Category Archives: permanent life insurance

Permanent life insurance in Colorado can be whole life, universal life, etc.

126th Cavalcade Of Risk

Welcome to the 126th Cavalcade of Risk, where we’re showcasing the best in risk-related writing from around the web.? As a primary risk-management tool, insurance in all of its various forms tends to show up a lot of the posts, but there’s something for everyone here, so dig in…

cards To start things off, we have a compelling article from Scott Bartlett about the dangers of progress.? Scott’s post is inspired by the book A Short History Of Progress by Ronald Wright.? It’s a reminder of the ultimate risk to all of us if we don’t take care of this little planet we all call home.? But more then the usual articles about climate change and environmental degredation, Scott also looks back over centuries of history to see how the rise and fall of civilizations is often linked to resources and their depletion.? Sobering, yet an excellent read.

To put a visual spin on the idea of risk, Julie Ferguson of Workers’ Comp Insider brings us a photographic depiction of workers performing all sorts of tasks far from terra firma.? If you’re leery of heights, these are probably not the jobs for you.? There are pictures of modern workers, as well as plenty from days gone by, and it’s interesting to note the complete lack of safety equipment in some of the older shots.

Life Insurance And Estate Planning

plane Jim Yih of Retire Happy Blog brings us Cathy’s story of life insurance.? It’s an excellent example of a scenario where term life insurance makes much more sense than permanent life insurance.? Term life insurance is a perfect product for someone who is insuring her life in order to protect her children, since we can assume our children will only be financially dependent on us for a finite length of time.? And since it’s a lot less expensive than universal or whole life insurance, a term policy allows a person to have a policy with a higher face value and lower premiums.

Free Money Finance also writes about term life insurance, taking to task a recent WalletPop article that included term life insurance as a type of coverage that is “not worth the money”.? I think FMF’s take on this is absolutely correct.? For some people, permanent life insurance might be just the right product.? But anytime a planner or advisor is recommending permanent life insurance as being generally a better option, it’s a good idea to question how much more commission they will get if the client goes with permanent life insurance.

Continuing on the importance of estate planning, Jeff Rose of Good Financial Sense tells us what happens if you die without a will.? Basically, all assets will pass through probate, and state laws will determine how your money and possessions are doled out – and who will care for your minor children.? The way the state does it may be far different from how you would want it done, which is why having a will is such an important part of financial planning.

quake Russell Hutchinson of Chatswood Consulting Limited takes a look at whether the Christchurch, New Zealand earthquake will impact life insurance premiums.? He notes that although the loss of life was tragic, the payouts in terms of life insurance settlements will be quite small when compared with the payouts for property damages from the quake.? He concludes that events like the recent earthquake will usually not impact life insurance premiums rates at all.

Health Insurance And Healthcare Reform

Jaan Sidorov of the Disease Management Care Blog delves into some of the financial nitty gritty behind the idea of patient centered medical homes.? The PCMH concept has become quite popular during the course of the healthcare reform debates, but Dr. Sidorov’s article brings into question the financial sustainability of such models, as it appears that they won’t be making much money.? The idea is for the clinics to be paid on a per member per month basis, but the actual amounts that would likely be paid are startlingly small.

racecars InsureBlog’s Bob Vineyard tells us about a European ruling which prohibits companies from using gender in setting prices for products like insurance and annuities.? Turns out that there could be some unintended (and not-so-great) consequences, such a young men buying higher performance cars because their auto insurance premiums are artificially reduced.? Here in Colorado, health insurance premiums are no longer allowed to be based on gender.? It will be interesting to see if similar laws catch on across the country, or with regards to other products, like auto insurance.

Jason Shafrin of the Healthcare Economist looks at a proposal from the Healthy Trucking Association of America and the Convenient Care Association, for a plan to provide health insurance to truck drivers that would allow them to access care congress wherever their job may take them.? The integrated medical home concept works well for people who are generally in the same geographic location from one day to the next – but truck drivers need access to care all over the country.

Eric Turkewitz of the Terkewitz Law Firm writes and open letter to NY lawmakers, encouraging them to reject a proposed measure that would cap pain and suffering damages at $250,000 in medical malpractice lawsuits.? While we tend to hear a lot from people who are in favor of tort reform measures like the cap on non-economic damages, Eric’s letter provides quite a bit of detail from the other side, and explains why it would do more harm than good to place such a cap.

The Consumer Boomer gives us an overview of how Medicare Advantage programs work, the details about what the various Medicare plans cover, and information needed for enrollment.? Good info for anyone approaching retirement age and starting to look at how health insurance works once we turn 65.

P&C Insurance

Nancy Germond of All Business explains why your home may be underinsured.? The problem seems to stem from the fact that many insurance carriers give the homeowner the responsibility of determining the replacement value of a home, and that may not be the same as the market value of the house.? Nancy notes that a better option is an insurance carrier that will do an independent appraisal, or one that will add a percentage cushion to the determined replacement value in order to more adequately account for increases in replacement cost.

Neal from Wealth Pilgrim explains that if you need to file a claim with your homeowner’s insurance, hiring a private insurance adjuster can be a good way to make sure that you get as much money as you’ll actually need to repair or rebuild your home.

Canadian Finance Blog explains the basics in terms of how auto insurance premiums are calculated😕 type of coverage, how much you drive, what kind of car you drive – they all play a factor.? I’ve read that some auto insurance carriers even look at credit scores in order to set prices.

Other Risky Business

alt Health Blog’s David Williams discusses whether parents should be allowed to give teachers gifts.? While regulating such things might at first seem trivial and intrusive, David points out how gifts from pharmaceutical companies to doctors have been shown to influence the doctors’ prescribing habits.? Observation of the relationships between doctors and pharmaceutical companies when gifts are involved should give us pause to consider the fact that there is always a risk of compromising integrity when gifts are allowed.? Good food for thought.

The Dough Roller tells us about identity scores.? I wasn’t aware such a thing existed, but an identity score – compiled using data from a much wider source of data than credit scores -? is used by lenders as an indicator of how likely it is that a credit applicant is using a fake identity.? The higher the number, the more likely it is that an applicant is committing identity theft.? The article includes details about how you can check your ID score and make sure that it doesn’t contain errors.

Credit Card Guru takes us for a closer look at payment protection insurance, and concludes that it’s usually not worth the money.? Sure, programs like that help to alleviate some risk (for people who carry a balance on their credit cards and would have a hard time making payments if they were faced with an unexpected job loss, illness, etc.) but it appears that the insurance is pricey and has a lot of fine print.

Heather Hollingsworth takes a look at how unrest in Egypt and the rest of the Middle East could impact global financial recovery from the recession.? Since so much of the world’s oil comes from the Middle East, protests and regime changes there can have an effect all over the world.

That wraps up this edition of the Cavalcade of Risk.? Thanks for all the great submissions!

Increasing Premiums For Universal Life Insurance

Most people who have financial dependents have a genuine need for life insurance. ?But for the majority of those people, a simple term life insurance policy can fulfill that need in a relatively uncomplicated, inexpensive manner. ?A term policy purchased in early to mid adulthood that lasts for 20 or 30 years (with a fixed premium during that time frame) will protect most families throughout the time when they are financially responsible for children and debts like mortgages. ?After the children are grown, and the mortgage is paid off, and especially after retirement, there is much less of a need for significant life insurance death benefits for most people.

For some people with more complex financial situations (such as a family business that they would like to leave to their heirs, for example), permanent life insurance may be a more appropriate choice. ?But such policies are much more expensive than term life insurance, and tend to be more complicated too. ?For people who really only have a genuine need for the protection offered by term life insurance, the investment benefits associated with permanent life insurance can usually be obtained in a more straightforward manner by simply investing the additional premiums that would have been needed to purchase permanent life insurance.

Although permanent life insurance products can be a useful tool for some clients, purchasing them might not be truly the best financial move for many people who might be better served by a basic term life insurance policy and a separate investment program to accumulate money for later in life and/or to pass on to heirs. ?However, the commissions for agents who sell permanent life insurance is significantly higher than the commissions for term life insurance policies, in part because the policies themselves are so much more expensive. ?This can potentially create a conflict of interest if a client is taking policy recommendations from an agent who will receive the commission for whatever policy is ultimately purchased.

In a reminder that Universal Life insurance (a form of permanent life insurance) premiums are not fixed, a recent class action lawsuit in CA ended with a federal judge ruling that Conseco Life Insurance Co. cannot triple premiums for 50,000 policy holders who have had their policies since the late 80s and early 90s. ?The courts got involved because the proposed premium increases were so significant, but the complexities of universal life insurance include a lot of flexibility in terms of premiums. ?If interest rates drop (as was the case for people who bought policies in the 80s, when interest rates were much higher than they are today), future premiums can increase significantly. ?Although the court has ruled that Conseco cannot triple the premiums for those policy holders, there’s no set limit for how much premiums can increase. ?Older policy holders who have had their coverage for decades can find themselves unable to keep their policy in force if premiums rise beyond what they can afford.

Anyone in the market for a life insurance policy should be well aware of the differences between term life insurance and permanent life insurance, and should understand the long term implications of each type of coverage before selecting the best option for their particular situation.

Disability And Long Term Care Riders On Life Insurance Policies

One of the advantages of permanent life insurance is that there are all sorts of riders that you can purchase along with the policy. ?Two that could be particularly useful are available through The Hartford: ?The LifeAccess rider and the Disability Access rider. ?The LifeAccess rider aims to take the place of a long term care insurance policy for people who have life insurance but not a separate long term care policy. ?The Disability Access rider provides a safety net for people who don’t have short term disability insurance coverage (the rider does not provide long term disability coverage).

Sales of the LifeAccess rider are up 80% nationally (the rider was first introduced in 2007) in the past year, and that may have something to do with the rising price of long term care policies recently. ?The rider can be added to a permanent life insurance policy for a cost ranging from 5% to 15% of the cost of the life insurance policy. ?The rider will generally be less expensive than a long term care policy on its own, but the cost of the permanent life insurance will be much more than the cost of a term life insurance policy with a similar face value. ?For most people, it probably makes more sense to purchase a term life insurance policy and a separate long term care policy. ?But for people who have a genuine need for a permanent life insurance policy, adding a long term care rider could make a lot of sense. ?In addition, the LifeAccess rider is more leniently underwritten than stand-along long term care policies, which might make it an attractive option for applicants with less than perfect health.

The Disability Access rider has been available from The Hartford for a little over a year, and costs an additional 6% to 10% of the cost of the life insurance policy. ?It has a monthly benefit cap, and a lifetime cap of up to 24 monthly payments. ?The monthly benefit cap is calculated when the policy is issued, and cannot exceed $5,000. ?The money can be used to protect the insured’s lifestyle/income in the event of a disability, or to pay for a buy/sell agreement or key man insurance policy depending on the insured’s business situation. ?As with the LifeAccess rider, this rider only makes sense if the insured truly has a valid need for a permanent life insurance policy and is able to pay the premiums that it entails. ?For some people, it will be a good option, although term life insurance and a separate disability insurance policy might be a better choice for a lot of people.