Term life insurance: Money-saving tips (they do exist)!
Term life insurance is the most affordable way to protect your familys future. As inexpensive as term life insurance is, there are money-saving tips that will ensure you are paying only what you need. Get the most value for your pound by checking out the following helpful tips that will save you money while still getting great protection.
1.Get coverage early the sooner you buy life insurance the less your annual premiums:
Some people are gamblers by nature and choose to take their chances by skipping out on life insurance. Although it is unlikely you’ll die during your working years, you’re not insuring for what’s likely to happen but instead, for the worst-case scenario. That’s why term life insurance costs less the younger you are. It is also why you should buy it sooner rather than laterbecause you’ll be providing financial security without spending a lot of money for it.
For example, if we look at the cost to purchase a 250,000 Term 10 life insurance policy youll see how delaying purchasing a policy by just a few years could cost you more in annual premiums.
For male non-smokers*:
A 35 year-old may get quotes for as little as 195 per year for a 10-year total cost of 1,950.
A 40 year-old may get quotes for as little as 263 per year for a 10-year total cost of 2,630.
A 45 year-old may get quotes for as little as 373 per year for a 10-year total cost of 3,730.
For female non-smokers*:
A 35 year-old may get quotes for as little as 165 per year for a 10-year total cost of 1,650.
A 40 year-old may get quotes for as little as 210 per year for a 10-year total cost of 2,100.
A 45 year-old may get quotes for as little as 270 per year for a 10-year total cost of 2,700.
* Lowest quote online from February 2006 for a Term 10 policy, one of the most popular life insurance products in Canada. Premiums shown are the rates if paid annually.
2.When your age isnt really your age:
Your next birthday may be 6 months away but in the eyes of most life insurers youve already hit that next magical number. When you get a life insurance quote, the rate you are given is based on the age you are closest to which, 50 per cent of the time is your age at your next birthday. Its a term called Age Nearest, and that half-year price increase could really add up. See the difference yourself.
For male non-smokers*:
A 39 year-old may get quotes for as little as 248 per year for a 10-year total cost of 2,480
A 40 year-old may get quotes for as little as 263 per year for a 10-year total cost of 2,630.
A savings of 150
A 44 year-old may get quotes for as little as 345 per year for a 10-year total cost of 3,450.
A 45 year-old may get quotes for as little as 373 per year for a 10-year total cost of 3,730.
A savings of 280
For a female non-smoker*:
A 39 year-old may get quotes for as little as 200 per year for a 10-year total cost of 2,000
A 40 year-old may get quotes for as little as 210 per year for a 10-year total cost of 2,100.
A savings of 100
A 44 year-old may get quotes for as little as 255 per year for a 10-year total cost of 2,550.
A 45 year-old may get quotes for as little as 270 per year for a 10-year total cost of 2,700.
A savings of 150
* Lowest quote online in January 2006 for a Term 10 policy. Premiums shown are the rates if paid annually.
3.If youre a smoker ask about incentive programs aimed at helping you quit:
While not all life insurance companies offer incentive programs to help you quit, some do and could save you money if you are thinking about buying life insurance and quitting smoking. For example, one such company will refund you an amount equal to the difference between the premiums you already paid as a smoker and those you would have paid had you not smoked. Whats more, once you quit smoking, this same company will adjust your premiums to non-smoker rates based on the age you were when you purchased the policy, not the age you are at the time you quit!
4. Check out your paymentbilling options:
Many life insurance life insurance companies offer discounts to consumers who pay their annual premiums up front. If you have the money handy, you could save up to 10 per cent of your policys premium each year. For example:
A 35 year-old male with 250,000 in coverage can pay 195 up front per year for life insurance coverage. If paid in monthly installments, however, the annual premium jumps to about 215. Paying up front can save this person 20 per year!
A 40 year-old male with 250,000 in coverage can pay 263 up front per year for life insurance coverage. If paid in monthly installments, however, the annual premium jumps to about 288. Paying up front can save this person 25 per year!
A 45 year-old male with 250,000 in coverage can pay 373 up front per year for life insurance coverage. If paid in monthly installments, however, the annual premium jumps to about 407. Paying up front can save this person 34 per year!
Life insurance made even more affordable:
With these money-saving tips in hand, Term Life insurance is more affordable than ever. There is no better time than now to get the coverage you and your family need.
Term Life Insurance
Term life insurance is a life insurance product that pays out a cash lump sum upon death of the insurance policyholder or at the point that the insurance policyholder is diagnosed as terminally ill. But, despite it being a low cost term life product – insurance cover can be acquired from as little as 5-10 per month – surprisingly few of us have term life insurance in place.
For people with a mortgage and family to support, not having a term life insurance policy exposes them to a large financial risk. This risk becomes apparent when you consider how the mortgage and household bills would be paid if the main income producer were to die or to become terminally ill. The end result could be that loved ones who are left behind find their home is repossessed because they cannot keep up the mortgage repayments.
Some people prepare for such an eventuality by taking out a mortgage life insurance policy. This is all well and good for covering off the remainder of the mortgage loan, but where will the money come from to pay the gas & electricity bill and the council tax bill every month, let alone the money needed to cover the policyholder’s funeral expenses? It is at this point that a term life insurance policy becomes very useful indeed.
If you don’t have a term life insurance policy in place, here are some sobering reasons why you should consider taking out a term life policy now
CANCER – One in three people will develop cancer at some point in their lives. Research into cancer is of course ongoing, and one day some cancers may be curable. In the meantime a term life policy offers income protection for loved ones left behind in the event of terminal cancer diagnosis and death from cancer.
HEART DISEASE – Heart and circulatory disease accounts for more than 35% of all deaths in the UK each year. The number of people dying from heart and circulatory disease is on a falling trend, but the number of people becoming morbidly obese is increasing, and so may reverse this trend in the near future. Term life policies can be configured to pay out if cause of death is heart-related.
MRSA (SUPERBUG) – The death rate from the MRSA superbug has doubled in the last 4 years. MRSA is a bacterial infection that is resistant to antibiotics. It commonly causes death in people with weak immune systems, and so easily spreads amongst the sick & old in hospital wards. Many life insurance policies pay out if the cause of death is MRSA related.
AVIAN FLU (BIRD FLU) – Recent comments by the Society of General Microbiology in the UK sparked controversy when they estimated that 2 million people in the UK could die from a highly infectious strain of mutated Avian Flu. If you are worried about Avian Flu check with the life insurance agent to see if their term life policy covers such an eventuality.
Term Insurance vs. Whole life or Permanent Insurance – A
Term Insurance vs. Whole life or Permanent Insurance – A Car Analogy
Should I lease a car or buy it?
Think of a term life insurance policy as leasing a car. When you lease a car you get the benefits of using the car, but when you stop paying you don’t have a car anymore. As with term insurance as long as you pay your premiums you get the benefit of the term life insurance policy, but when you stop paying, you no longer have any coverage.
Whole life or “permanent policies” are designed to build up a cash value. So similar to buying a car you have an asset that you can keep. Unlike a car, hopefully this asset will grow in value. Whole life, Universal life and Variable Universal life are all different types of permanent insurance. Permanent insurance, most of the time, is meant to keep until you die or as a saving vehicle.
The way the policy grows in value gives you the different names of insurance such as, Whole Life, Universal Life, and Variable Universal Life. That leads to the understanding of the different types of permanent policies.
“Whole Life- Is an insurance policy where premium payments are usually the same throughout the life of the policy, as is the death benefit. You usually need to pay the premiums as long as the policy is in force.
“Universal Life – Is an insurance policy where premium payments may be changed and the death benefit can also be changed by the owner. Usually if the death benefit is being raised you will have to show some evidence of insurability (medical information) or other information requested. Your policy grows at a stated interest rate which changes every so often.
“Variable Universal Life – Is an insurance policy where premium payments may be changed and the death benefit can also be changed by the owner. Usually if the death benefit is being raised you will have to show some evidence of insurability (medical information) or other information requested. Your policy grows at the rate of your investment choice you choose. Since you may invest in market instruments similar but not exactly like mutual funds. Your policy can lose value causing larger premium payments than expected.
Take a step back and think about it from the insurance company’s point of view, its easier to understand the difference. A portion of the cash value that builds in the insurance contract will pay for the “cost of insurance”.
Whole life- The insurance company is taking most of the risk. They are paying a death benefit to you no matter what happens to the cash value in the account. As long as you make your payments the insurance company has to pay your death benefit. This may be the most expensive.
Universal life – The insurance company is taking some risk. The policy grows give the current interest rate it pays. At times you are only able to earn low interest rates. You may need to make up more payments to keep your policy.
Variable Universal life – The insurance company has taken the least amount of risk. In the Variable policy the rate of return is variable, meaning you don’t know how fast your policy will grow or shrink. This type of policy is most likely used for someone who is younger and can ride out the volatility of their portfolio. Since you take on the most risk in this type of policy it usually has the smallest premiums.
Term Insurance
Term insurance is a level term life insurance product that pays out a lump sum when the insurance policyholder dies or becomes terminally ill. It provides peace of mind to the insurance policyholder that loved ones left behind after their death will be financially secure. Term life
insurance can be configured to pay off all existing loans – including the mortgage – and leave a cash sum in the bank to support your spouse and children. If you don’t want your family to have to cope with financial pressures during their bereavement, or struggle to find the funds to pay for your funeral then term insurance is the life product to have.
Term insurance is different to mortgage insurance
It is important to realise that term insurance is a different life product to mortgage insurance. Term insurance is a long-term insurance product that can be taken out over a lifetime of 50 years. During this time the insurance premium remains the same as does the amount paid out in the event of death or terminal illness.
Mortgage insurance on the other hand mirrors the life of your outstanding mortgage loan. The insurance premiums remain the same throughout the life of the product, but unlike term insurance the amount paid out upon death or terminal illness reduces in line with the outstanding mortgage loan. So, if you were to die at the point that you owe only 2000 on your mortgage, then the mortgage life insurance product would only pay out 2000.
Terminal illness
Terminal illness cover generally comes as standard with term life insurance polices. The terminal illness clause tends to trigger pay out if the insurance policyholder is diagnosed with a terminal illness named on the term policy and is given 12 months or less to live. Pay out in these circumstances allows the policyholder themselves or someone with power of attorney for the policyholder to receive the full lump sum from the term life insurance policy. They are then free to enjoy the final months of their life with their family free from financial constraints.
When a term life insurance policy pays out for terminal illness the policy will end. Therefore the life insurance company will not be liable to pay anything further upon death of the policyholder.
Term life insurance restrictions
As with most insurance policies there are restrictions and exclusions that apply to term life insurance policies. The main restriction is on pay outs to term life insurance policyholders who become critically ill, yet are not diagnosed as terminally ill. In this case, a standard term life insurance policy will not make a payment, unless a critical illness policy has been added to the term life insurance.
Tell The Insurers Everything When You Apply For Life And
Tell The Insurers Everything When You Apply For Life And Critical Illness Insurance.
The failure to disclose information, especially medical information, is the most common reason why an insurer will reject a claim on a life or critical illness policy. To help underline some issues, we want to tell you a true story – but we’ve concealed the policyholders’ name and a few other aspects to preserve anonymity.
Mrs A was fighting a secondary infection following surgery to remove cancerous lymph nodes in her groin when she received further bad news. Her critical illness insurer was refusing to pay out the 200,000 she was expecting. To understand why and the issues involved it’s useful to understand how the events unfolded.
In June 2001, Mrs A visited her GP after discovering a patch of flaky skin on her back. Mrs A thought it was eczema. During a brief consultation, her GP thought that it should be looked and recommended a referral to a dermatologist. But soon afterwards the flaky skin healed and Mrs A cancelled the appointment with the dermatologist. Apparently her GP did not express any major concern and some years later admitted that Mrs AP was in all likelihood unaware of the urgency of the referral.
Nine weeks later a sales representative from Standard Life made a routine visit to Mrs A at her home. As Mrs A was now alone with a young family, the representative reviewed Mrs A’s life insurance cover and suggested that she should also have a 200,000 Critical Illness policy. Mrs A thought that sounded a very good idea and willingly agreed there and then.
The sales representative produced the form and went through it, question by question, writing down Mrs A’s answers for her. When it came to the question asking Mrs A to disclose all occasions her GP had recommended referrals for tests or treatments, Mrs A asked the sales representative what Standard was asking for. Mrs A alleges that the representative replied that Standard only needed details of appointments that related to serious conditions. Mrs A did not believe that her referral for what she thought had been eczema, fell into that category – so she did not mention it. She then signed the form honestly believing that she had disclosed everything Standard Life had required.
Standard subsequently accepted her application and issued the 200,000 Critical Illness Insurance policy.
Two years later Mrs A was found to have skin cancer. Major surgery rapidly followed to remove the cancer. As her critical illness policy included cover for her cancer, Mrs A then made what she thought was a valid claim.
Standard Life subsequently rejected her claim on the basis of reckless non-disclosure the insurers’ jargon for Mrs A’s failure to disclose her cancelled appointment with the dermatologist.
The Issues
The events that followed showed that Mrs A’s application should have included her referral to the dermatologist. So why didn’t she disclose the information?
It seems that two aspects conspired to create the situation: Standard Life’s sales representative told Mrs A that the question on the application form asking for all occasions her GP had referred her for tests or treatments as only relating to serious conditions. That interpretation was fundamentally wrong. The question asked for ALL OCCASIONS. These questions are worded carefully and ALL means ALL – it is not asking the applicant to make a personal judgement as to whether the grounds for the referral were serious or not. The representative was clearly wrong.
Secondly, the GP did not apparently convey to Mrs A the potential seriousness of her flaky skin and her referral to the dermatologist. If, when the insurance application was being completed, Mrs A was unaware that her condition was potentially serious and the representative said the referral question only related to serious conditions, Mrs A can hardly be held responsible for not disclosing that information.
In our view, and on the basis of the information provided to us, Mrs A is not to blame. Standard Life’s representative made the vital error. He gave incorrect guidance on what the question at the heart of the dispute, was asking for. In our view Standard Life should pay out.
The lessons to be learnt
Always very carefully read each question on an insurance application form – and answer the question FULLY and ACCURATELY. Do not be tempted to be economical with the truth. If you do omit something they ask for, the insurance company can rightfully claim that you mislead them by omission. Never be tempted to omit some information in order to qualify for a cheaper premium. You might get a cheaper premium, but that’s a false economy if a subsequent claim is rejected.
We hope Mrs A will get her payout as she was mislead by circumstances beyond her control. We believe she acted honestly. She deserves her payout and our best wishes.
However, those applicants who deliberately withhold information from their insurer or who provide misleading information, do not.
Postscript : Reports show that Standard Life refuse 5% of all Critical Illness claims due to non-disclosure. Some other insurers have much higher figures – Legal & General reject 16% and Friends Provident reject 15%. The insurance industry is trying to improve this situation by the ways they seek information from applicants and by the way the penalties for no-disclosure are explained.
Standard Life Insurance Company What Is Standard Life
Standard Life Insurance Company What Is Standard Life Insurance?
Standard life insurance is the title given to most life insurance policies that are issued with standard rates. Health status along with credit are two factors that determine whether an insured is a standard risk or a sub-standard risk for life insurance. Some life insurance companies will issue policies on people with health problems but will give them a higher table rate than the standard rate. There are companies that exist just for the purpose of insuring the non-standard risk. The premiums are much higher because of the risk.
The majority of the life insurance companies are standard life insurance companies that use the table rating method for adverse risks. When you apply for life insurance your application is sent to an underwriter. The underwriter examines all of the details on the application. It is the underwriters job to determine the risk factor and table rate for each applicant. There are several resources available to underwriters about your medical history. One such resource is called the medical insurance bureau. This is an organization that provides medical information to life insurance companies. The MIB will not always have your medical details but the bureau will be able to provide dates and times along with the nature of an illness and injury. Disclosing accurate medical history on you application is critical. Do not omit health history because that is a red flag to an underwriter and may cause your application to be rejected.
It is best to purchase as much life insurance as possible at the youngest possible age. The rates are low and most of the time you will receive standard life insurance rates. Most of the companies online offer standard life insurance rates. Some companies have preferred rates that are even lower than the standard. Standard Life Insurance Companies are common. Most companies will take a trial application on special risk applicants. This is an excellent way to see if you qualify for standard life insurance. You are not obligated to put any money down on a trail application until you are accepted by the insurance company.
Smokers life insurance Smoking can kill your wallet
When insurance brokers look out into the world they see two types of prospective customers. Every individual person fits into one of the two categories. They are either smokers or non-smokers.
Someone who occasionally smokes socially and someone who smokes everyday can end up in the same insurance category. He will pay even more if he smokes more than 20 cigarettes a day. Often premium rates for smokers can be up to three times the rate non-smokers pay. This is because insurance companies believe that smoking amplifies the risk of untimely death.
The financial penalties of smoking extend far past the price of a pack of cigarettes. In addition to the nickel-and-dime of a pack of smokes every time he runs out, the smoker endures costly consequences to lighting up.
Homes and vehicles that retain the stench of cigarette smoke lose resale value. Smokers can also be penalized when shopping for a new home because insurance companies believe smokers are more likely to burn down the house.
Smokers will also pay more for health insurance, dry cleaning and yearly teeth cleaning appointments. All of these costs add up quickly to put a hefty dent in a smokers wallet.
It isnt simply what a smoker pays in extra an expense that reduces funds, but being paid less in the first place can cause his bank account to suffer as well. Studies have shown that smokers earn up to 11 percent less than non-smokers. These figures not only take into account time wasted on smoke breaks, but first impressions as well. Smokers may be perceived as less attractive and therefore passed by for jobs.
Insurance costs arent the only money matters smokers have to worry about; however, it is a huge issue. A smoker literally burns his money away. That nicotine rush can cost thousands of pounds a year more in insurance premiums.
While saving money on insurance premiums may not persuade him to quit smoking, a smoker may not be conscious of how much the habit is actually costing him. He may even lose his job. There have been several companies in the news recently who have fired employees who smoke simply because they pay more insurance on smokers than non-smokers.
It begs the question, is it worth the cost?
But, the high cost of smoking doesnt necessarily only affect the smoker himself. Documented studies have shown that Americans spend over 60 billion pounds a year treating smoking related illnesses. Women who choose to smoke during pregnancy cost the country another 3 billion pounds a year. It also causes the deaths of 2,500 unborn babies a year and results in low birth weight and life-long complications in countless others.
Fires set by smokers who fall asleep or are otherwise careless with their habit, cost the government 500 million pounds a year. The human cost is great, as fires started by cigarettes take the lives of more than 2,000 people a year.
Smokers with group life insurance push up premiums for smokers in the same pool by 4 billion pounds a year.
Smoking is by far the most prevalent cause of untimely death in the United States today. More than 400,000 people a year pay with their money and their lives to light up a cigarette.
That quick fix can not only be deadly, but greatly reduce quality of life as well. Be it human life, depreciation of property, health factors or jacked-up life insurance premiums, the decision to smoke cigarettes is costly.