Say you are a breadwinner to a family of three. You are happy to sustain the needs of your family. Suddenly, you caught the coronavirus bug. What will you do? You can no longer go to work! You cannot fulfill your work from home duties either.
Fortunately for you, you decided to purchase a life insurance policy prior to this event. Your critical illness is covered. Apart from that, how can life insurance help you in the future?
Firstly, there are two types of insurance such as whole life and term insurance. The latter is cheaper than the former. I will get to that later. Nonetheless, life insurance serves as your protection for unforeseen events, your shield for medical emergencies, and your extend relief after retirement.
The difference between whole life and term insurance is the amount of money you will have to put inside and the amount of money you will get back. Both policies provide protection in the event of total permanent disability and death.
Term insurance, true to its name, provides you with protection only for a fixed period of time (such as 20 to 30 years). The plan expires after the given term. If nothing happens to you and you do not make the claim, you get nothing. On the other and, whole life insurance covers you until you die. This is as long as you pay your premiums.
PROTECTION FOR UNFORESEEN EVENTS
Ensure that you will be able to support the needs of your surviving family with life insurance. When the income earner dies, there is a significant impact for the surviving family. There are possibilities when a survivor can provide for the rest of the family’s needs as well, but it is better to be prepared.
Keep the impact of death to minimum and provide your surviving family members with a source of income by arranging your life insurance plan.
SHIELD FOR MEDICAL EMERGENCIES
Whether you are single or married, having an emergency fund is vital to your life. You will never know when bad events such as this pandemic will occur.
Getting life insurance and having emergency funds are the best way to be ready for any emergencies. It will not only assure you but it will also prevent you from having an empty pocket when you drown in an unfortunate situation.
Some people might say that getting life insurance is like getting ready for your funeral. However, you may look at it as a means to prepare yourself for survival.
RELIEF FOR RETIREMENT
Using the cash value of your life insurance policy allows you to have an additional financial support once you retire.
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You may also use this money to indulge yourself, after you retire. Just ensure that you work within your means.
There are many different options available when it comes to life insurance, leaving you with a range of choices that can often seem bewildering. At first glance, they can be difficult to understand – so you’re not alone if you’re not sure where to get started.
The best place to begin is by asking yourself an easy question – do you really need life insurance, and if you do, why? The answer to this question can help you decide which life insurance to purchase, so make sure that you go into as much detail as possible. Let’s explore the different types of life insurance policy available – by now you should hopefully find it easier to match one up with your needs.
#1. The Purpose of Life Insurance:
First, let’s look at the purpose of life insurance and all the various reasons as to why it may be a good option for you. Many people decide to get life insurance after becoming a parent – suddenly finding yourself responsible for a human life can be the push you need to make sure that those nearest to you are financially comfortable in the event of your death. Or, perhaps you have started a business with a partner and want to make sure that they can afford to continue running the company if you die. The need for life insurance will vary depending on your personal situation, but the idea is to make sure that somebody who relies on you financially won’t struggle if you were to pass away.
#2. How Much Coverage?
It can be difficult to work out exactly how much coverage you will need to protect your family’s financial future, especially if you work in a high-risk profession like law enforcement. This can depend on a variety of different factors including your income, debts, lifestyle and how many dependents you have. A general guideline would be to obtain a policy that pays out five to ten times worth your annual salary in the event of your death – avoid going too high as not only would this make your premiums more expensive, but it can also cause additional issues for your family should they need to make a claim.
#3. Types of Policies:
Once you’ve decided how much life insurance you need and why you need it, it’s time to consider the different types of policies available. Whole life insurance is the most expensive policy – purely because it’s guaranteed to pay out someday. Your premiums will remain the same until you have paid off the policy. On the other hand, term life insurance is usually cheaper as it will only cover you for a certain period of time, lowering the risk of paying out for the insurer. You can choose term insurance if you only need to be insured until you have paid off your mortgage, become debt-free, retired, or when your kids move out of the family home, for example. Another option to consider is decreasing life insurance. This policy offers cover that gradually decreases over time as you need less – for example, you’re likely to need less cover as you repay your mortgage and debts over time.
#4. How to Find the Best Policy for You:
Finally, now that you know what you are looking for, it’s time to find the best policy for your needs. Shop around – you may be surprised at what you find, compared to only going with insurers that you’re familiar with. It’s worth using comparison sites as a handy way to get all your options in one place. If you are considered high risk due to your career or a health condition, it can be worth hiring a professional insurance agent to work on your behalf.
Which type of life insurance is best for you? We’d love to hear from you in the comments.
As I was searching for a life insurance to protect myself and my family, I came across a type of product through the help of my financial advisor. She recommended getting the Variable Universal Life (VUL) insurance policy. I was drawn by the unique fusion of life insurance and investment.
For those of you who are unfamiliar with VUL, it is a type of life insurance policy with a built-in savings component (cash value). The cash value can be invested into different accounts consisting of mutual funds, bonds, or stocks. Associated with the savings component is a maximum cap and a minimum floor on the investment return.
What’s more? The premium you need to shell out is flexible. Flexibility is one of the advantages of having a VUL. Let us start with that.
FLEXIBLE PREMIUMS
Last week, I invited three experts to host a Financial Literacy Talk in our workplace. These experts discussed about the current economical state of the country as well as the investment and insurance options available in the market. One of the products that they highlighted was the VUL.
We all have different needs and different capabilities. However, that must not stop us to get an insurance. Fortunately, VUL’s premium can go up and down for several reasons. These reasons depend on your lifestyle and needs. For instance, you may consider to raise the death benefit as a breadwinner. Increasing your death benefit may require proof of “insurability”. Nonetheless, the performance of your cash value account may allow you to lower your premium.
BENEFICIAL DEATH
There is a considerable weight on the shoulders of the loved ones who have to go through loss. Money will never be able to replace someone’s presence, but it will help lessen the financial weight when going through a death of a family member. You need to avoid the double-whammy of losing someone and getting sucked into debt.
VUL offers both investment options, death benefits, and critical illness coverage. Study these elements before signing up.
VARIED INVESTMENTS
VUL has varied sub-accounts, which allow the investment of the cash value. Its function is similar to mutual fund with an array of stock and bond accounts along with a money market option. Some policies may restrict the number of transfers into and out of the funds.
Interestingly, VUL got its name from the varying results of investment in the ever-changing market. Keep in mind that exposure to market fluctuations can generate significant returns or substantial losses.
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Let us move on the out-payments. You must ensure that you are insurable before implementing a strategy involving VUL or other life insurance policies. Several factors will affect the availability and cost of your life insurance. These factors include age, health conditions, and amount of insurance purchased. You see, life insurance have other charges attached to it. For instance, if a policy is surrendered prematurely, some policyholders may have income tax implications. Any guarantees associated with the policy are dependent on the ability of the issuing insurance company to continue making claim payments in the long run. Choose wisely.
DISCLAIMER: Please note that this VUL product is most applicable to American and European insurance issuer. Thank you.
As a person ages, they need to have life insurance to make sure their loved ones a properly taken care of. Life insurance is especially important for seniors. A senior may think that they cannot get life insurance due to their pre-existing health condition.
There are few insurance policies for a senior where no medical exam is required. Life insurance will make sure the loved ones are taken care of and a senior will not have to be examined in order to get their coverage.
Here are the 7 Reasons to Buy No Exam Life Insurance for Seniors
Cover Final Expenses
Final experiences can easily cost tens of thousands of dollars. A funeral and a burial are very expensive and without life insurance, this expense will be passed onto family members. The family will be suffering and emotional toll when their loved one passes on. They should not have to suffer a financial toll at this time as well.
In addition to funeral and burial expenses, there are debts and taxes that will have to pay on behalf of the senior. Life insurance can take care of this as well. If a senior has a spouse that is still alive they can make sure they are provided for and will not have to worry about them being in a bad financial position.
Coverage Begins Quickly
When a senior applies for up no medical life insurance their coverage will begin right away. When the senior pays for their coverage the policy will begin anywhere from 1 to 14 days after the application is accepted. For some seniors, the policy can even begin the same day.
These policies begin immediately and a senior will not have to worry about a long wait for their coverage. Some companies even offer a 30 days money back guarantee if a person is not happy with their coverage options or if they no longer want this insurance as long as a claim is not made on the policy during this time period.
No Hassle
No medical life insurance is very easy to get. All a senior must do is fill out an application and specify the amount of coverage that they need. They can even fill out a form for this life insurance or speak to an insurance representative. They will not have to see a doctor to get life insurance.
They will not have to have a person come to their home and give them a medical exam which can be invasive. This will also reduce the waiting time for the policy to begin. This life insurance is very easy to get and there is no hassle in the process. This also allows the policy to go into effect quickly and coverage will begin right away.
Health Issues Accepted
When a senior applies for no medical life insurance they will not have to answer health questions. When a senior applies for other types of health insurance they may have been rejected due to some moderate health-related issue they already have. If a senior is already experiencing some health issues they will more than likely have trouble getting life insurance.
No medical exam life is available to seniors that may be experiencing some health issues. Even if a senior has a serious health problem they can still get the life insurance coverage that they are looking for. If they have been denied life insurance in the past due to health questions non-medical life insurance is a good option for them.
Insurance Will Not be Cancelled
When a senior decides they want to purchase no medical life insurance they can relax and know that their life insurance policy will not be canceled. If they develop a medical condition after the policy, even a fatal condition they will not have to worry that their life insurance policy will be canceled. The coverage will not be reduced either.
A person will get the amount of life insurance that they pay for. If a person pays their premium they will not have to worry about their life insurance policy being canceled due to their age or due to their health condition. A senior will continue their coverage no matter what happens.
Tax-Free Policy
If something were to happen to the senior and they do pass on their loved ones will have peace of mind when it comes to their taxes. When the family or other beneficiary goes to collect on the life insurance policy they will not have to worry about it on their federal income tax. When the policy is paid out to the beneficiary will not need to be reported on their federal income tax.
Different Coverage Options
When a senior is looking to purchase non-medical health insurance they can get the amount of coverage that meets their needs. They can choose from different plans based on how much coverage they are looking for and what the monthly premiums will be. A person will be able to get as little as $5,000 to help with their final expenses.
For this amount, the monthly premium will not be high. Many seniors choose to get between $25,000 and $50,000 worth of life insurance coverage. If a senior has a lot of debt and they want to make sure their loved ones are well taken care of they can get as much as $1,000,000 in life insurance coverage. The premiums will be higher for this higher payout. A person can still get this amount of coverage with no medical exams.
Conclusion
If a person has pre-existing health conditions or if they are older in age they can still get a life insurance coverage without a medical exam. Even if a senior is in fair to poor health they will still get the life insurance coverage that they need.
These are only 7 of the reasons as to why a person should purchase no medical life insurance. This coverage will make sure that loved ones are provided for and a senior will not have to undergo a medical exam in order to get their life insurance coverage.
Insurance is a safeguard against unfortunate and unforeseen events. It is a strategic way to manage various risks. Insurance companies offer individuals or policyholders protection from potential losses in exchange of payments called premiums.
Aside from guaranteed coverage, what are the honest reasons why people buy insurance? On the flip side, what are the insurance company’s objectives as they offer their services?
OBJECTIVES OF INDIVIDUALS
As you age and progress along the stages of life, you become more and more aware of how necessary insurance is. A number of factors may lead to this realization such as seeing your elderly parents and starting your own family. While you know that you are supported by your CPF account as well as your Medishield Life, you can realize that it may not be comprehensive enough to meet your lifetime needs. This can serve as your wake up call to evaluate your present financial situation and plan for your future and that of your loved ones.
The exact reasons why people buy insurance is unique and highly subjective. However, here are some of them:
a. Worried about critical illness – consider health insurance.
b. Worried about permanent disability – consider life or term insurance.
c. Concerns about the loss of belongings – consider general insurance.
d. Concerns about death (as a breadwinner)- consider life or term insurance.
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OBJECTIVES OF INSURANCE COMPANIES
Nowadays, insurance companies offer a wide array of insurance products and policies that cover areas from property, health, and travel. Insurance companies must satisfy certain objectives to effectively function and meet their clients needs. Before purchasing one, know some of their objectives:
a. Pooling Money
By collecting premiums from a number of individuals or businesses, the insurance companies are able to pool their money together. They then pay out for the relatively few claims filed each annum. Keep in mind that majority of the policyholders do not file claims over the same period.
b. Financial Competence
Another objective is to ensure the policyholders that they are financially stable. Once one or more policyholders report that they were not duly compensated, society’s confidence in the system may be gone.
c. Influencing Behavior
One of the most important aims of insurance companies is to reward and promote responsible behavior. For instance, individuals with lower records of vehicular mishaps are more likely to be quoted with a lower car insurance premium than those with unsafe driving records. Rewarding safe driving practices can increase the likelihood of such desirable behavior.
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