What Are The Three Main Types Of Life Insurance
The three main types of policies are term life, whole life, and universal life. Term life policies provide affordable temporary protection whole life and universal life policies are also called “permanent” insurance because they are designed to provide life-long protection with wealth-building benefits:
This form of protection lasts for a limited time, typically 10, 15, 20, or 30 years. Most term policies feature “level” premiums, but with some, premium payments may periodically increase, for example, at 5-year intervals. It can be more affordable than universal or whole life. Still, when your term ends, you’re no longer protected you either have to apply for a new life insurance policy at a higher cost or go without coverage.
This is permanent life insurance that can provide guaranteed protection for the rest of your life while building cash value that can be used for things like policy loans – or even cash supplement retirement income.1,2,3 Whole life policies don’t expire as long as the premium is paid. A mutual life insurance company may also provide dividends.4
Insurance Sales Interview Questions Drive The Sale
Selling insurance consistently is NOT about being a hardcore closer.
Instead, if you want success, you must know the top probings questions for life insurance sales that gather facts and emotion.
Im a big believer that if you master the craft of asking disturbing questions, as legendary life insurance agent Ben Feldman put it.
Disturbing insurance sales interview questions develop all sorts of life insurance opportunities.
What Is The Most Important Asset In Your Business
This is a fantastic question to ask small business owners because most small business owners insure their business.
They insure their factory, land, equipment, and people.
Business owners insure every aspect of their businessEXCEPT themselves!
Its a great reminder that they spend all this money on all sorts of assets that produce the products they sell on the market.
Its a practical idea to insure their components to produce whatever goods theyre selling.
But, in reality, the biggest asset in the business is the person in charge.
Think about it.
Why would you not insure yourself the key factor in your business above and beyond all else?
The most important component of a business is the BUSINESS OWNER! He is the epicenter of his business.
This drives home the importance of self-insurance. It shows them why they should have life and disability insurance.
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Question #: Have You Made Any Arrangements To Take Care Of Final Expenses
It takes some education to learn just how expensive a funeral can be, and if your client doesn’t have a Plan A, Plan B isn’t a great one.
We see it all the time the family is quickly trying to pull together funds, and a GoFundMe page is sure to follow. It’s not the legacy anyone wants, and final expense insurance is a great, inexpensive solution.
Start the conversation with your life insurance prospect by asking: have you made any arrangements to take care of final expenses?
The conversation will flow naturally from there, and if they have made some arrangements, ensure they have enough funds set aside. A lot of people underestimate the average cost of a funeral.
What Are The Exclusions
This is a must-ask question because life insurance has no standard policy. Terms, prices, and exclusions will vary dramatically by company. As a practice, insurance companies want to get as many customers as possible so they dont normally want to turn business away.
Many activities that they considered risky and they excluded in the past . They are often accepted for an additional charge. Even the people who have chronic illnesses may get coverage if they are willing to pay a few dollars more in premiums. Many companies still exclude suicide usually for the first one or two years of the policy.
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Question #: Do You Want To Pass Any Of Your Wealth To Your Family After Death
Life insurance is a great way to pass wealth on to family after you pass. If this is something your client would like to do, ask: do you want to pass any of your wealth to your family after death?
If the answer is yes, talk to them about life insurance options. Kirk Sarff, Director of Life Insurance Sales, can also help you determine which life insurance company and product type is the best recommendation for that client.
Occasionally, an annuity can also be a good option as it avoids probate.
What Happens If I’m Late On A Payment Or Can’t Pay
That depends on the terms of your policy contract . With a term policy, there is often a grace period: a time period after the payment due date during which you can pay premiums without losing coverage. After that grace period, coverage will lapse. However, some companies may let you reinstate your policy if you bring your premiums up to date. A permanent policy typically offers more options, depending on how large the cash value has grown: Many whole life policyholders will tap into the cash value to keep premiums up to date. A universal life policy, which features flexible life insurance premiums, offers even greater flexibility.
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What If I Dont Die During The Term Of The Insurance
Its a little ironic that people who buy term life insurance get upset when they find out that if they dont die, they get zero out of their insurance.
If this is an issue for you, then lets see what will happen to your policy as you near the end of the term.
- Your premiums will go up. In practice, many term policies offer level premiums for several years 10, 20, even 30 years as an example). As you near the end of the term, you may have the option of keeping your policy. If you decide to do so, expect a sizeable spike in your premium.
- You might need a new policy. If you are still healthy at this time and you still want the same insurance coverage, we would suggest that you apply for a new policy.
- You can drop your coverage. Lets say you got the policy just for safety while you are paying off your mortgage and now youre fully paid. Since you have no other obligation to protect, you can just let the coverage expire.
- You can upgrade the policy. Many term policies come with a conversion privilege. This would allow you to trade in your old term policy in favor of a new permanent policy.
What Are The Guarantees Given By The Life Insurance Company
The first thing you need to know is that the only assurance that any Life Insurance Company can give you is that it will pay out if you die. Whether your dependents are taken care of after your death, whether your estate needs to be probated, or whether anything else needs to be taken care of depends on what other arrangements you have made for yourself and your family.
What Are The Different Kinds Of Life Insurance And Which One Do I Need
Paya: There are essentially two kinds of life insurance you can get: term vs. permanent.
A permanent life insurance policy lasts your entire life, while a term life insurance policy lasts for a specific period of time i.e. your policys term length. This will typically be 10, 15, 20 or 30 years. Generally, term life is a simple, affordable type of life insurance thats easy to purchase and manage.
The main differences between the two types are complexity, price point, and the cash value component. Permanent life insurance has a cash value component that can grow over time and be borrowed from while youre living. This cash value component and the lifetime coverage makes permanent life insurance more expensive and more complex to manage.
Typically with term life insurance, you apply to have coverage in place until a clear end point in your life when youd no longer need the coverage, such as your children becoming adults, or your mortgage being paid off. The primary purpose of term life is to protect your loved ones in the event of your untimely death, whereas a permanent life policy may also be used as a vehicle for cash accumulation and/or estate planning purposes. For most people, term life insurance is a solid, budget-friendly choice that protects your loved ones during the years they need it most.
Term Life Insurance Vs Whole Life
You need term life insurance if you need a large amount of life insurance but have a limited budget VS you need whole life insurance if you want to earn a savings element that will rise on a tax-deferred basis and could be a basis of borrowed funds for a type of purposes.
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Have You Considered Your Other Needs If Your Spouse Or Children Pass Away
Many people haven’t considered life insurance for other family members. In the case of a spouse that doesn’t work, the income-earner in the family might not have considered expenses they would have if their spouse passes away. If the spouse cares for children at home, how would they pay for child care without them? Other considerations include final expenses in the case of a child’s death. An extended illness can also add up to a significant sum if the spouse or child passes away. Both this and the previous question encourage your prospects to consider life insurance as a whole-family proposition.
Does Your Job Already Give You Life Insurance Cover
Some employers offer Life Insurance to their staff. That might be simply as a perk of the job, or as Key Person Insurance to protect themselves from the financial impact of losing a core member of staff.
Before setting up Life Insurance for yourself, make certain whether or not you already have it through work, along with the terms of that cover. It could affect how much cover you need, and might change the specific role you need your Life Insurance to perform.
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Are You Licensed And By Which Company
In many states, it’s a requirement to obtain a license before you can sell insurance. To get a license, you must take and pass a state exam for each type of insurance you’ll be selling. From there, you can become licensed by organizations such as the National Insurance Producer Registry to sell insurance.
A credible agent or broker is one who had to go through extensive training to become licensed. You want to make sure your insurance agent or broker is licensed by your state, as well as the companies they direct you toward, because you may only purchase life insurance from a company that is licensed by your state.
Robert Palidora, a financial consultant from AXA Advisors, LLC suggests going to FINRA broker check which will tell you which companies are registered.
To find where your agent or broker was licensed, insurance agent Huntley suggests, Do a Google search for your state + department of insurance + license search, and youll find the broker search page for your department of insurance.
It can tell you how long the agent has been licensed, as well as what type of education they got to receive their license.
Johnston of The Financial Guides recommends checking into what the agent or broker is licensed to sell as well.
An advisor that specializes in one area may be able to give help in more challenging or complicated situations. An advisor that has a more rounded approach can help in most general situations, Johnston said.
What You Can Do
Review your carriers forms. Look for forms that have all the questions a life insurance company application would ask. Look at the questions that specifically ask about drug and alcohol usage, marijuana and CBD oil usage, tobacco/nicotine usage, hazardous activities and driving history.
Or choose one of the life insurance applications you use to collect the data. If the application doesnt include questions on marijuana or other drug use, you should add some of your own questions in your field underwriting questions, such as:
Does your client currently drink alcohol? Yes | No
- Type of alcohol
- How much is consumed per week?
- Date of last consumption
Does your client ever drink substantially more than present? Yes | No
- If yes, when?
Has your client ever consulted a doctor or received treatment because of alcohol use? Yes | No
- If yes, provide details
Has your client ever used illegal drugs or sought treatment because of drug use? Yes | No
- If yes, provide details
- Type of drug used
- Date of last use
Once you or your client fills this form out completely, then you can call your underwriters to see if they will underwrite your client with a favorable rating. Remember, the more health issues your clients haveor if they state they have used drugsthe higher the rating will be.
Best of luck in your field underwriting!
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Is The Insurance Provider Good
This question is very important and you must obtain a concrete answer to this. Insurance is all about trust. And, this step would help in building trust. Usually, you would get to hear a lot of things and reviews about the insurance provider you choose or think about choosing. However, you must ask this question to the agent appointed by the insurance company. Tip: You must get details about the financial health of the company, its claim settlement ratio, its support and commitment towards its customers, the period it has been into the insurance market, etc.
Do I Need Life Insurance At All
If any of the following statements describe your situation, you should consider a life insurance policy:
- Other people depend on my incomeYou don’t have to be your family’s primary wage earner if people would feel economic hardship without you, they depend on your income. If you’re single but planning to get married and have children in the next few years, your answer to this question should also be “Yes.”
- I have debts that others would be responsible for if I dieDo you have student loans that your parents will have to repay if you can’t? A car, mortgage, business, or personal loan with co-signers? If so, a life insurance policy can keep you from burdening a loved one with thousands of dollars in debt payments.
- I don’t have enough savings or assets to cover all my obligationsMost individuals don’t have enough saved to fully pay off their debts and support family members in their absence. So, if you’re like most adults with financial obligations, you should consider buying life insurance.
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Q2 There Have Been Some Exciting Changes At Policyme Can You Please Tell Us About That
Yes! In March 2021 we launched our own brand of term life insurance!
Weve been able to cut out a lot of inefficiencies in the life insurance world, both on underwriting and distribution costs. Because we cut out those inefficiencies, weve saved money, and we pass those savings to you, our customer, through lower premiums.
That means we can offer lower rates for the exact same quality and coverage of insurance you could get from another company.
We also dont have a sales team! No one is pushing our product through commissions. In fact, all the advisors at PolicyMe are non-commissioned, which means you can be confident that youre getting advice tailored to you because theres no up-selling.
Were able to offer one of the cheapest rates in the market through all these methods, so were proud that weve been able to make the life insurance process both easier and more affordable!
Is It True That Some Companies Wont Turn Applicants Down
Its always important to make sure you understand what a company is actually offering when they make these advertisements. Such ads are for “guaranteed issue” policies that ask no health history questions. The company knows it is taking a risk because people with bad health could buy their policies. The company balances the risk by charging higher premiums or by limiting the amount of insurance you can buy. The premiums can be almost as much as the insurance! After a few years, you could pay more to the insurance company than it will have to pay to your beneficiary. Such policies may offer only the return of your premiums if you die within the first couple of years after you buy the policy. So once again, it is very important that you understand what is covered and what is not, and how much it will cost you before signing on to any policy.
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Will My Premium Change In The Future
Ask your agent if your premium will be level. Youll want to know if your premium will stay the same or change in the future. For example, most term life policies have level premiums for the entire term. There are some companies and policies that have age bands where your policy increases at certain time.
How Much Whole Life Insurance Coverage Do You Need
How much whole life insurance coverage you need will depend on your long-term financial responsibilities, who is dependent on your income, the cost of final expenses and more. Our life insurance calculator is a good place to start when trying to figure out how much coverage is right for you and your family.
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