Winning The Life Insurance "Game"

How to make the application process work for you. Provides advice for people with specific risk factors, such as medical conditions and adventurous hobbies, on how to obtain coverage at a reasonable rate.

Should My Life Insurance Pay for College?

One of the primary reasons why people buy life insurance is to pay for their kids’ college. Let’s suppose Mom and Dad have been putting away money for that expense. Tragically, one (or more horribly, both) meet an early demise. Life insurance would pick up the slack and complete the college fund for the surviving children.

For the past generation, this type of planning has been central to family finances. But these days, should it remain so? Here are some developments that could cause parents to think twice about sending their kids to college:

1. There are a multitude of blue-collar jobs that need to be filled.

A college degree may not even be necessary to make good money. Check out this interview with “Dirty Jobs” guru Mike Rowe by Nick Gillespie in Reason Magazine. To quote:

Rowe: You have right now about 3 million jobs in transportation, commerce, and trades that can’t be filled.

reason: This is anything from carpentry to being an electrician, a plumber, construction-

Rowe: Heating, electric, truck drivers. Welders is a big one. There’s a long list of jobs that parents typically don’t sit down and say to their kids: “Look, if all goes well, this is what you’re going to do.”

2. Many colleges have a bias against certain well-paying industries due to political ideology.

This means that even though these schools are supposedly committed to helping students launch careers, they may deliberately steer new graduates away from well-paying opportunities purely out of prejudice. See this assessment by Paul Tice in the Wall Street Journal:

Here is a college quiz. While many parts of the U.S. economy struggle to recover from the Great Recession of 2008-09, one domestic industry is experiencing a technology-driven expansion in which American innovations have led to countless new company startups, a surge in hiring and some of the highest-paying entry-level jobs for graduating college seniors.

How are the nation’s universities responding so students might prepare for a promising career in this growing and intellectually challenging field? By largely ignoring it. Why? Because the industry is oil and gas.

Is college for some people? Most certainly. But each child should be presented with all options, and informed about the realities of the marketplace for each. Some could end up in higher education, and others trade school. Still others could even start their own business. Everybody wins if the parents provide the counsel and the finances to support what is right for the individual child. And life insurance can secure that investment.

Does this make sense to you?




Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Will My Life Insurance Cover Death By Meteor?

Good questions indeed. Norwegian sky diver Anders Helstrup is probably asking them right now (if he isn’t, I’m sure his wife is). Did you catch the video he recently posted on Youtube? It shows him sky diving, when – literally out of the blue – a meteor shoots past him. At least it looks a lot like a meteor.

He and his wife believe it was, and took their tape to a scientific lab for review. Can you imagine a rock from the asteroid belt between around Mars and Jupiter making its way into the earth’s atmosphere… and then shooting at fantastic speed within a few yards of you… while you are falling through the sky with nothing but a parachute between you and the crushing planet crust?

Well, it is the job of life insurance underwriters to think about this kind of stuff. Believe it or not, they could come up with a price to charge you for coverage. The policy could cover not only skydiving, but death by any cause – including attack by meteor.

And so you and your family could sleep at night knowing that not even heavenly forces could prevent your claim from being paid.

By the way: science writer Phil Plait did a very thorough job investigating this incident. He concludes it probably wasn’t a meteor.

What do you think it was?



Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Stop Applying for Life Insurance!

Okay, here is the situation: you’re a doctor, and you want to buy into a new practice. You have been approved for the bank loan, but the lender wants you to have life insurance in force to cover the debt. This is par for the course.

However, you have recently been diagnosed with Diabetes Type II. You are taking the prescribed medication, but your physician says you have to wait a few months to confirm your blood sugar is under control.

Now you start to panic a bit. The clock is ticking to close on the bank loan, and you are eager to move forward with this new business venture. You are nervous that the newly- diagnosed medical condition may make you ineligible for coverage at this time. You are also concerned that if you can get coverage, it will cost you an arm and a leg.

So you do what you think any prudent businessman would do: you start shopping. You go online, and contact brokers, and start filing applications with as many insurance companies as you can find. Why not? Shouldn’t you have as many irons in the fire as possible?

No, you should not – not when it comes to life insurance for people with a medical condition. Contrary to common belief, this is the exact wrong thing to do. Submitting multiple applications at once with multiple brokers will in all likelihood get you nowhere, waste your valuable time, and cause a lot of aggravation.

Here are three reasons why:

No direction

Not every company will be competitive for a diabetic. Even among those that are, not every one will be able to accelerate the underwriting to meet your loan deadline. The selection of carrier must be very precise. The odds of choosing the right one by shotgunning applications across the marketplace are very remote.

No credibility

How many times have you seen people shop until they drop, yet not buy anything? It happens all the time, and underwriters know it. If you want one to act now and cut you a break, then you have to show that you are a serious buyer. If you come across as somebody who’s going to keep shopping, and play one company against the other to hold out until the very best deal, odds are the underwriter you want will take a pass.

No advocacy

Let’s suppose one of your brokers gets lucky and actually connects with the right underwriter. That is only the beginning of the ball game. A diabetic case – especially one that needs to be placed quickly – has a lot of room for error. Many situations can and will arise that require intervention by the broker on your behalf. If he is not an expert in representing candidates like you, then these issues will not get resolved, and you will not receive an approval as quoted.

The bottom line is that life insurance shopping should be a very targeted process, under the guidance of a seasoned specialist. This will position you to get the product you want, at the price you want, when you want it.

Make sense?



Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

2 Ways to Keep Your Slate in Life Clean

A clean slate in life is treasured by almost everybody. People across generations and across cultures have known the importance of a “fresh start.” Those who believe in “life after death” don’t want to take any excess baggage into the next world. Those who live  only for the present moment appreciate the benefit of a “do-over.”

How can you live and keep your slate clean? Here are two tips I can offer. They come from my experience both as a spiritual seeker, and as an insurance professional.

1. Treat every person as an equal.

Always remember that no one is better than you, and no one is worse than you. And make sure others remember that too.

Sure, your boss is your boss. Your assistant is your assistant. Your client is your client. Your waitress is your waitress. And your kid is your kid.

But these are all roles to play. Essentially, you are a person just like everyone else. You deserve equal treatment as a person. And everyone deserves equal treatment from you.

Bear this in mind and you will have as little unfinished business with people as possible.

2. Pay off your debts.

Loans can be vital to starting a business. Most entrepreneurs don’t have enough capital to self-invest. So the loan from the bank (or Uncle Harry) comes in handy.

Loans can also be necessary in tough times. A reserve fund is a financial must-have. If  the fund is insufficient when a crisis hits, then a helping hand keeps things status quo.

But when you take on a debt, prioritize paying it off. And don’t make debt a habit. It can become too easy to look to others when you should rely on yourself. Then you can become a resource for others!

This brings up life insurance. With sufficient coverage, you can make sure your heirs can pay off any lingering debts, expenses, and taxes due.

Plan your finances accordingly, and your estate will pass on with as few unfulfilled obligations as possible.

These two practices will leave you with that “clean and fresh” feeling. Do you have that? If not, what can you do to get it?


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

A Better Way to Protect Your Money planning attorney, journalist, and organized mom Bonnie Bowles of the Denver Examiner offers keen insight into the advantages trusts have over wills, when trying to protect the money in your estate.

And you know what?

Life insurance works very nicely with those trusts!

Here are three examples from Bonnie’s article, with my comments about life insurance added:

Avoiding probate

A trust bypasses the probate court process, whereas a will requires probate and the subsequent commitment of time and money.

Life insurance typically avoids probate as well, and benefits can be paid very quickly.

Special needs

A special needs trust can protect assets for a special needs person better than a will – without jeopardizing eligibility for government benefits.

How can that trust be funded?

Life insurance is a good choice.

Asset protection

A trust is the preferred method for protecting assets from creditors.

Life insurance does so as well! It can also provide the money to pay off those creditors.

What questions do you have about protecting your estate?


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Do You Feel Proud of Yourself?

Political commentator and columnist John Hawkins just gave America an uncompromising look at itself in His essay is entitled, “5 Things America Should Still Be Ashamed of Doing.” I want to publicly thank him for the “morality check.”

The five things are: Acting Like A Skank In Public, Allowing Your Children To Inconvenience Other People, Being On The Dole, Politicians Lying To The Public, Promoting Separatism And Race Hatred. I think every item on this list hits the mark. I might even add a sixth item: Shirking Our Rights and Duites as Citizens. (We will save that for another time).

Let’s focus on #3 for a second, Being On The Dole. Here is a quote from Mr. Hawkins:

One of the best scenes in Cinderella Man came after James J. Braddock had a hand injury that killed his fighting career and he was forced to get welfare to feed his family. You could tell Braddock was utterly humiliated by the experience. Afterwards, when he started making money boxing again, as a matter of pride, he went and paid the money back. If everybody felt that way, there probably wouldn’t be a person alive who had a problem with welfare…

You’re supposed to be ashamed of not being able to pay your own way. It should be EMOTIONALLY PAINFUL for you to live off other people and if it’s not, it’s a sign that something has gone wrong with you as a human being.

Yes! To live contrary to our inner drive for independence is to lead a pained life. Not only do you suffer, but others can suffer as well.

In my home community, we recently experienced the tragedy of a young father dying of a heart attack. He was only in his 30s and left a pregnant wife and six other kids. He had no life insurance and very little savings.

Fortunately, people stepped up and donated to charity to preserve the welfare of the family. But don’t think for a minute that being forced to live on handouts was good for their morale. Besides which, if he had purchased life insurance, communal funds could have been used for others in need. Disaster victims, abused wives seeking shelter, and many others in crisis could have been helped. Public money only goes so far.

Very affluent people can feel shame too. Can you imagine inheriting a huge business or piece of land, but having no money to pay estate taxes? You would have to sell this asset at a great discount just to pay that bill on time. It would be emotionally painful to lose value on what is yours and let people take advantage of your misfortune. That is a big reason why wealthy people buy life insurance.

Whether you are rich or poor, financial self-sufficiency can keep you proud. Thanks for reminding us of that, John.

Are you proud?



Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

How You Can Give $1million to Charity

What are the best ways to give money to charity? Here are a few options:

Sell your share in a business.

Rohini Nilekani, wife of Infosys founder Nandan Nilekani, just sold some of the shares she owns in that company. She intends to use the proceeds from the sale (worth $27 million pre-tax) to fund charities in the areas of water, education, environment and governance.

Set up a private equity fund.

Tim Gocher set up a private equity fund for Nepal. It is an “impact fund” with the goal of creating wealth, creating jobs, and creating a better life for residents.

Buy life insurance.

Life insurance can turn a small premium into a large benefit for the charity of your choice. You don’t have to sell any property or start your own investment fund. You simply buy a policy and make the proper arrangements.

To give you an idea of how economical this gift can be, here is some sample pricing. All rates are for $1 million of universal life guaranteed to age 100. The rate class is preferred nonsmoker.

Male age 40, preferred nonsmoker rate: approx $6000/year for $1million guaranteed to age 100.

Female age 40, preferred nonsmoker rate: approx $5000/year for $1million guaranteed to age 100.

Male age 50, preferred nonsmoker rate: approx $8200/year for $1million guaranteed to age 100.

Female age 50, preferred nonsmoker rate: approx $7200/year for $1million guaranteed to age 100.

Male age 60, preferred nonsmoker rate: approx $15,500/year for $1million guaranteed to age 100.

Female age 60, preferred nonsmoker rate: approx $12,500/year for $1million guaranteed to age 100. 

Can you think of any other financial instrument that can give such a benefit for pennies on the dollar – on a guaranteed basis?



Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Should I Leave Money to My Kids? insurance is often purchased to leave a legacy to the next generation.

People buy life insurance in order to…

  • Take care of their family obligations
  • Make sure income is replaced
  • Secure their business interests
  • Provide money to pay taxes
  • And leave something extra for their kids

(Of course, that extra something can be big or small, depending on the net worth of the insured. If your father is not a billionaire, then don’t expect a million dollar inheritance…it would be nice though, wouldn’t it?)

But is this a good thing to do?

Misplaced love

Insurance people often talk about the purchase of life insurance being an act of love.

The insured does not personally benefit, but he or she loves his family enough to take care of them when he passes on.

Sometimes, though, love can be misplaced. We don’t want to spoil people, right?

Apparently, many Americans feel this way. More and more people want to spend all the money they have made.

A nickname for them has now emerged: “die brokers.”

Today, only a small minority of people are willing to constrain their lifestyle to maximize their inheritance.

Even those people who are planning a legacy are being cautious with their generosity. Prospective heirs are being educated in responsible money management. Tools such as trusts are being utilized to control access to the money.

As a matter of fact, compared to other countries, Americans are starting to lag behind in leaving inheritances for future generations. Only 56% of our retirees are planning to leave money to their children. The average inheritance is $177,000.

What is going on here? It used to be that immigrant families came to this country to make a better life. That included making sure their children will have more than they had. Is this no longer the American way?

Perhaps the problem is that adult children these days have been given so much, that to give them any more would spoil them further.

What do you think is going on?





Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Does Your Insurance Broker Treat Women With Respect?

Does your life insurance broker have a bad attitude about women? When I say bad attitude, I mean patronizing, belittling, or otherwise treating them as secondary players in family decision-making. Unfortunately, it is highly possible he does, given the history of the life insurance business. But that is slowly changing. Has it changed enough for you?

A generation back, life insurance salesmen were pretty much members of an old boys club. You know the crowd: a bunch of construction workers with ties. Selling was directed at the man of the house, since he typically controlled the finances.

In my generation, the industry became much more professional. The insurance office became a more suitable place for women. Women salespeople reached out to women consumers to empower them. If the wife was going to be the beneficiary of the policy, she had to make sure the coverage would be sufficient.

Today, opportunities abound for women to get involved in life insurance sales, as well as other financial service professions. Workplace marketing, distribution through banks and other institutions, and web marketing all have made room for women to establish careers. This corresponds to women becoming more prominent as financial decision-makers in society at large. Many are single heads of household, and single parents. Many participate in egalitarian marriages. Many have simply taken charge of their finances because they have the training and skills to do so.

One would think that in today’s climate, women would have achieved a certain parity with men when it comes to treatment as financial consumers. In a lot of cases this is true, but in a lot of cases this is not true. A lot of studies have been conducted to explain this, but the short answer to me is that men can be dumb and thick-headed. We all know that real men don’t have to belittle women to feel good about themselves. Hopefully that idea will catch on more.

In the meantime, women must at times deal with a male financial advisor who cops a bad attitude. Financial writer Amy Fontinelle he has a superb article in Investopedia that shows women how to do this. Her solutions include:

Problem 1: Some advisors patronize female clients. Solution: interview potential advisors carefully.

Problem 2: The advisor only communicates with the woman’s husband. Solution: work with an advisor who addresses both partners as equals.

Problem 3: Advisors treat single women as if they are clueless. Solution: work with an advisor who will empower you.

Please read her article. How how it has helped you deal with your own particular issues?


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Should I Marry Somebody Who Buys Term Insurance?

Dating websites can be pretty personal with their profile questions. Yet, how many ask about preference in life insurance product?

What is that? You don’t think they should? Of what relevance to marriage is the selection of a life insurance product? Well, I think you may be surprised at what you can learn about a person in the term vs. permanent debate.

Here are some examples:

People who prefer term might be considered short-term thinkers, whereas people who prefer permanent might be long-term thinkers.

“Term people” might have a narrow focus, concentrating only on coverage; “perm people” might have a wider focus in thinking, since they care about both death benefit and also cash value.

Term buyers might be more risk-takers in assuming they will be insurable when the policy renews, and they then want to buy new coverage. Perm buyers might be more conservative in assuming they might not be insurable later, so they lock into rates early.

Of course, such old-fashioned criteria as looks, manners, and sense of humor apply as much as ever. But when you are on that first date, don’t be shy about bringing up the topic of life insurance. You might learn something very useful about your prospective mate 🙂

“Compare term life insurance rates at no cost from top rated companies in seconds.”



Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

The Top Five Reasons to Buy Permanent Life Insurance life insurance gets a lot of press these days because it can be cheap. But, as is usually the case, you get what you pay for. There are many other considerations when  buying life insurance. Once you take them all into account, permanent life insurance looks pretty good. Below you will find some perks you may not have thought about.

Note: permanent life insurance here means universal life or whole life. Also: it is assumed that premiums are paid as scheduled. Life insurance can be a little bit technical. Call me and I’ll explain the details about these advantages so you’ll know what we’re talking about.

Here are the top five reasons to buy permanent life insurance, in my humble opinion:

1. No rate increase

You get a lifetime guarantee on the premium. It will never go up, so you won’t be blindsided by a huge rate increase. Also: what if you had a term policy that became too expensive, but you unfortunately were no longer insurable, due to illness? You wouldn’t be able to secure your family or business just at the time when they might need it.

2. No reduction of coverage

You also get a lifetime guarantee on the death benefit. Regardless of the investment performance of the company, they cannot lower your face amount. More than that, the right product will actually increase the death benefit for you!

3. Payment flexibility

You have flexible payment options. You can pay for one year, 10 years, 20 years, or according to another schedule, and still get a lifetime guarantee on the death benefit. Then again, you can pay on a yearly basis and keep your expenditure as low as can be.

4. Guaranteed cash

You can get a guaranteed cash value. If you are the kind of person who wants a guaranteed portion of your financial portfolio, few other products will match the guarantees of life insurance. At the same time, these products can also have non-guaranteed cash values that can grow significantly over time.

5. Low long-term cost

The rate you pay at age 30, let’s say, will be the rate you pay at age 90. You can enjoy a long-term savings by locking into a premium for one permanent policy, as opposed to buying a term policy every time you need one as you grow older. The premium on a policy bought at age 30 for life, is frequently lower than the premium you would pay on a policy at age 30, and then another at age 50, and then another at 70, all added together.

Stretch your brain a little bit and think long-term about life insurance. How does it feel?


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Take Your High PSA Seriously!

This morning I was informed that a gentleman who has applied for life insurance through my firm has prostate cancer. He had no knowledge of any prostate problems when he had applied. He took his insurance exam, and the PSA was very high. The carrier automatically declined him. He then did the right thing: he got the results, went to his doctor, got a biopsy, and found the cancer. It is a low stage, and treatment will be starting soon. Under these circumstances, there is reason to be optimistic that he will be “cured.”

Here are some interesting points to note about this story:

1) He had not seen a doctor in two years. At his age (mid fifties), annual checkups are essential precisely for making sure a sickness is not developing.

2) When he had seen a doctor a few years ago, his PSA was borderline high. The doctor shrugged it off as “getting older.” Don’t you think the doctor should have requested a follow-up soon to monitor the situation?

3) This is the sixth year in a row in which an applicant for life insurance through my firm found out he has prostate cancer. They were all initially declined due to lab results. They all went to their doctor with those results. In a few of those cases the physician didn’t take those results seriously and actually tried to artificially lower the PSA without doing any diagnostic test. In one of those cases the doctor finally did a biopsy and found stage 4 cancer. Too bad he had wasted all that time trying to monkey around with the lab results.

The good news here is that people who recover successfully from prostate cancer can eventually qualify for life insurance, and at a good rate. I am hoping to do business with this gentleman; not only that, he is a good friend and I want the best for him and his family.

I hope his experience can serve as a reminder to us all to take a high PSA seriously.


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Don’t Bank on Your Employer-Paid Life Insurance

Financial writer Amy Fontinelle has an excellent article today in Investopedia. She asks, “Is Your Employer-Provided Life Insurance Enough?” Her answer is basically, no – it is not. I think her conclusion is “on the money.” Here are some problems she identifies, along with my explanation as to why they are particularly pressing in today’s economy and life insurance marketplace. Be sure to read her article for the details of her research.

Problem: Your employer may not offer enough life insurance.

Is one or two years salary enough to provide for your survivors? For most people, it is not. Do you know what is the optimum formula to use to replace your income? Identify a capital sum that can be invested so the interest would be sufficient for your family to pay its bills. Your family will then never run out of money. An employer will never provide that amount, except in a highly selective executive bonus arrangement.

Problem:  You’ll lose your coverage if your job situation changes.

Have you seen the unemployment figures lately? How about all the people whose hours are being reduced to part-time, due to Obamacare? Transiency is the hallmark of today’s employment workplace. The lack of portability of group coverage is therefore a liability.

Problem: Employer-provided life insurance may not be your cheapest option.

Group rates increase as the participants enter new five-year age brackets. This means that the rate you pay at age 35 will not be the rate you pay at age 40, and will certainly not be the rate at age 45. Underwriting leniencies are available on individual policies, even for people with a history of serious illness. In the long term, the total cost for coverage could be much lower.

Are you concerned about your own coverage?


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

How Life Insurance Can Help with a Divorce Settlement

When a couple is unfortunately reaching the end of their marriage, they need to know how life insurance can help with a divorce settlement. Yet if you’re going through the heartache of a divorce, one of the last things you may be thinking about is life insurance. Still, did you know that life insurance is often required as a part of the divorce decree? This is usually in place to protect your spouse and/or children if anything should happen to you while the decree is in place.

How to arrange the coverage

Because insurance coverage is stipulated in the divorce decree for a specific amount of time, term insurance is usually purchased. Either spouse may ask the court to require life insurance, though it is typically the dependent spouse or the one with primary custody of the children. This stipulation needs to be covered during the settlement period by making sure that an adequate policy is ordered to be purchased with yourself as the beneficiary and preferably as the owner, since the owner of the policy controls it. The owner is able to change the beneficiaries. Remember that you can add beneficiaries to the policy such as a new spouse or children.

Taking care of the children

Unfortunately, minor children often find themselves at the middle of the divorce. In a divorce, one spouse frequently gets primary custody of minor children. It is essential that there is sufficient life insurance in force on that spouse to protect the children. Though it may seem easier to set them up as beneficiaries, they are not legally competent and doing so may cause more problems for your children than it solves. Consulting an attorney to set up a trust is a better option if you do not feel that your former spouse should be managing their money for them.

Cover all bases

Divorce can be extremely stressful and nerve-wracking, with stress-related conditions developing ranging from anxiety and depression to stomach issues. When you are going through the prequalification stage for life insurance, it is vitally important that you are up front about this. In addition to life insurance requirements, there may also be requirements for carrying health insurance, homeowners or renters insurance.

One final note on how life insurance can help with a divorce settlement

After the divorce decree has been fulfilled and is no longer in action, you can change the policy to provide income replacement benefits to your new spouse if remarried, provided that you remember to change your beneficiaries.


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Will My Spouse Get My Life Insurance Benefit?

You purchase a life insurance policy to provide financial security for your family. You are attracted to the guarantees of the product, and to the financial strength of the carrier. You think through the amount needed, and budget for the premium payments.

You live a long, productive life, and then your final day on this planet finally comes. All arrangements are executed, and your estate is settled. But then, BIG PROBLEM: your spouse does not get the money! What happened?

Here are some possibilities. All of them have to do with errors made by the insured/owner. The good news is that they can all be avoided with proper foresight and policy management.

Policy lapse

Insurance companies are extremely diligent in sending out premium due notices. They even keep records of all the notices sent. They will also send out a number of lapse notices when the policy is in danger. These notices can even be sent to a third-party to make sure they are received.

Yet, people get busy, and the premium notices can fall to the bottom of the pile. Eventually, the time allotted for reinstatement runs out.

No beneficiary update

Unfortunately for many couples, their marriage ends in divorce. Then again, many divorced people remarry. What has to happen then? A  change in the beneficiary of the existing life insurance policy from the old spouse to the new spouse. What will happen if this change is not made? The former spouse can get the money.

It is important to note that state laws, such as community property, can affect this outcome. Be sure to consult with an attorney.

No collateral assignment

Life insurance is often obtained to secure a business loan. Under these circumstances, the benefit should be assigned to the bank – the bank should not be named as beneficiary. If the bank is named as beneficiary, it could end up with more benefit than to which it is entitled.

At that point the lawyers will have to fight it out. This adversity could be avoided simply by filling out a form so the lender will receive only the amount of the loan outstanding at the time of death.

Are you certain that the current beneficiary designation on your policy is correct?



Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

What Do I Need to Know About Life Insurance for Older People?

A recent article in USA today states that older workers may still need life insurance. This is true. Here is what you need to know:

1. If your spouse is still dependent on your income, you will need life insurance for income replacement.

2. If you have incurred debts, such as a second mortgage, you will need life insurance so your spouse can pay those off.

3. If your pension distribution will terminate upon your demise, you will need life insurance so your spouse will not suffer the loss of that income.

4. Term insurance may be appropriate, but many times it is not. If you buy 10-year term insurance at age 70, how much higher do you think the price will be if you have to buy more insurance at age 80? Permanent insurance would avoid that problem

5. Remember that if you have insurance in force, but it is not needed by a family member, you can use it as a charitable bequest. Your favorite group that does good deeds would remember you as a hero.

6. These days, life insurance carriers specialize and even sub-specialize in population niches. Premiums can be very reasonable.

7. Specific needs for life insurance, such as estate preservation, might call for a joint policy with your spouse. Pricing here can be very economical.

Be sure to consult with a planner, and a broker who specializes in policies for older ages.


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

How to Get Life Insurance and Plan Your Estate

How to get life insurance and plan your estate? That was a topic recently discussed by two close friends and business owners. Ross, a 50-year-old manufacturing industry executive, sits down for lunch one day with long-time friend George, a 68-year-old small business owner now considering retirement. As they spent time catching up on each other’s lives, estate planning came up. Here, we listen in on their conversation.

“Yeah, I just came down here to visit my mother,” Ross shares with his long-time friend, George. “Sort of giving Courtney a little break, you know?” The pair met years before, when Ross walked into the offices of G & A Manufacturing, the most prominent and prestigious corporation in their industry. As a 21-year-old, fresh faced intern, Ross was at the bottom of the corporate ladder. George took a genuine interest in him, becoming first his mentor, and eventually his friend. Ross always appreciated George for his kindness in those early days; years later, he still sought him for important advice.

George nods in agreement, smiling. “Ah, yes. How’s Courtney these days?” he asked.

“Good. She’s real good. We’ve been working together day and night on the business to wrap it up for sale, as well as on our various charitable commitments. Sometimes when I talk to her, it’s easy to see she needs a break, so I take that four-hour trip down here to give her… what do women call it? A little ‘ME-time?’”

George chuckles a bit. “I know what you mean. So, is the buyer financing in place?”

Problem: taxation of wealth.

“Yeah, it is We are all set to close. Now I have to think about paying a hefty estate tax. My net worth is going to increase considerably, even after all taxes from the sale are paid. I need to make sure the kids can pay Uncle Sam after Courtney and I are gone.” George nods, prompting Ross to continue. “Having that heart attack two years ago really ‘woke me up’, George. So, I started looking for life insurance coverage as soon as I was released from the hospital. I had no IDEA how tough it would be! It’s like companies keep saying, ‘Nope. Not with this medical history.’”

George interjects, “Yeah, companies can be pretty stringent with their requirements these days. I had the same problem recently. I read about estate taxation in Denis Clifford’s estate planning book and started the process. I, too, sought to get a policy. Apparently by their standards, at 68 with my health history, you’re an old geezer and nobody would take a chance on me.”

How to get a low rate with a history of serious illness?

Ross smiled at the joke, but the look of concern soon returned. “So, what do we do now?”

“Glad you asked,” George chimed right in, not missing a beat. “I asked some other buddies of mine who, like me, own small businesses, are looking toward retirement, and are trying to get their financials in order.”

Ross perked up, now sitting at the edge of his seat. “And what’d they tell you?”

Getting started.

“Well, it’s a little uncomfortable, so a lot of us put it off, Ross. But you need everything in writing, you know that. Have your attorneys draw up a will, as well as Power of Attorney, in case you’re sick and can’t tell your family what you want.”

“Okay,” Ross replied. “What about the life insurance?” He looked glum. “I really would rather my kids not have to sell properties just to pay a tax bill!”

How to get life insurance and plan your estate? It takes the right broker.

“They won’t have to!” exclaimed George. “My buddies referred me to a broker who specializes in tough cases. He can help you, Ross — I’m gonna recommend you to him. Listen, he knows how to choose the right carrier. He’ll fight to get it done for you, even if you’ve had problems before. Plus, he is licensed in 48 states, so if you and Courtney decide to retire to Florida to be closer to family, you won’t have to find a new agent.”

“Wow, George! I knew I could count on you. I’ll give him a call today.”


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

How to Purchase Life Insurance for Income Replacement

Purchasing life insurance for income replacement is not exactly a popular activity. The traditional worldview saw death as a part of life. In modern times, we separate the two. The subject of death is something we try to avoid. Oh certainly, in the abstract it’s easy to adopt a grim, gallows’ humor; but when the topic hits close to home, and the death you’re contemplating is your own, the humor gets a bit forced. It becomes particularly troublesome when you have to assign a dollar amount to that demise. Perhaps that’s the reason why people have difficulty arranging for their life insurance needs.

How Much Life Insurance Do you Need?

Unfortunately, there is no one size fits all when it comes to deciding how well a life insurance policy will fit a person’s needs. The answer at the heart of that question is a personal one, and must consider the varying needs, obligations and dreams we each have. At the same time, people share a need for insurance throughout their working career, regardless of their occupation, profession, or business.  That need is to replace your income should it be lost due to your death.

Life Insurance for Income Replacement: What to  Consider

The determination of your income replacement requirement will need some  initial number crunching. The theory behind this approach is that your purchase of life insurance should be equal to the current value of your future earning potential. As such, you will factor in your current salary, annual raises, your earning rate, and finally your work life expectancy to arrive at a figure that will work for your needs.

Fine Tune that Income Replacement

Once you have arrived at a ball-park figure that will safeguard your loved one’s future, you can fine-tune your calculations. See if some of the survivor needs could be covered by other available assets. Make adjustments to include expected passive income such as retirement plan distributions. Be sure that your need for insurance in other areas, such as mortgage protection and educational funding, would not reduce the amount of money designated to replace your income. It is important to look at the whole picture of your insurance purchase needs and make sure they are all covered, before you finally settle on the amount needed for income replacement.

The purchase of life insurance for income replacement is worthwhile once you realize that your are securing the future of your loved ones. They are dependent on you now for their quality of life, and will remain so should they tragically lose you. That is why now is the best time to start buying it.



Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

How to Choose Between Term Insurance and Permanent Life Insurance? The Youngest Son Replies.

A Family Discussion is Completed (click here for Part 1, and here for Part 2)

“How to choose between term insurance and permanent life insurance? That is the question you are going to ask me now, Father, isn’t it”

The young man looked expectantly at his father as he approached the kitchen table. His father had been sitting quietly, enjoying his late afternoon tea. As the youngest son, he had found the path down which family discussions flowed. His father would initiate one with his oldest brother, and then proceed to the middle brother. When a point of mutual understanding had been reached with each, the discussion would then culminate with him.

“Yes,” his father said. “The time has come. However, you had not been available when I took my afternoon tea. It would have been nice to sit and drink together.”

“Yes it would have been,” the youngest son replied. “But it is a beautiful night. Will you join me for a walk?”

His father looked at him with some contemplation, and then arrived at a decision. “It is a good idea,” he replied, as he rose from the table. “There are many ways for people to connect.”

Father and son left their home and strode into the cool night air. The moon was full, and its brightness illuminated the homes along the block. The youngest son was eager to speak, so he initiated the conversation.

A  Family Heritage of Understanding Finance

“I appreciate all you have taught me about business and finance, Father,” he started, “and I am grateful for the counsel of my elder brothers. My education has allowed me to arrive at an answer to this question quickly and efficiently.” He nodded his head in emphasis.

His father raised an eyebrow in some surprise. “To arrive at an answer to a big question in a small amount of time can be risky. There is a chance that not all factors involved will be considered sufficiently.”

His son smiled at him. “It all depends on one’s level of confidence,” he stated. “I believe with all due modesty that I have figured out how to make this decision.”

At this father his father stopped walking and turned to him. He had an incredulous look on his face. Finally he spoke in a low but serious tone.

“I would very much like to hear your thinking, my son,” he said. “Please share it with me.”

Is Life Insurance a Commodity?

The youngest son turned his body as well so they were now facing one another fully. “It is simple for me, Father,” he said. “Life insurance is a commodity. One buys it as one needs it, as with any other commodity.” He waited for his father’s reaction.

The senior man showed no emotion on his face, and said cautiously, “Please continue.”

“When I need life insurance for my family, I will buy it. When I have a mortgage that I need to protect, I will buy it. When I become concerned about securing the educational funds of my children, I will buy it.”

“It is a big marketplace,” he said, in completion of his thought. “I am sure that any time I have a need for life insurance, a company will be interested in making me an offer.”

In reply, his father followed his logic. “So,“ he said, “if you start a business and take out a loan, you will buy the policy then. If you take on a partner and need to fund a buy sell agreement, you will buy the policy then. If you hire a key person and need to cover him, you will take out a policy then.”

The youngest son began to reply, but his father raised a finger for him to pause.  “And when you retire and need to maximize your pension distribution, you will take out a policy then. If family members unfortunately become dependent on you, you will take out a policy then. When you decide to make a charitable gift, or leave a legacy to your estate, you will take out a policy then.”

“You will just keep buying policies as you need them, as someone buys cars or clothes. Is that what I am to understand from you?”

The youngest son was taken aback by the sharpness of his father’s rebuke. He did not feel that he deserved such a response, but was careful to keep his emotions in check. Nonetheless, he did respond with emphasis.

“That is exactly right, my Father. The question of how to choose between term insurance and permanent life insurance is not complicated. I will simply buy a new term policy every time I need more coverage.”

“Now, I know what is your concern,“ he smiled assuredly. “You are thinking that if I keep buying a new policy at an older age, I will have spent more money overall than if I had brought a larger policy at a younger age. Am I right?”

Noncommittal, his father waited for him to continue. “I want you to know that I too am concerned about overall finances. For that reason I am making a strong commitment to investing my money. I am 100% certain  of this: with my understanding of investments, I will earn much more money buying term and investing the rest, than I would have saved by locking into a rate for permanent insurance at early age.”

When “Buy Term and Invest the Rest” Will Not Work

His father shook his head. “Nobody denies you your ability to commit, my son,” he replied, “You are disciplined, you are economical, and you have integrity. When you say you will do something, you do it.”

He began to walk, and his youngest son joined him. The fullness of the night had arrived, and there was a quiet in the street. It seemed as if their conversation was the only – and so the most important – event taking place in the neighborhood.

“But my son, your estimation is falling short. There is one factor in your thinking that you have underplayed. It happens to be the most important factor when deciding how to choose between term insurance and permanent life insurance. And that is mortality.”

For the first time, the youngest son seemed perturbed. His confidence had dropped a bit. “Please explain, Father. I do not want to miss an important consideration in my thinking.”

Underwriting Makes All the Difference

His father spoke slowly and deliberately to make his point crystal clear. “The error of your approach lies in treating life insurance as a commodity,” he said. “It cannot be. It cannot be something you simply go out and buy when you need it. You cannot take for granted you will qualify as long as you have the money to pay for it.”

“Life insurance is a product that is underwritten according to mortality risk assessment. You have to qualify for it medically. Your lifestyle and hobbies are assessed. Your family history is assessed. Your official driving record, and legal record, and financial record, are all assessed”.

“Your entire strategy, my son, for deciding on how to choose between term insurance and permanent life insurance, is based on the assumption that you will always qualify for the lowest rate available. That is a very questionable assumption.”

The youngest son looked introspective as he digested his father’s words. “You are telling me, Father,” he said at last, “that if any one of these factors becomes a higher risk, then the financial picture changes. I may not be able to get the life insurance I need at the price I want to play, or even be eligible for it at all.”

“Yes, yes, my son,” his father replied enthusiastically, “that is exactly right. Under those circumstances, you will have lost the financial bet. Should you become a higher risk in any way, your future purchases of life insurance may be jeopardized.”

Which Approach is Best for You?

They were now heading home. The youngest son felt that the discussion was coming to its final point. He knew that his father wanted him to restart his thinking. He wanted very much to please his father, but he recognized that they were different people.  His father had taught him that all economic decisions are made with regards to a measure of risk against reward. Some people, like his father, took a much more conservative approach. Others, like himself, were more aggessive.

The conservative approach here, with regards to how to choose between term insurance and permanent life insurance, would be to make sure life insurance would always be available. That meant buying permanent insurance now. The aggressive approach would be to buy term and invest the rest. The risk would be that he would not qualify for any more life insurance, should he need it. He would then have to settle for more expensive non-insurance options.

The youngest son felt a strong sense of gratitude and appreciation for his father’s teachings. He loved his father dearly. He became motivated to show his own children the caring and dedication that his father had shown him. Smiling, he took his father’s arm and drew him close. “You are my father and my teacher. I cannot tell you how fortunate I am to be in your care.”

“Compare term life insurance rates at no cost from top rated companies in seconds.”


Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Check Who’s Benefiting from Your Policy, and Other Estate Planning Tips

A prestigious law firm just published it’s top five estate planning tips for 2014.

Number one on the list?

“Check your life insurance beneficiary designation.”

Life Changes Can Change Your Policy

Margaret Barr of McBrayer, McGinnis, Leslie and Kirkland explains why:

“Divorce, births, deaths, and changes in relationship can alter one’s wishes for who should receive the benefits.”

She urges us to look as well at our stock proceeds and other items. Here is her complete list.

Who, What, When, Why of Estate Planning

CNNMoney explains what you need to know about estate planning, including why you need a will in the first place and how to assign power of attorney.



Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.