There are basically two types of life insurance policy available known as ‘whole life’ and ‘term’. Whole life policies are there to provide benefits to the owners throughout their entire lives, whereas ‘term’ policies are taken out to provide coverage for a set period of years.

Life insurance needs should be re-assessed at regular intervals to ensure the policy or policies taken out are still adequate for their purpose. Policies taken out 10 -15 years ago may have outlived their use, lapsed, or premiums may have gone up due to underperformance in a volatile market place. Examples of underperformers include many of the ‘permanent’ life policies available over recent years –‘whole life’, ‘universal’ and ‘variable’ life policies which are linked to interest rates, which can go up as well as down.

No ‘One size fits all’ Life Insurance Policy

There is no ‘one size fits all’ insurance policy out there and it may be a case of combining different types of life coverage in order to ensure future financial needs will be met. Many people decide to re-assess their requirements for life insurance after experiencing a big life change which affects their finances – such as having a baby, or taking out a mortgage. The implication of leaving behind dependents or partners who may be left with big financial commitments motivates many to plan a financial future which includes life cover.

As well as meeting the needs of their beneficiaries in their ongoing lives, another common reason to take out coverage could be simply to cover short term funeral costs (costs which are rising every year).

How to calculate life insurance requirements

An appraisal is needed as to how any current policies are performing, and an honest calculation of their projected value going forward is needed. You may find that there are better products out there in the marketplace to suit you. Restructuring may seem like a hassle, but lower administrative fees and the fact that insurance companies have re-designed their cost structures mean that changing policies is not the financial headache it used to be.

Alternatively – you may discover through the process of re-evaluation that your life coverage is just fine, thank you – but taking stock of finances in an uncertain economic climate has to be a good thing.

Source: Stephen Smith, Delmarvanow.com

 photo credit: SMJJP

There are lots of great deals on the market currently if you are looking for term life insurance and critical illness cover. Term life insurance is cheaper than whole life insurance because it only covers you for an agreed term, whereas whole life insurance provides coverage for life. Plus, you do not get any return on investment with term life – but can reap good dividends with whole life coverage.

Critical Illness Cover is a Welcome Boost to a Life Insurance Policy

Term life insurance can be boosted by adding on critical illness cover to it and many life insurers can offer this benefit at a very cost effective rate. Critical illness insurance means you are insured against the main critical medical conditions and illnesses including cancer, heart attacks and kidney failure – insurers will publish a comprehensive list of illnesses they cover.

Make sure to carefully check out exactly what is covered, since you could get a nasty shock if it later turns out that e.g. the loss of one limb is not considered ‘critical’ by the insurer, whereas losing two e.g. legs is. Similarly, some insurance companies will only cover you for certain types of cancers – so check the terms very carefully. And speak to an advisor before taking out critical illness protection.

Take the time to Check Terms and Conditions of Life Policies

Many of the term life insurance policies being offered seem like really good deals – the policy premiums often look like excellent value as far as the policy cover amount. For example, a 40 year old non-smoker could arrange a $1 million dollar term policy to run over 30 years, and only pay around $2,500 per annum for it.

Use a top Rated Company

But –make sure you are buying a policy from a trusted and known source. If you don’t you run the risk of being shortchanged in the event of a claim. The best way to check out which life companies are reliable is via a broker or the internet.  Make sure you check out whether the life insurer is financially stable, too by looking up its rating on Standard & Poor’s or AM Best – and go with an insurer that has an A rating or better.

Use ‘Execution Only’ Brokers for Cheaper Life Insurance Deals

Also it’s worth noting that life insurance prices change on a daily basis – so it’s a case of ‘best buy brokers’ rather than ‘best buy insurers.’ Brokers take on the job of finding the lowest priced insurance companies – but – some brokers receive extremely large commissions from the insurance providers and this can have a big impact on how much you end up paying. The best way of getting round this is to utilize ‘execution only’ brokers – they give you the commission, and charge a small fee in return.

Other things to check are that life premiums are ‘guaranteed’ rather than ‘reviewable’ so that know exactly where you are when it comes to monthly payments. The most important thing to remember when you are trying to get the cheapest life insurance and critical illness deals is that it pays to get advice.

Source: Amy Perry, Allvoices.com Jan 2011, and MoneySavingExpert.com Oct 2010

photo credit: allaboutgeorge

Sales of life insurance rose in the three months ending in June this year, making it the second quarter of growth. This is welcome news for life insurance companies who saw a slump in sales last year as a result of the recession. Last year saw the biggest drop in sales of life insurance in 70 years. According to trade group Limra International life insurance sales in the first half of 2010 rose by 9%.

Whole Life Policies Show Biggest Increase in Sales

Whole life policies, offering death benefits with additional savings features showed the sharpest gain with sales rising by 23%. Life insurance products which have just guaranteed death benefits went up by 5%.

Half of Insurers Saw Double Digit Growth

Ashley Durham, a senior analyst at Limra stated “Things appear to be looking up” and added that “nearly half of all companies experienced double-digit growth during the first half of the year.” New York based Met Life, the largest life insurance company in the USA, saw increased earnings as did Prudential who reported a sevenfold increase in profits on investments compared with the previous year.

According to Limra Term Life Insurance was the only product which saw a decline in sales in the second quarter with premiums dropping by 11%.

Source

• Inyoung Hwang –25  August, Bloomberg Businessweek

photo credit: kevinzhengli

A woman from Kazakhstan is believed to have just reached her 130^th birthday – which makes her more than 16 years older than the world’s other longest-lived person. Sakhan Dosova, mother to ten children, says she has never seen a doctor, doesn’t eat sweets, and loves cottage cheese – she believes that the reason she has lived so long is down to her sense of humour. Her grand-daughter, Gaukhar Kaniewva, 42, agreed “She is a very cheerful woman. We think laughter and her good mood helped her live so long.”

(more…)

There’s no getting around the fact that the current economic conditions are getting on peoples’ nerves. The stress factors that many people have to deal with are rising rapidly as life insurance and other financial matters grind away at the thoughts and worries of everyone. There’s a definite link between financial pressures and personal stress and for many people that means not being able to deal properly with the everyday matters of life such as friends and family. Unfortunately, having a good life insurance plan usually doesn’t mean it’ll help you live a better life while you’re here. That’s why it’s important to keep your quality of life in the upper reaches by dealing properly with stress levels.

The simple truth is that 44% of all employees in America are living from one paycheck to the next with 60% of all employees – even the more successful ones – worried about their financial future and whether or not they’ll continue to be able to make ends meet. It’s very important that you don’t allow financial worries to begin to take a toll on your personal health. Stress has a very subtle way of grinding away at a person a little more every day until only the raw nerve ends are showing. Increased stress levels can also mean increased health costs to people who have a hard time dealing with the stress brought on by uncertain financial times.

(more…)