I spoke to a gentleman on the phone today about the world economy.   He asked me what is going to happen in the market and if I am concerned.   The short answer to this question is that I am worried about the economy, like any American.    The good news is that our whole life clients seem to be pretty happy, as they have seen their cash values increase even with the economic downturn.   No matter what, the cash value gets better ever month and every quarter.    A whole life policy has guaranteed values in the cash values and a non-guaranteed amount with a dividend.    The dividend is declared by mutual companies and then credited to your policy.   Mutual companies, which are owned by policyholders may reduce dividend scales in an economic downturn.   Even with reducing they dividend scale, most will still pay a dividend and have a long history of doing so.

Even if the economy went completely south and the companies halted paying a dividend temporarily, they guaranteed values would always still grow.   The bottom line is that the whole life cash value always goes up.   It is a safe and steady place to put some of your money and can be a very valuable fund to tap into.   We work with our clients to help them understand the principles of  “Infinite Banking” and how they should build and utilize their cash value in the most efficient way possible.

It is a tough econ0my out there, but whole life insurance keeps plugging right along.

When looking for life insurance as a cancer survivor, it is important to consider many factors.    You want to speak with a life insurance consultant that can work with you to understand your situation and ask the right questions.   How long have you been cancer free? What type of cancer did you have?  Did you have chem0therapy?  What medications are you on now?  What follow up do you have on an annual basis?

Those are just a few of the many questions that should be considered for a preliminary analysis to determine the best carriers.  When looking for the best carriers, we want the most aggressive underwriting and best rates will be imperative.  The various carriers will look at different scenarios different ways, so it is important to weed out the ones out who will not provide the best opportunities.   Once we have the preliminary analysis, we like to take the analysis  and inquire on anonymous basis with all the carriers.   Once we get the feedback of the best opportunity for the client, then we will submit a formal application for the client.   In some cases, we might even submit applications with two carriers and have them compete for the business.

The last thing you want to get is a decline.  The decline goes into your record and all of the insurance carriers can see this and it makes it more difficult to get a good rate or even get approved.    If you want a preliminary analysis, we are happy to go through the process with you.  This is the best and most efficient route if you are a cancer survivor, unless it has been more than ten years.

Jacksonville, Florida — Most consumers understand that term life insurance is a very basic form of insurance that offers coverage over a certain period of time. These specific periods can be in 10, 15, 20, or 30 year increments, but this can really vary on carrier or product.  You can make premium payments monthly, quarterly or yearly.

Once your policy term period ends, no premium payments are made because you are now out of coverage and no death benefit (American General Life Insurance) will be paid in the event of someone passing. If you wish to maintain your policy coverage after the term period ends than you must either convert that policy into a permanent policy or purchase another term life insurance policy for another a specified period of time. Term life insurance is often viewed as one of the cheapest ways to purchase coverage.

Many consumers are trained to purchase term insurance policies because they are less expensive and invest the rest in the stock market. If you are looking for a safe way to earn interest on your money you may want to look at a whole life policy rather than a term.  Either way you will always get some payout on death benefit, while under a term life insurance policy, the possibility always exists that the policyholder will outlive their policy, and lose all of the money the paid in. A great deal of statistics show that payments that are made under a term life insurance policy are lost, which makes it much easier for life insurance carriers to offer this coverage at a cheaper price.

Article Source:  Life Insurance Article

The AARP has partnered with New York Life Insurance Company to create the “AARP Life Insurance Program”.   Basically it is a program designed for members of AARP to get either permanent life insurance, term life insurance, or guaranteed issue life insurance.  It appears as if the permanent insurance coverage is whole life insurance and it can be attained from age 50-80.   The term life insurance requires no medical exam and only three medical questions to be approved for coverage and ages 50-74 can apply for this coverage.  The guaranteed issue life insurance is exactly as it sounds.   There is no medical exam or medical questions to be answered and it is for members 50-80.  The guarantee issue pays limited benefits for the first two years except for death by an accident.

AARP has done well with this program as it has partnered with one of the premium life insurance companies with huge name brand recognition.   While New York  Life and AARP are great brand names, it is important to know that you often overpay for brand names.    It may be that the rate for your product through the program can be beat in the private market.    I suggest to clients that are interested in this program to let us run independent quotes for comparison.   I compare the AARP Life Insurance Program to how you might overpay for a pair of expensive brand name jeans.  You can get great jeans that don’t have the label of the fancy pair, but that serve you perfectly well.  Just make sure you check out your options.

We get calls all the time about AARP life insurance and that clients are interested in this.   The bottom line is that AARP has partnered with New York Life Insurance Company to offer life insurance to its members.  No medical exam is required and only 3 medical questions are asked on the application.  Since there is minimal underwriting the premiums are note going to be more than a fully underwritten product.   With that being said it may be of benefit to some to have a product not fully underwritten as health may be a concern.  If that is the case there are other companies that offer similar products that may be even more competitive.

Did you know that the life insurance carriers like when you buy term life insurance?  A lot of clients we speak with think  that it is the agenda of the insurance company to sell them permanent insurance because it costs more.  While of course life insurance carriers want you to buy permanent products, they are quite content when you buy term.   Only about 2 percent of term policies ever pay out a benefit and therefore it is highly profitable for them.   A good option for many is to buy a return of premium term product.   This allows you to have best of both worlds with term, but return of premium if you outlive the level term.  If you are not familiar with this option you should ask about it.  It is usually more beneficial the younger an insured is.

One of the longest standing arguments in the insurance business is buy term and invest the difference or buy cash value life insurance.

The argument of buying term and investing the difference is based on the premise of getting cheap term and taking the extra money (you would have spent on whole life) and investing it in the market.  The thought is that you can make a higher return with the money in the market than you can inside a life insurance contract.

While the true accumulation value of an investment account can be higher than the accumulation value of the cash value, other factors must be considered.   For example, what if your investment account performs poorly and you actually lose money.   A life insurance policy has certain guarantees built into it that guarantees that you will not lose money no matter what.

Also, a big consideration needs to be from a tax standpoint.  What is a modified endowment contract?  Where will you invest?  What is your tax bracket?  What will the tax bracket be when you want to access the money?  Would it help you to have money that you can access tax-free from the life insurance?  Is the death benefit being passed tax-free going to be a benefit to your estate and family.

Term is a great way to cover your liability at a very reasonable price.  The problem with term is that it only lasts for a period and most people outlive the term and their family never sees a benefit.  Often times a combined approach can be a good one.   In other words, having a majority of the coverage as term and part being whole life or universal life.

What term life insurance carrier is the best for you?

This is an important question and one that should be looked at before you apply to a carrier for life insurance.

Do you have any special underwriting circumstances?  Medical issues? Dangerous avocations?  Family history? Medications?  Weight considerations?

Based upon various underwriting circumstances, different carriers will underwrite the issues differently.  Therefore, it makes sense to use a company that underwrites for that particular situation the most favorably.   That is what we try and help our clients identify what those companies are going to be.

A great example is Prudential who will give an occasional cigar smoker a non-smoker rating as long as it is admitted on the application.   Most other carriers will give that client a smoker rating, so that is a huge piece of information to know.   Recently we had a client who had lupus and after speaking with all the various carriers we actually found one that would consider her for preferred.   Most all the other carriers would consider her at at table B rating at the best.   This specialized knowledge will help you win as the consumer.

Another factor in picking the right term carrier for you is if they offer a good conversion option.   Does the carrier have a good universal life conversion option or whole life conversion option?   While you may only want term know, it is good to have a permanent option just in case.   The permanent option can be exercised with no proof of insurability.   It allows you to convert all or part of your term to some form of permanent insurance.

Have you ever heard of  “Infinite Banking”?  It is a great strategy that is pioneered by Nelson Nash that uses the cash value of life insurance as your personal bank.   In essence you buy big ticket items with the cash inside the dividend paying whole life insurance policy and finance the purchase with it.  For example, you buy a new car with the buildup in your policy and then amortize the loan over a period of time and pay your policy back at a fair interest rate above the interest rate of the insurance company.   Rather than make the bank or finance company rich, you are able to recapture a lot of the finance charges you would otherwise payout elsewhere.  After paying back the loan to yourself, you have completely repaid the principal and made the interest spread yourself.   This will turbocharge your policy.

Not only is the cash value used during your life for various purchases, investments, etc., but it can be used for retirement income as the money can be accessed at retirement tax-free.  In order to create the “infinite Banking” concept you need to capitalize the bank.  Just like Bank of America or the community bank, there was no money in the bank until it was capitalized.   Once it is capitalized, the fund has been created to use for this purpose.  It is important to set the policy up correctly with a good mutual company and to fund it the appropriate way.    The structure of the policy is important for your long term success.

This is often a great way to start the process of applying for life insurance.   We use this with our clients on a regular basis and it is a great way to avoid wasting time blindly.

For example, if a client has type 2 diabetes, I need to fill out a questionaire for this to give to our underwriting consultant.    Once our underwriting consultant receives this information, then he can help us determine the carrier that would probably underwrite the case the most favorably with the best possible rate.  Since we are an independent broker, we can shop it across all the main players in the life insurance market, to ensure that we are getting our clients the best estimate.  Of course, everything is subject to actual underwriting.  With a little preliminary checking we have a much better chance of pinpointing everything better.

Another reason to do a preliminary questionaire is the client doesn’t want to get declined.   If we look at it from the information we can gather, we can rule out applicants who will probably be declined.   Since we are getting feedback from all the carriers, we also know who would probably not decline them as well.   Once we get the initial information to the carriers and get feedback, we can do a formal application to the identified best carrier.   Obviously, if there are no major health issues a preliminary evaluation is not necessary and you can go right to the application.

If you have questions on your condition(s), please don’t hesitate to call me at (800) 554-5142 and ask for Vince.