Term Life Insurance Digest

When it comes to term life insurance quotes, it’s important to understand what they are, how they are derived, and how they can change.  They are after all just quotes; they are not guaranteed rates.

Once you have offered basic information to your life insurance agent or an online life insurance website, a quote can be given.  This is a quote of real rates based on the information you have provided.  The reason it is not guaranteed (unless it’s a guaranteed issue life insurance policy that is being quoted to you) is because the life insurance carrier will most likely need to send your application through underwriting.  Underwriting is the process that determines which health class you fit into.  Rates are based on the health class of the individual applying.  If after underwriting you fit into the same health class that you were quoted, then the rates will be the same as the quote.

If you do not fit into the same health class you were quoted, then the rates will be different.  Having an agent that knows how to ask the right questions will help you get a term life insurance quote that is less likely to change after underwriting.

There are a few different types of life insurance.  Within those different types, there are many different purposes for your life insurance.

The simplest form of life insurance is term life insurance.  Term insurance is most often used for mortgage protection, and with people that are younger.  It is purchased for a specific term.  At the end of the term, you can keep the policy, but the premiums are no longer guaranteed and will go up each year.

Whole life insurance is like term life insurance, except for the term and the price.  It is purchased to cover you for your whole life, and the term is guaranteed to stay the same until you die.

Universal life insurance is like whole life because it’s meant to cover you for your whole life.  It builds up cash value, and you can borrow against the cash value or withdraw it at different times in your life.  This type of life insurance is a little more complicated.  To get a policy that works right for you, you need to speak with an agent and have a clear idea of what you want.  They’ll direct you toward the correct policy.

Return of premium life insurance is normally a term policy that refunds all of your premiums at the end of the term.  It can be a good investment if purchased for 20 or 30 years, but normally isn’t worth the extra cost if only purchased for 10 years.  (It would make more sense to get term insurance and invest the difference, even if the return on the investment isn’t that great.)

Guaranteed issue life insurance is a type of life insurance where the issuance of the policy is guaranteed.  In other words, if you apply for the policy, you get it no matter what.  Most policies require underwriting, but this policy does not.  It is often the most expensive form of life insurance because it carries the most risk.

My last post was about a political/socio-economic subject.  I will refrain from straying much from life insurance on this blog, as I don’t think politics generally has much to do with life insurance (although definitely there are laws that affect life insurance, so I’ll continue to talk about those).  Hopefully my message that everyone should have life insurance will continue to spread.  Life insurance is for everyone, regardless of race, color, gender, age, or financial situation.

I know this has nothing to do with life insurance, but I was listening last night to the election returns and it really frustrated me to hear what some of the most successful black people in America were saying.  The one that stuck out in my mind was Oprah.  She said something to the effect that she never thought this would happen in her lifetime.  And she was of course referring to the fact that a black man was elected President of the United States.

That line of thought is very frustrating to me.  Maybe it’s because I’m white.  I don’t know.  But when I think about who I want to be President, I don’t ever think about color.  I think about policy issues; I think about leadership ability; and I think about good judgment.  Those are the things I look for in a President, and none of those things have anything to do with color.

What struck me about Oprah’s comment is that she, in her heart of hearts, didn’t believe that a black man could ever succeed at something so great–at least not in her lifetime.  What does that tell you about a culture, when one of their most successful icons doesn’t believe in her heart that her people can succeed?

How are black people ever going to succeed if they don’t believe that they can?

I grew up in a culture in Sacramento where I was always told I could do whatever I wanted to do.  I grew up believing that my success was up to me–not someone else.  And when I look at my life, I can see when I was successful because of my decisions, and when I failed because of my decisions.  Other people may have been involved in that success or failure, but ultimately the responsibility was mine.

I wish the black leadership would instill in their people that color does not matter.  Color of skin will not keep you from being successful.  You are the only person that can keep you from succeeding.  The most successful people in the world have failed many times.  Failure is part of success.  From it you learn and grow and find other avenues for success.  If the black society stopped blaming America for their failure, then maybe they’d keep on trying to find success, and through whatever failures came their way, they eventually would.

It’s always amazing to me how many people do not have life insurance coverage.  LIMRA is the Life Insurance Marketing and Research Association, and it does studies all about life insurance.  Wholesale Insurance recently quoted some of their life insurance statistics.  If you don’t have life insurance, then I suggest that look into getting some.  It is worth every penny you will pay for it.

If you are an agent looking for a good Brokerage General Agency, then I suggest you check out Pinney Insurance Center.  They offer great service, a great line of products (from just about every major carrier), and have really good compensation plans.  As a life insurance agent myself, I know that those three things can really affect the value of a BGA.  If you’re like me, you also want to be able to provide the best quality and best priced products for your clients, while still being able to make high compensation.  And having great service (which equates to quick underwriting and accurate policy placement) just makes selling that much easier.

If you have an estate and are worried about what will happen to that estate, then estate planning may be something you should look into.  Recently I’ve seen a lot of people using life insurance in their estate plans.  Life insurance used correctly can help to reduce or eliminate the death tax.  It can in many instances also increase the value of your estate.  For example, if you have assets worth 1 million dollars, you could use those assets to fund the purchase of a life insurance policy whose death benefit is worth more than 1 million dollars.  In this instance, you would be passing on more than your current estate value to your heirs, and it would be tax free (the death benefit of a life insurance policy is tax free).  Of course, when working on your estate plan, you should always consult licensed professionals that are experts in estate planning.

I noticed on the Wholesale Insurance website that they are beginning to talk about Disability Insurance.  Disability insurance is great for anyone that works.  Really, this is something that everyone should have.  I learned recently that if you’re 35 you have a 50% chance of being disabled for more than 90 days by the time you’re 65.  That is a huge number.

I normally focus solely on life insurance on my blog, but it’s obvious that disability insurance is likewise important for the financial protection and stability of your family.  If you are interested in learning more about disability insurance, give the folks at Wholesale Insurance a call, and I’m sure they’ll be able to help you out.

I recently went to a conference for life insurance direct marketers.  One of the discussions was about the women’s market.  One of the statistics I thought was very interesting was that 86% of women either make the purchase decisions alone or share equally that responsibility with their husbands.  Specific examples were given that 66% of all home-computer purchases are made by women, as well as 80% of all health-care service purchases.  I thought I’d write about this after I found another blog that talked about women and finance.

I also know that a few of the life insurance carriers have tried to reach out and market directly to the women’s market.

Here’s another statistic that relates directly to women and life insurance:

When asked if life insurance is the best way to protect against the troubles that would result from a premature death, 83% of women agreed.  Only 72% of men agreed.

So I just found an awesome site.  If you are a life insurance agent, it would be a great place for you to be able to submit life insurance applications and then let someone else do all of the hard work for you.  You still get paid 50%, but you don’t have to do anything but give basic quote information.  If you are interested, check it out.  You can easily run a quote and see what rates would be.  I don’t know… Hopefully you think it’s as cool as I thought.