Disability Insurance Can Also Be a Lost Policy

Hello All,

While you may have purchased a life insurance policy and become comfortable with the choices you’ve made regarding your policy and its terms, you probably haven’t thought about what could happen if, instead of death, you suffer a debilitating injury. A disabling injury can leave you and your loved ones without a source of income, large medical bills, and the cost of both rehabilitative services and long-term care. Many insurance providers give the option of purchasing add-on riders to your existing policy, offering more specific coverage depending on your needs. It is very possible you can purchase a disability income insurance rider and it may benefit you to do so.

Keep in mind when purchasing a Disability Insurance Plan that you also make sure that it is easily found when the time comes. Often when it is needed, the person it is provided for is not coherent enough to tell you with which company it is with. Register it on a database to prevent it from becoming a lost policy.

The definition of a disability often changes depending on the existing circumstances surrounding the situation. Total disability typically covers you being able to perform your own job, with residual disability covering the loss of earnings or loss of earnings and ability to do work. Some disabilities will automatically classify you as being totally disabled (called presumptive disabilities) and includes: the loss of two limbs, the loss of speech and hearing, and permanent blindness.

The benefit period for disability insurance differs from total or term life insurance in that the length of time you get the benefit once you are disabled is dependent on the benefit period you’ve chosen when you purchased the policy. This could be anywhere from two to five years or even be contingent on an age designation. Some policies have lifetime benefits but most are categorized as short term or long term. Short term policies typically pay benefits anywhere from as little as 13 weeks up to a 2 year period. Any longer period of benefit coverage is considered long term. As a general rule, the longer period you pick means a higher premium you pay out.

There is also a waiting period before you are able to begin receiving your disability benefits from the policy. Known as the elimination period, this waiting period often affects the premiums you pay as well. Acting in the opposite of the benefits coverage period, the longer a waiting period the less you pay in premiums and the shorter the period the higher. Most people choose the length of waiting period based on cost and on how long they might be able to life off of savings or ancillary income before they begin receiving their disability benefits.

The main purpose of disability insurance is to cover your loss of income while recuperating from injury. To that end, and to ensure you have some incentive to return to work, the insurance typically pays only a fraction of your normal income. The amount of disability you receive is typically 50 to 70 percent of your income, subject to a designated monthly maximum. This amount is determined when you apply for the policy and takes into account earned and unearned income and other disability coverage you may be eligible for (Social Security, group policy benefits, etc.).

Certain types of accidents or illnesses may not be covered by the disability policy, including war, suicide attempts, and normal pregnancies. And if you have a pre-existing condition, the policy may exclude your condition from the coverage, either permanently or for a specific time period.
 
Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
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Always remember our Mission Statement
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Planning Your Life Insurance

Hello All,

Why do we buy life insurance? Most of us buy life insurance as a protection for our family and loved ones if something happens and we pass before they are able or capable of living independently. Most of the time it is to fill the financial void when you’re gone. But once you’ve purchased the policy, what then? How do you ensure the death benefit goes to the people who need it most and when they’ll need it most? Always make sure that you register it on a database to prevent lost life insurance.

Buying the life insurance policy is just the first step. You also need to make sure what you leave behind is going to be enough. Go over your insurance needs annually – and especially after a major life event like the birth of a child, divorce, marriage or unemployment. The needs of your family sometimes change and that means you should consider changing your policy coverage to match those needs. Talk to your insurance agent if you think you need more coverage or if you think it might be too much. They will be able to help you choose the right amount for your specific situation and needs. If you have a cash value insurance policy with investments you might also consider approaching a financial advisor, who will be able to guide through reallocating your account.

If you have children you’re going to want to discuss your life insurance with them, as well – at least if they’re of a mature enough age. Usually around 18 is probably best but if you think they can handle the discussion younger is okay too. Don’t dwell too much about how mom and dad aren’t always going to be there. Instead make sure they understand how much money they’ll get when you pass and that it should be a sufficient amount for them to afford a higher education and so on. They’ll also need to know who’s going to be in charge of the finances, be it a trust or other type of account. It’s important for them to know if they’ll have immediate access to it or if there are restrictions such as what the funds can be spent on. Just as important as letting them know all this is to let them know why it’s important to plan ahead like this for the future. And if you have any specific desires for the death benefit (such as a college education) it’s important they know this as well and why you think it’s important. Young children are going to need a guardian appointed for them. In some instances this can be a spouse but that may not always be best for your needs. If your children are that young it’s for the best to discuss all this information with their appointed guardian so they will know and understand your wishes.

If you’re concerned your beneficiaries won’t be able to handle the financial duties and obligations a death benefit entails, you might consider creating a trust for their benefit. A legally appointed person (trustee) is then capable of managing various aspects of the inheritance, such as real estate and life insurance proceeds, for one or more beneficiaries. An attorney will help you set up a trust and guide you through which type of trust is right for you and your heirs. It is an excellent way to make sure your wishes are met and protect and plan for your beneficiaries future.
 
Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

Common Life Insurance Scams You Should Avoid

Hello All,

Despite the honorable intentions insurance companies and life insurance purchasers have, the sad truth is some people still want to play the system and feel the need to try and make a dollar at someone else’s expense. They turn a tool that’s purchased as a benefit for your family into an unscrupulous way to make some dishonest money. It can also hurt you. Make sure that you also register your life insurance company name with a database to prevent lost life insurance.

One common technique tricksters use is offering to purchase your life insurance. In this scenario a stranger owns someone else’s life insurance policy. With life insurance policies you typically can’t sell your policy until you’ve had it for two full years – it’s a no no. At this point, the scammer suggests paying the money for the policy up front, even offering to pay the premiums for two full  years. Usually it’s a large policy worth north of $1 million and often times they consider it a loan. If the policy holder dies before the full two years, the family gets the policy benefit and uses it to pay off the loan. If the insured isn’t dead they can choose to sell the policy outright and use the money as repayment on the loan, hold on to the policy and pay on the loan (and any accruing interest), or (and this is where the scammers come in) sign over the policy to the lender/scammer – doing this they pay zero on the loan. With the last option, the lender (scammer) becomes the beneficiary when you die. Often they seek out the elderly as victims since, statistically, they are more likely to die sooner – they make better profits. If the insured chooses to pay back the loan they’re out the money. If you sell the policy, or it reverts to the lender, you might find you can’t get insurance later on.

Another scam engaged in by unscrupulous insurance agents is called churning. One of the financial opportunities life insurance companies offer is an annuity. Annuities have an added benefit of regular income once you’ve paid in in premiums. As you make regular payments, the money grows as the insurance company invests it. Many companies lock out payments on annuities for 10 to 15 years, however, so they’re typically considered a long-term investment. Some deplorable agents offer a scam to older seniors in which they exchange their current annuity with new annuities for an instant cash bonus. The senior then finds themselves stuck with a new, locked annuity without the bonus. Only by paying a large penalty fee can they withdraw money from the annuity. Sometimes they do receive an instant bonus, but not usually generous enough to pay for the fact they now have no regular income. For those over retirement age who relied on the annuities to help with their retirement this scam can be particularly devastating.

Sometimes it isn’t easy to see a scam coming, even for those of us with plenty of experience and who know what signs to look for. It is often blindsiding for anyone with little or no experience when dealing with life insurance, especially if this is the first time you’ve gone shopping for insurance. If you can arm yourself with some research and facts before hand it can save you, or someone you care about, in the long run.
 
Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

Lesser Known Categories of Life Insurance

Hello All,

There are some types of life insurance that the general public may not be familiar with so a small introduction to these varieties can come in handy. Prevent lost or unclaimed life insurance by knowing what these are.

While most of us are not in a position to finance loans for other people we are often in the position to apply for a loan.  When seeking a large credit line you should be aware that a lender can purchase a life insurance policy, called “credit life”, to pay off any remaining balance you owe upon your death.  A lender can also mandate that you purchase a credit life policy in accordance to their loan conditions.  A borrower may not need to purchase a credit life policy if he or she already has a term or whole-life policy in place.  In this case the borrower must establish the lender as a partial beneficiary guaranteeing that any remaining loan balance will be paid upon his or her death.   A variation on credit life is an accident and/or health policy which will cover remaining balances if you are unable to meet loan payments because of illness or injury.  These policies are usually attached to and paid for in concert with loan costs.

Another type of life insurance that is becoming increasingly popular is funeral insurance.  This kind of policy is set in place to ensure that funeral expenses are covered in advance.  This insurance can be extremely costly if in place for longer than 10 years or so and often comes with a graduated coverage amount for the first several years.  This means that if you die before you have met a specified number of payments that the death benefit will provide the coverage that it was intended to upon its purchase.  Often a better solution to the expense of funerals and/or burial is to invest in a cemetery plot and funeral expenses ahead of time and make payments directly to the funeral home.  Another option is to set aside a specific portion of your term or whole life insurance policy to pay for these expenses.

Home service life insurance policies are sold door to door.  You should be careful before purchasing a policy this way.  Make sure you understand the terms and the benefits provided by the policy before signing any documentation.  A similar type of very limited term life insurance policy is being sold at some department stores.  These policies are usually one year term policies that provide very limited coverage. 

When looking to purchase any type of insurance it is important to find a reputable company to purchase a policy through.  It is also important that you understand your policy thoroughly.  Keep in mind that upon your death your beneficiaries need to be able to locate your policy information so you should leave the name of your provider as well as a reference or policy number in a safe place that you have shared with a loved one.   Weigh the benefits and costs of different kinds of insurance before choosing a policy that you will be paying on for years to come.

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

 

Life Insurance Policies that Offer Cash Value

Hello All,

Because of the increased benefits offered by cash-value life insurance policies their premiums are usually higher than those of term policies.  Cash-value policies offer the ability to use a portion of the policy similarly to a savings account. This is the reason you do not want them to be a lost life insurance policy.  You may borrow against it, invest part of it or even withdraw a portion to meet your current needs.  Premiums begin at a higher rate than those of term policies.  The increased initial rate accounts for the cost of purchasing the savings component of the policy.   The overall cost of cash-value policies versus term policies usually equalizes over time if the policy is purchased when you are young and health and kept active through your middle years.  You may even discover that your premium rate is lower than an equally value term policy would afford.

Cash-value policies are established by placing a share of each premium into what is basically a savings account.  This value of the account grows as more premiums are paid and reflects the cash-value of the policy.  Depending on your insurer and the details of the policy the account could increase at a fixed rate, a flexible rate or be dependent on the insurers’ rate of return on secure investments.  Policies vary on how you may use this cash value.  Most policies will allow you to borrow against it using it as collateral.  You may often be allowed to use the cash value toward your premiums.  You can also simply withdraw a portion of the money for immediate needs.  You must be aware that the withdrawal of the entire cash value will terminate your coverage.

When establishing your policy you should clarify what your beneficiaries will be entitled too.  Some policies disburse only a death benefit others may include part or all of the cash value.  Depending on the benefits allowed to those you name your premium rates may be affects.

Cash-value policies grow over time and it will be several years before there is a significant available balance.   When considering a withdrawal you need to double check your policy terms to make sure you are not going to accrue a surrender charge for accessing the account prematurely.  You should also be aware of any tax penalties you will be responsible for before withdrawing funds.   For your policy to be cost effective it should be in place for more than 15 years.  Cashing your policy in early will mean the loss of death benefits as well as the premiums paid into the policy.  The cash value simply will not cover the incurred expense. 

Both whole-life and universal-life insurance policies can offer cash-value options.  Whole-life policies are in place until your death unless you cash them in or fail to meet the premiums.   Premiums for whole-life policies are set in place when the policy is established.  You will either keep the same payment or know ahead of time that the cost will increase at an agreed upon rate.   Universal policies allow flexibility in rates and term coverage and end at a pre-specified date.

Cash-value policies can be a great financial move but do not establish a policy like this unless you can foresee leaving it in place long enough to benefit from the advantages it offers.

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

Should You Consider Life Insurance?

Hello All,

As we enter adulthood we often have a sense of invincibility.  Because of this many young adults fail to consider purchasing a life insurance policy.  No matter how young and healthy you may be it is important that you consider purchasing even a small term-life insurance policy to cover any final expenses that may arise in your name in case of a sudden illness or accident.  Small policies exist to make sure that your loss, while devastating to loved ones, does not become a financial burden for them as well. 

With any policy you may decide to name one beneficiary or several.  If naming more than one recipient you need to designate how the benefits will be distributed.  Most policies allow you to name secondary beneficiaries as well to protect the policy if the primary has already died. A huge benefit of life insurance is that, in contrast to investments, they pose no risks.  It guarantees  to pay death benefits as long as your premiums have been met.  This allows you to provide for those you leave behind without the worry that investments will lose value becoming incapable of providing the financial support your beneficiary needs.

There are several types of life insurance policies and some may accrue a cash value that you can borrow from or even use as income.  When you purchase a policy while you are young and in good health it will allow you to receive the lowest premium rates for your insurance that may be available.  Agents should never try to market these policies as investments because they do not meet the requirements to be an investment.

When you apply for a life insurance policy the company will use a number of factors, through a procedure called underwriting, to determine if they should cover you and how much your premium should cost for the desired amount of coverage.   Factors that can affect the cost of your coverage are your age, medical history, social history including alcohol consumption, drug use, or whether you are a smoker as well as your gender.   As mentioned before the younger you are and healthier you are the lower your rates will be because you should live long enough to make more payments toward your policy.  Those who smoke or present at-risk health issues such as advancing age, high blood pressure, depression and other health factors have a lower life-expectancy and will most likely pay higher premium rates.  If your risks seem too outstanding an insurer could refuse to cover you.  If you are denied coverage by one company keep looking because policies differ between companies.

If you have no dependents you can look for a small policy to cover your final expenses.  If you are married and hold job it is important that you consider what your spouse will need financially after you are gone.  If you are a stay at home parent, remember that your spouse and children will need help with expenses like child care if you are not there to provide it.  The more children you have the more coverage you should carry.  There are many ways to calculate the amount of insurance you need.  You should research types of policies and discuss with your agent the need to affordably provide for your loved ones after your death.

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

 

 

Why It Is Important To Inform Your Loved Ones Of Your Life Insurance Policy

Everyone has a life expectancy. Some people prepare for the end by getting life insurance. This is so that their loved ones will have something to live off of after they are gone. But sometimes when people take out life insurance policies they do not inform the beneficiary.

Due to someone not being notified of being the beneficiary of a life insurance policy, it will not be paid out. Every year millions of dollars are lost due to unclaimed life insurance policies. If the beneficiary does not claim the life insurance money, than the company will not notify them of its existence.

This is kind of shady but it happens every day, all the time. If you are planning to start a life insurance policy is sure to let the beneficiary know that you have done so. Let them know what company the life insurance is through, and how to get a hold of anyone who can help.

By not letting someone know where the life insurance money is at you risk them losing out on it. Every year this happens and lots of people are left out in the dark. Not only does your loved one die, but you are left without a penny to help with the funeral costs and what not.

When purchasing a life insurance policy is sure to make copies of everything. Copy the policy, and the every single paper you can get a hold of. By doing this you can insure that the beneficiary has a complete set of documents pertaining to the life insurance policy. This way if there is any kind of problem with collecting the life insurance policy than the beneficiary will have copies of the policies so they can make the process of claiming a lot more easily.

By making copies that is the only way to make sure that the beneficiary has a complete grasp on how to get the money that is owed to them. Planning for the end is the best thing one person could do for their family and loved ones. Insurance companies do not like to pay money, so they will not pay if they can. This is shady but it happens every day.

Insurance companies are companies. And needless to say they want to save as much money as possible. By not paying out on life insurance policies they save millions. This is why you should be sure to let the beneficiaries know exactly what to do in case of your death.

Let the beneficiary know who the company is that you are insured through. Give the beneficiary a complete set of copies of the life insurance policy. And be sure to let them know that they are your beneficiary.
 

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

What do you think?

Hello All,

I am a member of a few insurance groups on LinkedIn and I posted the following video of one of Suzi Ormans call ins. Now, please understand that I am not bashing Suzi she does have her own unique style of selling things. However, I wanted to post this because I did get quite the conversation going in LinkedIn from life insurance agents. Everyone had great points for and against what she was saying. Any comments from individuals that agree or desagree with her, please feel free to comment.

https://www.youtube.com/watch?v=IuWea6xpY00&list=UUIN-QsztU-mZpOXXUfB5dGw&index=3

Until next time,

Michael Hartmann http://www.findyourpolicy.com/

Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

Why Should the Single Non-Parent Consider Life-Insurance

Hello All,

Most of us think about life insurance as a means to help replace lost income from our death.  This income is especially important for dependents such as spouses and children who will suffer without its replacement.  That said, why should a single person who does not have any children consider purchasing life insurance?  Well, first of all no one knows their own destiny.  If you are 45 and never plan to marry you could meet the person of your dreams and start a family five or ten years down the road.  You just never know. 

Life insurance is much more affordable if you purchase it when you are young.  This is especially true of term life policies.  Permanent or whole-life policies increase in price with age but start out more expensive than term does.  Term policies can be purchased for just a few dollars a month when you are healthy and in your 20’s.  That changes the older you get however.  Even if you retain your perfect health that cost of those policies can multiply as much as five times over less than two decades.  In addition to that aging often brings changes in health.  Even minor changes in your health can affect insurance premiums.  Gaining 10 pounds could possibly bridge an invisible line that increases your rates.  As you age, the risks of high blood pressure and cholesterol increase.  You could receive an injury that will increase your rates.

If you marry and have children at some point down the road you will appreciate having the coverage you already purchased.  Most policies allow you to increase coverage without a repeated physical and many term policies are convertible to permanent policies.  By purchasing life insurance when you are young you keep your options open for the future.

By having life insurance in place you can continue to help the people you love.  While you may not be in a place of financially providing for your extended family and friends you probably provide them with plenty of help.  If you have family or friends who depend on you to help them through life a financial benefit after your death could help them to compensate for the things you will not be available to do. 

An option that many people forget to consider is the ability to contribute to a church or favorite charity through your death benefits. 

A really important reason to consider purchasing life insurance, even a relatively small policy, is to prevent your loved ones from having to cover funeral and burial expenses when you are gone.  A grieving parent or sibling should never have to struggle financially to figure out a way to bury you.    The cost of an average funeral is well over $7000 and higher end options can run over $20,000.  The financial impact of this could weigh heavily on those you leave behind.

If you pass away with outstanding debts those debts do not go away.  Your family may not be legally responsible for paying them off but they may feel like it is the right thing to do.  With insurance benefits your survivors will be able to pay these debts off instead of allowing them to remain unpaid.

No matter what your circumstances you cannot foretell the future so it is easiest to prepare ahead, just in case.  Someone you love will benefit from you having a policy in place at the time of your death.

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

How Much Life Insurance Do You Need

Hello All,
 
Figuring out how much life insurance you should purchase can be a complicated process; no matter what shortcut strategies like multiplying your income imply.  More goes into planning than just your annual salary.  You want to find the middle ground; insurance coverage that will meet the needs of your loved ones, that has an affordable premium payment and that is not far in excess of what you truly need. 

A simple way to figure how much insurance coverage you should shop for is to take into account four main categories of financial need, in addition to some other contingencies.  These categories are income replacement, debt, final expenses, and education expenses for your children. 

Your family’s most immediate need will be the money to cover the expenses of your final arrangements.  Whether you decide in advance not to have a service there will be costs for burial or cremation.  This cost can exceed $20,000.    Make sure that if you want something lavish to celebrate your life after you are gone that you plan for the extra cost.  The benefit of using insurance coverage for this is that beneficiaries are usually allowed quick access to part or all of the policy.

You need to take into account your debts.  These need to include the mortgage or rent on the home you live in now and the likelihood of that expense increasing over time.  Include loan payments such as student loans, credit card balances, and car loans.   Even if your beneficiaries do not decide to sell the home they will need the money to cover the payments each month.  This will ensure a home for them to live in long-term.

After debts have been paid off and final expenses have been met your family should not need your full annual salary but a portion of it.  It is important that you take into account the replacement of your income.  Usually this amounts to about 50%-60% of your pre-tax income.

The thought of college expenses is very overwhelming whether you have one child, three or even more.  You need to plan for an estimated cost of college once your children reach 18.  Over the past 20 years tuition at most colleges both public and private has nearly tripled.  Remember to include this amount of money for each of your children.

You need to total the amounts for each category and combine them to get an estimate of your insurance needs.  Medical problems, spousal income, a paid off home, and more will figure into exactly what your needs will be.  You also need to consider how long you want the coverage to last.  If you are most worried about covering the expenses of your children growing to adulthood you might consider a 20 year term policy.  If you want to ensure that your spouse and children receive death benefits when they are independent adults you will want to check into a whole-life policy. 

 

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”