lymphoma that need life insurance. Medical marijuana users may even get the best rate class for their coverage. Contact us for help our check out our life insurance for pre-existing conditions page to learn more.
How Much Life Insurance Do You Need?
The easiest way to determine how much life insurance you need is to think of life insurance as replacing your income if you were not here. Your income pays for all of your family expenses including mortgage, college funding and retirement funding.
A general rule of thumb is to multiply your income by 7-10 and buy that much life insurance. However, this isn’t very accurate for your personal situation. You may need less if you have additional assets. Or you may need more if you have a large family or large debts, mortgage, etc.
We have a handy life insurance needs calculator that will take debts, income for survivors, college funding and more into account. Use the calculator to determine your needs and then use our instant life insurance quote calculator on this page to compare rates from the nation’s leading life insurance companies.
Been Declined for Life Insurance Already?
If you have been declined for coverage, it’s probably due to applying with the wrong company for your particular circumstances. As mentioned above, each company has different guidelines for who they will accept. It’s like putting a puzzle together. Once we know your situation, we will find the company that is the right fit for you.
Have a Life Insurance Policy You Don’t Need?
This is quite common. You reach a point financially where your family will be ok financially if something happens. On the other hand, life insurance premiums can become unaffordable when people have large medical bills or other financial issues.
Don’t just stop paying the policy and letting it lapse. There are people who buy life insurance policies. You may be able to recoup some of the money you paid. Contact us to discuss your options.
Life Insurance is an important decision and a key piece of your financial portfolio. Work with an expert to make sure you have the right and least expensive policy for your situation. We don’t just want to sell you a policy. We want to become your insurance agent for life.
View Life Insurance Rates on our Instant Quotes form right now or call us at 858-703-6178.