Tag Archives: Colorado

Viatical Settlements – Buy At Your Own Risk

This Wall Street Journal article from last week reminds me of the advice we hear about things that sound too good to be true. ?Viatical settlements or “life settlements” are arrangements in which investors (or intermediary companies) purchase existing life insurance policies from people who they think (hope?) will die within the next few years. ?The investors then continue to pay the premiums on the policies until the original policy owner dies (at that point, the investor gets to collect the life insurance pay out).

Life Partners – a company that purchases the policies and then resells them to investors – advertises that its policies are “priced to target a compounded return of 12-14% at life expectancy.” ?But it looks like they have been underestimating (by a wide margin) the life expectancies of the insureds whose policies they purchase. ?If the insured lives longer than the company has predicted, the investors’ returns start to drop off. ?And it looks like the vast majority of the policies purchased by the company over the last several years are still in force, even though many of them were expected to “mature” (ie, the original policy owner was expected to die) by now.

Last year, Fred Joseph, the Colorado Securities Commissioner, testified at a Senate hearing that viatical settlements present “… significant risk to policy holders and investors.” ?And Colorado securities regulators have tussled in court with Life Partners, alleging that the company doesn’t disclose to investors how accurate their life expectancy predictions are, or the fact that if future premiums aren’t paid, the policies can lapse (although that aspect of insurance is relatively common knowledge, in a life settlement scenario it’s possible that investors might not understand that they have additional financial responsibility beyond the purchase price of the policy).

Viatical settlements do provide both an investment opportunity as well as a way for insureds to cash in on a portion of the face value of their life insurance policy before they die. ?But they are not a get rich quick scheme. ?In addition to the moral questions some might have about betting on a stranger’s somewhat rapid demise, there’s also a risk that the insured might live far longer than the projected estimate, and the premiums that the investor must continue to pay will slowly eat away at the anticipated return on the investment.

Increasing The Amount Of Life Insurance Money Exempt From Creditors

The 2010 Colorado legislative ended last week, with mixed reactions from lawmakers (seemingly divided along party lines in terms of whether they felt that the session was bipartisan or not). ?One of the bills that passed was Senate Bill 147, sponsored by Senators Lundberg, Penry, King K., and Sandoval.

SB 147 will allow up to $100,000 of life insurance proceeds to be exempt from the insured’s creditors. ?This law will go into effect on September 1, 2010. ?Until then, the current cap of $50,000 will apply. ?26 states have an unlimited exemption for the protection of life insurance settlements from an insured’s creditors. ?The new Colorado law will bring the state a little closer to the protections offered to beneficiaries in other states, although $100,000 still isn’t really a lot of money in terms of protecting a family’s financial future if the primary earner dies.

Extreme Sports And Life Insurance

Many Americans get life insurance as a benefit from their employers, but the amount provided is often not enough to really provide for a family. ?For this reason, a lot of people seek out additional life insurance coverage on their own. ?Term life insurance policies are very inexpensive, especially when compared with the cost of things like health insurance and long term care insurance, but those prices can increase dramatically if a person is unhealthy or participates in anything that life insurance companies deem to be risky activities.

As an example, if you’re a very healthy 35 year old, you’ll probably find it relatively easy and inexpensive to secure several hundred thousand dollars worth of term life insurance. ?But if one of your hobbies is rock climbing, the premium on the life insurance policy can easily be tripled or quadrupled by most carriers. ?The standard underwriting action in a case like this is to bump the rate from “preferred best” to “preferred” and then to add an additional annual amount ($2 – $2.50, for example) for every thousand dollars in life insurance coverage. ?So a half million dollar policy can easily increase in premium by more than $1000/year if the applicant participates in “risky” activities.

However, underwriting does vary from one insurance carrier to another, and some are more lenient than others for specific activities and health conditions. ?If you’ve applied for a life insurance policy in Colorado and received a rate increase because of health or lifestyle, there may be other options that would allow you to purchase the same amount of insurance for a lower premium. ?We can compare options for you and help you find the best value for your insurance dollars, and there is never a charge for our services.

Aflac Enhancing Life Insurance Benefits

Aflac is enhancing its life insurance policies in response to consumer interest. ?Most Aflac coverage is purchased by employees through their workplaces, and Aflac is now making it possible for employees to take their life insurance policies with them if they change jobs. ?Many Americans have only the life insurance that they get through their employer (through a program like Aflac, or as an add-on to their group health insurance policy), so the ability to take their policy with them if they change jobs will provide some much-needed security.

Aflac is also adding to their coverage options, with higher face value policies available than they had in the past.

We work with an Aflac representative here in Colorado, who can provide life insurance as well as a range of other products for you and your employees. ?Please contact us if you would like additional information.

Job Loss Often Means Loss Of Life Insurance

The recession seems to have a lock grip on our economy right now, and employment numbers get worse by the day.? The loss of health insurance that goes along with the loss of a job is a common subject in the news right now.? Most people can’t afford COBRA when they’ve lost their jobs, and even individual health insurance premiums are out of reach for some families struggling to get by on unemployment.

But what about life insurance?? 66% of Americans get their life insurance through an employer.? It’s typically inexpensive, just a few dollars per paycheck, or in some cases completely funded by the employer.? But for a person who gets laid off, life insurance is often just one more thing to add to the list of benefits that are lost in addition to the job.

Basic term life insurance is much less expensive than health insurance, but it might not be something that a family thinks about in the face of a job loss.? Unfortunately, that leaves a family – that might already be facing some of their most trying economic times – with much more potential financial risk.

It is possible to continue group life insurance under COBRA, but I don’t think it’s an option that most people know about.? And while individual life insurance premiums are quite low, it’s easy to procrastinate on the application process.? Although most Americans understand the importance of life insurance, it might be pretty far down on the list of priorities in the event of an unplanned job loss.?? Here in Colorado, unemployment reached 6.1% in December – the highest in five years.? And nationwide, job loss numbers are not encouraging.? While it’s not particularly enjoyable to think about being laid off, it’s a good idea to think of the benefits your job includes, and get an idea of the options that are available for continuing or recreating those benefits on your own if necessary.

Why Use Insurance Shoppers?

Why Use Insurance Shoppers to Buy Life Insurance?

about We are independent life insurance brokers, with no allegiance to any particular company. This gives us the freedom to help our customers choose the life insurance that truly fits their financial situation and risk tolerance. We can look at a wide variety of Colorado life insurance companies and get quotes on many types of insurance and different risk classes. By letting us know your health, driving, and family history up front, we can let you know what life underwriting class you will be classified into and get you the right quotes the first time.

We have a relationship with each of the life insurance companies that we represent. This allows us to serve as advocates for our clients, and help them get in touch with the right person when they have a question about their policy.

We have a very good working knowledge of the companies we represent:

  • benefit options
  • stability of the life insurance companies
  • underwriting and health class guidelines for each company in Colorado . Each company has a different set of underwriting guidelines to determine what classification you will be. From preferred plus, ultra preferred, preferred, standard, and many different smoking classes, we will know what company will benefit you the most based on your health history. This can save you a lot of time and frustration getting this figured out before actually applying and jumping through the hoops for each company.

We’re free. We get paid commissions by the insurance companies so the quotes are the same if you use a broker or go directly through the insurance company. Most life insurance in Colorado is done with the help of brokers because there is no disadvantage and there are many advantages to using a knowledgeable broker to guide you in the right direction. You will always get the lowest premium for the same coverage by purchasing your Colorado life insurance through us because we can shop for the life insurance plan that fits your financial situation and tolerance for risk using our expert knowledge of how each company grids pricing, underwriting guidelines, and takes risks with their money. We will also give you more personalized attention, and a balanced perspective about the advantages of choosing one policy over another. We can also act as a liaison between you and the insurance company if you ever have any questions or problems.
The Colorado Division of Insurance polices the pricing of life insurance, so no insurance company or agency is allowed to sell at a price that is any different from the price set by the commission. So we can find the best plan for you at no cost. For years, we have been highly recommended in Colorado as a no hassle agency able to find the best life insurance for your financial plan.

We continue to be there for our customers after their policy is in force. We can always analyze different options as your financial needs change and keep you current. This will always help you know that you are getting the best deal available and that you have the best coverage you can get for your family.

We have designed this interactive web site where our customers can compare prices, get details on various Colorado life insurance policies, download applications on their own, and even apply online. We shop over 75 companies such as American General (AIG), Zurich/Chase, Banner Life, Empire General, First Colony, Transamerica, Lincoln Benefit Life, MONY, Protective, Prudential, Transamerica, Travelers, West Coast Life, United of Omaha, Fidelity & Guaranty, and many more. Get as far as you like by yourself until you would like our assistance. We will always be there to answer questions or help with applications if needed. but we have the web site in order to provide a no-pressure setting for clients to compare options that are available for them. Colorado Life Insurance disclaimer

How Much to Buy

Do You Know How Much Life Insurance You Require?

dad1 We analyze a client’s life insurance requirements using either an income replacement method, or a needs fulfillment method, or both. We also combine this with a clients individual budget for life insurance to determine what type, and how much Colorado life insurance the client requires. The income replacement method of a needs analysis is to determine how much life insurance is required if the purpose is to replace the income that your family would require to survive. The needs fulfillment method determines how much life insurance is needed to cover future family needs like paying off debts and mortgages, saving for college, etc.

Universal Life Insurance

A Good Long Term Investment

life-insurance-colo A universal life insurance policy is more flexible and less expensive than a whole life insurance policy, but the interest rates have lower guarantees. Premiums may be increased or decreased by the policyholder within policy limits in order to change the policy as needs change. The amount of life insurance may be increased, subject to evidence of insurability, or decreased subject to minimums set by each Colorado life insurance company. Loans can be taken from the policy once it has gained a cash value, but can reduce the cash surrender value and death benefit. Withdrawals may also be taken but can also reduce the cash surrender value and death benefit.

Term Life Insurance

Term Life Offers the Best Value

A term life policy pays out its face value only if you die during the selected term. Normally, if you have not used the death benefit when the term runs out, the policy expires. However, return of premium policies are becoming very popular as an alternative to typical term life insurance and even whole life and universal life policies. Building cash value with a permanent policy means paying high premiums (2 to 3 times as much for the same coverage). While an unused term policy can feel like a waste. Return of Premium (ROP) term is an easy and effective new solution that splits the problem down the middle. It starts out like term life insurance with one extra promise from the carrier: If you pay your premiums and you live, we’ll give you your money back. On a normal 20 year level term Colorado life insurance policy the ROP benefit may cost about 30% more, but that extra premium will effectively earn you a 6-7% return over the 20 years — just enough to earn you back everything you’ve invested. What’s in it for the life insurance company? Your loyalty. Colorado life insurance companies spend a lot of money to get your business, and only start making a profit if you stick around more than five years or so. ROP gives an incentive for their customers to stay for the full term. And, for those that don’t, the carrier made an extra 30% on those guys — and used some of it to pay you a solid return on your money for sticking around and living. So if you know that you are going to be insured for the entire term, then think about paying a little more for the ROP benefit and getting it all back in the end. We would be happy to give you the price of a term life policy and compare it with the same amount of ROP term and do the math to see if ROP term would be a good investment.