Here’s The Deal…
People are living longer = life insurance premiums are lower
The life insurance industry uses a standardized table to help them determine how much to charge on a new insurance policy called the Commissioners Standard Ordinary Mortality (CSO) table. The most recent table available was the 2001 CSO, prior to that it was the 1980 CSO and well before then insurance companies…
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Is Your Life Insurance Any Good? Probably Not!
When Do I Need Life Insurance?
Your need for life insurance changes as your life changes. When you’re young, you typically have less need for life insurance, but that changes as you take on more responsibility and your family grows. Then, as your responsibilities once again begin to diminish, your need for life insurance may decrease. Let’s look at how your life insurance needs change throughout your lifetime.
Footloose and…
What Type of Insurance Policies are Available?
There are two major categories of life insurance: Term Life and Permanent (cash value) Life Insurance. Within the two broad categories are many types of policies that have been developed over the years in response to consumer demand, market conditions, and changes in the tax laws.
Term Life
Offers low cost coverage for a temporary duration. Premiums are traditionally
guaranteed to remain…
How Much Life Insurance Do You Need?
Your life insurance needs change as your life changes. When you are young, you may not have a need for life insurance. However, as you take on more responsibility and your family grows, your life insurance needs increase. Your needs may then decrease after your children are grown. You should periodically review your needs to ensure that your life insurance coverage adequately reflects your lif…
How Does An Insurance Company Know If I Used Tobacco?
Higher Premiums For Tobacco Users
More deaths are caused each year by tobacco use than by all deaths from human immunodeficiency virus (HIV), illegal drug use, alcohol use, motor vehicle injuries, suicides, and murders combined. Because of this, life insurance companies charge a higher premium for tobacco users, especially smokers. For this reason, life insurance companies have devised a…
How Do I Read A Life Insurance Company Illustration?
A life insurance policy illustration is a text-and-graphics presentation of how a life insurance policy will perform at a selected interest rate, with an assumed number of predetermined premium payments and a “current” and “guaranteed” cost of insurance and expenses. A life insurance policy illustration is not a legal document–legal obligations are contained in the policy itself.
What does…
Client #4: Overpaying by 1,000%
The Situation:
The client, a 31 year-old male, owned a $102,000 current assumption universal life insurance policy that his father had purchased for him when he was 16.
$102,000 death benefit
$9,264 approximate cash value
$600 annual premium
Current Policy Findings:
Assuming the guaranteed maximum policy charges, guaranteed interest crediting rate and the current annual premium of…
Client #3: 79 and Life Insurance Isn’t Going to Last
The Situation:
The client, a 79 year-old female, purchased a $105,000 current assumption universal life insurance policy when she retired from the State in 1994. At the time of her retirement, she chose a single life payout on her pension and purchased the insurance to protect her husband in the event she passed away before he did.
$105,000 death benefit
$3,281 approximate cas…
Client #2: Dying Policies
The Situation:
The client, a 50 year-old male, owned two different life insurance policies to protect his family in the event of his premature death. The first policy was a current assumption universal life purchased in 1986.
$100,000 death benefit
$28,239 approximate cash value
$451 annual premium
The second policy was a variable universal life policy purchased in 1995.
$500,000…
Client #1: Way Over Insured
The Situation:
The client, a married couple age 51 and 50, purchased a second to die variable universal life insurance policy in 2000 to help preserve their estate from estate taxes. In 2000, any estate in excess of $1,000,000 was at risk to pay in excess of 50% in estate taxes. The client had millions of dollars of stock options that placed their estate well above $10,000,000 and the policy was…