Saturday, July 13, 2013

Questions and Answers on Life Insurance: The Life Insurance Toolbook

When my husband and I were first looking for life insurance, we found that we really didn't understand what all we were paying for. The sales person "explained" everything to us, but did it in a way so that we still didn't really understand what we were buying. When I received this book from the Goodreads contest I found that I was able to answer a lot of my questions that I hadn't been sure about. The book is very informative and helpful for those of us who do not speak "insurance language". The only issue I had with the book was that it was a little long. If I was in a book store looking for a book on life insurance, this is probably not one I would purchase just because of the fact that it looks very lengthy and complicated. But since I won the book I took the time to read through it and found it to be quite helpful.
Questions and Answers on Life Insurance by Anthony Steuer

questions and answers on life insurance 
This was one of the first books I won from Goodreads First Reads! So I'm very excited about that. 

My rating is based on the fact that this book was useful, but as an insurance workbook it's not really something I got excited about. It's well-written, concise, accessible and informative.

The workbook is a supplement to a book I don't have, I believe called the Questions and Answers on Life Insurance. Even without the main book, the workbook gave me a much clearer idea of what my options for life insurance are, what each kind has to offer, and why I would want such a thing. When (if?) I decide it's time for me to get life insurance I will probably buy the main book.

Keep in mind I knew absolutely nothing about life insurance before reading this workbook. I always kind of considered it one of the big huge adult messes that I would probably have to deal with one of these days. Now I have a fair (and personalized) idea of when I should start thinking about it, where to start looking, how to evaluate and reevaluate my needs, and where to find more information and an agent. The sections on permanent life insurance are a bit technical and fairly confusing compared to the rest of the book, but he always tells where relevant information can be found. 

The only real complaint I have is that he defines terms like "riders" multiple times, but doesn't define field specific terms that may have different uses in other fields, like underwriter and premium. I'm sure a quick google search would answer my questions, and probably the book the workbook is intended to accompany would also answer them

How Life Insurance Works . . .
for you and your loved ones 
The reasons for owning life insurance are   
simple, but the more you know about how it 
works and what choices you have, the  
better you can fit your coverage to your  
family’s needs.
This short booklet is designed to help you 
build a better understanding of what life   
insurance can do for you and your family.
In a straightforward question and answer format,  
it answers typical questions we receive from 
policyholders about life insurance coverage.
It also attempts to anticipate and address 
other issues you might have concerning life 
insurance in general.
Keep in mind, though, that life insurance   
and related financial matters can be complex 
and each situation should be evaluated on an   
individual basis. For this reason, we recommend  
strongly that you contact an Amica Life   
representative to seek professional assistance 
in determining your particular needs and the 
solutions to those needs.

Why do I need life insurance?

In practice, life insurance creates an “instant estate” for 
you. That is, when you die, cash can be paid to your 
beneficiary and used for any purpose — and, in most cases, 
this payment is received income tax-free!
Normally, this asset is used to provide an income to your 
spouse and children or to fulfill some other obligation or 
desire that you have, such as paying off a mortgage or a 
business loan, financing children’s education or protecting 
your assets from the diminishing effects of federal and 
state estate taxes.
In addition to benefits paid at death, cash value life insurance  
(as compared with term insurance) has benefits while you 
live. Living benefits include the build-up of a cash fund 
that can be borrowed from in the case of an unexpected 
financial need. If withdrawals from the cash fund are not 
paid back, however, the death benefit will be reduced by 
the amount withdrawn (plus unpaid accrued interest).
Another living benefit that is becoming increasingly 
important today is that life insurance can provide a 
supplemental income at retirement or help pay the cost of   
long-term care. In certain instances, life insurance can ease   
the financial burden of terminal illness on families by   
allowing policyowners to collect a portion of the death  
benefits early — before dying — to cover such extraordinary  
expenses. This option is not intended to replace health 
insurance or long-term care insurance, but it can provide 
assistance for special medical needs that result from 

terminal illness. In fact, life insurance — unlike most other 
financial products on the market today — guarantees that 
money will be paid to the individuals you select at exactly 
the time it is needed most.
What are the different types of life insurance?
Today, there are literally thousands of different life insurance  
policies available from hundreds of companies, with a 
variety of combinations, options and benefits that can be 
tailored to fit your individual needs.
However, most policies fall into one of two basic groups: term  
life and whole life (also called permanent or straight life).
Term life, as its name implies, provides protection for a  
specific, limited amount of time — usually in five-year 
segments, such as for 5, 10, 15, 20, 25 or 30 years. In the  
vast majority of policies, the cost of term life insurance 
covers only death benefits and policy expenses. As such, 
it is the least expensive type of life insurance in regards to 
premium payments. 
Term policies may be renewable without evidence of  
insurability (medical exams, etc.) and generally are convertible  
to a whole life policy — an important option for younger 
couples with the potential to earning higher incomes as 
they age. Keep in mind, though, that the premiums for most  
term life policies increase with age. The older the insured, 
the higher the annual premium for this type of coverage.
Annual renewable term insurance is renewed on a year-
to-year basis, and is typically owned by policyholders with 
short-term life insurance needs. These may include people 
whose children are in college or those who need financial 
protection over the last years of a mortgage or equity loan.
Whole life is designed to stay in force for as long as you 
live. The main advantages of whole life are that generally 
premiums remain unchanged as you grow older, and the 
policy accumulates a cash fund that can be accessed if you 
need it. When you retire, whole life can provide you with a 
guaranteed income for the rest of your life.
Permanent insurance  — such as whole life — also has 
many other variations that are typically centered around 
how the cash fund is handled within the policy. These 
include universal life, under which a policyholder may 
pay premiums on a flexible basis at any time and in any 
amount, subject to certain minimums. Universal life is an 
excellent choice if you want to have a high degree of 
flexibility in structuring your policy.
Variable life is similar to whole life except that death 
benefits and cash values are driven by the performance 
of stock and bond funds selected by the policyowner and 
managed by the insurance company — rather than based 
on the insurance company’s general investment account, 
which is used for traditional whole life and universal life 
policies. In operation, variable life is a type of investment
with built-in life insurance protection guarantees. Since 
it is classified as a security, it is offered only through a 
prospectus and can only be sold by an insurer and agent 
who both must be specially licensed for such products.

How do I determine how much life insurance  
I need?
Before addressing this question, you might be interested 
in this snapshot of the life insurance marketplace, gleaned 
from a study done by LIMRA International, a leading research  
organization for the insurance industry. 
According to LIMRA:
 •  32  percent  of   adult  U.S.   citizens  have  no  personal    
    life insurance coverage.
 •  Of  those   who   are  insured,   30  percent  will  provide   
    their beneficiaries with less than one year of their   
    annual income.
 •  33  percent  of   people  with   annual   incomes   of   more   
    than $100,000 are severely underinsured.
 •  Many  people  in   the   LIMRA   study   did  not  know  that    
    group life insurance provided by their employer   
    usually ends when they are no longer employed.
 •  On  the   other  hand,  one   of   every  two   people  are   
    aware that they need additional life insurance.
 •  One   of   every  three   people  said   they   will  add   life    
    insurance coverage within the next year.
If the LIMRA study is reflective of your own situation,
you likely need more life insurance . . . but how much?
Financial planners suggest an amount of life insurance that 
is equal to six to eight times your annual income. However, 
this is just a rule of thumb, and many other factors should 
be considered before determining the amount of life 
insurance you need. 
These include other sources of income, such as any existing 
life insurance coverages, investments, pension plans or  
other assets that might be accessed. Also, if you are married,  
your spouse’s earning capacity and the number of individuals  
who are financially dependent on you (and for how long) 
could significantly impact the amount of coverage you may   
need. This might include money for your children’s education  
or paying off any other liabilities, such as a mortgage or loans.
The process of determining how much insurance you 
need should not be approached lightly.  Keep in mind 
that it is very useful to prepare a conceptual budget of 
what your family’s financial needs will be should you die 
prematurely. Your budget should include everyday living 
costs (food, utilities, insurance, taxes, etc.) and the need for 
future cash for items such as children’s education, paying 
off a mortgage, relocation expenses and the like.
Many companies, including Amica Life, offer free needs-
analysis worksheets and checklists that can help you 
organize the needs determination process and make it  
easier to develop minimum and optimal budget estimates.
Should my spouse and children be insured as well?
In a dual-income household, it is vitally important to protect  
the income-earning capacity of both spouses. Life insurance 
on an at-home spouse is recommended for the purpose of 
paying for household services and childcare that may be 
otherwise unavailable when the surviving spouse returns 
to work. In some cases, it may be advisable to have life 
insurance on children. However, insuring children should 
not be done if it reduces purchasing appropriate amounts 
of life insurance for the family’s main income earner. Most  
insurers offer some type of inexpensive “children’s insurance  
benefit” rider that provides a small, but usually adequate, 
amount of life insurance coverage to pay for funeral and 
other final expenses.
What about group life insurance?
Many life insurance companies offer employers and various  
organizations the fringe benefit of life insurance for their 
employees or members through group life insurance policies.  
But, in most cases, when employment or membership ends, 

so does the life insurance!
Although group life policies typically provide only term 
coverage, most states require that departing employees be 
given the option to convert to permanent insurance and 
pay premiums directly to the insurer.
Smaller employers tend to offer insurance programs under 
which employees pay most or all of the policy cost and 
retain coverage on their own after leaving the company.
What is a policy rider?
Additional benefits can be added to your base life insurance  
policy with riders that enable you to design your life 
insurance coverage so that it fits your individual needs. 
Because riders entail additional risks for and/or financial 
commitments by the issuing company, there is a cost for 
each rider. Common riders include:
 •  Accidental Death Benefit. An accidental death   
    benefit rider adds an additional death benefit to  
    your policy if the insured dies in an accident. The  
    accidental death benefit rider amount typically  
    cannot exceed the face amount of the base policy.
 •  Waiver of Premium. With this rider, the insurance   
    company will waive the requirement that you pay   
    premiums and will continue your coverage should   
    you become disabled for a time, usually six months.   
    After six months, the company refunds your  
    premiums back to the date of disability* and all   
    future premiums are waived until you recover.
 •  Purchase Option Rider.  A valuable benefit for   
    younger insureds, this rider allows the purchase   
    of additional insurance without answering any   
    health questions, having a medical exam or   

    otherwise having to show proof of insurability at  
    some time in the future.
 •  Cost of Living Rider (COLA).  A  COLA   rider   
    enables you to increase the face amount of your  
    insurance based on increases in the Consumer  
   Price   Index.   COLA   is   a  great  way   to   systematically   
    keep your coverage in step with inflation. Your  
    company may not make it available on all policies   
    or in all states.
How are life insurance cash value funds, 
dividends and death benefits taxed?
The annual increase in a policy’s cash value currently does 
not incur any income tax liability for the policyowner. 
Dividends generally are considered to be a “return of 
premium” and are not taxable for the policyowner. 
In most instances, life insurance death proceeds will not 
be subject to income taxation for the beneficiary. If the 
insured has ownership in the policy at the time of death, 
the proceeds may be counted in the insured’s estate for 
federal estate tax purposes. 
State inheritance taxes and federal gift taxes may also 
apply to life insurance proceeds in certain situations. 
You should consult with your tax adviser regarding 
questions about possible income, estate and gift taxes 
in connection with life insurance that you own or may be 
planning to purchase. 
How do I choose a good, reliable company?
In general, state laws regulate all life insurance companies. 
Each state insurance department keeps close tabs on the 
life insurance operations within its borders, with the goal 
of assuring consumers that companies are managed in an 
acceptable fashion and have the financial reserves to pay 
their contractual obligations when the time comes.
Beyond that, there are important differences among 
companies. Some are large multi-line companies that offer 
both casualty (e.g., home and auto) and life insurance, and   
some concentrate only on life insurance and annuities. 
Some are focused on specific markets such as small 
businesses or seniors — or “niche” products, such as 
variable life. There are approximately 1,600 companies 
providing life insurance in the U.S., according to LIMRA.
Another way to distinguish life insurance companies is 
how they distribute their products. Many are involved in 
some type of national or regional general agency system, 
where the general agent is authorized to retain and train 
agents who sell the company’s lines. A growing number of 
companies, like Amica Life, sell their products on a “direct 
basis” to consumers and businesses using direct marketing 
and regional offices.

Friday, July 12, 2013

Term Life Insurance Company How To Compare Them And Choose The Best For You

There are some companies that only sell term life insurance but they are the exception and not the rule. Term only life insurance companies are usually companies that are proponents of buy term and invest the difference. Most life insurance companies sell both term and permanent life insurance. There are some life insurance companies that have affiliates that sell supplemental policies to support their wide range of life insurance products. Shopping for term insurance is relatively easy but the number of life insurance companies that sell term insurance is staggering. There are a number of things to consider when you choose a life insurance company. How do you want to be serviced? That is an important question to answer because that will help determine what kind of life insurance company will best service your needs. 

If you would like to have ongoing professional advice then you need to look at insurance companies that distribute their products through agents. There is an increasing number of people that prefer to do everything themselves either over the internet or by telephone with customer service representatives. There are insurance companies that do business this way as well. Once you have determined your preference then you can narrow down the insurance companies that fit your needs. This kind of evaluation will save you a lot of time when entering a rather large insurance marketplace.

The next step is to ask yourself why you are purchasing life insurance. This will give you a better idea about what kind of policy to look for when obtaining quotes. Debt coverage is usually best protected with term insurance. You may want to look at companies with extensive term portfolios. There are a lot of reputable insurance companies and they are highly regulated by their individual state’s insurance commissioner. There is a rating bureau called AM Best that gives a rating to each insurance company according to their financial strength. You can find this book in most libraries.

Why Should You Get A Homeowner Insurance

Homeowners insurance protects the homeowner from financial losses against theft, storms, fire, flood and all other causes explained in your policy. Read your policy carefully to understand your coverages. Reading policy is not enough you should also know about your rights. All states have renter’s insurance and consumer bill of rights to help you in case you file a claim against home insurance company. Your home insurance company should send you bill of rights with policy.

Don’t wait until you have a claim to review your policy and to know your rights.

Here are some reasons why you should get a homeowner insurance.

You are recommended to buy a Homeowners Insurance, which covers five or six coverages rather than specific policy for specific coverage. Buying separate policies will cost you much.

Homeowners policy include five coverages.

Dwelling coverage: This coverage of homeowners policy will pay you in case of damage to your outstanding building like garage or storage sheds and your home.

Personal property coverage: It will pay when your household items like furniture, television, freeze or clothing are stolen, damaged or destroyed.

Liability coverage: It protects you in case you are responsible for someone else’s injury or property damage. In such cases homeowners insurance will soon provide you with a minimum of 20,000 USD as coverage. Policyholders can buy an extra premium of $1 million.

Medical payments coverage: It pays all medical bills if someone gets injured even in the premises of your property. Medical coverage also covers certain injuries such as your dog biting someone in your house. You can get a basic coverage of $500. This can be increased upto$5000 by paying extra charges.

Loss of use – If your house is damaged due to any reason and you have no where to live, in such condition your living expenses will be paid by the homeowners policy.

Thus you can make your home and your life secure with Homeowners insurance policy.

Veteran Universal Life Insurance What Is It And What Are The Advantages

Veteran Universal Life Insurance is insurance that works for veterans to aid them in their post military endeavors. Universal life insurance means that you can vary or even suspend your premium payments depending on the financial pressures you face. Unlike typical life insurance, which pays out only on the demise of the policy holder, or at a nominated age, veteran universal life insurance is an investment scheme as well as life insurance.

This means that you build up a balance which you can borrow against or from to finance various purchases. The flexibility that is built in with payments is unparalleled in the insurance world, and can really help you and your family financially. If the policy is performing well, your beneficiaries may even receive more than the nominated death benefit.

You can also borrow on the balance of the insurance, for things like post retirement income. These withdrawals are deducted from the death benefit which is paid out to the beneficiaries. All these benefits do come at a cost however, a cost that you bear in the form of higher premiums than normal life insurance.

Where the advantage comes in is that you can effectively combine life insurance and investment together, not only that, but the policy can be tailored to suit the needs of a growing family. You can often choose which investments your policy goes towards. You can choose from stocks, bonds, and mutual funds. Not only that, but you can often change which investments your premiums go towards if you so desire.

This means that you can choose the amount of risk you take on, all whilst reaping the rewards that come with investments. Veteran universal life insurance can be an excellent investment and means of safeguarding your family financially, but it does pay to investigate the ins and outs of the particular policy offered to you, and also to learn a little about investing before you take the plunge.

Travel Insurance Is It Necessary For A Uk Based Holiday

Just over a month ago, my boyfriend and I decided to visit the beautiful city of Edinburgh for our 5 year anniversary. We live in Dorset, so we didn’t want to spend the whole time travelling. To make the trip easier on ourselves, we decided to fly there, and used a travel agent to organise the week long holiday. Imagine my surprise when I saw an additional

Static Caravan Insurance

If you are an owner of a static caravan holiday homes you should consider insurance to cover the caravan as well as the contents. There are two levels of insurance for your static caravan; the static caravan itself and the contents within the caravan. 

Insuring the static caravan will cover against loss or damage to the static caravan itself. The insurance can extend to a new for old policies were the caravan can be replaced with a new model should it be damage to an extent which is beyond financial repair. If this is the case some insurance companies will replace the static caravan if it is under 20 years old. The age under which new for old applies will vary from policy to policy. Some companies will only offer new for old for caravans which are less than 10 years old. It is worth checking with the insurance company to determine their exact terms of policy.

The content can be insured under a general policy where by a value is given to the entire content. If you have individual items which are valuable the insurance can also be taken out against such items to given suitable cover.

Below are examples of cover:

Replace new for old

Alternative accommodation costs

Debris removal and resiting costs

Fixtures and fittings

Public Liability

Fatal Accident

Consideration should also be given to the excess which applies to the policy as this will vary from company to company. Also check the policy details to determine the new for old cover and additional cover offered. 

When obtaining quotes ensure you receive at least three, the more quotes you obtain the more likely you are to achieve good value for money. Getting quotes online can be a quick and simple method to obtain multiple quotes.

Cheap Insurance Van

The word shopping brings a feeling of immediate excitement to most people. But if you combine the word shopping with car insurance, as in “shopping for car insurance”, it produces the opposite effect. The thought of shopping for auto insurance makes the eyes glaze over and the heart rate drop to the pace of a slumbering couch potato.

Couch potato? Indeed. Doug Heller, a consumer advocate at the Foundation for Consumer Rights and a recognized insurance issues specialist, told us that too often “people purchase insurance by calling the number on the screen.”

But wait, this is important stuff! You want to be adequately covered if you get in an accident. And you certainly don’t want to pay more for car insurance than you should. Maybe waiting for a solution to be beamed into your living room is not the best idea.

How can you stay awake while navigating through this murky subject? Just remember: There is money to be saved. How much? Hundreds, even thousands, per year. For example, one of the authors typed all of his insurance information into a comparative insurance service. The quotes (for very basic coverage on two old cars) ranged from $1,006 to $1,807