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mariamajesticblogs · 2 years

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6 Fatal Life Insurance Mistakes That You Could Already Be Making

Keep in mind these common mistakes before, during, and even after making your purchase. Read on to make sure you do not put your family's finances in jeopardy by making these mistakes.

Life insurance is a complicated but important kind of insurance coverage. It mainly consists of two types – Whole Life and Term Life. Unlike other insurance plans, life insurance pays out only after the covered policyholder passes away. Hence, it is vital to get the right life insurance coverage and avoid costly errors since rectifying them could prove to be near impossible by the time a problem is discovered after death.

With the Singapore life insurance industry seeing booming sales for 2021, Singaporeans are placing more emphasis and attention on the purchase of life insurance. Are they guilty of making these common life insurance mistakes? And are you one of them?

If you are currently in the market for life insurance or have recently bought a policy, read on to make sure you do not put your family’s finances in jeopardy by making these mistakes.

MISTAKE #1: WAITING TO BUY INSURANCE

It is not uncommon for people to delay their purchases of insurance policies. After all, the purchase of life insurance is a complicated matter. It is important to consider the amount of coverage you need as well as the cost. It is certainly not easy to make a decision with the plethora of life insurance options out there in the market.

However, buying a life insurance policy sooner, rather than later, can work in your favour if you are seeking to secure a policy at the lowest possible cost.

Life insurance rates generally increase as people age or as their health deteriorates. In some cases, illnesses or health problems may make you ineligible for coverage. The longer you put off the buying decision, the more the insurance will likely cost. Postponing the purchase of a life insurance policy could cost thousands of dollars over a lifetime.

MISTAKE #2: BUYING THE CHEAPEST POLICY

While it is important to shop for a life insurance policy that is affordably priced, the coverage that you are getting in return is also crucial. Life insurance policies can be a tad complicated, and it is a good idea to learn about their features and benefits.

Premiums of term life insurance are way less than whole life insurance and for a good reason. Term life insurance only covers you for a set period of time, while whole life insurance covers you until death.

If you believe that you would need life insurance for a set period of time, purchasing a term life policy would be best. On the contrary, if you are seeking lifetime coverage, or you want to own a life insurance policy that builds cash value similar to investments, whole life insurance would be a better choice.

The cheapest policy may not represent the best value. There could be other insurers in the market offering much better coverage at a slightly higher price. Hence, it is essential to evaluate the value of the life insurance plan that you are considering or currently hold.

MISTAKE #3: NOT PAYING PREMIUM ON TIME

You are expected to pay a premium in return for coverage from your life insurance plans. These premiums are based on your insurance risk class, which takes into factor your age, health, and many others.

Missing a premium payment may have serious consequences. Rather than a late fee penalty, a missed premium payment could cause your life insurance policy to lapse, and you will no longer have life insurance coverage. Depending on your insurer, you could get the policy reinstated by paying an additional sum of money.

However, in the event that you are unable to do so, you will have to seek a new life insurance policy. This could come with its own set of problems. Life insurance gets more expensive as you age, and even the difference of several years could lead to a substantial increase in cost. Any changes in health could lead to higher premiums or even ineligibility for life insurance altogether. The search for a new life insurance policy would also cause a coverage gap, and your dependents would not be insured if misfortune strikes during this period.

Life can also throw some unexpected curveballs at you; just as the recent Covid-19 events. Job loss, business failures, or even serious illnesses could impede your ability to pay for your insurance premiums. Hence, it is advisable to balance the coverage you need with a premium you can reasonably afford, even when all things have gone south.

How to avoid it? Pay your premiums on time! Ensure that you have sufficient funds in your bank account should you pay by GIRO, or set a monthly/yearly reminder for you to make payment. You should also consider using various platforms such as PolicyPal to track your various insurances.

MISTAKE #4: TOO LITTLE OR TOO MUCH COVERAGE

It is easy to under/overestimate how much your beneficiaries will need to maintain their current standard of living should anything unfortunate happen to you. Having too little coverage can have serious consequences for the people you leave behind, and they could face financial hardship as a result. Having too much coverage is also a problem due to the higher premiums charged to your card.

To calculate how much life insurance you need, consider what financial obligations need to be covered: replacing your income, paying off a mortgage or other large debts, and paying for your children’s education. Thereafter, consider what assets you have, such as savings, and if they are able to cover these costs. The difference between your assets and obligations is the gap that life insurance needs to fill.

As a rule of thumb, it is advisable for your life insurance coverage to be at least 10 to 15 times your current income. Nonetheless, this is just a rough estimate. Depending on your financial status, this number could be higher or lower.

MISTAKE #5: FAILURE TO REASSESS YOUR NEEDS

Most people would have their life insurance policy for quite some time, and there would be a lot of changes during that time. Your life insurance needs will differ greatly when you’re aged 20, 40 and even 60. These shifts in circumstances would signify a need to change your life insurance policies or life insurance beneficiaries.

Determine whether you need more to meet the growing needs of your beneficiaries or less coverage due to the amount of money you have amassed through the years. Carefully consider your budget and needs before purchasing another policy of any kind, to make sure you have the insurance you need at the right price.

If there are any changes to your dependents, do update your life insurance policy accordingly when these changes occur. This ensures those relying on you do not miss out on vital protection, should anything happen to you.

MISTAKE #6: BORROWING FROM YOUR POLICY

Life insurance policies that accumulate cash value could be a source of funds when you are in need of money. The cash value of a permanent or whole life insurance policy can generally be used for any reason you see fit, including tax-free withdrawals and loans, if done properly. Policy loans are borrowed against the death benefit, and the insurer uses the policy as collateral for the loan.

This is a great benefit, but it must be carefully managed. If you take too much money out of your policy and your policy lapses or runs out of money, all the gains you have taken out will become taxable. Not to mention, you would significantly reduce the death benefit available to your beneficiaries.

If you have taken too much money out and your policy is about to lapse, you may be able to maintain the policy by making additional premium payments, assuming you can afford them. When accessing your life insurance policy’s cash value, be sure to monitor it closely and consult your financial advisor to avoid any unwanted tax liability.

CONCLUSION

The purchase of life insurance policies is a complicated affair, but we are here to make it simple for you. Keep in mind these 6 common mistakes before, during, and even after making your purchase.

Consider making your insurance purchase at an earlier age when it is more affordable. Select sufficient coverage at the right price and pay your premiums on time. Reassess your needs every now and then to ensure you have enough coverage. There are no rules that disallow you from having multiple life insurance coverages, so go for it if the need arises. Avoid borrowing from your life insurance policies, and ensure you are able to manage them wisely when you do.

6 Fatal Life Insurance Mistakes That You Could Already Be Making

MARIA LUISA DE LUMEN

2 min ago

Keep in mind these common mistakes before, during, and even after making your purchase. Read on to make sure you do not put your family's finances in jeopardy by making these mistakes.

If you are currently in the market for life insurance or have recently bought a policy, read on to make sure you do not put your family’s finances in jeopardy by making these mistakes.

MISTAKE #1: WAITING TO BUY INSURANCE

However, buying a life insurance policy sooner, rather than later, can work in your favour if you are seeking to secure a policy at the lowest possible cost.

MISTAKE #2: BUYING THE CHEAPEST POLICY

MISTAKE #3: NOT PAYING PREMIUM ON TIME

MISTAKE #4: TOO LITTLE OR TOO MUCH COVERAGE

MISTAKE #5: FAILURE TO REASSESS YOUR NEEDS

MISTAKE #6: BORROWING FROM YOUR POLICY

CONCLUSION

The purchase of life insurance policies is a complicated affair, but we are here to make it simple for you. Keep in mind these 6 common mistakes before, during, and even after making your purchase.

#areteautomation #lifehealthadvisors#thisis4u#happy#fun

Credits: valuechampion

Date: July 4, 2022

Source: https://theindependent.sg/6-fatal-life-insurance-mistakes-that-you-could-already-be-making/

#areteautomation #lifehealthadvisors #thisis4u #happy #fun

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paolos83blog · 2 years

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Can Someone Buy Life Insurance on Me Without My Consent?

Can someone buy term life insurance on my life without my knowledge or permission?

Fortunately having someone buy term life insurance on you without your consent is almost impossible, but it’s important to understand the steps you should take if it occurs.

Buy Term Life Insurance with Confidence

Life insurance companies implement numerous strategies to prevent insurance fraud. These obstacles allow insurers to verify an applicant’s identity and obtain express permission to move forward with coverage. These strategies include:

Application questions: When applying for life insurance, there are certain questions that the insurance carrier uses to verify identity. These questions include:

Full name

Street address

Social Security number

Driver’s license number

Employer information

Signatures: All life insurance applications require the signature of the proposed insured.

A release form: Most life insurance policies require the proposed insured to sign a consent form to release his/her medical information.

Phone interview: After submitting an application, the life insurance company will contact the proposed insured for a confidential phone interview to review the application’s accuracy.

A medical exam: After applying, most life insurance policies require the proposed insured to take a medical exam. The medical examiner will check the insured’s ID to ensure identity and will ask the insured many of the same questions from the application to verify answers.

Insurable interest: In order for someone to purchase life insurance on someone else, life insurance companies require insurable interest. Insurable interest means there has to be financial dependence. For example, spouses rely on one another’s income for their standard of living. In contrast, your neighbor does not have a financial interest in your life and could not buy term life insurance on you.

Steps to Take If Someone Did Buy Term Life Insurance on You Without Your Permission

After taking those safeguards into consideration, if you still think someone may have decided to buy term life insurance (or any type of life insurance) on you without your permission, there are steps you can take, but it may take some effort. It is not possible to just Google your name alongside the words life insurance to find out. Life insurance is personal, so protecting your privacy is important.

Step 1: If you think you know which life insurance company the policy in question was purchased from, you can call their customer service and explain the situation. They will be able to confirm if there is a life insurance policy on you and then help you make the appropriate steps to terminate it. There are many life insurance companies, however, so this option only realistically works if you know the name of the life insurance company.

Step 2: You can request your Medical Information Bureau records (MIB Consumer File). Life insurance underwriters use MIB’s services when assessing individual applications when they underwrite life insurance policies. Your consumer file may include the name of any MIB member company that:

Received a copy of the medical and personal information that MIB has in its database about you during the three-year period preceding your request;

Made an inquiry to MIB about you within the past two years.

It is free to request your MIB file. You will not have an MIB Consumer File unless you have applied for individually underwritten life, health, disability income, long-term care, or critical illness insurance within the past seven years (or earlier depending on applicable law) and the insurance company to which you applied (or its reinsurer) was an MIB member company that submitted an MIB inquiry.

If you get a letter stating you don’t have an MIB file, you can rest assured there is likely no life insurance policy out there on you.

If you do receive a file, you can look for any companies that you did not personally apply to and contact them.

Step 3: You can hire policy locator services. There are online services that for a fee will send out emails and letters to life insurance companies on your behalf to discover if there is a life insurance policy in your name. The MIB website mentioned earlier is one company that offers this service.

It costs $75 and it is important to note that the locator service generally will not report on policies with a $100,000 face amount or less, guaranteed issue life insurance policies, employer-based life insurance policies, or military-issued life insurance policies.

Credits: Natasha Cornelius

Source: https://www.quotacy.com/can-someone-buy-life-insurance-on-me-without-my-consent/

Date: March 31, 2018

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sheryllsblog · 2 years

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The Benefits of Life Insurance

Life insurance is a contract between the policy owner and the insurance company, where the company agrees to pay a sum of money upon the occurrence of the death of the insured. In return, the policy owner agrees to make regular premium payments. Insured events that may be covered include: death, diagnosis of a terminal illness, diagnosis of a critical illness, disability due to ill health, permanent disability, accidental death, or requirement for long term care.

Not only can life insurance benefit your family in the event of your death, but it can also benefit you as an investment. Your life insurance can provide benefits to your children, emergency loans to you while you are still alive, and some other benefits as well. For the remainder of this article, we will outline each of the benefits available to you and your family under a typical life insurance policy so that you can decide if life insurance might be right for you, or if you need to make changes to your already existing life insurance policy.

The most well known feature of a life insurance contract is the designation of a beneficiary. In the event of your death, benefits can be distributed to one or more beneficiaries of your choosing. There are many different types of beneficiaries that you can establish, so we need to review each one and weigh the pros and cons of each.

You can specify multiple beneficiaries if you choose to do so. For example, you might want to have your spouse as well as all of your children listed as beneficiaries. You can also stipulate the percentage of the proceeds that each beneficiary is to receive. Most people list their wife as the sole beneficiary while the kids are still young, and then as the kids get older, they modify their policy to include their children for a certain percentage of the death benefit. A guardian or trustee needs to be appointed to administer the payout of the proceeds to any beneficiaries that are still a minor.

It is also common to name a contingent beneficiary. If your primary beneficiary dies, then the contingent beneficiary is next in line to receive the proceeds of your life insurance when you die. Also, your beneficiary designation can be revocable or irrevocable. If it is revocable, you can change it any time without permission to do so. If the designation is irrevocable, you can not appoint a new beneficiary without the consent of the current beneficiary.

There are a few different types of life insurance. For our purposes here, we are only going to make a distinction between those types of policies that provide you with money while you are still living and those that do not because we want to hold our focus on the benefits of life insurance, not the different types of coverage.

Term life insurance does not give you the potential for income while you are still living. It only pays a benefit in the event you die during the covered term. Other types of coverage, such as variable life, universal life, and whole life, do have a cash surrender value because a portion of each premium payment you make is invested in a separate account. That money can accrue over time, depending upon what the money is being invested in. You have the option of investing the money in fixed income or variable investment funds.

You can terminate your policy while you are still alive. If you choose to do, you will receive the amount that has been invested, minus the surrender charges that the insurance company will assess on the money for early withdrawal.

You can also take a loan against the cash value of your policy. The interest rates for these types of loans are typically small, and you can pay back the loan in a lump sum or installments. If you default on the loan, the insurance company will pay off the loan using the accumulated cash value that you borrowed against.

Also, it is possible to buy a participating policy. The insurance company pays the holder of a participating policy a dividend, much like a normal corporation pays dividends to its stockholders. A non-participating policy does not pay a dividend. Term life policies are always non-participating.

I hope this information will help you weigh all your options when you decide to buy a life insurance policy. If you already have a policy, review it carefully to make sure you have a policy that suits your needs. Call your agent and ask questions if there is something that is not clear. You may not have an individual agent assigned to your policy. If that is the case, call the customer service center for the insurance company, and they will be able to answer any questions you might have.

Credits : Jim Pretin

Date : 2022

Source : https://www.streetdirectory.com/travel_guide/152427/life_insurance/the_benefits_of_life_insurance.html

#areteautomation #lifehealthadvisors #knowledge #thisis4u

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spliffentertainment · 2 years

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ourmindonmusicpodcast · 9 months

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mariamajesticblogs · 2 years

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What Happens When a Life Insurance Policy Lapses?

Short Answer

A life insurance policy is a unilateral contract. As long as you make your payments on time, the insurance company is obligated to hold up its end of the contract. If you miss a payment or your cash value is exhausted, however, you could lose your coverage. The good news is that insurance companies offer a grace period for missed payments. And even if you don’t pay up before the grace period expires, you may still be able to reinstate the policy.

Keep reading to learn more about what could happen if your life insurance lapses and what you can do to avoid it.

If you need life insurance, the last thing you want is for your policy to lapse. Not only do your loved ones lose the protection the policy affords, but you may have to pay more to reinstate your policy or get a new policy.

If you forget or can’t make your payment on time for another reason, understanding your options is critical to making sure you remain covered.

About Your Grace Period

If you miss your payment due date, all is not lost. If you have a permanent life insurance policy with cash value, the insurance company may use it to pay your premium. But even if you have a term policy, you still have time.

Life insurance companies give you a grace period — typically about 30 days, depending on your state’s insurance laws — to catch back up with your premiums. Just remember that you’ll also need to make the next month’s payment.

If you die during the grace period, the insurance company will even pay out the death benefit, even if you haven’t yet made up your payment. But if you go past the grace period without making the payment, the policy will lapse.

Reinstating Your Life Insurance Policy

If your policy lapses, you can apply to have it reinstated. You may need to meet certain requirements, however, depending on when you initiate the reinstatement process.

For example, if it’s within 30 days of the policy lapsing, you may be able to reinstate it by just catching up on your premiums. But if it goes longer than that, the insurance company may require you to provide proof of insurability.

This means that if your health has changed since you originally bought the policy, you may be required to get a new policy with a higher premium. Depending on the health issue, the insurance company could even decline your request altogether.

Keep in mind that different insurance companies have different rules when it comes to reinstatement. So, find out what your requirements for reinstating a lapsed policy are before it’s too late.

Should You Replace Your Policy Instead?

If you’re in good health, you may think that replacing your life insurance policy is better than reinstating. After all, you don’t have to follow the insurance company’s rules to get the policy reinstated.

But even if your health hasn’t changed, your premium may still go up simply because you’re older than when you first bought the policy.

That said, if your life insurance policy lapses, do a little comparison shopping to see if there are any life insurance companies that can offer you a lower premium than what you were paying on your lapsed policy. This process could be especially helpful if you didn’t shop around when you first bought the policy.

How To Avoid A Policy Lapse

While you have options if your life insurance policy lapses, the best plan is to avoid a lapse altogether.

With lapses due to non-payment, preventing one can be easy. Start by setting up automatic payments so that you don’t have to remember to pay every month. Also, make sure that you have overdraft protection on your checking account so that a payment doesn’t get returned due to insufficient funds.

If you change your bank account, give the life insurance company the information from your new account so it can update your payment information. You can usually do this by yourself in your online account.

If you have a permanent life insurance policy, also keep an eye on your cash value balance, especially if it’s a universal life policy that doesn’t offer guaranteed growth. If it gets low, you can increase your premium payment to replenish your cash-value account.

The Bottom Line

If you have a term life insurance policy, make sure to keep up with your payments to avoid a policy lapse. And if you have a whole life or universal life policy, keep an eye on your cash value.

If your life insurance policy does lapse, contact the insurance company to learn about its reinstatement policy. Because reinstatement can include extra requirements, however, also consider replacing the policy with a new one.

The important thing is to ensure that you and your loved ones remain protected in case something bad happens to you.

Credits: Ben Luthi Date: April 20, 2019 Source: https://www.leaplife.com/what-happens-when-a-life-insurance-policy-lapses

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