Low Cost Life Insurance
Finding low cost life insurance need not be a complex process. The life insurance market in the UK is extremely cost competitive, with a glut of cost orientated life insurance companies keeping the cost of life insurance at record low levels. Competition in low cost life insurance has increased further over the last few years, with low cost UK supermarkets like Tesco and ASDA now offering cut-price low cost life insurance. A ?100,000 term life insurance policy for 25 years now has a low cost of around ?5 – ?6 per month for a young non-smoker with low susceptibility to health problems.
But, despite the greater accessibility of low cost life policies, the cost of life insurance premiums does vary. Here is a review of the major factors that influence the cost of life insurance policies: -
Low Insurance Age – The age at which a life insurance policy is taken out has a significant impact upon the low cost of the life insurance premiums paid. The younger you are when you start a life insurance policy then the better chance you have of obtaining a life insurance policy at low cost. This is because at a younger age you are viewed as being at a low risk of passing away than someone 30 or 40 years your senior. Life insurance premiums will therefore be at a low cost for young people, but not so low cost for older people.
Health – Life insurance companies will award low cost life insurance to people who have low health risks. To qualify for life insurance at low cost on health grounds you will need a low level of hereditary disease running in your family. If you suffer from a life threatening disease, such as cancer or heart disease, your life insurance cost will not be so low. Also, if asthma, high blood pressure or cholesterol problems exist then a low cost insurance policy could cost that little bit more.
Lifestyle – A low cost life policy is available to those with a low stress / low danger lifestyle. If you drink excessively or you are a smoker or practice extreme or dangerous sports / activities then a life insurance policy that is low cost could be out of your reach.
Insurer Cost – Finally, no matter what type of life insurance cover you have, be sure to check the cost of other life insurance policies regularly. The life insurance market is always changing, so you just might find a better low cost provider of low cost life insurance the next time you search the life insurance market for low cost insurance policies.
Life Insurance Equals Peace Of Mind
No one likes to think about the consequences of death and its affects on those that we leave behind. It is however an indisputable fact that sooner or later we will all shuffle off our mortal coils, often without warning. When that time comes a life insurance policy will ensure the financial security of our loved ones in their grief, and will ultimately give each of us the peace of mind that our mortgage is paid off and our families taken care of when we die.
Life insurance these days is in fact fairly cheap to maintain. Increased competition in the life insurance marketplace, coupled with its ease of purchase over the Internet has bought premiums down to record low levels. You can now obtain a life insurance policy that pays a lump sum of ?100,000 upon your death for as little as ?5 per month.
How Much Insurance Do I Need?
Those that do decide to take the plunge and sign up for a life insurance policy though often struggle to decide how much insurance they should take out. As life premiums go up in line with increases in the sum insured, the ultimate insurance amount is often dictated by how much the person taking out the life insurance can afford to pay each month.
Then there is the thought of the mortgage. If we are still owing money on the mortgage when we depart this world, many of us would not want to see our loved ones struggle to meet the mortgage repayments each month. The amount of insurance taken out therefore should at least cover the cost of our mortgage, or what is left on the mortgage as it would be if a reducing term life product is purchased.
Protect Your Mortgage
In fact, many mortgage lenders these days insist that life cover is taken out to protect the mortgage repayments in the event of the owner’s death. On joint mortgage applications, a joint life policy is strongly recommended by lenders, and in some instances mortgage lenders will include a basic life policy in with their mortgage products that reduces in line with the outstanding amount to pay. However, life cover issued direct by mortgage lenders may not always be the cheapest insurance policy available. It therefore pays to shop around for life cover on the Internet as you may be able to save ?15 or ?20 on your insurance premiums each month.
Deciding on the amount of insurance coverage
So, how is it best to decide on the amount of insurance coverage? It varies for each family / individual, but in general you should take out a life policy not only to cover the cost of your mortgage but also to provide your family and dependants with a lump sum after you’ve gone. What lump sum you decide upon will depend on many factors, but it should at least cover the cost of your monthly household expenses minus the mortgage payments.
The Best Kept Secret About Life Insurance
Do you love someone enough to spend your hard earned dollars on a life insurance premium — month after month?
Because the real benefit of a life insurance policy isn’t for you. It’s for those you love… but after you’ve gone.
Life insurance is money paid to those who rely on you right now to provide a secure standard of living. They can lose this in a heartbeat.
Life insurance is money when needed the most… with no income tax or publicity.
Buying a life insurance policy is challenging because it isn’t an easy subject matter to begin with.
Most people get confused about how it works and whom they can trust enough to make the purchase.
And there’s a large number of companies and sales agents all clamoring for your attention.
This article will help to clarify a huge misconception about term life insurance. Also, I’ll introduce you to what many knowledgable professionals consider to be the best kept secret in a life insurance policy.
Buy term and invest the difference is a phrase touted by those … including many life insurance agents … who have absolutely no idea how much harm it’s implementation can cause.
The principle theory is you no longer need life insurance when you reach a certain age such as 55, 60 or 65.
Supposedly your kids have finished school and are doing just fine earning their own income. And you and your spouse are living comfortably on retirement savings and social security.
On the surface and to the naive, this might appear reasonable.
Now, it’s easy to pick apart this hypothesis, but let’s focus instead on the real problem with this scenario.
We are living longer than ever before. We may not be enjoying it very much due to poor health but, nevertheless, we’re hanging on.
Life insurance companies know this better than anyone. In fact, most of them now use age 115 has a factor when calculating life insurance policy premiums.
You hear about retirees who are forced to find work at McDonald’s or Wal-Mart. Have you ever joined a seniors chat room on the Internet and witnessed the concerns most of them have about running out of money before they die?
Many of these seniors are frightened to death. And what about the millions of babyboomers right behind them.
An intelligently purchased life insurance policy can be the saving grace for those you love the most.
Now, let me set the record straight. I have nothing against term life insurance. For over 24 years I’ve personally sold millions of dollars worth.
What bothers me … and what I believe to be criminal … is when term life insurance is sold under false pretenses.
Let’s use a simple example.
A 35 year old nonsmoking male in excellent health can buy a %500,000 term life insurance policy for about %700 per year.
The premium is guaranteed to be %700 for 30 years. Some companies will be a little cheaper and some a little more expensive.
The buy term and invest the difference advocate would compare this to a %500,000 whole life insurance policy at %3,650 per year. Once again, some companies will be higher and some lower.
Theoretically, you have %2,950 to invest each year for 30 years. I say theoretically because in the real world you would never consistently invest %2,950 each year.
Not the same way you would commit to a life insurance policy premium.
How do I know this? Call it human nature based on lots of experience.
But, let’s give you the benefit of the doubt and say you actually do invest according to this hypothetical plan. What rate of return are you going to make over 30 years? 5%PRCTG% … 8%PRCTG% … 10 percent?
By the way, this question opens up another can of worms. The psychology of investing. But, we’ll save that controversy for another time.
For arguments sake let’s assume you get an 8%PRCTG% compounded rate of return each year for 30 years. This comes to %360,920.41.
Okay… so now you’re 65 years old and you have %360,920.41. But guess what?
When you reach 66 your %500,000 term life insurance policy will lapse without value because the annual premium becomes %21,180.
Yep, you read that right! It jumps from %700 to over 21 thousand dollars.
At age 70, it’s %31,430. At age 75, it’s %52,970.
There’s no way on earth you’ll pay this premium. Problem is… you aren’t dead yet!
You have paid %21,000 over a 30 year timeframe to have a %500,000 life insurance policy during a period of time when the odds are you would never die anyway.
Under normal circumstances you will die somewhere around age 80 — give or take. Your loved one’s investment account still won’t be worth %500,000.
What’s more, she will have to pay income tax on the investment gains. Remember, life insurance proceeds are income tax free.
Permit me to repeat myself. I am not against term life insurance … as long it’s purchased with an eye towards the reality of future expectations.
If your term life insurance policy is issued by a highly rated company with a broad selection of products, you will have ample opportunity to convert the term into something more permanent over the course of the 30 years in our example.
Keep in mind your age determines the length of time the term policy will have a guaranteed level premium.
You may not be able to get more than a 10 year guarantee if you are over 50 years of age.
So, exactly what is the best kept secret in a life insurance policy?
It is a universal life insurance policy that guarantees the death benefit regardless of investment performance.
Universal life is the most flexible type of policy on the market. The premium is higher than term, but lower than whole life. There are several on the market, so you must be careful.
If you decide to buy term because of budget constraints, then be certain to buy from a company that also offers universal life.
This gives you the chance to slowly convert the term into universal with the same company over the length of the term guarantee.
As your budget permits convert term into universal.
One word of caution. Long term interest rates are critical to the performance of universal life insurance.
Because they’ve been depressed for several years and will likely continue so, you must get the universal life with an unconditional death benefit guarantee.
Here’s an example using our 30 year old male. The %500,000 universal life insurance policy premium is %2,871 per year. This compares with the already discussed %700 term and %3,650 whole life premiums.
Let’s say you really do decide life insurance isn’t important when you reach 65. By that time, you would have paid %86,130 in total premiums.
Down a rat hole like the term plan? Nope!
The cash surrender value would be at least %85,501. It might well be over %100,000 based on the actual competitive interest rates credited to the policy over the 30 years.
When you buy the right type of universal life you guarantee the death benefit for as long as necessary… plus you have the ability to recover your expense if you wish to cash it in.
You can benefit from the best of both worlds when you use the best kept secret in a life insurance policy.
Everything You Need To Know About Choosing A Health Insurance Plan
The purpose of health insurance is to protect you from the alarming cost of medical care by providing you with insurance coverage for specified health and medical care services. Generally, you will pay a monthly premium, a deductible, and co-payments for services you receive. The cost for insurance is significantly less than if you had to pay for medical care out of your pocket. There are three basic types of health insurance, fee for service, consumer-directed, and managed care. These basic types of insurance plans cover hospital, medical, and surgical expenses, and depending on the particular plan you choose, possibly prescription drugs, mental/behavioral care, and dental.
A fee for service plan means the health care professional you choose will be paid a fee for each service provided to you. You can choose your own doctor and the insurance claim can be filed by either the doctor or the patient. A managed care plan will provide coverage to their members and offers incentives for patients who choose doctors participating in the plan’s network. The 3 types of managed care plans are HMOs, PPOs, and POS plans.
An HMO allows you to receive medical care through a network of participating physicians. You will generally select a primary care doctor, who will then refer you to a specialist when necessary. A PPO combines various features of an HMO and a fee for service plan. Members can choose from network doctors and pay lower upfront expenses, or choose any doctor they desire and pay more out of pocket expenses. A consumer-directed health plan gives members more choices and options in making health care decisions. Consumer-directed plans include a health account or fund designated for health care expenses. At the end of each year, unused funds will roll over to the next year.
A health insurance premium is the fee paid to the insurer to purchase health coverage. Premiums can be paid monthly, quarterly, or annually. Deductibles are the amount you will pay for covered services within a certain time frame, according to the terms of your plan, before you will be entitled to insurance benefits. Members with a high deductible may have to pay the first one thousand dollars of yearly medical expenses before the insurance would begin to pay, and those with a higher or lower deductibles would pay more or less, depending on the particular amounts specified in their plan. A co-payment is a stated amount or percentage that must be paid by the member along with each doctor visit, medical procedure, or prescription. For example, if your specified co-payments are %25, you will pay the first %25 of each doctor visit and your insurance would cover additional charges. Most insurance plans specify a different co-payment amount for prescriptions, doctor visits, and hospital or surgical care.
In choosing which type of health insurance plan is right for you, you must consider the affordability of doctor visits and hospital care, the amount of the monthly premium, the amount of the deductibles, and the amount of the co-payments. Make sure the plan you chose offers coverage for services you will actually use such as doctors, prescriptions, laboratory costs, treatment for preexisting conditions, and out-of-network care. Check the rating of the insurance company in question, the number of patient complaints in the past year, doctor drop out rates if the insurance plan includes a network, and the number of members who have dropped out of the plan in the past year. Health insurance that is subsidized by your employer is generally the least expensive, but if your employer does not offer health insurance, you should consider an individual health insurance policy. The cost of medical care is far too expensive to risk not having health insurance.
Catastrophic Health Insurance Coverage
A catastrophic or major medical insurance plan is a deductible and comparatively cheaper form of health insurance with an element of speculation to it. A deductible is the amount you pay out of your pocket for medical expenses before the insurer pays the balance. For instance, if your deductible is %5,000 and the hospital bill is %12,000, the insurance company will pay only %7,000. The general rule is the higher the deductible, the lower the premium. When you opt for this plan, you’re gambling that you will not face major medical problems in the near future.
It is a calculated risk. According to one survey, the annual medical expenses of 90%PRCTG% of the U.S. population are less than %2000; for 73%PRCTG%of the population, it is below %500.
Two groups that normally opt for catastrophic health insurance are young people in their twenties who are confident of their health condition, and older men between fifty and sixty-five who are still waiting for Medicare eligibility.
Catastrophic health insurance coverage is only meant to protect against major hospital charges and not routine medical expenses. It normally does not cover maternity care, doctor?s visits and prescription drugs. Certain pre-existing medical conditions and cases involving mental health and substance abuse are usually excluded from the coverage. A catastrophic health insurance policy can be purchased as an individual plan or as part of a group plan. In fact, there appears to be a trend among employers to encourage employees to opt for this type of medical cover. The maximum lifetime limit could be as high as %3 million.
Rates vary according to where you live and your age. In certain states, the saving on premiums could be two-thirds. For example, a 21 year old, non-smoking female may pay as little as %30 per month as a premium.
It is advisable to seek professional guidance from insurance companies and/or agents and compare quotes before making a decision.
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