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Affordable Life Insurance Option: Group Life Insurance
Employer-provided life insurance coverage is often the most affordable form of life insurance available. This is because the insurance is underwritten based on the group's risk, rather than yours as an individual. Your individual health will not be considered, since the underwriters use other criteria to determine risk when underwriting group life insurance. If your employer doesn't provide a life insurance benefit, find out if any of the organizations or unions you are a member of offer group life insurance to their members. Organizations like AARP, AAA, trade and talent unions often offer group life insurance to their members at a fraction of the cost of individual insurance.
*It is important to remember that your benefits may be contingent upon your membership or employment.
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LifeInsure.com Tip: Tips for Determining How Much Life Insurance You Will Need
How much life insurance do you need? There are no hard and fast rules or answers. The number depends on your individual circumstances, life stage and goals in obtaining insurance. The following tips can help you arrive at a ballpark figure.
Tip 1. Use a Life Insurance Calculator
A life insurance calculator is a fairly accurate way of conducting a capital needs analysis (in other words, determining how much money or capital you will need). To determine your amount, plug in estimated figures for funeral costs, estate taxes, mortgage and other debts. You will also plug in anticipated income from social security or other sources, assets and the number of years the income from the policy will need to last. These numbers taken together should give you an idea of how much life insurance you will need.
Tip 2. Use a Formula
The simplest formula multiplies the annual income of the policy holder by the number of years the income from the policy will need to last. For example, if the policy holder earns $30,000 annually and wants to provide 20 years of income for beneficiaries the face value of the policy should equal $600,000 (or twenty times the policy holders salary) More complex formulas consider a variety of factors to arrive at more accurate figures.
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Personal History Interview (PHI)
A personal history interview is the set of questions a proposed insured is asked by their agent or underwriter to determine their risk to the insurance company. The PHI contains questions about the proposed insured's health, medications, hobbies and occupation.
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LifeInsure.com Tip: Life Insurance Online
Did you know that you can receive instant life insurance quotes for many types of coverage? Depending upon the amount of coverage you are seeking you may even qualify for coverage with no medical exam. Buying life insurance online is convenient and easy.
Tip 1. Instant Life Insurance Quotes are Available on Term and Universal Policies
Getting life insurance quotes on line is safe. Shoppers need not submit any personal information. You can anonymously answer a few brief questions to get information about a variety of carriers that provide the coverage you want. Along with basic information about applicable policies offered by each carrier shoppers learn about their financial strength rating also. Why is financial strength rating important? Life insurance is an important investment decision. Strong financial ratings can give the policy holder confidence that the carrier will be able to pay the benefit in the event of a claim.
Tip 2. Talk With an Agent about Whole Life Insurance Quotes: There are many more factors to consider with whole life insurance than with term or universal. For this reason, shoppers work with agents to arrive at custom quotes. Your rate reflects your own individualized circumstances, and cannot be determined instantly.
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Adverse Selection (also called Anti-Selection)
Adverse selection occurs when a proposed insured who is already critically ill applies for life insurance. This is considered adverse selection because it increases the risk to the insurer. It can also create an inadequacy in the rate structure because the insurance company is charging a rate for a healthy person with lower risk.
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LifeInsure.com Tip: Life Insurance Quotes
When you shop for life insurance online you can often get preliminary life insurance rates that help you compare while you shop. How can instant life insurance quotes be possible without a meeting? Insurance companies consider a variety of factors to arrive at fair life insurance rates for their consumers. Following is a tip on one of the biggest factors.
Your Health Rating Directly Impacts Life Insurance Quotes
Insurance companies are interested in the health of their consumers. Depending upon how much insurance you are seeking, you will need to have a medical exam and answer questions about your health history. These two steps help the provider determine your health rating.
Health rating categories are placed into classes such as super preferred, preferred, regular and standard. Individual categories are further divided based on the age and gender of the policy holder.
Generally, a higher rating yields lower rates. In some cases, potential policy holders posing very high risk may be excluded from coverage or provided coverage at an additional premium.
Policy holders with major health concerns should shop and compare widely. Additionally, they should work closely with an agent that has experience insuring individuals with their particular health concerns and knowledge about who offers the best rates under those conditions.
If your health significantly improves, it is a good idea to work with your agent who may advocate with the carrier for reduced life insurance rates.
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Return of Premium Life Insurance Tips
If you are in the market for a life insurance policy you should be aware that there are additional benefits you can add to your policy to enhance the benefit. Return of premium riders are one such option.
The Return of Premium rider is a particularly attractive option for consumers because it ensures that you will get all your premium dollars back if you do not die during the term of your life insurance.
Policy holders pay annual premiums throughout the policy term (usually between 15 -30 years). The sum total of all payments is returned to the policy holder at the end of the term unless a death benefit is paid out (ask your life insurance company what happens to the additional premium if death does occur)
Policy payments do not earn interest but, since they are paid with after tax dollars, their repayment is not a taxable event.
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LifeInsure.com Tip: Tips on Life Insurance for Smokers
You may have heard that life insurance for smokers is never affordable. That simply isnt true. Use these tips to find out how smokers can still get the best rates.
Tip 1. Choose an Experienced Agent or Leading Online Life Insurance Site
Each insurer uses its own unique underwriting process. What does that mean when considering life insurance for smokers? Shoppers that smoke should make every effort to work with an agent that has experience with these kinds of policies. Because conditions and exclusions can vary widely among providers you will want to work with an agent that can steer you toward companies that offer good rates for smokers. For example, some companies assign different health classes to occasional cigar smokers than they do to cigarette smokers (likewise with users of smokeless tobacco). You need an agent that understands these variations and can help you find an insurer willing to work with you.
Tip 2. Be Honest
For many policies, insurers conduct a medical underwriting review designed to reveal unhealthy habits or health concerns. For example, when you apply for life insurance you may need a medical exam. The most basic exam collects urine, blood and saliva samples. If you use nicotine, an evaluation of the samples will turn up the associated chemicals. The Medical Information Board (MIB) may have information related to your nicotine use in its database, which is available to insurers. Also, if you are not honest (and your dishonesty is discovered) you may invalidate the policy and leave your loved ones without financial support.
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Group Insurance for Freelancers
If you are a freelancer, you may not have access to a group insurance plan through an employer--but ou still need coverage. If you have a chronic illness and can not qualify for individual coverage, you might consider joining a union in your discipline. Many freelance disciplines have unions (such as The National Writer's Union) that offer group health insurance once you've joined.
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