Archived Questions

7/26/2013

What Is The Average Cost Of Whole Life Insurance?

All premium quotes are dependent on the final underwriting outcome based on health, gender and age of the proposed insured. Here’s an example, more of a rule thumb.

Participating Whole Life Insurance purchased as a base policy with no riders is generally 20% over its guaranteed universal life (GUL) counterpart. A 30 year old male nonsmoker with super preferred health covering $100,000 of GUL averages around $550 annually with the top 25 the leading life insurance companies. The average participating whole life policy should come in around $675 annually. Always check the rate quoted by any online life insurance service to confirm the cost before moving forward.

What Is An Economatic Life Insurance Policy?

The life insurance industry lacks severe uniformity in its semantics, so that being said I’m addressing the question within the realm of a few possibilities. Economatic Life Insurance is sometimes defined as a participating whole life policy with a term rider to decrease the premium cost to the policy payer. In days gone by it was the method of monthly premium via a bank draft.

What Are Current Rates On Fixed Annuities?

Keep in mind that rates can change quickly. Always confirm the rate before moving forward with any decision to purchase fixed interest rate annuities. Presently, the guaranteed fixed interest rate for a five year period is around 2.95%. The guaranteed fixed interest rate for a ten year period is around 3.25%. The 35 basis point spread for twice the holding period may not be in the interest of the proposed annuity owner if interest rates rise over the next decade because long term guaranteed periods are generally protected by punitive surrender charges.

7/12/2013

Why Buy Long Term Care Insurance (LTCi) For Parents?

The societal trend is for succeeding generations to take care of their parents. The economic burden generally falls on them. In our present culture, baby boomers have taken care of their parents with some purchasing an LTCi policy to indemnify or at least mitigate the cost of extended care to protect their own finances. It is a reasonable planning tactic to cover geriatric parents as part of your overall retirement strategy which may include parental care.

How To Borrow Against A Life Insurance Policy?

The best way to borrow against a policy is to purchase the best accumulating cash value TAMRA compliant policy with the lowest policy loan cost. Keep in mind that the vast majority of cash value policies need time to accumulate enough cash value to access and that surrender charges could come into play, eroding the amount you may want to borrow.

There are several policy loan provisions in cash value policies. Here’s a quick inventory: zero net cost loans, wash loans, spread loans, direct recognition loans, participating loans. The policies loans can be fixed rate or variable with two sets of rates: current company practice and guaranteed contract.

You may not want to borrow at all if you can access withdrawals to basis without a taxable event. There are rules that govern this specific aspect of cash value access, but confirm with the life insurance company before moving forward with this idea.

How Much Is Life Insurance For A 30 Year Old?

A 30 year old male nonsmoker with super preferred health covering $100,000 of ten year term life insurance is around $85 annually with one of the leading life insurance companies. A permanent universal life insurance policy for the same proposed insured is around $377 annually with one of the leading life insurance companies. Always check the rate quoted by any online life insurance service to confirm the cost before moving forward.

7/5/2013

Who Is The Primary Beneficiary Of Life Insurance?

Life insurance is an indemnification product used in “defensive” planning to protect the beneficiaries from economic loss due to the death of the policy insured. The first line of indemnification is protecting the primary beneficiary, the one who would suffer the greatest of financial repercussions. In a marriage for example, the spouse of the insured would be in first position, primary beneficiary, and the children of the marriage could be contingent beneficiaries.

Is Life Insurance Paid In A Lump Sum?

As a Payment: Life Insurance is rarely paid in a lump sum, generally on an automatic monthly draft from the policy owner’s bank checking account. That’s not to say that you can’t pay a single deposit, it’s just not the most popular form of payment. You have other payment options as well such as quarterly, semi-annual and annual premium billing.

As a Claim: Life insurance is paid in a lump sum, but can be paid out on an amortized schedule.

What Is The Right Age To Buy Long Term Care Insurance?

There are schools of thought that purchasing long term care insurance (LTCi) early on when you’re healthy is the ideal time to buy LTCi. But other tributaries of thought say you should start seriously considering LTCi no later than age 50.

6/28/2013

Can I Get Short Term Disability Insurance?

Assuming you are healthy, working and generally younger than age 65, yes you should be able to secure disability insurance coverage. But before you start shopping for short term disability insurance you may have it already in your employer group benefit plan, so talk to your human resources department to find out. If you decide to shop for short term disability insurance, keep in mind that there are really only about a dozen disability companies worth reviewing. You can divide them into two categories: blue and white collar vocations. Once you identify your category the companies to review are few. We can help with that.

When To Purchase Annuities?

Maybe never. With any savings or investment products, you need to create a financial suitability profile that establishes your risk tolerance and confirms your economic goals. If those goals include tax advantaged insurance products, then you should consider annuities. If tax deferral is a key component for you, then annuities should be a consideration.

Annuities have crediting options like interest rates, indices returns and equity/bond market performance which you should correlate with your risk tolerance profile. But keep in mind that ultimate use of annuities in your portfolio should be for income. Without this critical goal in mind, annuities may not be for you.

Does Life Insurance Cover Disability?

Life insurance is a mortality product that indemnifies the death of the policy insured. Life insurance may have an embedded disability provision or an additional rider for the cost of insurance or the entire annual premium. Some life insurance polices have additional morbidity riders such as disability insurance, generally on a limited basis.

6/21/2013

Can I Get Short Term Disability Insurance?

Assuming you are healthy, working and generally younger than age 65, yes you should be able to secure disability insurance coverage. But before you start shopping for short term disability insurance you may have it already in your employer group benefit plan, so talk to your human resources department to find out. If you decide to shop for short term disability insurance, keep in mind that there are really only about a dozen disability companies worth reviewing. You can divide them into two categories: blue and white collar vocations. Once you identify your category the companies to review are few. We can help with that.

When To Purchase Annuities?

Maybe never. With any savings or investment products, you need to create a financial suitability profile that establishes your risk tolerance and confirms your economic goals. If those goals include tax advantaged insurance products, then you should consider annuities. If tax deferral is a key component for you, then annuities should be a consideration.

Annuities have crediting options like interest rates, indices returns and equity/bond market performance which you should correlate with your risk tolerance profile. But keep in mind that ultimate use of annuities in your portfolio should be for income. Without this critical goal in mind, annuities may not be for you.

Does Life Insurance Cover Disability?

Life insurance is a mortality product that indemnifies the death of the policy insured. Life insurance may have an embedded disability provision or an additional rider for the cost of insurance or the entire annual premium. Some life insurance polices have additional morbidity riders such as disability insurance, generally on a limited basis

6/7/2013

Can I Cash Out My Life Insurance Policy?

If you have cash in your life insurance policy, you have permanent cash value life insurance. You cash out or surrender the policy for its monetary values. If you do, be advised that you also are terminating your death benefit coverage and you may have an ordinary income taxable event for any gain in the policy at its surrender.

Is Universal Life Insurance Worth It?

There are several reasons why universal life (UL) insurance could be right for you. To make sure, you need to create a financial profile that establishes your risk tolerance and confirms your economic goals. Universal life insurance has four policy types: guaranteed UL for indemnification and three current assumption ULs for income based on crediting options like interest rates, indices and separate subaccount using equities and bonds investments.

Guaranteed UL is generally cheaper than participating whole life. The three current assumption UL types have saving and/or investing options to accumulate tax deferred cash values and the potential, with a TAMRA compliant non-modified endowment UL, to generate tax free income as long as the policy is kept in force for the life of the insured.

Is Surrendered Life Insurance Taxable?

If you’re addressing permanent types of life insurance with accumulating values that exceed the original basis (contributions), i.e. gain, then you ‘ll have an ordinary income tax event at your effective tax bracket rate. And if you’re receiving Social Security the income generated from the surrender of the policy will also be included in the provisional income test for the taxation of Social Security benefits.


5/31/2013

How Important Is Term Life Insurance?

Term Life Insurance is an important step in defending your beneficiaries from present economic loss and future obligations. This is especially true early in life because term life insurance can be very affordable. Term life insurance can often have a convertibility clause that may extend coverage by converting term life insurance to permanent life insurance. If you’re healthy and want to protect your loved ones or business associates, term life insurance is a good beginning to protect against an untimely end.

Who Can Take Out Life Insurance On You?

Technically, no one can take out life insurance on you without your knowledge, your permission and your signature. Also, those who desire to take out life insurance on you have to justify the amount, define their relationship to you and establish an insurable interest as your beneficiaries. Life insurance is for beneficiary protection from economic loss in the event of your untimely demise.

How Does Single Premium Whole Life Insurance Work?

Single Premium Whole Life Insurance is a lump sum deposit into a modified endowment permanent life insurance policy. The Single Premium Whole Life Insurance policy can be designed to cover an indemnification need, an income scenario like an annuity and as a transfer asset for generational gifting. Single Premium Whole Life Insurance can be a tax advantaged opportunity with interest rate crediting that may be competitive with other interest rate products.