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Tag: Financial Planning

Is critical illness insurance worth it?

What is critical illness insurance, and should you consider buying a policy?  

If you are concerned that you might face a critical illness in your lifetime and you don’t have the financial resources to protect yourself, or your family, then it’s absolutely worth considering. If you were to face a critical illness that is covered by the policy, it will provide financial protection, peace of mind and security.

We’re blessed to live in a time where so many advancements in modern medicine exist. The percentage of people who suffer critical illnesses, such as heart attacks or strokes and yet survive is increasing each year. However, that does not mean that life didn’t change for those patients. In many cases there may be substantial modifications to their lifestyle, including occupational changes, which could directly affect their ability to earn and provide financial resources for their family.

This is where critical illness coverage steps in to help save the day. Of course that is only true for those who are fortunate enough to have critical illness coverage in place prior to experiencing the illness or disease. If you or your loved one for example selected to add a $300k critical illness coverage rider to your life insurance policy, and you suffer and survive a heart attack, you would receive a lump sum tax-free payment of $300k, from the insurance company. It’s that simple. Your policy would be considered over at that point (since it has paid out on the claim), but you would receive the money to do with it as you wish. 

Again, we have to say that this is just an example, and that every policy is governed by the terms of the individual policy agreement. It also assumes all of the other obvious factors such as the person insured is actually named on the policy, your policy is in good standing with on-time payments and your critical illness coverage includes the named illness, and in this case, a heart attack would be the named illness covered or included in a list of named illnesses which are covered. So, based on the terms of your policy, it’s a pretty straightforward kind of coverage to help people deal with serious, and often life changing events (i.e. heart attack, stroke, or cancer).

With the number of people who experience some kind of a critical illness each year,  it’s not hard to figure out why some choose to add Critical Illness coverage to their policy. For those who do, Critical Illness coverage could make a huge difference in the quality of life, and their loved ones, for those who are fortunate enough to have planned in advance. That being said, only a small number of those experiencing such an illness will have the proper coverage in place. 


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What is Critical Illness Insurance?

Let’s say you’re a healthy young adult, but concerned that one day you might experience a life challenging health event such as cancer. With critical illness coverage, the insurance company will pay out a one time, lump-sum tax free benefit. The key is the illness must be specified (defined) within the policy that you purchased, and it must occur during the term of your policy.

Your policy must be in good standing, including compliance with all of the terms and conditions included in your policy. Another thing to keep in mind is that upon the expiration of your policy’s term, the coverage will also no longer be in effect, as the coverage ends based on the termination date, which is a date that is specified in every policy.

Critical illness (CI) coverage is often combined as optional coverage which is added to a term life insurance policy. It may be offered as a rider when creating a custom insurance solution. There is an important point to make note of and that is you can only use either the critical coverage or the death benefit, not both. For example, if the policy were to pay a lump sum payment for the critical coverage rider, then the term life insurance death benefit will not be paid. The policy will have completed its coverage with the critical illness payout, and will no longer be in effect, should you pass away at a later point in time.

Is Critical Illness Coverage Worth It?

Some might argue that they would end up paying for two coverages but only receive one in the above scenario. And in a certain way, you could say, they’re right. You might look at it this way too, but it’s worth considering. Does that necessarily make it a bad thing? If it fills a need and solves a major concern or potential financial disaster, who are we to judge whether that is necessarily good or bad. It may just depend on the situation. And as long as the person who is obtaining this coverage understands the way it works, and feels good about it, isn’t that what matters most? I would say that’s a pretty important point to consider.

However you see it, I think one thing that we can all agree on as the most important thing to realize, and to be very clear about is the basic understanding of how the policy works and that it is agreeable to the parties.

The paying for two benefits and only receiving one question, reminds me of the arguments against Whole Life insurance vs Term Insurance. In many Whole Life or Universal Life insurance policies, there is a “cash-value” feature, in addition to the “death benefit”, but the insurance company (based on the way that most of these policies are set up) will only ever pay out one or the other, at the time of death, not both. Or if the policy holder decides to withdraw 100% of their “cash-value”, before death, from their policy, there again, that would terminate most of these types of policies and therefore the insurance company would never have to pay the death benefit. I say most because depending on the fine print, there could be policies which differ slightly from this norm, but in general, the majority of Whole Life or Universal Life policies will be terminated if you cash-out of them or surrender the policy for the policies cash-value.

So, here again, you’re (in theory) paying for two things and only end up with one. It seems to be more realistic that one could much more easily create a separate savings account or retirement fund for themselves, and purchase a stand alone Term Life insurance policy to cover their basic life insurance needs during times where their liabilities are highest and their income or savings is at it’s lowest point. But as one get’s older and their liabilities decrease, and hopefully their savings has increased, they will have less need for a reliance on life insurance to cover the unexpected financial loss. And that would be a workable solution for many people towards solving the Whole Life insurance dilemma of the paying for two things (life insurance & cash-value “savings”), and only getting one or the other when they bundle their life insurance with cash-value. However, with Critical Illness coverage, it’s a little more difficult to argue how one might get around this by separating the two. If you’re considering the need for Critical Illness coverage, there’s a good chance you’re concerned about the financial loss of income after such an event. If that is a chief concern of yours, then you may not have a sufficient savings to adequately provide for such an unexpected event. And if that’s the case, that is particularly the kind of problem that insurance is best suited to solve. So, I don’t see paying for two protections, in this case Critical Illness, plus Term Life and only receiving one in the end, to be much of a deterrent for adding the Critical Illness protection, if that is a major concern.  At least in the case of adding Critical Illness coverage to a Term Life insurance policy, it’s not a problem that could easily be solved with any other means (other than insurance). Sure, you could start a separate savings account to protect yourself for such events as an unexpected heart attack, stroke or cancer, but there is no way to predict when such an event might occur, or even if one ever will for that matter. That being said, the uncertainty would at least open you up to the possibility that it could occur sooner than later, and in that case you would not have had much time for the efforts of your savings to amount to very much.

In short, we believe that Critical Illness comes down to a personal choice. It’s not a problem that is easily solved (for most), by any other way, other than insurance. And for that matter, we stand by our original statement that Critical Illness insurance is a great product for anyone who is concerned over the financial impact of an unexpected health crisis.

If you’re one of those people who find themselves concerned over the uncertainty of their health in the future, let’s circle back to how one might add Critical Illness coverage to a customized insurance plan.

Critical Illness coverage is one of many different options within a special area of insurance called accelerated death benefit riders. You can think of policy riders as optional add-ons, they’re really just different options which can be added to your base life insurance policy to create a customized plan to fit your individual needs.

Is Critical Illness Coverage Right For Everyone?

It really depends on your situation and the level of risk that you’re comfortable with taking. Depending on your lifestyle, overall health, financial liabilities and concern for the future, it could be a wonderful fit and bring you a great deal of peace of mind.

For example, if you are married with children, and have a mortgage, you might be concerned that your mortgage could be paid on-time, should you face a major life threatening illness. Often times people who are in this situation find they are no longer able to continue working. This loss of income might be devastating to your family’s stability.  Even if you have planned to protect your family’s financial interests with a life insurance policy, you might still be concerned over what would happen should you face a long and drawn out illness? How would your bills be paid? What impact might this have on the quality of your life and well being as you cope with the treatments and therapies?

Each of these are deeply personal questions that each person may answer very differently. We understand, and this is why there is no one size fits all solution.

 

Should I Consider Critical Illness Insurance?

Everyone’s situation is different so it’s hard to say, but it is certainly worth considering. I doubt anyone who added, then found out they were facing a critical illness would regret the decision. That’s the thing about insurance. One of the reason’s that  insurance as a concept has evolved over thousands of years is based on the uncertainty of the future. If you knew without a doubt that you would never face a critical illness situation, then of course you would decide to pass on it, but who can say what the future holds? Then there’s the other individual aspect of the cost. The payout and the premiums will be different for different people, based on many risk factors. This is why we say, it certainly can’t hurt to inquire and check it out. You may review your quote and after weighing your options, decide the peace of mind is well worth the monthly premium. Whether single or married, if you have family members who are depending on your salary, it may be exactly the answer that you’ve been looking for to offset the risk of financial uncertainty.  But no one can answer that question, but you. 

How Much Coverage Is Enough?

Again, this is a personal question that only you will be able to answer, but I would encourage you to think about your financial obligations, do you have a mortgage, what kind of debt do you have? Is it a lot or a little? Have you made promises to your children that you’ll want to make sure you’re able to fulfill?

How Would The Payout Work? Is it Percentage Based?

Generally, most critical illness coverage pays the full policy amount. That means you’ll receive the full benefit no matter how significant your illness is rated. However, some plans that do payout based on the seriousness of your illness, so be sure to inquire for specific details about the plan that you’re considering.

Which Illnesses Are Covered?

Each policy can be different so be sure to refer to your actual policy and underwriting agreement for clarification, but common illnesses which are normally covered include cancer, heart attacks and strokes. Depending on the underwriter you may have an option to add some additional illnesses to this list as add-on coverages. Be sure to ask your agent about which illnesses would apply with respect to coverage, and which illnesses would not be included in the coverage.

Other possible illnesses which you may want to inquire about, may include the following: 

  • Major organ transplant
  • Deafness
  • Traumatic head injury
  • Parkinson’s disease
  • Bacterial meningitis

Critical illness and terminal illness are not the same. Terminal illness is any illness where the person who has received the diagnosis is not expected to live beyond 1 year from the date of the diagnosis. Critical Illness is an illness which could be life threatening, but doesn’t necessarily have to be. It could just mean you’ll have to adjust to lifestyle changes based on therapies, surgery or other factors which impact your life as a result of the illness. Not all illnesses qualify as “critical illnesses”, be sure to ask your agent and/or check the details of your critical illness policy.

Medical History & Risk Assessment

Insurance companies have to base their pricing based on risk. Don’t be offended or surprised to provide the insurance underwriter with answers to their questions with regard to your medical history. This is the only way that they’ll be able to provide you with an accurate price. Your monthly premium cost is based on a complex formula which they use to determine statistically how much to charge. Make sure you are completely honest in filling out your application, with regard to your medical history. If you are not honest, and they find out you did not provide an accurate answer, or worse that you lied or deceived them, this could result in the insurance company not paying the claim. You would not want that to ever happen, and it’s easy to avoid this by simply making sure that you provide a completely honest answer, when completing your Critical Illness coverage application.

Speak with a licensed agent today. We're here to answer all of your questions.

Start Your Life Insurance Quote Today

Choosing the insurance coverage for your family is a great way to protect your loved ones. Our licensed agents are here to help. Contact us today to get answers to your insurance questions. 

By Samantha DevaneLife Insurance

The History of Insurance

Topics Covered On This Page: Click on any of the links below and proceed to the section.

Who Created Insurance?

Have you ever thought about who came up with the idea of insurance? Let’s look at the history of insurance and how it evolved into the financial protection that billions have come to rely on today. You may be surprised to learn that insurance as a concept dates back several centuries. 

Have you ever heard the phrase, “safety in numbers”?  Our ancestors knew this back when they hunted as a group, or built villages and tribes. In most cases, as the group increased, so did their individual odds of survival. If we think of it, limiting risk and spreading the risk of injury to any one particular member isn’t all that different than what insurance companies provide for us every day. 

As time progressed, we developed more sophisticated ways of calculating and found new ways to determine more accurate probabilities.

A Pascaline signed by Pascal in 1652

In 1645 Blaise Pascal presented the worlds first calculator to the public (which he called the Pascaline) and went on to build approximately twenty more machines during the next decade. Nine of Pascal’s adding machines have survived to this day and most are on display in European museums. In1654, he teamed up with Pierre de Fermat, and together they laid the foundations for probability theory. Together their new found theories helped to transform the world of insurance and underwriting (we’ll dive deeper into that topic a little later), leading the way for more affordable insurance through the use of more accurate predictions of potential financial losses.

Science and business have a long history of working well together, and have contributed greatly to the success of the societies who have taken advantage of this teamwork. Where would Tesla be without a predecessor like Henry Ford, or so many of our must-have electronics and gadgets, without the ideas and electricity of Thomas Edison? Science and business do go well together, and the development of mathematics as a technology is no exception.  

Statisticians use the science of data to make informed decisions, and insurance companies are but one example of putting this science to a practical use in business, and our lives today are a whole lot less risky as a result.

Just imagine the financial impact of a few of these examples:

1. Having to pay the collision repair bill for every fender bender, in a world without auto insurance.

2. Having to pay cash for every medical emergency and operation, without health insurance.

3. What about owing the bank for the total balance of a mortgage for your home that accidentally catches fire and burns to the ground because there was no such thing as home owners insurance?

4. What about a family with several small children that’s struggling to survive the devastating financial loss of a parent, because there was no such thing as life insurance?

These problems are just as real and practical as the shoes on our feet or the refrigerator in our kitchens. We may not think about them all that often, but lucky for us, someone who came before us did. And today there exists some form of insurance for each one of these situations and a whole lot more.  

We hope you enjoy our brief overview of the history of insurance, and we look forward to assisting you with your insurance needs. 

King Hammurabi's Code

The Code of King Hammurabi Photo from A side view of the stele "fingertip" at the Louvre Museum
Attribution: Rama

According to researchers the ancients had their own form of insurance. It was during the time of King Hammurabi of Babylon, who reigned from 1792 to 1750 B.C., where we find a written record of the nascent roots of financial protection for debts.  

King Hammurabi had a very large, pillar shaped, black stone slab erected with 282 laws written on the stone. A partial copy of the well preserved text exists on a 7.4 ft stone carved into the shape of an index finger.  The ancient Babylonian monument in which the code was inscribed remained undiscovered until 1901, when it was found by modern archaeologists.

King Hammurabi was the sixth king in the Babylonian dynasty (present day Iraq). The 282 rules in his code of laws, determined the standards in commercial interaction, as well as the fines, penalties and punishments for breaking them. Nearly half of the code deals with matters of contract, establishing the wages to be paid to an ox driver or a surgeon for example. Other provisions set the terms of a transaction, the liability of a builder for a house that collapses, or property that is damaged, among many other rules for their society. It’s also where we get the famous phrase, “An eye for an eye, and a tooth for a tooth.” line.

While it may not necessarily resemble insurance in the way that we think of it today, his code of laws would have most certainly been valued and appreciated as a legal means of financial protection, like insurance is today, for those who lived and benefited from it’s creation.

For example, Under King Hammurabi law, a debtor was not required to repay a loan, in the event of a catastrophe which resulted in the repayment being out of the question, such events would have included earthquakes, flooding, disability, or death.

Who Is Caius Marius

All Roads Lead to Rome - Graphic Illustration of a pack packer looking at road signs which all read Rome but point in different directions. It's supposed to be a little humorous representation of the concept. It’s been said, that all roads lead to Rome so you may not be surprised to find that our journey to the origins of insurance has taken a turn down one of the ancient roads of Rome.

According to the religious beliefs of many Roman soldiers, if one wanted to find peace with their soul in the afterlife, certain burial rituals were required. And for this, Caius Marius, a Roman military leader, started a burial club where members would each contribute monthly payments that would cover the cost of these elaborate burial ceremonies for its members.

While it may not have been known by the same name, the concept is very similar to what we have come to know today as, life insurance.

The Guild System Protected its Members

As time progressed, other societies developed methods to offset their financial burdens and attract new members to their trade. And that brings us to the Middle Ages where the British Trade Guilds practiced a form of group insurance to support & protect its members. Especially, among the larger, more established Guilds.

Most craftsmen started as apprentices in their youth working for little or no pay to learn their craft from a master craftsman. Upon attaining mastery, they would pay dues to the guild, hire and train their own apprentices and the cycle would again be repeated. In exchange, the guild would provide financial protection and ensure the master’s business would survive unfortunate events such as robbery, injury, fire and even death.

The more established guilds would also provide financial support for the master’s family. Again, it may not have been called life insurance at the time but the concept was there, and from its humble beginnings, we can see that our ancestors thought about and dealt with very similar issues to those that we face today in modern times.

Insurance Sets It's Sail

In the late 1600’s ships were just beginning to set sail and trade between the Old World of Europe, to the new and exciting lands, which they called the New World.
Located near the docs of London, were coffee shops where many of the men from these long journeys would gather and swap stories.

Sounds a little like the modern coffee shops of our time, doesn’t it?

I can close my eyes and just imagine the delicious aroma of pumpkin spice latte in the air…

Hang on a second, my imagination may have run wild there for a bit, but I can most certainly imagine the smell of fresh ground coffee in the air, and a room full of laughter and roaring voices telling fascinating stories of the sea, complete with their adventures of the new and far away lands.

I can hear conversations buzzing with excitement, while members of the community listen with great interest to capture more about this mysterious place called, the New World.

Today, we get together on social media to view and share our exciting discoveries, tall tales, travel and adventure, and of course entrepreneurial experience (I’m sure social media has already taught you how to make a million dollars online while you sleep), but for those who lived in London in the late 1600’s, and wanted to get their news first hand, there was no better place to be than the local coffee shops along the ports of London.

Hot coffee, wonderful stories and tall tales were not all that was going on in these coffee shops. This was also a great place to talk business and find venture capital for funding new voyages.

The late 1600’s were an exciting time to be alive. The maritime merchants understood the financial risk for sailing to the new world were high, but they also knew their potential rewards were high. The colonies were forming in the New World, and full of new and rare and exiting finds of cargo, like tobacco, that were starting to make their way back to Europe.

The local smart business investors smelled more than coffee brewing, they smelled opportunity. Not only were there excellent merchandise opportunities to bring home for a nice profit, but there was a growing population of colonists who relied on the transport of goods and supplies from the Old World to the New World.  However, merchants wanting to sell their goods faced the pressure of possibly losing everything in such a voyage. The mariners and ship owners risked losing even more, their very lives, as well as their fortune if they lost their cargo in route.

The coffee shops played a vital role in shaping the future of such voyages as well as the risks to all concerned. And they even eventually formed the foundations of the unofficial stock exchange for the British Empire.

There’s one coffee house in particular that we want to focus on, and the owner of that shop was none other than Edward Lloyd. In 1769, a small group of men formed New Lloyd’s Coffee House, which later became Lloyd’s of London. It became known as the place to go for ship owners and merchants seeking insurance. It was a gathering place for those needing insurance and those offering insurance, it eventually became a leading insurance marketplace. Lloyds of London is the oldest and most successful insurance marketplace to this day.

The vessel owners who understood how to navigate and sail to the New World could now afford to fund their trips through the help of their financial backers (venture capitalists), who would in turn receive a share in the returning goods and cargo brought back from the colonists of the New World.

The ship owners and merchants who wanted to sell goods to the New World would bring their ships manifest to Lloyds. Those willing to invest could read the list of items to be carried and sign their names to the bottom of the list, next to a figure representing the amount of cargo for which they would bear financial responsibility.


UNDERWRITING

They were literally “underwriting” the ]voyage by writing their names under the list of cargo on the ship’s manifest document. These businessmen also practiced underwriting multiple vessels of cargo to help spread their own financial risk of loss.

It took a long time to get to where we are today, but as you can see, the rest is history. A new business practice was born through the underwriting of maritime ventures. Today, we simply call this practice, getting or buying insurance. 

Speak with a licensed agent today. We're here to answer all of your questions.

Choosing the right life insurance coverage for your family is a great way to protect your loved ones. Our licensed agents are here to help. Contact us today to get answers to your important life insurance questions. 

By Samantha DevaneLife Insurance

How Does Life Insurance Work?

At first glance you might be wondering how life insurance companies are able to stay in business. You might be wondering since everyone eventually dies, how a business could be created that involves paying out large sums of money to their survivors?  It doesn’t really sound like such a great business plan, right?

When you consider the hundreds of thousands or even millions of dollars paid upon the death of a loved one, it’s a valid question. Especially in comparison to the modest monthly payments (premiums), paid by their customers.

And before too long, these questions could lead to more questions such as, do insurance companies really make good on their payments? Do they just look for legal loopholes to get out of paying? These are all great questions, and together we will have a look at them, in today’s post below. 

 

Topics Covered On This Page: Click on any of the links below and proceed to the section.

Life Insurance 101

Life Insurance 101

You might be familiar with the basics of life insurance, but perhaps you are unclear about how it would pertain to certain situations.

First, let’s say from the outset that each policy is governed by the contract and terms of your agreement with the underwriter. That is to say the company who will be responsible to pay the death benefit, should the insured die, while the policy is in effect. And without reading your policy, it’s impossible to truly know what might be excluded. Because life insurance policies can be confusing and complicated, it’s best to review and discuss your policy questions with a licensed insurance agent. 

Term Life Insurance

TERM LIFE INSURANCE: Term life insurance provides a death benefit protection for a limited period of time. Since periods of time can be broken down into terms, such as years, months or decades, the label fits quite well. Term insurance is limited to a certain term period or unit of time.

In general, this is the simplest form of life insurance, and we will use term insurance as a starting point into the introduction of life insurance types. To get started, you will complete a life insurance application, your application will be submitted and reviewed by the underwriter, and if accepted, your policy will be effective so long as you don’t violate any of its terms and conditions.

And of course that would include making your monthly or annual premium payment on-time and as agreed. As we’ve already outlined above, with term insurance, Graphic Illustrating long period of timethe person buying the insurance will normally pick from a selection of terms or time-frames. This represents the amount of time for which you would like the insurance protection to be in-force. For example, you might select a 5 year term, 10 year term, 20 or even a 30 year term. Different companies may offer different term options. Be sure to inquire with your agent about the policy protection term limit options which are available to you. Once you sign and make your initial payment towards your term life policy, your insurance will be in effect from the date your application is approved, until the full term of your policy has passed. And when the term is completed, your policy will expire. At which point, you will no longer be insured by the policy. When your term policy is over, that’s it. There is no accumulation of cash or value in a policy such as this, as it’s a very simple and straightforward type of life insurance. If you die while covered under the term (time frame) of the policy, you’ll be protected and when the policy expires, that protection ends. 

Whole Life Insurance

Piggy Bank savings illustration for whole life insurance concept.WHOLE LIFE INSURANCE: As the name implies, this type of insurance is not limited to a certain “term” but is designed to protect you with a death benefit for your entire life – your “whole” life.  Additionally, whole life insurance falls into the category of life insurance policies which build up cash-value. Some people think of this as a form of savings. There are different names for this type of life insurance, and some of the names for this type of coverage include: Whole Life Insurance, Universal Life Insurance, or Permanent Insurance. Since these types of life insurance policies include the accumulation of cash-value, you may have some redemptive value to your policy, should you decide to cancel it before you die. Insurance with cash-value is more expensive than term insurance, and if you’re interested in learning more about how it works, be sure to ask your agent and they’ll be happy to review all of your options. 

Protections & Caveats

There are generally provisions to protect the life insurance company built into the agreement, such as a suicide exclusion – most would agree, it wouldn’t be fair for the life insurance company to be responsible to pay the death benefit in a situation where someone rushes to purchase life insurance with the intent to end their own life to solve an immediate financial problem for their family. Therefore, most policies have a two year exclusion on such events to help protect the insurance companies financial interest, their ability to pay claims and to not provide a financial incentive for those who are financially desperate and/or suicidal. Additional protections for the underwriter also will include things like making sure the applicant is bound to be honest on their application. In order for a contract to be legally enforceable, it’s important that the parties of an agreement act fairly with each other. It’s certainly not fair for one party to lie or be dishonest with the other, especially when entering into a legal agreement. Dishonesty and deception in business are fraudulent behaviors and when discovered and proven are often a legal deal breaker. Being dishonest could certainly provide a defense for the insurance company to refuse payment. For that reason, it’s very important that you always answer any of the questions found on an insurance application accurately and honestly.

But, no matter which type of life insurance you decide is right for you, it’s always very important to be sure you complete your application honestly.

What About The Cost?

You might be asking what kinds of factors determine the cost or amount of the premium that one might pay for their life insurance policy? The price an individual pays usually depends on many factors. Some of those include the following:

Life Insurance Cost Illustration of a balance bar with heart on one side and bag of money on the other.How old are you? Age makes a big difference in determining risk when it comes to life insurance. Since life insurance companies are very interested in understanding the average lifespan for men and women. The older we get, the more likely we may experience a medical issue and possibly death. Obtaining insurance early and locking in for a longer term is a wise choice. If you can purchase before the age of 40, that would be highly recommended. Applicants between the ages of 30 to 39 are rated in a different lower risk category than those over 40. This lower risk generally means you’ll be able to lock in at a lower premium and for a longer term.  And if you wait until you’re over 60, not only will the cost be more expensive than when you were younger, but you’ll likely find your options for the longest term policies, are no longer available.

Daily Choices in Lifestyle
If you’re overweight, or a heavy drinker, this can lead to health issues. And those issues will place you in a higher category of risk for death since they shorten one’s life expectancy. Making healthy choices can not only help you live longer but they can help you save money on your life insurance premiums.

Are You Healthy and In Good Shape? 
If you have a pre-existing medical condition, that can have an affect on your life insurance premium cost. Some conditions such as being diagnosed with cancer, may prevent your ability to purchase life insurance. Insurance companies don’t generally issue a policy to someone who’s currently undergoing cancer treatment. If they do decide to approve your policy, it may be more expensive, they may require your cancer screenings to be negative for a certain period of time and your coverage may be limited.

Family Medical History
If your parents have a history of chronic medical conditions, that can play a role in determining your risk for insurance. For this reason, don’t be surprised if a life insurance company asks you to share with them information about your parents or siblings medical history.

What Kind of Work Do You Do? 
Are you a trapeze artist, does the guy at the state fair throw knives at you all day? If you’re line of work is considered dangerous, you may have to pay more than someone with a less risky job. A more realistic comparison of assessing modern job risk may be comparing a skydiving instructor to an office manager. So be prepared to provide an honest description of your employment, which will allow the underwriter to assess the risk of your work and how it might impact the cost of your policy.

Are You A Smoker? Do You Use Smokeless Tobacco? 
Smokers have increased health risk over their lifetime in comparison to non-smokers. If your’e a smoker, you can expect to pay more for life insurance than a non-smoker. This also includes vaping and any other tobacco related products like chewing tobacco (sometimes referred to as smokeless tobacco).

How Long of A Life Insurance Term Do You Want or Need?
The longer the term, the higher the chances that the life insurance company may have to pay a claim. For this reason, longer terms are more expensive than shorter terms. But keep in mind, locking in a longer term at a younger age, would be much better than waiting until you’re older to obtain a shorter term. And a 30 year term may be quite affordable if you’re still under 40. The best way to know is to submit a request for your personal life insurance rate quote today. Another reason to lock in for longer terms while your younger is to protect yourself from future health issues that could prevent you from being able to obtain life insurance, as well as save you a lot of money from the costly expense of increased premiums. As we age, we may develop chronic illnesses, and these must always be disclosed on a life insurance application. These kinds of disclosures could put you into a higher risk group which would affect the cost of your premiums. Locking in a lower life insurance rate while you’re young and healthy, and for a longer term, is our recommendation for saving money and making sure that you have the life insurance protection you need in place. 

How Much Coverage Do You Want?
This may sound obvious but choosing a higher death benefit (1 Million vs. $5k for example), will result in more expensive life insurance premiums.

Don’t sweat the details over how your application might compare to others. Insurance companies are in the business of writing policies, and for the most part, they’re always looking for new business. So, if you’re a smoker, overweight, have some family history of medical conditions…whatever the story is, we encourage everyone to not over think the application process. It is what it is. The underwriter has a process for assessing risk, and in the end, you may end up paying a slightly higher amount than the next person, but the important thing is, you’re insured.

Financial Planning Concept

One last thought, for those looking at the more affordable option, term life insurance, but concerned about not having a built-in cash-value feature like those offered in a traditional whole life insurance policy. If you’re young, let’s say in your 30’s or even older in your 50’s, and you lock in for the longest term you can, if that’s a 30 year term, great, if it’s only 15, go for that, but in this example we’re going to select the longest term we can get. Next, you’ll want to focus on saving money. If you’re older, you’ll have to be much more aggressive and save a whole lot more of your income, since you have less time to accumulate. If you’re younger, save as much as you can, but at least you do have time on your side. The key to saving when you’re young is time and consistency. You can choose a flat monthly amount to contribute to your savings, or a percentage of your total income each month to save. Either way, pick a method and stick with it for the long haul. If you select a flat dollar amount to save each month, keep in mind that as your income increases, so should the dollar amount that you have selected. You might start off with only being able to save $25 or $50 each month, but over time, you’ll find you can increase that amount to $100, $200 or much more. The most important thing is to remain faithful and disciplined over the years as you save for your retirement. 

Many people find saving a certain percentage of their household income each month to be a great way to calculate how much to save, such as 10% or 20%. If you’re older, you may need to save 50% and find ways to drastically cut your expenses and spending in order to meet your savings goals. Which is why it’s very important to start today. No matter how old you are currently, it’s the youngest that you’ll ever be. The idea is that today while your savings is low, your term insurance would cover you with life insurance, should you pass away before having sufficient time to build up your own savings account.

Also don’t just “save” money by purchasing the lower cost term insurance and blow the rest of your monthly income on entertainment or frivolous spending. You only truly save money when you actually find ways to invest the difference of what you could have spent. Savings happens when you purchase or invest into assets that will retain or appreciate in value over time. If you decide to go with the less expensive life insurance alternative, be sure you put away the money you would have spent had you purchased the more expensive forms of life insurance that include a built-in savings feature, such as a whole life or universal life policy.

With term insurance, having a 15 or 30 year term may temporarily cover all of your financial liabilities while you’re building your savings for retirement, but you’re going to need a savings account for when your insurance runs out, right? Of course you will.

While you’re younger and have higher liabilities such as mortgages, loans, kids to send to college, etc, and you’re building up a savings and/or retirement account, the less expensive term life insurance will be there in case your plan to live a long life doesn’t work out. I know, not a popular thing to say, but it’s why insurance exists in the first place. To protect us from the unexpected. 

You don’t want your spouse and children to suffer as a result of not taking the time to protect them with an affordable term life insurance policy. Then, when you’re older, as long as you saved and planned for the future, and depending on how well you did at saving, you could have plenty of savings built up and no longer need life insurance when you’re older.

If you do choose to have a whole life policy and make payments until your last day of living, that’s up to you, but we have a few things for you to keep in mind. First, that could mean making payments for a very long time, since some people even live past 100 years old. Second, the premiums are normally a lot more expensive, since the policy includes both savings and insurance for the longest term possible (until you actually die, i.e. whole life).

We want you to know that you do have choices, but which ever type of policy that you decide on, be sure to check the terms of any investment or savings “type” bundled life insurance policy very carefully. Most of the whole life and universal life insurance policies, only pay one or the other. This means your family (or whoever the named policy beneficiary may be) will either receive the death benefit or the built up savings but not both – usually whichever is the greatest amount.

So if you have $100k in the savings portion of your insurance policy, and you have $100k in the death benefit portion, your family will likely not receive both portions (the total of $200k), but only one or the other. However, if you save your own money separately (and do not mix it into your insurance policy), but purchase the lower cost term insurance policy, you will always be able to have access to your own separate savings or retirement account, which has nothing at all to do with your life insurance policy. Does this make sense? We encourage you to call us with your questions. Use the forms on this page to reach out, and a licensed agent will speak with you directly and help you navigate your life insurance needs.

If you’re wondering about where to save or what to do with your savings, that is beyond the scope of this article, but if you’re not familiar with retirement accounts, do some research on “how to set up an IRA” or “Roth IRA”, those search terms will provide you with a place to begin. And if you decide to purchase the less expensive term insurance to cover you while you’re younger, and your savings is probably lower but your bills and balances are higher, you’ll probably sleep a little easier at night knowing you’re family has the financial protection provided by an affordable term life insurance policy that should last (if you can get a long enough term) until you’re savings has built up enough of a balance to carry you through old age.

Keep in mind, this is not financial advice and not a substitute for speaking with a licensed insurance agent. We’re not offering legal, financial, medical or tax advice here in this blog post. We’re only sharing our opinion and we encourage you to call and speak with a licensed agent or to simply do your own research. Each person’s situation is unique and different so it would be impossible to provide a custom answer for each person who may be reading this post. We look forward to hearing from you and helping to answer your life insurance questions by phone. Feel free to use the form on this page to get your life insurance quote started today. 

Illustration of life from start to finish.

Most financial advisors suggest that making a buying decision before turning 35 is best. Since the premium cost will increase once you reach this age. And that’s not all. Just look around and I’m sure you can see that as people start to age, some start to experience health problems. If you wait too long, like over age 65 you may find it difficult to obtain insurance, and if you do, you may be very limited with regard to the term…that’s the number of years that the insurance company is willing to extend you coverage and lock in the pricing.

So, there you have it. Our best tip for you today is, you’re not getting any younger – carpe diem! Seize the day and speak with an agent. If you click on the button below, an agent will be glad to work with you one on one and make sure you get the answers you are looking for and the right policy for your budget and families needs.  

Speak with a licensed agent today. We're here to answer all of your questions.

Choosing the right life insurance coverage for your family is a great way to protect your loved ones. Our licensed agents are here to help. Contact us today to get answers to your important life insurance questions. 

By Samantha DevaneLife Insurance

What’s the Best Age for Buying Life Insurance

Young people live busy lives and one of last things on a young persons long list of things to think about is…well, dying. Right? We get it, it’s not a favorite topic at any age. Let’s take a few minutes and consider at what age adults, and young adults, should consider purchasing life insurance.

 

Am I Too Young For Life Insurance

If you’re like most young adults, you may be thinking…I know that I will eventually need to think about life insurance, but I’m not sure that day is today. You might even start taking the question more serious after completing a few of life’s major mile stones, such as, buying your first home, getting married or having your first child.

These kinds of life events do add a certain amount of weight to a persons stack of responsibilities. I think we can all agree on this. But even still, the question lingers for many.

And even with these kinds of added responsibilities, many times the idea of purchasing life insurance becomes something that we put off due to other financial constraints. Things like paying off student debts, or waiting until we get a higher paying job, and many other reasonable enough excuses to help us feel better about kicking the can down the road a bit.

While some of these ideas may sound convincing, they do not change the facts concerning “when” the best time to buy life insurance happens to be. So if there is a good, better, best time to buy, when is it? We’re glad you asked 🙂 and even more, we’re glad you stuck around so we could help explain it.

First, everyone’s situation is unique and while we can provide some high level input for your consideration, our objective here is to simply get you thinking and hopefully to take action to click the button below to speak with an agent that can really help you on a personal level to answer this question and ultimately assist you with finding the right policy to fit your budget, while better securing your loved ones future with financial protection at the same time. So take our blog post with a grain of salt. It’s not a substitute for financial advice and it is not legal advice either. We can’t bind or sell you a policy through the website, you must speak with a licensed agent to walk you through the application process. 

Illustration for agingLife insurance is directly tied to age. In insurance speak they call this being age-banded. In plain English it means as you age, you are a higher risk so the price is broken down into different layers or “bands”. Younger bands are at a lower risk of dying so they get the best pricing. The older you become, obviously the more likely you are to die so those bands are more expensive. The bottom line is, if you can purchase when you’re younger and lock in a longer term like 30 years, you’ll save a lot of money over the years as opposed to waiting until you are older and in a higher risk and price bracket. Of course you could lock in for 10 or 20 years but generally speaking, the earlier and longer the term you lock in the better. You could always just cancel or stop paying. By locking-in your rate, we don’t mean to imply that you can’t change your mind. It simply means that when you sign up, you ask your agent for the longest term available. They’ll provide you with a quote and if that sounds affordable and manageable, you can sign up and be covered. As long as you continue to make your payments, you’ll be entitled to keep your policy in effect, until it reaches the maturity date and expires. Which again, ideally would be 30 or 40 years from now.

seize the day carpe diem graphic

Most financial advisors suggest that making a buying decision before turning 35 is best. Since the premium cost will increase once you reach this age. And that’s not all. Just look around and I’m sure you can see that as people start to age, some start to experience health problems. If you wait too long, like over age 65 you may find it difficult to obtain insurance and if you do, you may be very limited with regard to the term…that’s the number of years that the insurance company is willing to extend you coverage and lock in the pricing.

So there you have it. Our best tip for you today is, you’re not getting any younger – carpe diem! Seize the day and speak with an agent. If you click on the button below, an agent will be glad to work with you one on one and make sure you get the answers you are looking for and the right policy for your budget and families needs.  

Speak with a licensed agent today. We're here to answer all of your questions.

Choosing the right life insurance coverage for your family is a great way to protect your loved ones. Our licensed agents are here to help. Contact us today to get answers to your important life insurance questions. 

By Samantha DevaneLife Insurance

5 Reasons to Buy Life Insurance

Life insurance may not be something that you think about every day, but there are few things in life that can do exactly what life insurance does. Let’s take a look at some of the top reasons and benefits for owning a life insurance policy, and why you might consider speaking with a licensed agent today to purchase life insurance. 

 

Life Insurance Provides Resources

The number 5

Life insurance can provide financial relief to your loved ones when faced with unexpected circumstances. Often times we are caught off guard when we lose a family member or close friend, and this should serve as an excellent reminder to all of us of the importance of planning ahead so that our loved ones left behind have the resources needed in order to carry on and not struggle financially. If there is one take away that we would like to impress upon you with this article, it would be for you to consider making precautionary plans by speaking with one of our licensed agents who can help you compare life insurance plans, and find the coverage to provide the financial resources that your family deserves. 

Flexibility, Time and Lifestyle Options

The number 4We’ve all heard that money doesn’t buy happiness, but poverty certainly doesn’t either.
How many people truly want to go hungry, live on the street, or drive a car that breaks down more than it doesn’t?
I don’t know about you, but money does solve a lot of those kinds of problems and frustrations in my life. And while it may not buy happiness, it will buy a lot more happiness than poverty. Money can provide a safe place to live and roof over your head, put food on the table, and help send your kids to college. So no, money isn’t everything, but there are few things in life that can take the place of money.

We understand that it doesn’t truly buy happiness, or wipe away the tears of sadness, but what it does bring is something called options. Specifically, it brings options for the family that recently lost a father or mother and the income they are accustomed to contributing towards the families expenses.
This loss of income, could mean the difference between downsizing into more affordable housing, or possibly even moving in with family members. It’s hard to imagine how much our families lives might change if we were no longer in the picture, but having access to the money that a life insurance policy can provide, could make the difference in your families ability to manage paying their bills or being left in a desperate situation. 

Promises Kept

Number 3Life is a lot of things, but the one reality that we must accept is there are no promises that we will be here tomorrow. We don’t even have the promise of today. So, when we make promises to our kids and spouses about future plans, dreams and ideas we base them all on a major assumption. And that’s based on our being around to fulfill them. But in spite of life’s uncertainty, there is a way that we can provide the resources that are often needed to help make those plans and dreams a reality for our loved ones. And that resource is called life insurance. It is what it is, and it doesn’t really have to be all that complicated. Simply click on the button found on this page, and we will connect you directly with a licensed agent who will help you put together a plan to make sure your family has adequate financial protection and that your promises are kept.  

Life Insurance Is For Those Who Survive The Loss of A Loved One

If you’re alone in this world, chances are you may not think much about a need for life insurance. You may even think, what does it matter…I won’t be here to worry about it. And to a degree, you’re right. But even if you are single and have no children to provide for, there is the cost of tidying up your own financial obligations with those who you have done business with, as well as providing for your final arrangements without being a burden on friends or parents to pick up the tab for your burial expense. However for most, there are loved ones to think about. Millions of us have spouses, children and significant others who depend on our financial contribution every month. And when that contribution is lost, it’s potential to leave a huge gap in their lives is a real and present reality.

When you think about the hurt that they’ll be experiencing, and how limited the choices are that you have for providing comfort from beyond the grave, you may consider that a well planned life insurance strategy could make all the difference in the world to how their life proceeds. So, in the end, it really is about the survivors. And one of the major considerations we have to think about is those who we will leave behind.

Life Insurance Can Help Protect & Take Care Of Those You Love

The number 1Life insurance can provide financial resources when you or your loved ones need them the most. In the event of an unexpected loss of a loved one, or even if it’s a long drawn out sickness, either way, losing a family member, life partner or significant other, can produce a real strain on us emotionally, as well as financially. And working through all of the choices and decisions for burial, combined with making tough financial decisions when it comes to paying for and making final arrangements, can definitely be an overwhelming process. This is only the beginning of the financial challenges which families and loved ones face when dealing with the loss of life. After the funeral, the car payments and mortgage payments continue. If there are young children, then even more challenges will be faced with childcare, after-school care, athletics, piano lessons, field trips, graduation parties, college and marriage. There are many unexpected and unplanned financial obligations that a surviving spouse with children to raise will ultimately face. In the end, having life insurance can help reduce one’s financial burdens which ultimately can provide comfort to those who are left behind to carry on with life.

Life Insurance Provides Resources

The number 5


Life insurance can provide financial relief to your loved ones when faced with unexpected circumstances. Often times we are caught off guard when we lose a family member or close friend, and this should serve as an excellent reminder to all of us of the importance of planning ahead so that our loved ones left behind have the resources needed in order to carry on and not struggle financially. If there is one take away that we would like to impress upon you with this article, it would be for you to consider making precautionary plans by speaking with one of our licensed agents who can help you compare life insurance plans, and find the coverage to provide the financial resources that your family deserves. 

Flexibility, Time and Lifestyle Options

The number 4
We’ve all heard that money doesn’t buy happiness, but poverty certainly doesn’t either.
How many people truly want to go hungry, live on the street, or drive a car that breaks down more than it doesn’t?
I don’t know about you, but money does solve a lot of those kinds of problems and frustrations in my life. And while it may not buy happiness, it will buy a lot more happiness than poverty. Money can provide a safe place to live and roof over your head, put food on the table, and help send your kids to college. So no, money isn’t everything, but there are few things in life that can take the place of money.

We understand that it doesn’t truly buy happiness, or wipe away the tears of sadness, but what it does bring is something called options. Specifically, it brings options for the family that recently lost a father or mother and the income they are accustomed to contributing towards the families expenses.
This loss of income, could mean the difference between downsizing into more affordable housing, or possibly even moving in with family members. It’s hard to imagine how much our families lives might change if we were no longer in the picture, but having access to the money that a life insurance policy can provide, could make the difference in your families ability to manage paying their bills or being left in a desperate situation. 

Promises Kept

Number 3

Life is a lot of things, but the one reality that we must accept is there are no promises that we will be here tomorrow. We don’t even have the promise of today. So, when we make promises to our kids and spouses about future plans, dreams and ideas we base them all on a major assumption. And that’s based on our being around to fulfill them. But in spite of life’s uncertainty, there is a way that we can provide the resources that are often needed to help make those plans and dreams a reality for our loved ones. And that resource is called life insurance. It is what it is, and it doesn’t really have to be all that complicated. Simply click on the button found on this page, and we will connect you directly with a licensed agent who will help you put together a plan to make sure your family has adequate financial protection and that your promises are kept.  

Life Insurance Is For Those Who Survive The Loss of A Loved One


If you’re alone in this world, chances are you may not think much about a need for life insurance. You may
even think, what does it matter…I won’t be here to worry about it. And to a degree, you’re right. But even if you are single and have no children to provide for, there is the cost of tidying up your own financial obligations with those who you have done business with, as well as providing for your final arrangements without being a burden on friends or parents to pick up the tab for your burial expense. However for most, there are loved ones to think about. Millions of us have spouses, children and significant others who depend on our financial contribution every month. And when that contribution is lost, it’s potential to leave a huge gap in their lives is a real and present reality.

When you think about the hurt that they’ll be experiencing, and how limited the choices are that you have for providing comfort from beyond the grave, you may consider that a well planned life insurance strategy could make all the difference in the world to how their life proceeds. So, in the end, it really is about the survivors. And one of the major considerations we have to think about is those who we will leave behind.

Life Insurance Can Help Protect & Take Care Of Those You Love

The number 1
Life insurance can provide financial resources when you or your loved ones need them the most. In the event of an unexpected loss of a loved one, or even if it’s a long drawn out sickness, either way, losing a family member, life partner or significant other, can produce a real strain on us emotionally, as well as financially. And working through all of the choices and decisions for burial, combined with making tough financial decisions when it comes to paying for and making final arrangements, can definitely be an overwhelming process. This is only the beginning of the financial challenges which families and loved ones face when dealing with the loss of life. After the funeral, the car payments and mortgage payments continue. If there are young children, then even more challenges will be faced with childcare, after-school care, athletics, piano lessons, field trips, graduation parties, college and marriage. There are many unexpected and unplanned financial obligations that a surviving spouse with children to raise will ultimately face. In the end, having life insurance can help reduce one’s financial burdens which ultimately can provide comfort to those who are left behind to carry on with life.

Speak with a licensed agent today. We're here to answer all of your questions.

Choosing the right life insurance coverage for your family is a great way to protect your loved ones. Our licensed agents are here to help. Contact us today to get answers to your important life insurance questions. 

Speak with a licensed agent today. We're here to answer all of your questions.

Choosing the right life insurance coverage for your family is a great way to protect your loved ones. Our licensed agents are here to help. Contact us today to get answers to your important life insurance questions. 

By Samantha DevaneLife Insurance