Life Insurance Blog

May 13th, 2010
in Life Insurance



in Life Insurance





April 20th, 2010
in Life Insurance





in Life Insurance,Universal Life Insurance,whole life insurance

Have you ever tried to read a life insurance illustration?  Often times they are so complicated that only a seasoned agent can understand them.    They have all the disclaimers on them about returns and typically you will see at least two columns of projections.

One column will be the guaranteed column, which will be the worst case scenario.  The other column is the assumption column.  This is usually based on the companies current dividend scale or some type of hypothetical return.    It is important to look at what guarantees are built in and to look at the companies historical results.   If you have a dividend paying whole life product, the dividends will go up and down.  The dividend is based on the companies success and the success will obviously fluctuate over a long period of time.   Most good mutual companies have never missed a dividend, but the amount of the dividend is the key.  If you are talking about a universal life, there is a bottom floor interest rate or return level in one column.  Many plans might guarantee like 3 or 4 percent as a worst case scenario.   The other side will be some hypothetical interest rate or market return.  This like the dividend is a total guess based on some historical data and future projections.

The key to reading an illustration is that it will give you some rough parameters.  Just remember that it will never play out exactly as illustrated.


April 1st, 2010
in Life Insurance




March 31st, 2010
in Life Insurance




in Life Insurance




in Life Insurance

Can you get your premiums back for your life insurance if you don’t die?  The answer is yes and it can be done in two different ways.   The first method is by buying a return of premium term life insurance plan.  These type of plans are usually available in different term lengths like regular term insurance.  The concept is simply get a full refund of all premiums paid if you live through your term period.   This is a great deal for the insurance company as well as for the insured.  You will pay more for this than you will for a regular term policy, but you will be pretty happy if and when the money is returned.   It is a good deal for the insurance company as they can use premium and generate a good return on your money and make a profit.  At the end of the term, they pay the insured back the contributed amount and they keep what they made for a return.

The other way to do it is buy using a permanent plan such as whole life or universal life.   After contributing for a period of time, you can withdraw money from your cash value up to your cost basis and still keep the coverage.  If you can afford to pay the permanent premiums, this can be a very beneficial strategy.    If you wait until the cash value is more than you contributed, you simply pull out the cash you have contributed and you have a full return of premium.  The problem with return of premium is that your insurance ends at the end of the term, but with whole life or universal life you can continue coverage.


January 14th, 2010
in Term life insurance

What is the best term life insurance?  That is an interesting question and how do I determine what that means?

I generally think this can be answered through a basic analysis when selecting the carrier you want to work with.  Which carrier will underwrite me the most favorably based upon my specific underwriting situation?  If you have sleep apnea and take medication for a couple of different purposes, then it might be one carrier.  If you have type 2 diabetes it may be a totally different carrier.  Based upon which carrier will underwrite your situation the best, that will determine your underwriting rating and your ultimate premium.  See what offers a Florida life insurance consultant can help with you. 

Another aspect of determining the best term life insurance for you is what is the company’s financial strength.   Generally you want to select a company that has an A rating or better.   This is something you will want to be comfortable as you select the carrier you work with.

When determining the best term you want to look at your short and long term goals and needs with the insurance.  For example, will you only want the term for the term period?  Will you possibly want to convert all or a piece of the term to permanent insurance?  If you will want this as an option then you want to look at what the term carriers offer as conversion options.   Do they have a good whole life option?  Universal Life?  How long do you have to convert it with no proof of insurability?

These questions might help you if you are trying to figure out what the best term life insurance is.  It is going to be specific to your situation and varies per person.

in Life Insurance

One of the longest standing arguments in the insurance business is buy term and invest the difference or buy cash value life insurance.

The argument of buying term and investing the difference is based on the premise of getting cheap term and taking the extra money (you would have spent on whole life) and investing it in the market.  The thought is that you can make a higher return with the money in the market than you can inside a life insurance contract.

While the true accumulation value of an investment account can be higher than the accumulation value of the cash value, other factors must be considered.   For example, what if your investment account performs poorly and you actually lose money.   A life insurance policy has certain guarantees built into it that guarantees that you will not lose money no matter what.

Also, a big consideration needs to be from a tax standpoint.  What is a modified endowment contract?  Where will you invest?  What is your tax bracket?  What will the tax bracket be when you want to access the money?  Would it help you to have money that you can access tax-free from the life insurance?  Is the death benefit being passed tax-free going to be a benefit to your estate and family.

Term is a great way to cover your liability at a very reasonable price.  The problem with term is that it only lasts for a period and most people outlive the term and their family never sees a benefit.  Often times a combined approach can be a good one.   In other words, having a majority of the coverage as term and part being whole life or universal life.

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