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Primary vs. Contingent Beneficiaries

There are a lot of things to think about before you purchase a life insurance policy, including what kind of policy you want, how much cash value you are looking for, how long the policy will last, and, not least of all, who will be the beneficiary of your policy, or the person who will receive your death benefit when you pass. What most people are unaware of is that there are two kinds of beneficiaries when it comes to life insurance policies: primary beneficiaries and contingent beneficiaries. It is important to understand the difference, how each works with the other, and if you can have both types on one policy. This will ensure that the right person receives your death benefit when the time comes.

Primary Beneficiary

illustration of a hand holding a money bag — *A primary beneficiary will receive death benefits first, and if they cannot, then a contingent beneficiary will.*

Your primary beneficiary is the primary person that you select to receive your life insurance death benefit when you pass away. Typically this is your spouse or your children. You can choose more than one person as primary beneficiaries, as well as how you would like the death benefit divided amongst them.

Contingent Beneficiary

A contingent beneficiary, also known as a secondary beneficiary, is a person or persons you can add to your policy who would receive your death benefit if something happens to the primary beneficiary/beneficiaries. For example, if you choose your spouse as your primary beneficiary, but they pass away before you, your contingent beneficiary (for example, your children) will receive the death benefit. The contingent beneficiaries will receive the death benefit if the primary beneficiary is dead, cannot be located, or is considered legally incompetent and not able to receive the money.

Primary Vs. Contingent Beneficiary

It is always a good idea to have both types of beneficiary, especially since it doesn’t cost you anything to have multiple beneficiaries. This way, if something happens to your primary beneficiary before the death benefit is distributed, any issues between family members surrounding your benefits will be cleared up. Having a backup will also save your family from going through the court system and paying court fees in order to access your benefits.

About Beneficiaries

You can name almost anyone as the beneficiary to your life insurance policy, including your spouse, children, siblings, parents, or even business associates. Just remember that if you do choose a minor as your beneficiary, they will not be able to receive the payout until they are of age. You can request that the money go into a trust or to a person who oversees the benefits on their behalf.

You can also change your beneficiaries at any time. It is generally a good idea to review your life insurance policy and its beneficiaries when you:

Get married
Have children
Get divorced
Get more assets

Understanding the difference between contingent beneficiaries and primary beneficiaries is important to help your family prepare for the unexpected. You can choose multiple primary beneficiaries, as well as contingent beneficiaries, in case something happens to the primary beneficiary. This ensures that the death benefit is used properly and is not tied up in a legal battle due to confusion or lack of information. Make sure to check your life insurance policy regularly, and update it when needed.

There are many different life insurance companies with different coverage options and prices, which is why it is important to compare all of your options. The best way to do this is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

How Does Debt Impact Life Insurance?

If you have debt, then you know how stressful it can be – and debt is a big issue for many people in the U.S. In fact, the average personal debt for an American is a whopping $90,000! And if you are one of the many people saddled with all of this debt, you probably also stress about leaving your debt behind for your family to deal with when you pass away, or about not being able to leave them anything when you’re gone. The solution? Life insurance can help you pay off your debts AND allow you to provide your family with money when you are gone. But the big question is: can you even buy a life insurance policy when you are in debt, given that life insurance companies look at your finances when you apply for coverage?

Can You Buy A Policy if You’re in Debt?

If you are plagued with debt then you might be worried that you won’t be able to purchase a life insurance policy, but the opposite is actually true. Life insurance companies will approve anyone trying to buy a plan even if they are in debt: after all, you need a policy just as much as other people. In fact, you might have even more reason to buy a life insurance plan, so you can help your family pay off your debt and then some when you are gone.

And fortunately, life insurance premiums are normally inexpensive monthly payments: they can be as low as $30 a month for a healthy 30-year-old. Because policies are so affordable, it’s better to buy now rather than later, since you could end up paying more in life insurance premiums as you age. That’s because the older you get, the more you will pay in premiums for your policy, so it is better to find a plan now that will offer your family financial security at a low rate.

Will Debtors Take Money From Your Policy?

Now you know that it’s possible to buy a policy even if you’re in debt, but will the money go right to your family, or will your debtors come knocking at your door after your passing and claim your death benefits? Fortunately, life insurance is not like other assets: your home, cars, personal belongings, and bank accounts all go into an estate when you pass, which can be used to pay off your debts before the remainder of the money goes to your loved ones. But with life insurance, your beneficiaries will receive the death benefit payout directly and will then be able to spend it however they choose.

Looking For An Affordable Plan?

illustration of an investigator with a magnifying glass looking at a red question mark — *You can still find a great and affordable plan by comparing plans from different companies.*

Your family has financial obligations that will not go away when you are gone: they will need your help more than ever with their expenses, and the last thing you want them to worry about while they are grieving is money. The best way to find an affordable life insurance plan, even if you are in debt, is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Keep Your New Year’s Resolution to Save Money With This Financial Checklist

The new year is here, and you’ve probably made some New Year’s Resolutions, right? Maybe you want to get healthier or break bad habits, but what about improving your finances and making sure your family is going to be financially secure in the future? These things should be just as high on your list of priorities: saving money is always important, even though it might feel like a pretty tough resolution to keep. Fortunately, there are a few simple things you can do to help reduce your yearly spending, including cutting down on some little things to save more money, while also investing the money you save by making these changes in the checklist below.

Check Up On Your 401K

illustration of a hand putting money into a bin that is labeled retirement — *Assess how much money you have saved up in your 401k to make sure you have enough when you retire.*

When was the last time you looked at your 401K, and at how much you’re investing and earning? For example, have you gotten a raise that would allow you to contribute more? This month is a great time to assess how much money you want to put into your retirement fund every year. This way, you can make sure you’ll have enough money put away for when you retire; you can also choose to contribute a little less right now if you need more cash in the short-term.

Review Your Household Finances

Do you get your nails done every 2 weeks or once a month? Are you planning on going on a family trip this year? Do you have a ton of subscription services that you don’t use very often? Now is a great time to review your monthly and annual household finances, so you can look for ways to save money. Are there ways you can budget better and expenses you can cut that are not necessary? If so, trim your household spending, and create a monthly budget you can live with.

How’s Your Credit Score?

January is the perfect time to check your credit score without affecting it. You’re entitled to a free copy of your credit report once a year from each of the three major credit reporting bureaus (Equifax, Experian, and TransUnion), so take advantage of it! Knowing what your credit score is will let you know where you stand if you’re planning on purchasing any big-ticket items. If your free report reveals that your credit score is not that great, create a plan to help increase your credit score, starting with making a resolution to pay all of your bills on time.

Life Insurance Benefits

a case full of hundred dollar bills — *Life insurance can offer you and your family extra money for any unexpected expenses.*

Want to save more money? Want extra cash for those unexpected expenses that pop up out of nowhere? A life insurance policy is a great way to help your family if you or your spouse can no longer help. In addition, if you choose a permanent life insurance policy that offers a cash value, you can borrow from the cash value and use it for your expenses, so you won’t have to struggle to pay your bills, choose one bill over another, or take out a loan.

And if you do have a life insurance policy, now is the best time to review your policy and make sure it still meets your needs, since every stage of your life will have different responsibilities. Determine if you need more or less coverage, and if you have a term life insurance plan, think about if you want to convert it into a whole life insurance policy.

Choosing the right life insurance policy is necessary to ensure that your family gets the benefits they need. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

When Should You Cancel a Life Insurance Policy?

When you think about protecting your family and their future, what comes to mind? At the top of your list should be life insurance. But after you’ve made the leap and purchased a policy, what happens if there are issues with it, or what if it doesn’t end up meeting your needs as you go through changes in your life? Is it ever the right move to cancel a life insurance policy? And what are your options when doing so?

You No Longer Have Dependents

If your children are all grown up and have their own lives, your current life insurance policy might no longer be as necessary as it was when they were growing up. In addition, if you have lost your spouse, this will also change your life insurance needs. If you no longer have as many dependents as you once did, your life insurance policy might be too much for your needs now.

When you find that you have fewer dependents, you should evaluate your financial needs as well as any financial burdens that your family could face after your passing, including any end-of-life expenses, medical bills, and other debts that need to be paid off. If your policy covers way more than those things and you’re finding the premiums to be too expensive, canceling it might be appropriate; if you choose to do so, though, you should look into other policies that would fit your current needs. After all, you still want to protect your family and make sure that they are able to pay off your funeral expenses and any other debts, without having to reach into their own pockets.

You Lose Your Job

Losing your job is not always a great reason to cancel your life insurance policy – after all, you’ll still need financial security for your family – but if you can no longer afford your premiums and you don’t have any riders that protect you from loss of income, you might need to consider canceling. It is important to note, though, that you might be facing some hidden cancellation fees and tax penalties if you do choose to cancel your life insurance policy.

As we pointed out above, canceling your policy might seem like a wise budgeting decision right now if you’ve lost your job, but your family could end up with financial issues in the future if you no longer have life insurance. So, if you’re worried that your current policy could become too expensive, consider asking your insurance company if you can add a rider that will help you pay for your premiums if you lose your job, such as a waiver of premium rider. You can also consider converting your policy or choosing a different life insurance policy that will fit your current needs more, and then increase your death benefit later when you have more cash on hand.

Changing or Converting Plans

As we have already mentioned, you do have the option of changing or converting your current life insurance policy. Instead of being tempted to cancel your policy, whether it’s because you want to take advantage of another insurance company’s lower rate, you feel like you can’t afford it anymore, or it doesn’t fit your needs, you can switch policies. Switching policies – instead of canceling outright – can be a great way to save money or even get more coverage for the same monthly premiums.

There are many different kinds of life insurance policies to choose from, including whole life insurance, term life insurance, and final expense insurance, so if you’re not sure where to begin, consider using online tools, or speaking with an agent. The right policy for you is out there! We have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Need Extra Cash? You Might Be Able to Borrow From Your Life Insurance Policy

Sometimes things happen in life, and you could end up with debts that are difficult to repay without a little help. If you’re looking for some extra cash, have you ever considered that you could borrow from your life insurance policy? Yes, it is possible to borrow from your policy – that financial cushion is not just for when you pass away. But before you go digging into your policy, there are a couple of things you need to be aware of: for example, you can only borrow from a permanent or whole life insurance policy. Not only that, but there are rules you need to know so you don’t put your family’s future financial security at risk.

Does Your Policy Allow You To Borrow?

illustration of money bills — *Permanent life insurance policies have a cash value, which you can borrow from.*

One of the first questions that needs to be addressed is if your life insurance policy actually allows you to borrow from it. The short answer is: as long as your life insurance policy has a cash value, you can borrow from it. Permanent life insurance policies, including final expense, whole life, and universal life insurance all have cash value.

Term life insurance only provides you life insurance for a fixed period of time, generally anywhere from 10-30 years, and provides a payout if you pass away during that term. Because there is no cash value in a term life insurance policy, you cannot borrow against it.

If you have a permanent life insurance policy, your cash value is like a savings account that builds interest over time, and as you pay your premiums, the cash value increases. Each life insurance company will set their own cash value amount and let you know when you can use it. The downside to having one of these policies? They are generally more expensive than term life policies, because they will cover you for your whole life, and because of the cash value you accrue with them.

How Borrowing From A Life Insurance Policy Works

When you are in need of cash, you can consider borrowing from your life insurance policy’s cash value; how much you can borrow from it depends on the size of your policy and how much you have paid into it. You will first have to request a loan from your policy’s cash value, because you are not actually taking money out of the cash value: the insurance company is extending a loan to you and using your cash value as collateral. The loan is also not recognized by the IRS as income, therefore it will not be taxed.

Unlike a bank loan, life insurance policy loans do not affect your credit and there is no approval process necessary – it’s your money to use! The more money that you have paid into your policy, the lower your payments to pay back the loan will be. It is important to note that interest on the loan will begin to accrue immediately, at a rate determined by the insurer. The rate is typically lower than that of a bank.

Paying Back A Loan

black alarm clock placed on top of hundred dollar bills — *It is best to pay back you life insurance loan as soon as possible so your policy doesn’t lapse.*

Most life insurance companies will have a flexible payback schedule, but it’s in your best interest to pay back your loan as quickly as possible, because the loan amount can be deducted from the death benefit that your family would receive in the event of your passing. Not only that, but the policy can lapse if a substantial amount is taken out and not repaid. Once it lapses, you essentially lose your policy, leaving your family without any financial security in the future.

When Should You Borrow From Your Policy?

You can borrow from your policy at any time, but you should only do so if you:

No longer need the death benefit- If you are retired and have no major expenses, and if your family is financially secure and you do not need the death benefit, a loan against your policy can work for you. In this situation, you can also consider surrendering the policy and collecting the accumulated cash value.
Don’t qualify for any other loans- If you cannot get a loan from a bank or any other source, your life insurance policy is a good option. One of the pros is that you will not have your credit checked or affect your credit score when you apply for the loan.
You can pay the loan back– It is always nice to take out a loan when you need cash, but if you do so from your life insurance policy, you will need to pay it back or lose the policy. If you know you can pay it back, taking out the loan when needed is a no-brainer.

If something were to happen to you, your family would be facing emotional hardships, as well as financial ones. Life insurance is a great way to help your loved ones with those financial hardships: the money they receive will help pay for expenses related to your death, and any other debts or bills they have. There are many different kinds of life insurance policies to choose from, including whole life insurance, term life insurance, and final expense insurance, so if you’re not sure where to begin, consider using online tools, or speaking with an agent. The right policy for you is out there! We have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Is there an Age Limit for Life Insurance?

Life insurance is important to have no matter what stage of life you are in, whether you are just starting a family or retiring. But a question that often gets asked is whether you can be is there an age limit to buy life insurance? Can you be too young to buy life insurance? Or too old? The answer to both is: it depends, but generally the younger you are when you purchase a policy the better, because age helps determine your rates, which will be higher the older you are. With that being said, you do have to fall within a certain age range to get life insurance, so let’s take a look at exactly how age comes into play when purchasing your policy.

Minimum Age For Life Insurance

There is no minimum age to purchase life insurance in most cases: generally, once you turn 18 you can buy a life insurance policy. In addition, parents and grandparents can purchase life insurance for babies and children, which can cover them for life, or until they choose to cancel the policy. So, as long as you can afford a policy, you should start looking into one – and if you are young and healthy, you can expect to pay only about $10-$15 a month for life insurance. Be aware that life insurance companies will want to make sure that you can continue to pay your premiums; they will request information about your income to make sure that you are financially stable.

Maximum Age For Life Insurance

If you’re an older adult, you might think that you don’t need life insurance or that it will be too expensive for you, but you might be wrong on both counts. You might still need life insurance depending on your situation, and there’s a good chance you can find an affordable policy no matter how old you are – even if you have health conditions.

You might still need a policy if, for example:

You Still Have Dependents

If you still have people who depend on you, such as your spouse or grandchildren, you might need a life insurance policy. There are life insurance policies available for people as old as 90, and some even allow policy holders to be as old as 100! And even if you can’t afford permanent life insurance or think it’s unnecessary at your age, you can always opt for final expense life insurance or other policies that are not intended for long periods of time, or that don’t offer as much coverage.

You Can’t Cover Funeral Costs

silhouette of a person sitting down with different colored question marks all around in a circle — *There are some common age limits when buying term life insurance.*

If you find yourself short on cash and feel like you aren’t going to leave a lot behind when you are gone, life insurance is especially important to have. Funerals can cost on average about $15,000, depending on your location, and that’s not an amount of money that most people generally have lying around. Having life insurance will ensure that your final expenses will be taken care of, so your family can worry less while dealing with their grief.

What Kind of Policy Should Older Adults Consider?

As we mentioned, if you’re an older adult, you might feel like a long-term policy is not the right option for you – in this case, you should consider term life insurance. Term life insurance is a great option because you can choose to be insured for 5, 10, 20, or 30 years, and you can generally buy a term life policy no matter how old you are, depending on the length of time of the policy. Generally, some common age limits for buying term life insurance are:

10-year term policy: 75 or 80 years old.
15-year term policy: 70 or 75 years old
20-year term policy: 60 or 65 years old
30-year term policy: 50 or 55 years old

How To Find Affordable Life Insurance

Life insurance is a great way to help your loved ones with the financial hardships that they could face after your passing: the money they receive will help pay for expenses related to your death, and any other debts or bills they have. The best way to find affordable life insurance, no matter what age you are and no matter what pre-existing conditions you have, is to do some research. There are many different kinds of life insurance policies to choose from, including whole life insurance, term life insurance, and final expense insurance, so if you’re not sure where to begin, consider using online tools, or speaking with an agent. The right policy for you is out there! We have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

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