Insurance World

Looking for a life insurance policy? Then, be careful… because life insurance is difficult to understand. It’s easy to be conned into buying something under false pretenses.

Recently a prominent life insurance company together with several of its agents paid a huge fine because it permitted the sale of a life insurance policy disguised as a retirement plan.

Little attention was paid to what a life insurance policy is truly designed to provide.

Life insurance is not an investment for your benefit. It’s guaranteed income tax-free cash paid to someone you designate in the event of your death.

If you deeply care for someone and want to protect them, then buying a life insurance policy makes sense.

Are you the primary bread winner in your family? Well, your lost income could have horrible consequences and jeopardize the ability of those you love to continue to enjoy their standard of living.

The only way to guarantee an immediate replacement of this money is with the intelligent purchase of a life insurance policy.

Notice I didn’t say term life insurance, low cost life insurance, or whole life insurance.

Because to your loved ones… this doesn’t really matter.

Over the years I’ve delivered millions of dollars of life insurance benefit to the families of deceased bread winners.

And no one has ever asked me what type of life insurance policy it was. They were just extremely grateful to get the money.

Term is the cheapest, but it’s unlikely the death benefit will be paid since the life insurance policy will probably lapse before you actually die.

Right now the premium may seem cheap compared with other types. But what happens when you’re older?

Term life insurance premiums can be level for a specific number of years, but when that number of years is up the price will skyrocket to a point you won’t be able or willing to pay.

Whole life insurance provides a lifetime level premium until the policy is literally paid-up. This could be 10, 20 years … or when you reach age 65, 85 or 100.

One type of life insurance policy is not necessarily better than another. But it’s critical you understand what you are buying, how it works and your net cost.

After all, if the policy isn’t in force when you die you have thrown your premium dollars right down a rat hole.

By the way, don’t fall for that line about buy term and invest the difference. Anyone who cons you with this bunch of malarkey doesn’t have a clue how to intelligently evaluate the purchase of life insurance.

You should consider universal life. This type of policy can guarantee the death benefit up to age 115… regardless of the performance of the underlying investment.

Although more expensive then term life insurance, universal life is far less costly than a typical whole life insurance policy.

But be careful because some universal life policies are sold by focusing on projected interest rates rather than contractual guarantees.

If you are considering the purchase of a whole life insurance policy from a mutual company that declares annual dividends, ask the agent for a hypothetical illustration using a dividend forecast at least one percent less the current rate.

In the past when long-term interest rates were higher, mutual companies credited very handsome dividends to their policies.

But today with long-term rates still depressed, it’s unlikely a life insurance policy will perform as illustrated.

In summary, pay close attention to the guarantees of whatever life insurance policy you decide to buy. Also, make sure you know the credit rating of the life insurance company.

There is nothing wrong with term life insurance, but understand your options about converting to a permanent plan. This could be critical if you become uninsurable before the policy expires.

Remember… you may never get a second chance to make the right decision.

Many people think that auto insurance companies are taking advantage of the fact that drivers, no matter what, are required to carry some sort of insurance to drive, by the laws of our country. When it comes down to the wire, the truth of the matter is, we have options when it comes to how we choose to get covered. Lets face it, auto insurance companies are there to make money, however, they are also there to protect you, your family, fellow drivers and pedestrians among others. Nevertheless, that doesn’t mean you have to be paying unreasonably high prices for that protection and peacefulness of the mind. There are a few pieces of information that many people are just not aware of that may be of some assistance to some.

Companies Versus Brokers

Firstly, there is not only one way to get coverage from auto insurance companies. Lets elaborate on that a little and take a quick moment to mention insurance brokers, who can also be referred to as “middlemen”. Anytime you do business with a middle man, they have to get paid for what they do, and that is generating business for companies. You have the option of getting car insurance through a broker, or you can also deal personally with insurence companies, both of which have their advantages and disadvantages.

When you wheel and deal directly with auto insurance companies, the “middleman” is taken right out of the equation, and this helps a company keep their rates as low as they can. But as we all know, there are always two sides to a coin, and it may not always be easy to get in touch with a large company everytime you have a question or would like to change your policy. Brokers are there, on the other hand, for added convenience, and are in fierce competition with eachother to get your business. With this in mind, insurance brokers will do the shopping around for you making sure you get a policy tailored to your needs, with the best price for you. With a broker, you can simply call them if you have any questions, and deal with them on a more personal level.

Who Decides What Rate I Will Pay?

Auto insurance companies work along side underwriters, mainly “property and casualty” underwiters. There are different types, but these specialize in auto insurance, as well as homeowner’s and worker’s comp to name a few. These guys are responsible for assessing the risk you propose to auto insurance companies, and then coming up with an appropriate rate. Their purpose, or mission, is to diminish the amount of loss, and to assist in generating profits for a company. An insurance underwriter can “make or break” an insurance company, which do not always have control over the rates you are assigned in exchange for coverage. They just want to make sure they stay above water.