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4 Mistakes to Avoid When Buying Life Insurance

Purchasing life insurance is the best way to make sure your family is financially protected when you are gone – sure, it might not be something that you want to think about, and searching for a policy might not be on the top of your list of fun things to do, but it is necessary, for your loved one’s sake. We get it: with so many different policies from so many different companies to choose from, searching for the right policy for you can seem like a frustrating and complicated chore, but not taking your time to compare and find out which one is best for your needs can end up hurting your loved ones. Learn the four mistakes that many people make when buying life insurance, so you can be one step ahead of the game.

1. Choosing The Wrong Policy

a checklist with 2 red X's — *Before buying a life insurance policy, make sure it checks all of your boxes.*

When shopping for a life insurance policy, you want to get the most bang for your buck. So, with so many different types of policies to choose from, you need to do your research and compare! Think about what you want from a policy: for example, if you want a policy that would cover major expenses for a certain period of time, say while your family is repaying the mortgage, a term life insurance policy is best for you. But if you want a policy that will cover you for your entire life, term insurance is not the way to go, because after your term expires, renewing it can be expensive. If a longer policy is what you’re looking for, whole life insurance is a better option; in addition, these policies offer cash value that you can borrow from during your lifetime.

Side note: it might be tempting to buy the cheapest policy, but don’t! Before you make any decisions based solely on price, check out the insurance company offering the policy: they might not be reputable or reliable, and if they go out of business, you could lose your policy. In addition, if you choose the cheapest option, you could simply end up with a subpar policy that doesn’t provide the coverage your family needs.

2. Not Shopping Around

As with any other type of insurance, you need to shop around to get the best rates and coverage. Life insurance companies are all different and use different data to assess your risk; for example, what one considers a major pre-existing condition that disqualifies you from getting a policy, another will not see it as not such a big deal, or some will charge more if you smoke, but others will not. This means that they also price coverage options differently, which can either end up costing you or saving you thousands of dollars. Comparing the coverage and prices of policies from different companies is the best way to make sure you are getting the right plan with the most savings. The best way to do this is to shop around, and work with an agent who can help you compare policies.

3. Not Buying Enough Coverage

illustration of a woman turning a piggy bank over with one coin falling out — *Choosing a life insurance policy is one of the mistakes that can end up hurting your loved ones when you are gone.*

Far too many people underestimate how much life insurance coverage their family will need. In order to figure out how much coverage is necessary for your family to continue to pay their bills when you are gone, you will need to take the time to do some math: add up your monthly expenses, or long-term expenses, including college tuition, mortgage payments and other debts, and then subtract that figure from your life insurance coverage. This will give you an idea of how much your family would need to be able to pay their big expenses and still have money left for everyday expenses.

Once you’ve done that and chosen the death benefit amount you think is appropriate for your family, remember to then figure out how much your beneficiary will receive in annual withdrawals from your policy. To do this, cut the amount of your death benefit in half and drop a zero: for example, if your policy has a $250,000 death benefit, half of it would be $125,000, and dropping a zero would make it $12,500, which is how much your family would get annually, which equates to about $1,042 a month. If that doesn’t sound like it would be enough to cover monthly expenses, consider a higher death benefit.

4. Waiting To Buy Life Insurance

orange circle with a green price tag and a money sign on it — *Waiting to buy life insurance can make it more expensive later.*

Over half of all Americans put off buying life insurance, but waiting to buy it is one of the worst mistakes you can make. Life insurance rates are based on a number of factors including your health and family history, but they are also based on your age, so the younger and healthier you are, the cheaper a life insurance policy will be. In addition, if you wait too long, you could end up developing a health condition, which would also push your rates up, or you could unexpectedly pass away without a policy, leaving your family struggling to keep up with their living expenses.

If you avoid all of these common mistakes people make when it comes to buying life insurance, you will be able to provide enough coverage for your family without breaking the bank. Shopping around, doing some comparison (and some math), and not waiting to purchase will mean you’ll be able to find a great life insurance policy that provides the protection your family needs. When deciding on a policy, consider using online tools to see what is available, as well as working with an agent who will help you compare plans and see which is the right fit for you. To get you started, 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.

The Different Types Of Final Expense Policies

Funerals are not something we often think about until we have to deal with them in our own lives, but it’s an unfortunate fact that they require a lot of planning and are extremely expensive. In fact, the average funeral costs anywhere from $10,000 to $15,00 – that’s a lot of money for your family to come up with, but it will be necessary for them to do so one day. Paying for your final expenses doesn’t have to be a burden for them, though: you can cover your funeral costs and protect your family’s financial security with final expense life insurance. There are multiple types of policies to choose from, so you are sure to find the one that is right for you and your family.

What Is Final Expense Life Insurance?

padlock — *Final expense premiums are locked in and cannot be raised by the insurer.*

A final expense life insurance policy will pay out benefits to your chosen beneficiary to cover medical and other end-of-life expenses, including funeral and/or cremation costs. But there is some flexibility as to how your loved one can spend the money: after paying for your funeral, they can decide to use the money for other debts or expenses. And that’s not the only great thing about this type of policy; other benefits of a final expense life insurance policy include:

No medical exam required for coverage
You will be approved and insured after answering a few questions
Your policy will not be canceled due to changes in your health status
Coverage is guaranteed for life as long as you pay your premiums
Premiums are locked in and cannot be raised by the insurer
Policies have a cash value that builds over time and can be accessed at any time
Death benefits are tax-free

Some plans will also offer additional benefits in the event of an accidental death.

Types of Final Expense Policies

Most companies offer multiple types of final expense policies, and it is important to compare all plans offered by different companies so you can find the right one for your needs and budget. Final expense policies fall into 2 basic categories:

Simplified issue policies– Over 90% of final expense policies are simplified issue. This means that medical exams are not required to get coverage, but you will have to answer some questions, such as whether you use tobacco products.
Guaranteed issue policies– This type of policy is usually only issued to those aged 40-80. You will need to answer medical questions with this policy, but the insurer will not generally ask if you are a smoker.

Depending on your age and health status, there are different types of plans you can choose from:

Level Benefit Policy– This type of policy is offered to applicants who are in excellent health, and is very similar to whole or term life insurance, because the rates are lower and the death benefit will be available on the first day of coverage.
Graded Benefit Policy– If you cannot qualify for a level benefit policy due to pre-existing health conditions, you can look into this type of policy, which will pay a portion of the death benefit if claimed during the first 3 years of the policy life, and the full benefit after 3 years have passed.
Modified Benefit Policy– If you cannot qualify for level benefit or graded benefit policies, this policy is the way to go. It requires no medical underwriting, but there is a 2-3 year waiting period before the insurer will pay the full death benefit; however, if you die from natural causes before the waiting period is up, the insurer will pay the sum of all premiums paid plus 10% interest.

How Much Coverage Do You Need?

Picking a policy is a big decision, and in order to know which is best for you, you should first determine how much coverage you need. The best way to do this is to estimate your monthly household expenses and factor in funeral expenses, which on average will be $10,000.

No one wants to think about their own death, but it is important that your family is financially protected when the time does come. When determining which policy is best for you, you should look at multiple insurance companies; consider using online tools to see what is available, as well as working with an agent who will help you compare plans and see which is the right fit for you. To get you started, we have provided the top insurance companies that offer final expense 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.

Pros & Cons Of Guaranteed Universal Life Insurance

What are you looking for in a life insurance policy? The first thing you’re probably thinking about is coverage that will help your spouse, children, and grandchildren when you are gone, but price might also be a big consideration. If so, you should look into guaranteed universal life insurance. A guaranteed universal life insurance policy provides permanent life insurance coverage, without the higher price tag of regular universal life insurance. But before you choose this type of policy, you should be aware of all its pros and cons, in order to make sure it works for you and your needs.

Guaranteed Universal Life Insurance Vs Whole or Term Life

Guaranteed universal life insurance, also known as “No Lapse” insurance, is an affordable way to buy permanent protection, and can be viewed as a kind of middle ground between term and whole life insurance. For some people, whole life insurance might be too expensive; others might like the price of term life but want coverage for a longer period of time than term life insurance offers. Guaranteed universal life insurance might be the answer, although you need to know what you are and aren’t getting with this type of policy.

different numbers on buttons — *Guaranteed universal life insurance policies last until you reach a specific age.*

Like whole life, guaranteed universal life lasts your entire life, but, unlike whole life, it doesn’t build cash value over time. Because there is no cash value building up, your monthly payments will remain low, and you do not have management fees (like whole life), making this type of life insurance policy financially doable for most people.

Guaranteed universal life insurance is similar to term life insurance in that it has fixed rates that will not change throughout the life of the policy. But there is one major difference between these types of policies: while term life policies last for a specific number of years, guaranteed universal life insurance policies last until you reach a specific age. For example, when you sign the policy, you will choose an age for when the policy ends; most companies’ choices include ages 90, 95, 100, 105, 110, or 121. The older you are when purchasing a policy, the higher the price of your premiums will be.

Pros Of Guaranteed Universal Life

The above similarities and differences between guaranteed universal life and whole and term life mean that there are both advantages and disadvantages to this type of policy, and you’ll have to carefully weigh these pros and cons before making your decision. First, let’s take a closer look at all the positive things that guaranteed universal life insurance has to offer:

Guaranteed Fixed Premiums & Death Benefits

As mentioned above, guaranteed universal life’s premiums will remain at a fixed rate throughout the life of your policy, meaning there will be no increase in rates until you reach the age at which your policy is set to expire. This could make one of these policies more desirable than non-guaranteed universal life insurance: with these policies, your investment or cash value has to perform well, otherwise your rates will increase.

In addition, with a guaranteed universal life policy, your death benefit will never change, which means when you pass away, your beneficiary is guaranteed to receive the amount agreed upon when you purchased the policy. The cash value that whole life policies accumulate is essentially a loan, and will be taken out of the benefits your beneficiaries will get when you pass away; guaranteed universal life does not accumulate cash value, so you will not have to worry about your loved ones getting less money when you are gone.

No Market Risk

Unlike whole life or regular universal policies, a guaranteed universal life policy has no cash value. This can be a positive thing, because the money your beneficiaries will receive will not be tied to the performance of investments in the stock market, and you will not have to worry about the market or interest rates.

Cheaper Premiums

A universal guaranteed life insurance policy will have lower premium rates as compared to non-guaranteed life insurance policies because you will not have to pay extra to accumulate cash value (because there is no cash value). The monthly premium price of non-guaranteed universal life policies is about 3-4x those of guaranteed universal life policies!

Easy To Understand

These policies are very simple and easy to understand: you pick the amount of coverage you want and the age you want your policy to last until, and you will pay the same fixed premium throughout the life of your policy. Your premiums are locked in and will not increase as you age.

Cons Of Guaranteed Universal Life

Some of the above differences between guaranteed universal life insurance and other types of policies could be seen as drawbacks. For example:

No Cash Value

If you would like to build cash value that you can use at some point as a loan, or to help pay for your premiums, you will not get it with this type of life insurance.

No Flexibility On Payments

With regular universal policies, you have the option to miss or skip payments by building cash value in your policy, but you do not get this type of flexibility with guaranteed universal life insurance. Instead, if you miss a payment, you run the risk of losing your policy.

exam room with bed and medical equipment — *You will have to undergo a medical exam for a guaranteed universal life insurance policy.*

Medical Exam

With some life insurance policies, you can skip the medical exam, which is helpful to those who have major pre-existing conditions. Unfortunately, guaranteed universal life does not offer this advantage: you will be required to undergo a medical exam when applying for your policy.

More Expensive Than Term Life

Term life insurance offers you coverage for a set number of years (10, 20, 30 years), and after that time has passed, you will need to purchase a new policy, or choose to renew your policy at a higher rate. The one advantage to this is that it keeps premium prices lower than those of other policies, including those of guaranteed universal life policies. Because guaranteed universal life policies offer guaranteed coverage until you reach old age, they are more expensive than term life policies.

Weighing Your Options

As with most types of life insurance, guaranteed universal life insurance policies have some very strong advantages, as well as some downsides that you need to consider before making your choice. When deciding on a life insurance policy, consider using online tools to see what is available, as well as working with an agent who will help you compare plans and see which is the right fit for you. To get you started, we have provided the top insurance companies that offer guaranteed universal 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.

Universal Life Insurance Explained

If you’ve made the decision to buy life insurance, congrats! As you’ve been researching policies, you’ve probably come across multiple types of policies, including universal life insurance, which might be a good option for you because of the many benefits it offers. Universal life insurance is a type of permanent life insurance that covers you for life as long as you pay your monthly premiums, and, like whole life insurance policies, universal life insurance has cash value that grows over time. What makes it more appealing than other types of whole life, though, is that it is less expensive. But that is just one of the advantages of universal life insurance.

How Universal Life Insurance Works

Having a universal life insurance policy is like having two forms of financial coverage in one. With one of these policies, you will pay a monthly fee that splits into two parts: one part goes toward your life insurance policy and the other part goes into savings, similar to a savings account.

The great thing about universal life insurance is that it’s all about flexibility. You have the option to increase or decrease your death benefit, as well as the flexibility to change the price of your premium. You can choose to pay the minimum premium amount set by your insurance company or you can choose to pay more; you can even skip a payment as long as there is enough cash value in your policy to cover it. If you decide to pay more than the minimum premium amount, that extra payment is added to your cash value. This cash value will grow over time with an annual interest rate that is set by your life insurance company. This is why it is important to shop around and compare all of the insurance companies offering policies in your area.

Cash Value Options

In addition to the flexibility of universal life insurance, one of the most popular parts of this type of policy is undoubtedly the cash value that it offers. What’s even better is that you have multiple ways to utilize this money:

Policy Loans- You can access your cash value as a policy loan, meaning you will be charged a small amount of interest. You don’t have to repay the loan, but any loans that haven’t been repaid will be deducted from your death benefit after you pass.
Paid-up Policy– With a universal life insurance policy, you have the option to stop paying premiums once you reach a certain amount of cash value. Essentially the plan pays for itself after a while.
Withdrawals- Instead of taking out a loan, you can withdraw money from your cash value. You will not have to repay it and will not have any interest that will be deducted after you pass. Be aware, though, that withdrawing money from your policy is considered a surrender of the net cash value, meaning your death benefit and your cash value will be reduced.
Policy Surrender- If you want all of the cash in your policy and no longer want the death benefit, you can surrender the policy and take all of the cash that has accrued over time. You will have to pay some fees for surrendering the policy.

3 Different Types

1. Indexed Universal Life Insurance

laptop screen with stock market on it — *Indexed universal life insurance’s cash value is based on how well the stock market is doing.*

Indexed universal life insurance’s cash value is linked to an index in the stock market. If the index is doing great, your cash value goes up. However, if the stock market drops, your cash value will drop, which will also have an impact on your premiums. Be aware that your insurance company also takes a share of your cash value.

2. Variable Universal Life Insurance

With variable universal life insurance, you have the option to put your cash value into a mutual fund, which is essentially a pool of money that is managed by investors. Your cash value will be invested into different companies and, while this lowers your risk, you will also have to pay a lot in fees, which will take away from your earnings.

3. Guaranteed Universal Life Insurance

Choosing this option means your premiums will stay the same regardless of how well the stock index is doing. This is because the interest rates on your cash value are set when you purchase your policy. The only downside to this type of universal life insurance is that cash value will be a lot lower than with other types of universal life policies, because these policies are not designed to build cash value.

Just Know…

If you do not use your cash value, you will lose it, and it will revert back to your insurance company. Your family will only receive the death benefit, not the cash value that accrued over your lifetime. Purchasing a life insurance policy means that your loved ones will be taken care of when you are no longer around. Universal life insurance is a great choice because it will last throughout your lifetime as long as you continue to pay your premiums, and it is very flexible. You can adjust your death benefit, your cash value earns interest, you can withdraw money or borrow from your policy’s cash value, and you have flexibility with premiums. You can choose to pay the minimum and let your cash value build up, and then, if you don’t want to lose your cash value, you can use it to pay your premiums and save more money.

The best way to find the perfect policy for you and your family is to compare policies and companies. There are many different life insurance policies and life insurance companies to choose from, so consider using online tools, or speaking with an agent. We have provided the top insurance companies that offer universal 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 universal life insurance rates today.

Why You Should Consider Joint Life Insurance

Getting married and setting up a life with your partner is a joyful time, and life insurance might not be at the top of your minds. But it’s an important subject to discuss: after all, you both want to support each other for as long as possible. There are multiple options to consider when looking into life insurance policies, but did you know that you can get coverage for you and your spouse on one life insurance policy? With a joint life insurance policy, you can cover two people, often for less than the price of separate policies!

What Is Joint Life Insurance?

african american hand holding a caucasian hand with rings on the ring fingers — *Joint life insurance will cover you and your spouse under one policy, which can be cheaper than two policies.*

Joint life insurance is a type of universal life insurance, meaning that it is permanent life insurance and will remain in effect for your whole life. Depending on how your policy is structured, it might build cash value that grows, tax-deferred, over the life of the policy. The unique thing about joint life insurance is that these policies cover two individuals on one plan. It is perfect for couples, because it allows you to provide for your spouse after death. But it is also a great policy for business partners! A joint life insurance policy will give you the financial security to keep your business going in the event that one of you passes.

The best way to find the right plan for your needs is to shop around and compare plans and prices. As you begin your research, be aware that you will come across two types of policies, first-to-die and second-to-die life insurance.

First-To-Die Policies

First-to-die life insurance will pay out after the first-named insured of the spouses or partners dies. For example, if you and your spouse are covered under a first-to-die policy, and your spouse passes, you would collect the entirety of the death benefit. After you collect the money, the insurance policy is exhausted, meaning you will no longer have life insurance coverage and must apply for a new policy. You have the option to use the money however you see fit, whether for mortgage payments, expenses that were supported by your spouse, for your growing family, etc.

Second-To-Die Policies

Also called survivorship policies, second-to-die insurance policies will pay the death benefit after both policyholders die. For example, if you and your spouse have a policy and your spouse dies first, the insurance will not pay out until after you pass as well. Unlike with first-to-die policies, once the first person dies, the second person has to keep paying premiums to keep the policy active. This kind of policy is best for estate planning purposes, as it allows you to leave money behind for dependents. It is also well-suited for business partnerships, if you want to keep the business going after both partners pass.

money tree in a plant pot being watered — *Your cash value grows over time with a joint life insurance policy.*

Joint Life Insurance Advantages

Joint life insurance is an excellent way to provide coverage for two people at a great price. These plans:

Are flexible– They allow you to increase or decrease the amount of your premium payments.
Grow over time– Your cash value will continue to grow over time.
Are accessible– You have access to cash value in case of an emergency or whenever you need it.
Are affordable– These plans are generally cheaper than buying two separate policies.
Offer savings– The company will underwrite both of you, and will typically focus on the healthier applicant. This reduces the risk, which means lower premiums.

Joint life insurance is the simplest and most affordable way to provide coverage for you and your spouse or business partner. You will be able to provide for your spouse after your death, or for your dependents or business after both policyholders pass. It is the cheapest yet most effective way to get coverage for two people.

There are many different life insurance policies to choose from, which is why you have to compare plans to find the best one for your needs. Consider using online tools, or speaking with an agent. We have provided the top insurance companies that offer joint life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to ensure that 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 joint life insurance rates today.

What To Do If Your Are Denied Life Insurance

Rejection happens to the best of us. Things are no different when it comes to life insurance: some companies might reject your application for a policy. If you get denied for life insurance coverage, you might question why you were denied. There could be a number of reasons, such as your financial history, health, lifestyle, or driving record. But the good news is, just because you’ve been rejected by one company doesn’t mean you can’t get a life insurance policy! Once the shock of being denied has settled, there are steps you can take to find a great, affordable life insurance policy that will give you and your family peace of mind.

tablet with mail on it and microscope over it — *If you are denied life insurance, then collect information as to why you were denied to make sure there was no mistake.*

Collect Information

The first thing you need to do is begin gathering information in regards to why you were denied life insurance. This will help you to understand what happened, and help figure out if there was some sort of misunderstanding. As an applicant, you have the right to request this information.

Verify Results

One possible reason for your denial could be a simple error. You or the insurance company could have made a mistake when filling out paperwork, or the information you have given could be incomplete. In addition, you could have medical records that have not been updated or are not detailed enough. Double check with the insurance company, your doctor if the problem is related to your health, or the Department of Motor Vehicles if there was an issue with your driving record. If for some reason there was an error, you can appeal the decision with the documentation necessary to reverse the insurance company’s decision.

Make Some Lifestyle Changes

woman's hand rejecting a pack of cigarettes in a man's hand. — *If you quit smoking, you can re-apply for life insurance and get a cheaper rate.*

If you are denied due to pre-existing conditions, or being a smoker, you can increase your odds of being approved for a different life insurance policy by making some changes. Show that you are willing to manage your conditions with regular exercise and healthy eating. Stop smoking if you can, which will even allow you to get lower rates! And don’t give up: in some cases, a life insurance company will not deny you outright, but will postpone your application a couple of months to give you time to make some changes. They will usually do this if you have had a recent medical diagnosis, so you have time to adjust to the changes and any new medication.

Explore Your Options!

Life insurance companies all rate the risk of different medical conditions in different ways. So if you are denied because of a medical condition, there might be another company that will provide you with coverage. Remember, too, that there are a number of different types of policies to choose from that will offer your family protection when you are gone. For example, if you get rejected for permanent life insurance, you could still apply for a different type of policy, such as term life insurance, simplified issue life insurance, or final expense life insurance. You will be accepted for simplified issue life insurance even if you have a pre-existing condition, because this type of coverage does not require a medical exam. The possibilities are endless when it comes to getting a life insurance policy, all you have to do is shop around and work with an agent.

A rejected application doesn’t mean that you won’t be able to get life insurance to protect your family and their assets. There are many different life insurance policies to choose from, and even with health conditions, you can find an affordable plan with great coverage. Consider using online tools, or speaking with an agent. 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.