Wednesday, June 15, 2022

How To Get A Life Insurance Policy

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If you are worried about someone buying a life insurance policy on your life without your knowledge, you can most likely rest easy. First of all, it isnt legal, and there are systems in place to prevent this from happening. Now, is it absolutely impossible that some kind of sophisticated fraud has taken place? Of course not! But life insurance companies are extremely sensitive to rooting out any fraudulent activity like this. Chances of someone doing it successfully are very low! And their chances of them ever collecting money upon your death are even lower.

How Much Does Senior Life Insurance Cost

Premium costs for a life insurance policy for older adults vary based on multiple factors, including:

  • Policy type
  • Life insurance company

For life insurance companies, its all about risk.

“In general, the younger and healthier you are, the lower your premiums will be, although premiums for males tend to be higher than for females,” says Estevez.

Brian Martucci, the Minneapolis-based finance editor for Money Crashers, says life insurance costs increase sharply with age.

“A new final expense policy might cost $2 or $3 per month for every $1,000 in coverage if you are a healthy 50-year-old, while a healthy 80-year-old can expect to pay $8 to $10 monthly for the same policy,” he says.

Brad Cummins, owner and principal agent of Insurance Geek, says a whole life insurance policy for a healthy male senior may run between $1,000 and $2,000 for a $250,000 policy versus $900 to $1,800 for a similar policy for a healthy female senior.

How To Buy A Life Insurance Policy

Purchasing life insurance can seem complicated if you have never done it before. Unlike home or auto insurance, there are many types of life insurance policies. Each comes with pros and cons and different price tags. If you are in the market for life insurance, here are the steps you may find helpful in purchasing a policy that is right for you.

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Decide What Type Of Policy You Need

After evaluating the amount of coverage you need, you can decide if you should buy aterm or permanent life insurance policy. Term life insurance is the best option for most people â itâs easy to manage and offers the most coverage for the lowest dollar amount. But there may be circumstances where you need apermanent life insurance policy, like if you have a lifelong dependent.

A Policygenius agent can help you decide on the best policy for your budget and coverage needs.

Why Should You Buy Life Insurance

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It would help if you prioritized buying life insurance quotes before making any other investments, for the simple reason that the insurance benefit will help you secure your family’s financial future in case of your untimely demise.Adding Life Insurance to your list of must-do’s will not only get you additional benefits such as year-on-year tax savings up to Rs. 1.5 lakh under Section 80C as per prevailing tax laws and rider options to enhance your life cover against critical illnesses or a sudden loss of income due to accidents.Moreover, getting the life insurance quotes helps increase your risk tolerance. The primary goal of any investor is to grow money over the long-term.Determining your risk tolerance and, subsequently, going with the appropriate asset allocation is crucial. With life insurance in your financial portfolio, you can take more risk with your investments.

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How Much Life Insurance Should I Get

The amount of life insurance coverage you should carry depends on a few factors:

  • Your age
  • Years until retirement
  • Your family

Many financial professionals recommend coverage of at least 10 times your annual salary as income replacement but you may need more or less, depending on your circumstances. For instance, if you have a large mortgage and are the sole breadwinner for your family, you may opt to get more than 10x coverage on yourself. Or this may be a simple final expense policy that covers end-of-life costs.

Hereâs a quick example of how to determine how much life insurance coverage you may need:

John has a wife and three kids. He makes $100,000 per year as the sole breadwinner, and they carry $500,000 in debt . John has decided to get 10x his salary in term life insurance coverage, plus another $500,000 to cover their debt obligations. Term coverage allows him to obtain coverage for a specific amount of time , for the lowest monthly cost.

Life insurance coverage should allow your loved ones to grieve without worrying about the financial implications of your passing.

Do I Need Life Insurance

The most basic insurance questions often start with: do you need a policy? More often than not, the answer is “yes.” Whether you’re looking for a way to help make sure your family will be protected if you aren’t there or you wish to make a legacy gift to a favorite charity, there are many reasons why you may want someone to benefit from your foresight.

Even if you’re young with no children, you may have reasons for wanting to provide benefits to a person or organization that will long outlive you. And the earlier in life you purchase your policy, the lower the cost of the monthly premiums you can lock in.

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How Much Life Insurance Do You Need

When it comes to actually purchasing a life insurance policy, most consumers wind up asking the same important questions: How much life insurance do I need, and how long do I need my policy to last?

At the end of the day, only you can decide if you want life insurance coverage in place until the day you die or only for a specific term. However, the price of different types of life insurance coverage may ultimately help make this choice for you. After all, permanent life insurance premiums can easily set you back 10 times more than term life insurance coverage in the same amount.

Generally speaking, youll want to make sure you have enough life insurance coverage to replace most of your income during your working years. Or, if you prefer, you can follow the rule of thumb that says you should purchase a minimum of 10 times your income in life insurance protection .

As you spend time comparing different policies and deciding how much coverage to buy, you may want to consider the following factors:

How To Get A Copy Of A Life Insurance Policy

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Life insurance is one of the most important contracts an individual can own. Life insurance protects loved ones and business partners from the economic loss an early departure creates. With such an important contract you’ll want to be sure to have a copy filed away.

Contact the home office of the insurance company. If you don’t have contact info for the insurer try a Google search to get their customer service number. If all else fails contact the agent that sold you the contract.

Verify your identity. When speaking with the customer service representative at the insurer they will have a lot of privacy and identity protection to do. Be sure to have all your information on hand as they will have lots of questions.

Ask for a copy of the policy to be mailed out. The company should be happy to oblige and should mail the policy in a week or two. When you receive the policy be sure to store it in a safe place such as a safe.

Writer Bio

Kelcey Lehrich has been writing for several online media outlets for the past few years. His work can be found on, and Lehrich holds a bachelor’s degree from Cleveland State University in business administration and finance.

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Considerations Before Buying Life Insurance

Research policy options and company reviewsbecause life insurance policies are a major expense and commitment, it’s critical to do proper due diligence to make sure the company you choose has a solid track record and financial strength, given that your heirs may not receive any death benefit for many decades into the future. Investopedia has evaluated scores of companies that offer all different types of insurance and rated the best in numerous categories.

Life insurance can be a prudent financial tool to hedge your bets and provide protection for your loved ones in case of death should you die while the policy is in force. However, there are situations in which it makes less sensesuch as buying too much or insuring those whose income doesn’t need to be replaced. So, it’s important to consider the following:

What expenses couldn’t be met if you died? If your spouse has a strong income and you don’t have any children, maybe it’s not warranted. It is still important to consider the impact of your potential death on a spouse and consider how much financial support they would need to grieve without worrying about returning to work before theyre ready. However, if both spouses’ income is necessary to maintain a desired lifestyle or meet financial commitments, then both spouses may need separate life insurance coverage.

Best Ways To Cash Out A Life Insurance Policy

  • Leverage cash value withdrawals
  • Use life insurance as loan collateral
  • Surrender your life insurance policy
  • Sell your life insurance policy

These alternatives apply to any type of permanent life insurance, whether you have a whole life insurance policy, universal life insurance or variable universal life policy.

The best choice for you will depend on your investment objectives and circumstances. In some cases, it may make more sense for you to borrow from your 401 plan or take out a home equity loan than to access the cash surrender value in your policy.

It is always wise to think twice when it comes to canceling any type of insurance coverage. But if you have a policy that you no longer need, then cashing it in or selling it may be the best option. Consult your financial advisor for more information.

Get an estimate of your policy value in seconds.

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Plan Your Life Efficiently With Insurance

Many investors tend to make a common mistake of investing in instruments without factoring their entire financial picture the equity they have built-in their home, existing loans, and other liabilities. Ideally, every asset and investment you own should factor into your risk-reward equation.Getting your life insurance plan at an appropriate stage in life allows you to take more risk when it comes to securing your life and making sure that you provision a significantly large financial corpus as backup against contingencies, while continuing to invest for other life goals. Moreover, with a life insurance plan in your pocket, you can be sure that even if something happens to you, your family will not have to deal with a financial crisis at any time during their lives.Planning with life insurance plans will help your family stay financially protected, serving as a safety net that will prove useful in case of an eventuality. Also, the insurance coverage will augment the total accumulated value of your investments, making sure that your loved ones continue to have a lifestyle that you intended for them, even if you are not there with them.

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The two key factors life insurance companies consider when determining the rate you pay for coverage are health and age. The younger you are when you buy life insurance, the cheaper it tends to be, Winslow says. Thats because you are more likely to be healthier when youre younger, and therefore less risky to insure.

The rate you pay also depends on the type of policy you get and how large the death benefit is. If you get a term life insurance policy, the length of the term you choose also will affect your premium.

If you can only afford a term life policy now but want permanent life insurance, most term life policies offer the option to convert to permanent life insurance. You can lock in a low rate with term life now and switch to a permanent policy if your income increases.

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Can I Get Life Insurance If Im A Smoker

Yes, you can. Most life insurance companies offer life insurance to smokers, but rates are typically much higher. Some companies offer better rates for smokers than others, while some even offer an incentive to quit smoking, offering lower rates for a period of time while the insured works on kicking the habit.

Life insurance policies also may have contingencies for those that are considered âhigh riskâ, including individuals with a family history of heart disease or cancer, or with an existing medical condition. Many policies require a medical exam as well to determine your insurability. If you qualify for coverage, rates could be significantly higher.

Overall, smokers and those with high-risk health factors will pay higher premiums, but coverage is available at most major life insurance companies.

Sign The Documents And Pay For Your Policy

Once the underwriting process is complete, youâll be issued a policy offer. If you agree to its terms, all that is left is for you to sign the policy documents and pay your first premium. Your policy isnât in force until you do so â a policy offer from the insurer doesnât mean you have coverage.

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Term Life Insurance Options For Couples

When considering buying life insurance as a couple, look at what coverage you may already have through your employer or that you may have bought when you were on your own.

If you decide to purchase insurance, make sure you consider all the options available to you as a couple. Make sure to consider the pros and cons of each.

Joint first-to-die term insurance

  • Insures two people under one joint policy
  • Pays the death benefit when the first partner dies
  • Gives each partner the same coverage
  • Is usually less expensive than two identical single policies
  • Is sometimes less flexible than single policies if the couple separates or gets divorced
  • Usually can’t be divided
  • Usually pays only one death benefit, so if one partner dies, the other needs to apply for a new policy to continue coverage

Single term insurance

  • Provides each partner with their own policy
  • Gives each partner their own coverage amount
  • Is usually more expensive in total than a joint first-to-die policy
  • Makes it relatively easy to change the beneficiary, if you separate or divorce

What Are The Different Types Of Life Insurance

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Life insurance comes in many different forms from short-term contracts to lifetime coverage. The best life insurance option for you depends on your financial goals, health status, age, and a variety of other factors.

Hereâs a quick overview of each type of life insurance, and who it is best suited for:

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Alternatives To Taking Out A Policy On Your Parents

If you dont think youll be able to cover your parents funeral, medical or end-of-life expenses, explore these ways to mitigate those costs:

  • Ask your parents to purchase life insurance coverage. Instead of you taking out a policy on your parents, encourage them to manage the process and name you as a beneficiary. Regardless of the type of policy they choose, youll receive a guaranteed death benefit when they pass away as long as they keep up with their premiums.
  • Prepay for funeral costs. With the average funeral costs running into the thousands, it might be worth prepaying your parents funeral and burial costs. You can do this through a funeral home.
  • Set up a dedicated savings account for end-of-life expenses. Contribute to it regularly, or ask your parents to add funds to it if and when they can.

Benefits Of Life Insurance

There are many benefits to having life insurance. Below are some of the most important features and protections offered by life insurance policies.

Most people use life insurance to provide money to beneficiaries who would suffer a financial hardship upon the insureds death. However, for wealthy individuals, the tax advantages of life insurance, including the tax-deferred growth of cash value, tax-free dividends, and tax-free death benefits, can provide additional strategic opportunities.

Avoiding Taxesthe death benefit of a life insurance policy is usually tax-free. Wealthy individuals sometimes buy permanent life insurance within a trust to help pay the estate taxes that will be due upon their death. This strategy helps to preserve the value of the estate for their heirs. Tax avoidance is a law-abiding strategy for minimizing ones tax liability and should not be confused with tax evasion, which is illegal.

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How To Choose The Best Life Insurance

The best type of life insurance is the one that fits you and your family. This includes understanding how much coverage you want, and what the money would be used for if you pass away. You will also want to consider whether you want temporary or lifetime coverage. You may want lifetime coverage, but then learn that term policies would save a significant amount of money, as well as cover you for the highest risk years .

Finally, figure out what you can afford. Most policies change a monthly or annual premium, with additional costs for riders. If you are looking for a low monthly cost, term policies may be a better fit, but if you want to use your insurance policy to grow your wealth, a whole or universal life policy may fit the bill . Compare costs between term and permanent policies to find what fits best in your budget.

For example, a 30-year-old man with a 20-year $500,000 policy will pay an average of $27.69 a month. A 30-year-old man with a $100,000 whole life policy will pay $89 a month, payable to age 99. This is more than double the cost of term life while providing less coverage, but covering you over a longer and more risky time of your life.

To get the best life insurance policy for your situation, and one that fits your budget, follow these steps:

Remember that itâs OK to get several different quotes to find the best policy. Do your research, ask questions, and/or speak with a financial or insurance professional if necessary.

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