29 Tips about Life Insurance Online Quote
- If you have a spouse, child, parent, or some other individual who depends on your income, then you probably need life insurance.
- Determining how much insurance to buy requires you to calculate your current annual household expenses, followed by your assets, debts, and other sources of income. Your financial advisor can assist you in this computation.
- Once you have an idea of how much coverage you need, you can decide which type of insurance product would be best to fill those needs. Although the array of insurance products may seem confusing, there are really just two types of insurance.
- Term. You pay for coverage for a specified amount of time, and if you die during that time the insurer pays your survivors the death benefit specified;
- At the end of your term, coverage will end and your payments to the insurance company are complete. If you outlive your term life insurance policy, the funds are forfeit. The premiums from individuals who don’t die while their policies are in force ultimately support the generous payouts that insurance companies can pay to those who do.
- If your term life insurance policy is ending and you want to continue to make sure your family is protected, you can convert the policyinto a permanent one.
- Most term insurance policies have a conversion rider automatically included. The rider would ensure you can’t be deemed uninsurable by the insurance company no matter your age or health status.
- Cash value. Usually referred to as whole life, universal life, or permanent life insurance, where, in addition to paying a death benefit, it also provides you with some other redeemable value. You can borrow against your cash value at a rate that is usually better than the prevailing consumer lending rates. If you die with an outstanding loan amount, the loan amount, plus interest, will be subtracted from your death benefit.
- For individuals age 40 or less, a term policy will almost always be less costly than a whole life policy. Although term policies do not build cash values, many are convertible to whole life policies without a physical exam. Thus, a term convertible policy may be a good option for someone who is under 40. There are various types of term insurance, which we will discuss briefly here.
- Get term life insurance if you haven’t bought a policy yet. Then invest as much as you can in tax-deferred IRAs and 401(k) plans. If your money is in stock funds, you are more likely to experience bigger gains than you are with a cash-value policy.
- Age is a major factor in determining your life insurance rate, which is set when you sign your policy and won’t change as long as it lasts. Because of this, every year you put off buying life insurance means an increase in the amount you’ll pay for it. For example, people in their forties can see rate increases of 5 percent to 8 percent each year they wait to buy life insurance. Those in their fifties may pay as much as 12 percent more in life insurance premiums each year they delay.
- Your medical history is another factor insurance companies use to determine your rate. This is done using a process called underwriting, which includes a medical exam to get a read on your current health and to find out about your lifestyle choices, like if you are a smoker or have any dangerous hobbies (like skydiving).
- There is no exact right age or time frame. It comes down to whenever you have someone who depends on your income to survive. Once you’re in that situation, it will be easier to figure out how long they’ll be relying on you, so you can decide whether term or whole is right for you. This way, you’ll get the best rate while not spending before you have to.
- Age is a major determining factor in how much you’ll pay for your policy. Therefore, it would seem that buying a policy as soon as you need one would be the way to go.
- Most people choose their spouse as their beneficiary, as they’re the ones who will need the life insurance payout if something happens to you. In fact, there are nine states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin—that have community propertylaws that make it illegal to name someone other than your spouse as your beneficiary if you get the policy after getting married. Alaska has community property laws, too, but you and your spouse have to opt in to them. (It’s important to check your state laws or speak with a financial planner familiar with your state laws to know the specifics you need to consider.)
- Beyond that, you really can name anyone as your beneficiary—children, nonrelatives (like a business partner or friend), organizations (like your business, your alma mater, a church, a nonprofit or charity, etc.), and even pets. Listing minor children as beneficiaries isn’t recommended, as it will be very difficult for them to receive the money. Life insurance carriers can’t pay out death benefits to anyone who hasn’t reached the age of majority, which is eighteen in all states except Alabama and Nebraska, where it’s nineteen.
- If you name a minor child or children as your beneficiary, it may be better to name a trust. This way, your appointed conservator for the trust can receive and disburse the money on your behalf. This makes it easier for your kids to access the life insurance proceeds if necessary.
- Because there is no one-size-fits-all insurance policy or provider, you should definitely comparison shop to find different offerings and figure out which one makes the most sense for you. An independent insurance broker represents multiple insurance companies, whereas some agents work for one specific insurance company. It’s best to shop the market with an independent broker. A good broker will ask smart questions to make sure they understand your needs so they can match you with the best policy for you. Think of them as your insurance advocate.
- Unfortunately, nothing ties the insurance carrier’s hands to allowing your coverage. It is based on your health and many other factors. Not much you can do about this except work with a well-rounded agent who has plenty of carriers to work with.
- The insurance carrier needs to remain solvent. This makes them selective about who they offer coverage to.
- A common circumstance in which a life insurance policy will not pay out is in the case of suicide. Depending on what state you live in, there could be a suicide clause in your policy. If there is such a clause, and if you were to commit suicide within the specified time frame, your beneficiary would only get the premiums back, not the death benefit.
- If you do decide youy’ve bought too much insurance or can’t afford their current coverage, you should contact your carrier. Most companies will let policyholders scale back the level of coverage and pay lower premiums.
- Unlike other kinds of income or inheritances, the benefits of a life insurance policy are tax-free, and in some policies, any investments or cash-value also grow tax-free. So while most people buy life insurance primarily to replace the income they currently contribute to a household, 11% cite tax savings as one of their reasons to buy, and 22% say transferring wealth (tax-free) is a motivation.
- Getting a life insurance policy usually requires a medical history and exam, including blood and urine tests, and a possible echocardiogram, if the policy is worth $1 million or more. Don’t like needles or doctors? Some companies offer policies with the option to skip the pricking and prodding, and instead use a medical history and computer programs to evaluate applications and set premiums. But such no-test coverage can be much more expensive, and buyers usually can’t get as much coverage.
- If you haven’t died yet, it’s easy to feel good about all those premiums you didn’t pay. But experts say that if someone depends on you for financial support – typically a spouse or a child, but including other relatives or business partners – life insurance is a way to protect them. That means any time life circumstances change, it’s important to review your coverage, after marriage or the birth of a child in particular.
- Always compare apples to apples – be sure the policies you are comparing are identical in every way.
- Can you purchase life insurance completely online? You are unique, and when it comes to buying life insurance, you want to find the policy that meets your individual needs – for the rest of your life. It’s a major financial commitment that deserves careful consideration. Just as you would shop around for the best internet provider or your first home, you should also shop around for life insurance and make sure you’re getting the insurance policy that’s right for you.
- Go online.There are many useful sites that can help you compare insurance products before you buy. Remember, online comparisons are not the same as personal advice from a trusted and licensed agent or company. It’s a good idea to speak with an insurance agent or company who can assess your individual needs, answer your questions, and provide ongoing advice over the life of the policy.
- Submit an application. When you decide to apply for a life insurance policy, your agent or company will submit the documents to the underwriter. Make sure all information is accurate before signing the application, and ask for a copy of the completed form for your records. Also remember that failure to provide accurate and complete information can invalidate your policy.
We hope this short guide on life insurance helps. If you’re ever confused about insurance policies, don’t be afraid to ask a Mintco Financial Life Insurance Agent. Remember, Mintco Financial is
life insurance. Done differently.
Call us 813-964-7100