Category: Term Life Insurance

Need Life Insurance? Be Prepared to Answer Financial Questions

Posted on by Nick Trawinski

When you requested your quote for life insurance online, you entered an estimate of how much life insurance you need. But is it accurate? And can you afford it?

Determining How Much Life Insurance You Really Need

Once you’ve submitted your life insurance application, it goes to underwriting for a process called Evidence of Insurability (EOI). This is where the insurance company conducts its due diligence to ensure they can afford to cover you and to establish a financial justification for the coverage amount you requested.

Life Insurance companies base EOI on two things: your physical well-being and your finances. In most cases you’ll have to take a medical exam or at least answer some health questions. That’s to be expected unless you go the no-exam route.

But your financial health is just as important as your physical health. While you could be in peak physical condition, you could be denied coverage if your financial health is failing.

Underwriters assess your risk, assess your beneficiary’s dependence on your income, and make sure you can afford the life insurance premium they assign.

Financial Information Requested During Your Life Insurance Application Process

So what will they ask about?

  1. You will have to tell the company where you work, what you do and how much you make. Life Insurance companies generally allow you to apply for 20-30 times your annual income if you’re relatively young and less than 20 times your income if you’re older.
  2. Your beneficiary. The company will want to know about the amount of hardship your death would cause your beneficiary. They want to ensure your beneficiary’s need aligns with the coverage amount you requested.
  3. You must provide information about assets like investments, alimony, real estate, and other income-generating products and activities.
  4. Other Life Insurance policies. If you have applied for other life insurance policies or are insured by other companies, you’ll need to disclose that.

If you justifiably disagree with the coverage you’re offered, you can negotiate. You want to be sure you have what you need and can afford to pay for it every bit as much as the company needs to be sure you’re a good risk.

Because at the end of the day, life insurance is about relationships. Your online life insurance quotes are the jumping-off point. The underwriting process determines if the relationship will go the distance.

Universal Life Insurance: The Most Flexible Life Insurance Option

Posted on by Nick Trawinski

Maybe you’ve never heard of Universal Life Insurance. Many people haven’t. For those who don’t want the restrictions that Whole Life policies demand but desire the benefits it’s known for, a Universal Life Insurance policy offers the flexibility and freedom other policies do not.

Understanding Universal Life Insurance

Like Whole Life, Universal Life provides lifetime coverage and cash value.

A Universal policy puts you in the driver’s seat as to how much and when you pay your premiums after your first payment. (Most companies do have a minimum requirement.)

It allows you to adjust your death benefit according to your shifting circumstances. For example, if your beneficiaries are less dependent on you for financial security, you can lower the death benefit—and thus your premium amount.

And like Whole Life insurance, Universal Life allows you to build cash value, which you can invest anywhere you wish. You can invest it in a wealth-building vehicle or use it to pay for your premiums, loosening your budget to spend your hard-earned money on other things.

However…

A Universal Life Insurance policy is vulnerable to market fluctuations. If interest rates don’t perform well, neither will your cash value. It could dwindle to zero or fall below your policy’s value. And if that happens, the insurance company will use your death benefit to pay the difference.

And if you miss a payment, which often happens as premium payment flexibility can lull you into a false sense of security, you will lose the policy and pay back any amount owed. Insurance companies depend on your premium payment to cover their costs of doing business. If those costs are higher than what you’ve paid in premiums or have in cash value, you’ll owe it back to your carrier.

But there is a way to protect yourself from this scenario.

No-Lapse Guaranteed Life Insurance Rider

You can purchase a no-lapse guaranteed rider on top of your Universal policy to protect it against unfortunate market dips and forgotten payments. This entails adding a minimum-amount premium with a set schedule onto the traditional Universal policy but it’ll keep you paid up even if you miss an unscheduled premium.

A No Lapse Guaranteed Universal Life Insurance Policy ensures your policy won’t lapse.

Riskier Universal Life Insurance Policies

Those with a higher tolerance for market fluctuations may consider Indexed Universal Life or Variable Universal Life, both of which build cash value quicker. They do need babysitting though as they are vulnerable to changes in the market and lapse-causing forgotten premium payments.

Universal Life Insurance: Pros and Cons

Armed with the basic facts, let’s examine the pros and cons Universal Life Insurance pose to someone considering buying Universal Life Insurance as opposed to Term Life or Whole Life.

Pros

• has the same benefits as Whole Life Insurance: lifetime coverage and cash value

• is less expensive than Whole Life

• offers more flexibility in how much and when you pay your premium

• gives you more control over where you’ll invest the cash value your policy provides

Cons

• is less expensive than Whole Life, but more expensive than other types of life insurance—especially if you opt for a No Lapse Guaranteed rider

• needs babysitting. If you aren’t monitoring your premium payments and investments, you could lose your coverage and owe the insurance company money.

As I said at the beginning of the article, while it’s called “universal,” Universal Life Insurance isn’t for everyone. But if you want the benefits but can’t afford Whole Life and have a risk-taker mindset, this type of policy warrants some consideration.

FREE QUOTE, Better Future through Life Insurance

Posted on by Nick Trawinski

Right now, just paying bills and providing for your family are top of mind for everyone. Which is as it should be.

The question is, how will the bills be paid and your family’s current lifestyle remain uninterrupted should you no longer be there to provide for them?

Unthinkable scenarios aside, life insurance is a spectacular investment vehicle for long-term wealth building.

But who has the time to conduct a life insurance rates comparison on the best types of life insurance out there with everything else on your to do list?

Life Insurance Quotes, Free & Simple

When online buying disrupted every other industry, life insurance saw the opportunity to not only make purchasing easier but to eliminate what buyers disliked most. High-pressure sales.

Gone are the days of going into an insurance office to haggle with a high-pressure salesman showing you insurance policies you don’t need and can’t afford. We don’t like that any more than you do.

You can instantly access several life insurance companies and their costs from your computer in one place at one time. Your options appear side-by-side so you can easily compare the quotes and features of each carrier.

For free.

It’s only after you’ve looked at the best life insurance options for you and your family that you are offered the opportunity to speak with a non-commissioned agent trusted to act only as an advisor—not a salesperson.

Armed with facts, you drive the conversation. And if you don’t want to speak to an agent, you can bypass that step and buy an online life insurance policy on your own.

Building Wealth Through Life Insurance

Start with Term Life Insurance.

Right now, your budget may be pulled in all directions with day-to-day living expenses as you grow your career and raise your family. Most people are.

Get term life insurance and make a start toward long-term wealth with an affordable term life insurance quote. A small investment of $25 a month for a 30-year term life insurance policy can yield wealth-building dividends later.

Transition to Wealth-Building Whole Life.

Whole life insurance builds wealth for your family with less risk, interest-bearing dividends you can use to invest in your retirement, your children’s education, or real estate. It’s yours to spend however you wish. And it provides lifetime coverage.

But the term policy you buy today can be converted into an investment vehicle down the road. The conversion will require no medical exam or health questions. Just a seamless transition from one policy to another.

Life insurance is so much more than a policy. It’s an investment in your future. And it starts with a tap or two on a keyboard for online term insurance. For free.

Hassle free.

Age Matters. Budget Your Time as Well as Your Money

Posted on by Nick Trawinski

Life seems so much easier for older people. They’re financially secure. They get senior deals at restaurants. They’ve already lived through most of their tough times.

But there are some advantages to being young besides great skin and the ability to lose ten pounds in a month: Like time.

If you’re in your twenties or thirties, you have years to relish the great moments that are ahead of you, plan for your financial future, and make a difference as well as make mistakes and learn from them.

You also have time to take advantage of life and financial advice from the older and wiser.

Timeless Words of Wisdom You’ve Probably Heard from Your Elders

A penny saved is a penny earned.

Learn to budget – and stick to it. A budget enables you to know where your money comes in and where it goes out. There’s no substitute for seeing it laid out in front of you in black and white.

Some other tips for sound financial planning while you’re still young:

  • Automatically put some of your direct deposit into a savings account.
  • Round up purchases and put the difference in savings.
  • Take advantage of that 401k your company may offer. It’s never too early to save for retirement.

Give yourself time to develop good financial habits. If you try to do it all at once you’ll give up. A small step a day builds a secure habit you’ll stick to.

But here’s something your grandpa didn’t have. Apps. Consider using one of the following financial apps to help you save more than you spend.

Money doesn’t buy happiness.

A daily Starbucks grand white mocha will cost around $2,000 by the end of the year. And daily lunches out will cost you $9,000 (Both of which would make a great down payment for your next car).

Speaking of cars, buy a used one that’s new to you – not a brand new one. Driving that shiny roadster with plush leather seats is tempting. But as we all know it loses value as soon as you drive it off the lot. You’ll lose money – especially if you’ve taken out a loan to buy it.

Used cars are just as reliable as new ones. Just have a mechanic check it out before you buy it. Or you could wait a year until the newest model rolls out and last year’s model becomes cheaper. Better yet, consider using public transportation and help preserve the environment.

Finally, Don’t spend more than you owe. Avoid credit card debt. Save for those things you want but can’t currently afford.

Things that are surprisingly cheaper for younger people:

Aways read the fine print. Always.

This is especially true with college loans. Look into scholarships or grants first before investigating subsidized federal loans. Federal loans have lower interest rates and repayment options. Some offer repayment plans based on income; others won’t charge you until you graduate. Only take out a private loan if you absolutely must.

And of course, reading the fine print applies to any form that’s put in front of you.

Eat your vegetables.

They’re cheap and will keep your premiums low.

Life insurance, health insurance and even travel insurance is cheaper when you’re young and healthy. Coupons for healthy food and household items are readily available.

Prepare for the unexpected (like if you do get sick).

Have an emergency fund and don’t touch it unless you absolutely need it. Shoot for three months’ worth of savings. Just a few dollars a month toward savings adds up.

Life is short. Live every moment as if it’s your last.

Invest in relationships as well as your financial future. Relish fleeting moments. And remember that mistakes are nothing but lessons learned. Just breathe. Make a gratitude list or two just to put things in positive perspective.

And get off your damn phone.

First COVID, Now Monkeypox: Protecting Your Family in an Unpredictable World

Posted on by Nick Trawinski

First COVID, Now Monkeypox:
Protecting Your Family in an Unpredictable World

First COVID, Now Monkeypox: Protecting Your Family in an Unpredictable World

According to the CDC around 1 million people have died from COVID. Adults aged 30 to 50 make up 6% of that number. And although Monkeypox is still somewhat of a mystery, https://www.wired.com/story/mystery-monkeypox-global-spread/ it looks like it’s going to hang around a while. Even the Spanish flu hung around long enough to become the common flu. And can still be deadly.

We’ve had a healthy helping of queasy times, haven’t we?

Maybe a fit discussion about life insurance makes sense right about now.

First off, life insurance does cover pandemic diseases.

If you have an active policy with timely paid premiums your family is covered in the unlikely event of your suffering a fatal bout of COVID. And you don’t have to worry about travel restrictions or vaccination status, either.

If you haven’t purchased life insurance yet, you can still get it but it may take longer.

How long it will take depends on whether or not:

  • You’ve had COVID with complications or hospitalization. The process may take longer, anywhere from a few weeks to six months.
  • You’ve traveled to an outbreak hotspot. If asked, be honest about where you’ve been and where you plan to go. Dishonesty leads to disqualification and your family not receiving benefits. This includes any household member’s travel plans.

Recent pandemic diseases aren’t raising premiums. Yet.

Right now, insurance companies are following pandemic patterns to assess future risks. But so far COVID isn’t expected to significantly raise premiums even if you buy insurance after you’ve recovered from the virus.

However, one of the things insurance companies are looking at is COVID’s long-term effects, such as lingering COVID symptoms that affect not only the heart and lungs but the brain and kidneys. This caveat is especially true if you’re considering purchasing premium life insurance.

And although very few insurance companies are asking about travel history right now, they could in the future. It depends on the carrier and your circumstances. Shop around.

Find out if your latest or planned destination puts your qualification at risk.

Plan Ahead:

Get insurance now before the criteria change—while insurance companies are still trying to figure out how to deal with pandemics.

If you face a long approval waiting period, look into temporary coverage.

Get vaccinated and boosted. Although many companies aren’t currently asking pandemic-related questions, they may soon be looking at it the same way they do smoking.

Don’t lie when answering questions about your health. It will jeopardize your qualification and your family’s future. Insurance companies will investigate everything to ensure they are protected.

And finally, keep up the hand washing. It may just save your life.

Don’t get caught with no protection against the next global threat. Get a term life insurance quote today.

A Simple Guide to 30-Year Term Insurance

Posted on by Nick Trawinski

A Simple Guide to 30-Year Term Insurance

A Simple Guide to 30-Year Term Insurance

First things first: what is term life insurance?

Unlike permanent life insurance  that covers you for life, term life insurance charges a fixed premium for a fixed amount of time. You buy a policy for 10, 15, 25, or 30 years and pay a locked-in premium for the length of the term. If you die before the policy term expires, your family receives the exact benefit amount stated in the policy.

Think of it this way:  Term life insurance is more “if you die,” whereas other types of life insurance come with a “when you die” mindset.

Why should I choose a 30-year term life insurance policy as opposed to say, a 20-year term?

Value. A 30-year term policy provides the fullest amount of coverage at an optimal amount of savings.

Let’s say a 30-year-old husband and father of two purchases a 30-year term life insurance policy while his children are in elementary school. That policy will cover his children until they are in their early 30s and shield his spouse from assuming the burden of his lost income, their mortgage, and other debts.

By the time the policy expires, he will most likely have accrued enough assets to protect his family’s financial future without life insurance. Or, he can purchase or convert to another policy.

Also, a level-term life policy is a sturdy anchor to build around. You can add riders to protect your family should you suffer a terminal or chronic illness or cover any other unfortunate events.

Let’s take a look at a 30-year term life’s pros and cons.

30-YEAR TERM POLICY PROS30-YEAR TERM POLICY CONS
Locked-in rate – even if you get sick while your policy is active.
Not so with shorter terms.		It’s the most expensive level term insurance available. Shorter term policies are less expensive.
Provides financial protection for your children when they’re most vulnerable—from childhood to early adulthood.It’s not an affordable option for people over 45.
Covers your salary, your mortgage, and outstanding debt.It may not make sense for a childless couple or family of three with a shorter-term mortgage and less debt.
Provides only what you need if you need it; frees you to invest in wealth-building vehicles like college funds, IRAs, stocks, and the like.
Many term policies do not require a medical exam; all term policies shield you from the mandatory medical exam inherent in a permanent policy should you decide to convert to one later.
Benefits are 100% tax-free.

 

30-YEAR TERM POLICY PROS

  • Locked-in rate – even if you get sick while your policy is active. Not so with shorter terms.
  • Provides financial protection for your children when they’re most vulnerable—from childhood to early adulthood.
  • Provides only what you need if you need it; frees you to invest in wealth-building vehicles like college funds, IRAs, stocks, and the like.
  • Many term policies do not require a medical exam; all term policies shield you from the mandatory medical exam inherent in a permanent policy should you decide to convert to one later.
  • Benefits are 100% tax-free.

30-YEAR TERM POLICY CONS

  • Is the most expensive level term insurance available. Shorter terms are less expensive.
  • It’s not an affordable option for people over 45.
  • It may not make sense for a childless couple or family of three with a shorter-term mortgage and less debt.

Is a 30-year term policy the best life insurance for You?

That’s a decision only you can make. But some factors for you to consider include:

  • The policy’s cost
  • Your age and the age of your dependents
  • How many dependents you have
  • Your current and expected financial obligations

Here are the factors life insurance companies consider:

  • Your gender – men pay higher premiums
  • Your age – their risk of payout grows with each year your policy is active
  • Your general health – the healthier you are, the less likely they’ll have to pay a benefit
  • Your lifestyle (habits and hobbies) – the more you smoke and drink, the more likely they’ll have to pay your benefit

The main takeaway is this:  A 30-year policy is the best term life insurance plan for young professionals buying their first home and starting a family. It will provide for their children when they’re financially vulnerable and shield any other dependents from assuming large debts with less income.

If that sounds like you, keep this in mind: Even if 30-year term life insurance rates are higher than other level term plans, the value it provides makes your premium worth every penny. You pay a fixed rate that covers only what you need during a period when your family may need it most.

Find the best life insurance for you. Get a life insurance quote today. 

What Is Permanent Life Insurance?

Posted on by Nick Trawinski

What Is
Permanent
Life Insurance?

Permanent Life Insurance: What Does a Permanent Policy Include?

Simply put, a permanent policy provides lifetime coverage.

There are two primary types of permanent insurance: Whole Life and Universal Life. And while you can combine the two in various ways to meet your individual needs, for the sake of simplicity, let’s establish a basic understanding of Whole and Universal life insurance before trying to mix them.

In addition to lifetime coverage and a death benefit, each policy type generates cash value you can access when you need it. Both require a health screening.

What sets them apart is how they manage the cash value they generate.

1st Type of Permanent Life Insurance: Whole Life

Whole Life is by far the most expensive option available. It offers a fixed-rate premium and guaranteed death benefit, meaning the amount you pay every month and the amount your beneficiaries receive upon your passing will never change.

It also generates cash value based on your monthly premium. The premium the insurance company charges is higher than the cost of the policy itself. The insurance company invests the difference in its financial portfolio, earning you money based on its performance.

2nd Type of Permanent Insurance: Universal Life

Universal insurance is slightly cheaper and more flexible. With a Universal policy, the amounts you pay for your death benefit and premium payments can change due to the fact that your policy’s cash value is determined by the interest your payment generates, rather than your insurance company’s portfolio performance. And, as we all know, interest rates fluctuate, which can work for or against you.

If my Permanent Policy Generates Cash Value, How Can I Use It?

You can use your generated cash value for a number of things, including:

  • Home purchases
  • College tuition
  • Retirement funds
  • Charity donations
  • Paying your premium
  • Increasing your death benefit
  • Paying off personal or business debts
  • Collateral for bank loans

Best of all, withdrawals are tax-free up to several million dollars. However, taking the money out of a premium policy may decrease the death benefit. And if you die before you pay off a loan you made against your insurance policy, your heirs will be responsible for it.

The wealth-building benefit of permanent life insurance is tempting. But not everyone can afford permanent life insurance rates. If you’re young and have the income, investing in a permanent policy may make sense. You can pay a higher premium at the beginning of the policy, then once it’s paid off, you can invest in other things and never worry about making a premium payment again.

Sounds Good. But I Simply Can’t Afford a Permanent Policy Right Now.

Consider a term life insurance policy, then. It’s your least expensive option because you pay only for what you need, only for as long as you think you will need it. You pay a fixed premium and your family receives a fixed death benefit—without locking yourself into a higher premium. Because once you lapse, you lose.

You can always convert to a permanent policy when you have the income to afford it. And when you convert a term policy to a permanent one you avoid the health screening a permanent policy generally requires. This conversion benefit is particularly handy when you consider how our earning power tends to increase while our health tends to decrease as we age. Plus, with a low, fixed-level premium, you can invest your money in other ways and buy that permanent policy sooner.

Save those high life insurance premiums and medical exams for later. Get a term life quote today.

Understanding Term Life Insurance

Posted on by Nick Trawinski

Understanding
Term
Life Insurance

Understanding Term Life Insurance: Less Expensive, More Specific. No More, No Less

Talking about life insurance isn’t as enjoyable as talking about say, last night’s game or your daughter’s first ballet recital. But it’s a necessary conversation.

And the topic can be overwhelming. You probably already know that life insurance protects your family if you pass away, and you pay for it with monthly premium payments while you’re still alive.

What you may not know is that term life insurance is a less expensive option.

How is Term Insurance Different from Other Types of Life Insurance?

Other insurance types provide lifetime coverage but are at least three times more expensive. Term life insurance companies charge a specific premium and pay a specific death benefit within a specific period of time. No more, no less.

Lifetime coverage can offer investment opportunities, but that’s why you’ll pay a significantly higher premium. Because term insurance is sold in limited time increments, the insurance company assumes less risk, so you pay less in premiums and your family receives a fixed benefit if you pass away.

Not everyone is at a place in their lives where they can afford to pay for lifetime coverage. Term life gives you control over how long you want to pay for coverage and how much you want to spend on monthly premiums.

Are There Different Types of Term Life Insurance?

There are two types: level term and renewable term.

With a level term plan, premiums and benefits remain constant for the entire coverage period. And you must buy at least five years’ worth of coverage. It may or may not require a medical exam to renew it once the term is up. This plan is perfect for young families or young, single professionals who expect to increase their income as they grow older.

Renewable term life insurance is bought on an annual basis. It’s cheaper than level term in the short run but will increase every year as you age. However, you don’t have to submit to any health questions or medical exam to renew your policy, which makes it ideal for people predisposed to developing a health condition as they grow older.

There are several clauses you can add to further personalize your plan for level or renewable term policies, but that’s another discussion.

How Do I Choose the Right Term Policy?

You must ask some difficult questions. How do you envision your family’s life without you? If you were no longer around, would your son still be able to play league soccer? Would your family be able to pay for your daughter’s dream wedding with you not there to walk her down the aisle?

Will they both be able to go to college?

Some variables to consider include:

  • The number of beneficiaries you choose
  • The standard of living you’d like them to enjoy
  • Your current health
  • Your current debt and cash flow

Because life insurance is such a hefty topic, many people find that a quick chat with an insurance professional clarifies the options and lightens the decision-making process. No more, no less.

Or, if you’re ready to start shopping, get a quote for life insurance online now.

Importance of Life Insurance

Posted on by Nick Trawinski

The Importance of
Life Insurance

Why You Need Life Insurance Sooner Than You Think (and Why Term Insurance Makes Sense)

Paul’s dad started pestering his 29-year-old son about buying life insurance soon after Paul got married. Paul kept putting it off. He and his wife wanted to travel. They bought a house. When they had a baby boy who was diagnosed with autism, they decided she would stay home to care for his needs. Money from Paul’s $130,000 salary came in and went out. And Paul lived in the moment through the good times and the bad.

Then a car skipped over a median and split Paul’s car in two. The wide eyes of the driver in the other car were the last thing Paul ever saw.

No one saw it coming. So no one planned for it.

With no death benefit from a life insurance policy, her son’s daycare costs and medical bills, and her inability to earn what Paul had brought in, Paul’s wife filed for bankruptcy five years later.

Life Insurance Is Important

Most of us are too busy living life to think about what happens when we’re no longer living. But the following statistics may encourage you to stop a minute and take stock.

  • According to the National Funeral Directors Association, the average funeral expenses total $7,500.
  • According to reporting by CNBC.com, average annual childcare costs are more than $10,000.
  • According to emarketer.com, the average outstanding mortgage loan debt is $177,477.
  • According to a study conducted by nerdwallet.com, the average credit card debt is $6,006.
  • According to U.S. News & World Report, a middle-class annual income in a three-person U.S. household hovers around $200,000.
  • According to the United States Census Bureau, the medical debt the average American family carried in 2021 was around $2,000.

If you take out your calculator, the math is sobering for the average family with kids. And if you think you can’t afford life insurance, you’re not alone.

According to a recent Bankrate article, 42% of millennial-aged adults think a $250,000 term life insurance policy costs $800 more per year than it really does.

Term insurance makes life insurance doable—especially if you start early.

Why Term Insurance Makes Sense

It’s simple.

You pay a low monthly premium; your loved ones receive a guaranteed lump-sum death benefit.

You decide the benefit amount and the length of coverage you need. Every penny of your paid premiums goes directly toward your death benefit.

It’s tax-free.

Unlike permanent insurance, term insurance does not yield dividends, which allows your family to keep the entire death benefit amount. It frees you to invest your money elsewhere to secure your family’s financial future.

Why tie up your earnings in a permanent policy when it may make more sense to invest them somewhere else?

It’s cheap.

The sooner you buy, the cheaper it is. A $1 million death benefit will cost a healthy 35-year-old man a monthly premium of around $35.

If your needs change as you get older, you can always adapt the policy to meet those needs by adding clauses when you renew or convert to a more permanent policy with extra features.

Paul’s wife eventually landed on her feet. After her bankruptcy went through, she found an excellent job with a salary that provided her and her son with a healthy standard of living. And when her son grew older, she remarried.

But had Paul listened to his dad, he could have saved his wife and son from darkly desperate times.

Protecting your family costs less than you think. Get online life insurance quotes today.