How to Choose Beneficiaries

How to Choose BeneficiariesWe purchase term life insurance for one main reason: to insure that in the case of our death our loved ones will be taken care of, at least financially. Part of making that happen is naming your loved ones as beneficiaries in that insurance policy.

It is advisable to name more than one person as a beneficiary, in fact naming multiple beneficiaries is a smart choice.

The general practice is to name a spouse or life partner and children as your beneficiaries. Additionally, financial experts advise naming a trust as the beneficiary as well. All of these choices are complex and require specific considerations. Not taking those into account when setting your policy in place can cause expensive problems for the ones you leave behind.

Spouse: Naming a spouse is the most logical choice for a married individual. One reason is that the proceeds of life insurance (if properly set up) are generally income tax free and your spouse can easily access the funds needed to pay immediate bills.

In most cases a spouse will be able to transfer the inheritance tax free. An IRA can even be rolled over. These laws vary from state to state, so check with your lawyer or tax adviser.

It is not Estate tax free unless it goes to only the spouse (children may be subject to estate taxes). The help of a good legal adviser is recommended.

Non-spouse beneficiaries: Life partners and Non-spouse beneficiaries are now eligible for no-tax transfers in some states. Find out if your state allows for this when choosing your life partner as a beneficiary.

A Trust: Many people name a Revocable Living Trust, Credit Shelter or Family Trust as their primary benefactor. The reason for this is so that the money will be protected from creditors, or lawsuits. Again, talk to your adviser.

Children: One of the main reasons parents purchase a term life insurance policy is so that if they die before their children are able to provide for themselves, their children will have the financial means to succeed in life. With that in mind, you should take into account the consequences of handing over a large sum of money to a child. Seek advice on how best to structure the death benefit. One of the largest bills parents think of when choosing how much insurance they want to purchase is to cover college tuition. You can choose a guardian or open a trust fund for your child/ren that will distribute the proceeds according to your intentions. Since predicted the future is impossible a good option is to draw out a diagram of potential scenarios.

If you have more than one child and want to divide the money equally between your children, you’ll need to decide between dividing the proceeds per stirpes or per capita. Per stirpes means that the money will be divided by branch of the family, while per capita divides the proceeds by head.

A note of caution: Be sure that your Last Will and Testament and your designated beneficiaries don’t contradict. This can lead to a long and complicated legal process that will not only delay the funds from going where you intended, but can also result in family feuds. Talk to your insurance agent and adviser to make sure the two don’t contradict each other.

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The benefits of using Non-Captive Insurance Agents

The benefits of using Non Captive Insurance AgentsWhen shopping for insurance there are many different methods a prospective buyer can use to make their insurance purchase. With today’s technology, buyers have unprecedented access to insurance products like never before.  Regardless of whether you are using a phone, Internet or walking into a local agency, it is important to understand the type of insurance agent you might be buying your insurance from. Let us help you break it down. Agents who work for and therefore represent only one insurance company’s products are called Captive Agents.  Agents who are permitted to sell products for multiple insurance companies are called Non-Captive agents.

The phrase Captive or Non-Captive refers to the Agent’s relationship with their insurance company or companies. Captive agents are locked into the product options and pricing structures of the parent company they are appointed to represent.  Clients who apply through Captive Agents will not be able to “shop” their insurance coverage for potentially better (cheaper) offers since Captive Agents are only permitted to sell products that use the same underwriting guidelines.

Since non-Captive Agents hold appointments with many different carriers they are not restricted in the number of carriers they choose to represent.  Clients do not have to contact multiple insurance companies for quotes in order to find the best prices, these agents Non-Captive will research and find quotes for insurance products that match their client’s specifications. Basically those agents do the shopping for you, comparing different companies and coverage in order to make the best “match,” according to underwriting guidelines that best fit the client’s risk profile.  This alone could end up saving a prospective client hundreds of dollars in the search for the lowest rates they can qualify for.

The benefits of using Non Captive Insurance Agents

Holding multiple appointments with different insurance companies means Non-Captive Insurance Agents can find the best combination of coverage, price and service.  Many insurance companies offer different policies and riders that a Captive Agent might not have access to. Non-Captive Agents  have more flexibility in this regard, as they are able to offer policies and riders that are adjusted to the client’s need and expectations, rather than asking the client to adjust their needs to what is offered by any one particular insurance company.

Since Independent agents have access to more carriers and products when you have found an agent that you are comfortable with, you can use that agent for all of your future insurance purchases.  As you age more than likely your insurance needs will change. Your Independent Agent will be there to guide and provide you with the most suitable products on the market to meet those changing needs. Independent Agents will also be able to assist you in diversifying your insurance portfolio should you wish to have multiple insurance policies with different carriers.

Regardless of the Agent’s status as Captive or Non-Captive their first duty is to service clients in a professional manner. The primary goal of every agent is provide an experience that meets the client’s needs and exceeds their expectations.  All Agents bear the responsibility of finding products that are suitable for their clients no matter the number of insurance companies they represent.  Non-Captive Agents are simply in a position to give their client’s greater choices, which can save them time and money.

As a buyer your insurance needs, concerns and risk profile are different from the next potential client out there. It is vital that you share your insurance motives with your agent. Once you have built a rapport, your agent will use that information to provide you with the most pertinent products that you are considering.  You must trust your agent and provide them with as much detail as possible regarding your life style and health history. Remember a quote is only as good as the data collected to generate it.

To get your free quote today visit

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When’s the Last Time You Reviewed Your Term Life Insurance Policy?

When’s the Last Time You Reviewed Your Term Life Insurance Policy?

You’ve completed the check list of being a “responsible adult”, you’ve got:

  • A savings account
  • Sound investments
  • A gym membership (which you actually use)
  • An annual budget (that you stick to)
  • A term life insurance policy
  • A living will
  • A last will and testament
  • and more….

This is no small feat, and we applaud you for it! Taking the necessary steps that give you peace of mind is great, but follow-up is even better.

As your life circumstances change so do your term life insurance needs, which is why it’s a good idea to review your policy every few years.

When you first bought your life insurance policy you purchased it based on your needs and budget at the time, but as your income grows, debts increase and children grow up and start supporting themselves, your needs and budget change too.

One of the main reasons you bought term life insurance was to replace your income in case you suddenly could no longer provide it for your family. Does your policy still do that?

Take a look at what your income was when you first purchased your life insurance policy and what it is now.

  • Has your income increased?
  • Has your family grown?
  • Have your bills increased?
  • Did you have the foresight to purchase enough coverage to begin with?
  • What did your dependents need then when compared to what they would need now?

The answers might surprise you!

Begin your review by carefully reading your policy. Be sure to pay attention to who you’ve listed as your beneficiaries, how much coverage your dependents would get, and what company is responsible for a pay out if necessary.

Now take your pen and paper (or your electronic device) and make notes about any questions you have, changes to your life, weigh your current coverage, and so on.

Then call your insurance agent and find out how to go about adding onto or adjusting your policy to fit you and your family’s needs today. 

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Why Summer Is the Best Time to Buy Term Life Insurance

Why Summer Is the Best Time to Buy Term Life InsuranceSummer has arrived and with it we are looking forward to longer days ahead filled with BBQs, camping trips, and lazy beach days. Summer is about vacation, all the serious stuff can wait till autumn, right?

While we do agree, we’d also like to give you a little peace of mind so that you can thoroughly enjoy the months ahead. We have one suggestion for you to do before you take some time off from the never ending to-do list of life: buy term life insurance!

This may seem like a funny suggestion, but in truth summer is the best time to get your insurance policy in order.

Along with the fun of summertime activities come a higher number of injuries. From heatstroke to cases of drowning to car accidents the next three months are documented as ones with the most deaths and critical care needs. Auto accidents resulting in fatalities are highest in the months of June, July and August as well as a 20% increase in emergency room visits related to other injuries.

A higher number of summer related injuries and fatalities include:

  • Drowning
  • Sunstroke
  • Dehydration
  • Burns from grills, fireworks, campfires and even dangerous burns from the sun
  • Broken bones from outdoor activities
  • Bicycle accidents
  • Car accidents
  • And more…

Our intention here is not to scare you into a life insurance policy, it’s to protect you and your family in the worst case scenario… one that we hope you’ll never have to actually face!

Getting your term life insurance policy in order now is simply smart planning! Take some time over the weekend ahead to evaluate your budget and find a policy that fits your needs.

We promise, having your term life insurance policy in order will make for a much more enjoyable summer… plus it’ll take one more thing off your to-do list when September comes around.

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Why Parents Choose Term Life Insurance

Why Parents Choose Term Life InsuranceAs a parent, the last thing you want to do is add yet another expense to the household budget. As if the grocery bill alone doesn’t astound you, every single trip. The school backpacks, the soccer uniforms, the ballet shoes, the private piano lessons, and the math tutoring – it all adds up. But have you budgeted for the one expense which is crucial to ensuring continual care for your children, namely – life insurance? And while we’re on the topic – do you know how to get a life insurance policy that matches your budget?

A life insurance policy – even a cheap life insurance policy – is your assurance that, in the event of the unthinkable, your children will continue to have all their purchasable needs met. That all the groceries, school backpacks, soccer uniforms, ballet shoes, private piano lessons, the math tutoring, etc. will remain stable aspects of their lives.

And let’s not even begin to mention college tuition – four years’ worth. Imagine if you left behind children who didn’t have the means for their necessary higher education. What then?

Once you’ve realized life insurance is a necessary expenditure, you’ll be faced with the decision about which type of life insurance to choose. Many retirement packages go hand in hand with a lifelong life insurance policy, otherwise known as permanent life insurance. The trouble is that the cost of a permanent life insurance plan can be prohibitively high, especially since its coverage is usually more than a family truly needs.

Consider instead a term life insurance policy to suit your budget. In fact, term life insurance is the most popular type of plan for parents.

Here are the 3 main reasons term life insurance is attractive for moms and dads:

  1. Term life insurance is ordered for a fixed number of years (hence, the word “term”). This means you can choose to have it run out, for example, when your kids come of age to support themselves.
  2. Term life insurance payments are only for the life insurance. No fancy extras. The money you pay is strictly a life insurance policy.
  3. Timeframe flexibility. Term life insurance is usually available in policies for 5-30 years, allowing you to set the policy length according to your needs.

The above reasons all facilitate much lower costs for term life insurance over permanent life insurance. In these ways, term life insurance monthly payments can feel light on the family budget while ensuring your children’s expenses, from the day-to-day to the big-time, would be covered in case of a premature loss of a parent. Thankfully, term life insurance is available as a secure, wallet-friendly choice, allowing you affordable peace of mind.

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Phases of Underwriting

Phases of UnderwritingApplying for life insurance is simple. You provide information so that an insurance company can get to know you. It involves a series of questions regarding your life style and health history, and in a few weeks (ideally) you have an offer for a life insurance policy to protect your family or business. Today we will examine the different phases of underwriting and why we advise clients on the reality of the underwriting process… which can take anywhere from 4 to 8 weeks to conclude.

Application Review
This is the initial phase of underwriting. The underwriters for the insurance carrier with whom you are applying will do a comprehensive review of your application. They will confirm the accuracy of your identifying information, from your driver’s license number, to your credit history. Since most of this information is kept in centralized databases the expected time of release is generally takes a day or two (as long as the information on your application is accurate). This is also the phase where the underwriters will begin to build your profile as the applicant. As they review the application the underwriters will determine if any additional details are needed based on the answers you provided. The additional details necessary could range anywhere from providing dates of life events or future travel to requesting supplemental questionnaires for specific risk factors. Responding to these questions quickly will help get the underwriting of your application off to a fast start, as this phase is the foundation of your profile.

Lab Results Review
After you have completed your medical requirement, the underwriters will review the lab results from the blood and urine samples that were taken by the paramedical professional. Typically the lab results are ready for review within 5 business days. After reviewing the labs and your medical questionnaire the underwriters will determine if they need to order medical records from your doctor(s). In some cases depending on your age and test results the underwriters may determine they have enough information present to make you a formal offer for the life insurance policy you applied for. Conversely, depending on your results the underwriters may determine that you are uninsurable. It is important that you complete the exam as soon as you can, since most carriers will wait for these results before ordering medical records. The sooner the exam is completed and the results reviewed the sooner your application can move to the next step.

Obtaining Medical Records
Here is where the underwriting timetable can get tricky. Generally the bulk of time spent in underwriting is simply waiting on medical records from an applicant’s doctor or hospital. Think of your health history as a connect-the-dots style puzzle. Dot A. leads you to Dot B., and so on and so forth until you have completed the puzzle and now have a full health portrait for underwriter reviewers. Each medical facility has their own timetable on when they will be able to release an applicant’s medical records. This timetable is based on their ability to process requests that are flowing into their practice for all of their patients. Some medical facilities outsource their records to third parties who maintain their records and process these request on their behalf. Most medical facilities will accept the standard authorization form for the release of information that is mandatory as a part of every insurance application. However, some medical facilities have their own request form known as a “Special Authorization”. These facilities will not process a request for the release of medical records until their special authorization form is received. If your medical facility requires a special authorization form it is imperative that you return the form signed and dated in a prompt manner. Underwriting on your application will be at a complete stand still until you do so. There is no defined time period for when your medical records will be made available prior to speaking with each medical practice. Sometimes records are released in as little as a few days other times it could take a month. It is important that you stay in communication with your agent regarding the expected release dates in the event your assistance may be required in expediting the release.

Final Review
Once the underwriters have collected all of the pertinent information regarding your background as the applicant, your application will move forward to the Final Review phase. Here the underwriters will review all records and determine what rate class you qualify for according to their companies’ guidelines. The expected timeframe for completion of your final review is typically 3-5 business days. At the end of the final review your application will be approved, postponed or declined. Make sure that you discuss the underwriting decision with your agent. Agents are not made privy to confidential information in your medical records, however they can share general information that may shed light regarding what decision was made. Keep in mind that if you are not satisfied with your underwriting decision you can make a formal written request to receive full details from underwriting that your agent could not provide.

Please remember that each application is unique and it impossible to apply any uniform method for completing underwriter sooner. The best thing you can do as an applicant is keep the lines of communication open at all times with your agent. Make sure you return emails and phone calls promptly. This will keep your application on schedule and prevent unnecessary prolonged delays in underwriting. For a free quote visit today.

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Who are the MIB and How Do They Affect Me?

Who are the MIB and How Do They Affect Me?Have you heard of the MIB? Well whether you know who they are or not, if you have applied for life insurance, health insurance, disability income, long-term care or critical illness insurance at an MIB member company within the past seven years then chances are they know you.

Nope, we’re not talking about Agent J and Kay (Will Smith and Tommy Lee Jone’s characters in Men in Black), we’re talking about the Medical Information Bureau.

The Medical Information Bureau (MIB) is a reporting agency who maintains a database of information with medical history, hazardous avocations, hobbies, and driving violations.

Wondering how this information is gathered and what it’s based on? If a member company finds any information that they deem a significant risk to your health and overall well-being they will submit that information to the MIB which will then be accessible to other MIB members.

Sounds a little “big brother”, we know. But they actually provide a service that is in need in order to maintain an equitable marketplace and to insure that people are not “over insured”. Furthermore, if you are in good health and have been approved for a policy with a standard or preferred premium then chances are there is no MIB record on you.

If there is a file on your, don’t stress! Information about you can only be reported to MIB with your permission and the information is kept confidential. You can also request a free copy of your file.

Although the MIB rules state that no insurance company can take action in terms of making a final decision about an applicant based on the information they provide, it can influence the process. Mainly they can point an underwriter in the direction that they need to look to further investigate the level of “risk” you represent to the company.

If you have received an adverse decision from an insurance company due to information discovered during the underwriting process via MIB, they will provide you with a free copy of your MIB Consumer file. As a consumer you have the right the access this file and can dispute any wrongful findings.

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What term length is right for me?

What term length is right for me?When purchasing life insurance selecting the correct term length is just as important as selecting the right amount of life insurance. There are many factors to consider when selecting the term that is going to be the best fit for your needs. One of the primary factors is the current health of the applicant. In general, applicants with moderate health conditions who are approved for insurance will want to consider longer terms to lock in that rate if their health circumstances do not improve in the future. Another factor that can make selecting a term length easier is to figure out the purpose of the insurance. What is the exposure period of current or future debts? Today we will review the different term lengths and look at some of the more common reason why our clients select these terms.

What does “term” mean?
A term life insurance policy provides the policy owner with a guaranteed amount of life insurance at a fixed priced for a pre-determined period of time. The most common term lengths available are 10,15,20,25 and 30 year periods. Most term policies have a built in conversion option. This option allows the owner to convert the policy to a permanent insurance product (whole life, universal life, etc) at a later date prior to the initial term period’s expiration. Most term policies also have a renewable clause that allows the owner to renew the policy on an annual basis once the initial term period expires. However once the term period expires the premiums are no longer level and will increase on the anniversary of each policy year. Now that we understand what a term policy is, we can examine their functions.

Short Term (10-15 years)
Shorter term lengths are typically used to protect the policy owner from exposure that has a definitive expiration date. These could include personal, business or student loans. For example, a small business owner seeking to take out a loan to expand their current business may be required by the bank to keep a life insurance policy in force until the loan is paid off. The same principle can be applied to co-signers as well. If you are you assisting a friend or relative in gaining approval for a loan you want to consider taking out a life insurance policy on them. Insuring the primary borrower is an excellent method to protect your credit in the event they pass away before the loan is satisfied. One of the benefits in selecting a shorter term is that the insurance premiums will be lower for the amount of life insurance being purchased. This allows the policy owner to purchase more insurance at a lesser price.

Medium Term (20 years)
Medium term lengths are generally used to protect against debts or liabilities that have a longer period of exposure or a less defined period in general. Some of the more common reasons this term length is used are when a 2nd mortgage is taken out, key-man or buy sell agreements for small business’ and general family protection which may include college tuition. The medium term length will provide the policy owner with a longer guaranteed level premium period, without sacrificing the flexibility that term policies offer.

Long Term (25-30 years)
The 30 year term is the maximum guaranteed level premium coverage period that can be purchased outside of buying a permanent insurance product (whole life, Universal life, etc.). The 30 year term is the most expensive term option but also provides the longest period of protection. It is generally used to protect against a wide variety of exposures that do not have an expiration date (with the exception of a 30-year mortgage). The 30 year term is a great tool for family protection and burial policies. When placing a 30 year term policy in force you are guaranteed a fixed premium rate for the next 30 years regardless of the insured’s insurable status. As previously mentioned this is a great asset for those with moderate health conditions. Should the condition worsen overtime there will be no need to worry because the life insurance policy will stay in force as long as the premiums have been paid.

When purchasing life insurance there is no “one size fits all” approach. It is important to speak with a licensed agent to review your personal needs. They will assist in determining the right policy length for you. The previously explained scenarios should only be used as a reference point when you begin shopping for life insurance. Those scenarios may align with your insurance goals but be sure to speak with an agent about your personal situation. For a free quote visit today.

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How to Lower Your Life Insurance Premium

How to Lower Your Life Insurance PremiumThere are three main factors that come into play when an insurance company is determining your premium:

  1. Your age: Usually the younger you are when you first sign up for life insurance, the lower your premium. This is why we advise to sign up in your 30s!
  2. Your family medical history: Sorry, there’s nothing you can do about your history, but if you want your children and grandchildren to have a lower premium you can take a look at your family medical history and see where you need to pay attention to your health the most.
  3. Your lifestyle: this includes your medical history, credit history, driving record and lifestyle habits.

Since two out of these three are out of your control, we’d like to point out a few things you can do about the third factor to lower your life insurance premium.

Like we said “your lifestyle” includes your overall health, your credit history, driving records and lifestyle habits. So let’s take a look at each of these and see what you can do to optimize your life and lower your life insurance premium at the same time. Sweet deal if you ask me!

Overall Health
Do you eat a balanced diet, live an active lifestyle or go to the gym regularly? Do you smoke or drink? Participate in extreme or high-risk sports?

All these things will be taken into account when an insurance company is determining what “risk factor” you are to their company. So get in shape, quit smoking, decrease your alcohol intake and improve your diet. Not only will this lower your premium, it will improve your quality of life now!

Credit History
No, the water company won’t shut off your water for a payment that comes in a little late, but you may end up paying the price for it later! Your credit report is available for insurance companies to review when deciding on your premium. Whether you pay your bills on time or not is noted in your credit report, so be sure to be on top of all your bills.

You might want to consider automatic payments as a way to insure that your bills are paid on time (a service most banks and/or credit cards provide). You may find that having the due date on a bill off your “to-do list” helps your stress levels too, another plus for your overall health and quality of life. Score!

Driving Records
Your premium can increase if you have numerous moving violations. Since there are few and far between who will admit to being a “bad” driver, take a look at your driving from the perspective of the insurance company. Do you have moving violations? If so, how many and what for? Any car accidents? If the answer to some or all of the above is “yes” then find a way to improve your driving.

Consider a refresher session with a driving instructor, a road-rage course if you have a history of aggressive driving or maybe get that “how’s my driving” bumper sticker. Whatever you do, remember that safety on the road pays off for you, your passengers, the people around you and your premium.

Lifestyle Habits
Who doesn’t like traveling, going on the occasional roller coaster or trying new and exciting things? We are not saying you need to lead a dull life in order to get a low premium, just a conscience one! Life is best when lived, but there is a not-so-fine line between enjoying life and being an adrenalin junkie. Personally, I vote for enjoyment… well balanced, conscious enjoyment.

Here’s to a well lived life with a low premium to boot!

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Understanding the Life Insurance Application Process

Understanding the Life Insurance Application ProcessStep One: Fill out the online form for your life insurance quoteCheck! Now what?

There are a number of follow up steps in the process for applying for a life insurance policy. A life insurance agent will contact you to assist you in the next steps, which are more paperwork, a medical exam and a review of all the information collected.

This next set of questions will deal with your mental health, family health history, financials, and lifestyle habits (fun, huh?).

It is VERY important that you be completely honest in this process! The repercussions of lying on your application can result in denial of insurance, higher premium, cancellation of your policy or denial of a claim, as well as the possibility of “red flagging” you if you go to another insurance company for coverage. All in all, lying on your application is a huge mistake, so don’t!

Next: an in-person medical exam (still having fun?).

The exam will be performed by a health care professional called a paramedic, who will:

  • Take your medical history, which will include questions about your family’s medical history, medical conditions, surgeries and any prescription medications
  • Talk to you about your lifestyle habits (diet, exercise, smoking, drinking, drug use, high-risk hobbies and travel)
  • Take your blood pressure
  • Listen to your heartbeat
  • Check your height and weight
  • Take a blood sample
  • Take a urine sample
  • Additional test may be requested by the insurance company depending on your age, history, and type of coverage

Finally, your information will be reviewed by an underwriter at the insurance company. The underwriter’s job is to assess what financial “risk” you represent to the company, and therefore how much they will need to charge you for coverage. The underwriter may request further information from your physician.

Once all the information is gathered to the company’s satisfaction they will either approve or deny your application. The process can take a significant amount of time depending on when you schedule your exam, how long it takes to receive your test results, whether or not the underwriter needs further information and so on. So get started with the process today!

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