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Does Life Insurance Terminology Have You Stressed Out?
For most people, being faced with unfamiliar terminology is just as bad as being forced to read through a thick owner’s manual or complicated instructions. If this sounds like you, then you are definitely not alone. You may even be ready to pull your hair out or completely give up. You have probably read the same sentence over-and-over, trying to understand it, but found yourself daydreaming about anything but the topic. Fair enough; it may not necessarily be a fun topic, but it may be an important one. This is true for life insurance terminology. The sooner you take the time to get familiar with the terminology, the faster you will find the coverage that you need, and be able to go to sleep at night knowing it is one less thing you have to worry about.
You can start by getting familiar with the most commonly used terms and then you can get to know other words you come across later, if you need to. You will find that when you explore the terminology word by word, it is a lot easier than looking at the big picture. Whole Life, Term Life and Universal Life are the three most commonly used terms you will face, and believe it or not, they are not as complicated as you think. In fact, when you explore the meaning, you discover that the term used really does describe exactly what it is. For example, Whole Life provides coverage for the policy holder’s “whole” life.
Article Posted by Expert Author: 4 on 12/13/2013
Article Posted In: How to Guides
Top Myths Surrounding Life Insurance Companies
A lot of people think they know all there is to know about life insurance companies, however, most of what they think they know is actually a myth. The truth is that this type of coverage is just like any other insurance policy, which means there will come a time when you will use it but in most cases that won’t be for a long time.
Below are some of the top myths to help you understand life insurance a little better.
Top Myths Debunked
Employer Coverage Is Enough
his may or may not be true. For the employee who is single and earning a modest income, coverage from an employer may be sufficient. But an employee with a family that includes a spouse and children may need additional coverage where term policies don't meet their needs.
Premium Costs Are Deductible
Unfortunately, this is not true in most cases. Personal life insurance costs are almost never deductible. The only case where they would be is when the owner of the policy is self-employed and the coverage is being used for business asset protection.
Without Kids You Don’t Need Coverage
Did you know that the biggest reason people get a policy is to cover their debts, not for a continued luxury lifestyle for their family? The truth is that life insurance is used more to cover any debts that you have for the time being, not just for children and family members. Being uninsured will mean that your family or executor will be left to decide what to do. If you are low income, having life insurance can allow you to leave your legacy to a charitable organization of your choice.
Buying Term Coverage And Investing The Difference Is Best
When comparing term coverage with permanent life insurance policies, it becomes easy to see how high term coverage can get as time goes on. If you know that you want to be covered when you pass away, permanent coverage is likely your best choice. The total amount paid for a permanent policy, although more expensive, will very likely be much less than having to pay ongoing premiums in a term scenario.
Twice Your Salary Is Adequate
There is no 'one size fits all' where it comes to coverage. Everyone's situation will be different. Many factors go into how much coverage is ultimately chosen. As well, you may wish to be able to pay off debts like a mortgage in order to take the financial burden from your family should you pass away. One of the most accurate ways to calculate how much coverage you need is to do a cash flow analysis.
Foregoing Coverage Altogether And Investing Instead Is Smarter
Experts advice that coverage of some sort is needed at least until you have accumulated enough assets to break even. For example, if you have accumulated liquid assets totaling one million dollars, this is the point where you can choose to reduce or discontinue a $1 million dollar policy. Not getting coverage and instead relying on your investments for coverage could very well see those investments depleted by the time your family needs to be provided for.
Every Type Of Term Coverage Should Have An ROP Rider
A return-of-premium rider, or ROP is not necessarily a cost-effective solution. This is what a number of financial planners may advise. The decision to include an ROP rider will depend on how much risk you think you can tolerate, as well as any other goals you have for your investments.
This topic is always going to be foreign to most people and that is why you need to take the time to learn more about it. Comparing what life insurance companies have to offer along with their ratings is a good first step.
Should You Purchase Life Insurance Online?
Most people today use the internet when looking for information. While it can be much quicker than calling companies, special care should be taking when using the internet to buy life insurance.
Do Your Homework
Before you even begin searching for life insurance coverage, it's important to do a little homework first. Find out what kind of policy you think you will need. This will mean choosing term coverage, whole life or universal life policies.
Next, figure out how much your family will need to cover their expenses should something happen to you. Then, you will need to figure out for how long you will need coverage for. Finally, your monthly budget will definitely come into play. How much will you need to spend per month on your life insurance premiums?
The Importance Of Your Source
Just like anything else you do on the internet, it's important to be sure that you are getting your information from reputable sources when you search for life insurance options online.
One of the ways to do this is to check their ratings with the Better Business Bureau. The BBB website has extensive listings for companies all around the world. You can read about customer complaints, and hear from the customers on what kind of job a life insurance company did in a time of great need.
Types Of Life Insurance Quote Sites
Be aware that there are three types of life insurance web sites: lead capture, corporate and broker sites.
Lead capture sites do not provide you with an online quote, but inform you that insurance companies will call you with a quote instead. In order to get a quote, you must provide them with consumer information which will then be sold to insurance companies.
Corporate sites allow you to compare only the products that they offer, and not quotes from different companies.
Broker sites offer coverage from several insurance companies, and allow you to compare multiple companies with one interface. So if you're searching for life insurance companies in Kansas and how to compare them, you'll want to keep this information in mind.
Can You Really Cut Out The Middle Man By Getting An Online Quote?
Many people who are looking for life insurance coverage expect that they will save more money on that coverage due to there not being an agent involved. But this couldn't be further from the truth.
If you want coverage for ten years, and that coverage will cost you $500 per year, this might result in an agent commission of 50%, meaning just over two dollars per month when the commission is averaged over a decade. This means you only save a couple of dollars per month, even if you eliminate the commission.
Underwriting, And The Agent's Role
Because going online for a life insurance quote means never meeting an underwriter in person, those underwriters only have your application information to rely on when deciding on the rate class you will receive. Your rate class will be super-preferred, preferred, select, standard or substandard.
By purchasing insurance coverage online, you may find that underwriters are less aggressive with their decision. This can be especially true if it’s determined that you fall between one class and another. Having an actual agent can mean better communication with the underwriter, which could very well result in a better rate for your life insurance policy.
You'll want to deal with only those life insurance companies that have a long track record of serving consumers through fair practices, and you'll also want to make sure you are comfortable with the policy benefits and price points you are being offered.
Taxes And Your Life Insurance Coverage
Many people who are ready to choose a life insurance company don't associate this with their tax situation. But if you are looking for coverage and are in a high tax bracket, one type of life insurance may benefit you over another. For example, permanent insurance may work well for you due to the tax-deferred savings options. As well, your family will not have to wait to receive benefits such as they may with other investments.
Death benefits are not taxable, regardless of the type of life insurance policy you have purchased. But your life insurance policy will be added to your taxable estate. This means that as long as you can say you own your insurance policy and have paid the premiums as required, then any proceeds from your policy will be added to your other property when it comes time to determine your death taxes. You can leave up to $600,000 in property to your heirs without having to pay federal estate taxes.
For more information on understanding the industry, the providers available, and the types of benefits you will derive from purchasing a policy, check out our resource at http://www.lifeinsurancecompaniesbystate.com/.
Ways To Buy Life Insurance
When searching for quality life insurance companies in Colorado, you may discover you have a few ways in which you can purchase coverage. Getting coverage via a broker, salesperson or agent is the most common way to do so. A qualified professional knows how to assess your unique situation for the best possible coverage for your needs. A person who takes the time not only to listen to your needs and goals, but to understand them has one of the most important marks of qualification.
You can also get life insurance coverage via your employer in some cases. But be aware that most of the time, this is only basic coverage, although it is offered at no or very little cost to you. If you are worried about adequate coverage, looking over your work insurance policy will tell you right away where you are covered and where you are not. Treating work insurance as a supplement to your total life insurance plan is a good idea.
You may want to begin your research online by checking out reviews of top life insurance companies available in the United States, as well as the types of policies they offer, their ratings, and their availability in your state.
What To Do After A Loved One Dies
Even if they aren't ill at the present time, knowing what to do following the death of a loved one can be as important as knowing life-saving techniques when someone has a medical emergency. The most important thing you can do following the death of a loved one is to stay calm. Knowing where their policy from life insurance companies in Kentucky is located is one of the first steps to take. If you don't know, contact a family member or friend of the deceased to get the information you need.
Be on the lookout for fraud. Although this is not something anyone wishes to think about, there are those who will scour the obituaries for the recently-deceased. Your whereabouts can easily be located by a fraudster posing as a long-lost friend or relative, even going so far as to enter and burglarize your home while you and your family are at your loved one's funeral. This can be combated by having someone stay at your home while you and your family are away.
If you do not yet have a policy, this is one item on your to-do list that can have disastrous ramification if you continue to procrastinate. Begin your research as The State Insurance Guide where you can familiarize yourself with the terminology of the industry, and can educate yourself on the various types of policies that companies offer, and review the most reputable providers to see which one offers the right safety net for you and your family.
Reasons For Choosing Whole Life Insurance
There are a number of reasons that customers choose whole life coverage from life insurance companies in Louisiana. First of all, whole life insurance allows for stability where premiums are concerned, as they don't change. For those looking for some extra security in their retirement years, whole life insurance also offers the opportunity to build tax-deferred cash value. This cash value can also be used towards home renovations or making large purchases. As well the cancellation of any whole life policy allows immediate access to cash value, although taxes may apply.
Many older people favor whole life insurance as one of many safer options in their portfolio to diversify their wealth for the future, whereas term life insurance is favored more for people looking to protect their loved ones in the event of their untimely death.
Of course, whole life coverage isn't for everyone. The pros and cons of each type of life insurance must be carefully weighed. And then, life insurance companies should be compared to see which one offers the most adequate coverage for the most affordable monthly premium. Some online resources are available which allow for the instant comparison of several factors, such as industry rating and customer satisfaction.
An Easy Way To Get The Money You Need To Afford Life Insurance
You may think that life insurance costs a lot more than it actually does. And you wouldn't be alone. Many Americans way overestimate how much they will pay for life insurance. If you're a healthy person of 30 years of age, you can actually get good life insurance coverage for $150 per year, which is a drop in the bucket when you consider that it's only about $0.40 per day.
Still, your budget may be incredibly tight, and let's face it; whose budget isn't with the current state of the economy? So if you know you need life insurance but aren't sure how you will go about paying for it, how about not doing anything except filing your taxes? Using the money you get back from your income tax can go to great use - funding your purchase of a policy from life insurance companies in Mississippi.
Life insurance rates are lower than ever, which means that you get definitely get more bang for your extra buck with a policy these days. So why not get a few quotes and see how affordable life insurance really is? You will discover it's a very small price to pay to secure your family's future with adequate term coverage.
Life Insurance Fraud Can Happen To You
These days, fraudsters lurk around every corner, doing the best they can to drain good-hearted consumers of their money. And it's no different with life insurance. Hundreds of thousands of dollars have been lost by clients to life insurance fraud. And this has a lot of people running scared, and ultimately avoiding the purchase of life insurance.
But not securing your family's future financial needs is not the best way to protect yourself from fraud. Instead of avoiding getting coverage, consider that there are many things you can do to ensure that the coverage you get from life insurance companies in Alabama is on the up-and-up.
Checking a life insurance agent's references is probably the most important thing you can do. Google them to see what prior customers or place of business have said about them. A keen eye will also help you avoid fraud - by looking your policy over closely, you will be able to tell if anything's missing.
Check out The State Insurance Guide for information on the big names in the industry, as well as how to understand the benefits of various types of policies and other jargon.
Know What Life Insurance Ratings Mean
If you're confused about the series of letters and plus and minus signs that can be found beside the names of life insurance companies, you are definitely not alone. But while these letters may seem insignificant, they can mean a lot to you when it's time to figure out whether a company is as reliable as they seem.
Top companies like Transamerica Life Insurance may have a rating of "AAA" or "AA-". Ratings like this are provided by independent industry monitors such as A.M. Best and Standard & Poor. The criteria for the ratings a life insurance company ultimately receives are its history of customer service and its financial stability. The better the rating, the more likely a life insurance company will be able to answer all of your questions quickly and accurately, and be there years from now when your family needs financial help to pay for things like your final expenses and their daily requirements.
Check out http://www.lifeinsurancecompaniesbystate.com/ for solid information about how to evaluate insurance companies and to make a wise choice when shopping for an insurance policy. You and your family deserve the best in care should the worst happen when you are least expecting it.
Assessing Life Insurance Companies Ratings
The benchmark of any quality life insurance company is its ability to pay you benefits and settle your claims effectively, and not the one with the lowest premiums, as some may believe. Verifying a company's financial stability is the only way to ensure that they will be able to help your family when they need it the most. And the only way to do so is to look at life insurance companies ratings.
The company itself will tell you what its ratings are, but that may not give you the whole story. Oftentimes, companies will put their higher ratings in plain view, but downplay lower ratings from other agencies. One way to get to the bottom of things is to check a company's rating for the current year, and then the previous year using the data provided by two or more agencies.
Understanding what rating codes mean is crucial. An A+ rating from one company may mean something completely different from the A+ rating of another. Another good tip is to search not by brand, but by underwriting company. This information can usually be found at a company's web site.
At The State Insurance Guide we help you find the data you're looking for on the top insurance providers in the nation. Don't leave this decision up to chance - doing your homework up front can mean peace of mind later on down the road.
Tips To Getting The Right Life Insurance For You
Choosing a policy that will suit your budget and needs for coverage can be a challenge if you don't know where to start. And just because a major company like American General Life Insurance may have good ratings and affordable pricing, doesn't necessarily mean that they can offer you the coverage you're looking for.
You will want to ensure that you can get a policy that will be there until your children are old enough to move out or that will last until you reach retirement. As well, it can become easy to get frustrated and put off getting life insurance until later. But waiting to get coverage until something happens will usually mean that you may much higher premiums for coverage.
Just as your mom may have taught you, honesty is the best policy. Being truthful about the questions asked on the application will mean that you receive more accurate coverage. Lying to get a lower rate can mean a lot more trouble in the future.
If American General is not one of the life insurance companies available in your state, make sure you check out the other reputable companies reviewed on our site to see what your options are.
Funeral Options For Low-Income Families
Recent reports indicate that the cost of funerals, especially taxpayer-funded funerals, is rising. In Indiana, one township has seen a rise for covering funeral costs for low-income families rise to almost $60,000 in 2011 from $28,000 in 2007.
Providing final care for the deceased whose family simply cannot afford the cost is seen by a necessary expense by many townships. To a family without the means, knowing that their loved one is eligible for this kind of coverage is a great relief at a time of great loss and emotional pain.
Another kind of funeral coverage can be found by low-income families in the form of burial clubs or societies. Usually offered by churches or other civic organizations, burial clubs have a long history of providing families in need with a decent burial for their loved ones.
Looking for information on you city's web site may provide information on where these clubs can be found. Many churches today can be contacted via email. Another source for funeral payment assistance may be found at organizations like the Red Cross or YMCA.
Life insurance needn't be only for the well-to-do. Find out why it is crucial to fit this line item into your famiy budget in the event that something may happen to you or your spouse at http://www.lifeinsurancecompaniesbystate.com/.
Getting Comfortable with Life Insurance Terminology
When you purchase a home, you don’t need to be 100 percent familiar with all the lingo that realtors and agents use, but you do need to have a little knowledge of the basic words, such as fixed rate, term, variable rate, closing cost, inspection, etc. This same concept applies to obtaining coverage from reputable life insurance companies. There is a lot of terminology that you will see and hear tossed around by those in the industry. You don’t have to fully understand every single word, but a little basic knowledge will go a long way in helping you get the exact coverage that you need.
The easiest way to do this is to make a list of different words you should explore. A few to get you started include Whole Life, Term Life, Universal Life, Survivor Life, Variable Universal Life, term, beneficiary, disability insurance, disability waiver, guaranteed survivor and coverage. Keep in mind that there can be small variations in terminology from one insurance company to the next. For example, one company may refer to Survivor Life insurance as Second-to-Die insurance. They are basically the same thing, but have different names. You don’t have to choose a life insurance company or coverage option on your own either. Help is available! Nearly everyone has questions on this topic. It is your right to make sure you get your answers before obtaining a policy.
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