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How Mental Illness Affects Your Life Insurance

How Mental Illness Affects Your Life Insurance text overlaying an image of a woman sitting on a chair with her head in her hands When choosing whether or not they should accept your life insurance application, insurance companies look at a number of things. Some of these things are your age, your job, your habits, your general health, and your mental state. Mental health affects many of us, with about 57.8 million American adults having a depression, anxiety, or PTSD diagnosis. As we learn more about how mental health affects people, insurance companies change their screening process. Your mental health can affect whether you can get a life insurance policy and how much you’ll pay for it. So, it’s important to know what life insurance agents are looking at on your application if you struggle with mental health. So, you know what to expect and which policy would be worth the higher premium. 

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Depression

Depression is a common mental illness that is often treatable. However, if you have depression and want to get life insurance, insurance companies will consider you being a higher risk applicant. The main thing that worries life insurance companies about a depression diagnosis is that, according to the National Institute of Health, depression often leads to other serious health issues. For example, the chance of coronary artery disease is 64% higher for people who have a depressive disorder or even signs of depression. Other health conditions linked to depression are weakened immune system, and cardiovascular disease.

 

Aside from the health concerns, some life insurance companies also worry that people suffering from depression may have trouble paying their premiums. Statistically speaking, people with depression are more likely to quit or lose their job. This is because they tend to feel like they can’t do the job, struggle to show up or are not able to be productive.

 

Some insurers even treat postpartum depression as clinical depression even though it’s a temporary form of depression. Postpartum usually happens within the first 3 months of having a baby. It does eventually fade away especially if you seek help for it. But because life insurers treat it as clinical depression you face higher rates. Which is difficult because many parents buy life insurance when they start a family. 

Depression Categories

Most people experience sadness at various points in their life. However, being sad is not the same as having a depressive disorder. Because of this, life insurance companies only consider you to have depression if you have a diagnosis from a doctor prior to applying for a policy. Depression can be defined in a number of ways, just like many other health problems. These include seasonal affective disorder, persistent depressive disorder, and major depression. Companies that sell life insurance divide people into 3 groups. How they decide your rate depends on which group you’re in.

 

 

  • Mild – You’ve had no more than one type of medication for depression and have never been hospitalized for depression.
  • Moderate – You take multiple depression medications and see a psychiatrist.
  • Severe – If you’ve ever had suicidal ideations or a history of an attempted suicide.

Anxiety

If you have an anxiety disorder diagnosis life insurance companies will take that into account when deciding your eligibility and premiums. When a person with anxiety applies for life insurance, drugs and alcohol abuse is one of the main things that life insurance underwriters worry about. Life insurance companies will be very hesitant if you use drugs or alcohol to treat yourself. Or if you have a history of abusing them. Each case is carefully examined to decide if you can buy the policy. Having an anxiety disorder can make it harder to get life insurance, but it doesn’t mean you can’t get it at all. Many people who have been diagnosed with anxiety are still able to buy life insurance. The good news is not all life insurance companies cover health concerns the same way. So one company may charge you more than another because of the anxiety.

Anxiety Ratings

Different people have very different anxiety conditions. When working with underwriters, many people with these disorders may find it uncomfortable to be put in the “mental illness” category, especially since some of the questions are intrusive. But insurance companies usually depend on experts, especially the criteria for these conditions set by the Centers for Disease Control and Prevention (CDC), to figure out how extensive the disorder is.

 

If you’re not sure about the classification, you should first ask for more details. It is always better to treat a condition properly than to do nothing. In fact, many people with much worse mental illnesses than, say, occasional panic attacks can get life insurance as long as their situation is under control. As we mentioned, some of the questions may seem like they are prying. Some common questions you might get are:

  • What is the diagnosis?
  • When did you get diagnosed?
  • How severe is the condition?
  • Have you received treatment?
  • What are your symptoms?
  • How long have you had the symptoms?
  • Have you missed work due to your condition?
  • How has your situation changed your life?
  • Has a reason been found for your condition?
  • Have you ever been hospitalized for the condition?

Possible Outcomes

Depending on your answers and medical records (you’ll be asked for the names and addresses of the doctors and hospitals you’ve been to), you can expect the following “ratings”:

 

  • Preferred rating – This means that your mental health is under control or not too bad. Either you are taking one medication that works well. Or a mental health professional has told you that you don’t need any medicine at all. In short, you can expect to get the best benefits and prices if your diagnosis doesn’t affect your health as a whole.
  • Standard rating – This means that your mental health problem isn’t too bad, but it does affect your health in some way. This group includes people who have been hospitalized, need daily therapy, or have more than one prescription.
  • Table rating – This grade means that your mental health problem is very bad or that you aren’t doing anything to deal with it. This grade could lead to either high premiums or being turned down for coverage.

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PTSD

Even though many traditional term or whole life insurance applications from people with Post-Traumatic Stress Disorder (PTSD) are automatically turned down. There are a few companies that will at least look at a person with PTSD as a possible candidate for traditional coverage. Before you even think about asking for coverage, make sure the life insurance company you’re working with is more willing to work with people who have PTSD. If you don’t, you’re likely wasting your time and effort.

 

Insurance companies will want to know more about your diagnosis of PTSD. They may also want to know about your habits and how you live. The insurance company will use this information to figure out how much of a risk you are. And how much your premiums will be. The questions you’ll be asked are very similar to the ones asked for anxiety. You can expect:

 

  • What traumatic event started your PTSD?
  • What are your symptoms?
  • How long have you had PTSD?
  • What treatment did you receive?
  • What is your current mental health state?
  • What medications are you taking for PTSD?

PTSD Rating

As we’ve already said, if you’ve been diagnosed with PTSD, most standard term or whole life insurance companies will automatically turn you down. They do this because they think that insuring people with PTSD is too much of a financial risk for them. Which is fine, since not all life insurance companies will have such strict rules about who they will accept.

However, you can bet that even companies who aren’t that strict will be hesitant to insure someone who has been diagnosed with PTSD. Because of this, most people who are able to get coverage do so at a “sub-standard” rate. Which means their insurance will cost more than if they hadn’t been labeled with PTSD.

Other Life Insurance Options For PTSD

If your PTSD or other health problems make it hard for you to get a traditional term or whole life insurance policy, you may have other choices. You could also think about getting a “guaranteed issue” life insurance policy. People who can’t get traditional life insurance because of their health or other reasons can get guaranteed-issue life insurance. These policies don’t require a medical exam or ask the applicant about his or her health background. So, they are often more expensive than standard life insurance policies and may have lower coverage limits.

 

These plans will also have a “graded death benefit,” which limits when your policy will start covering natural causes of death (usually, the policy needs to be in place for two to three years before natural causes of death are covered). An accidental death policy is another thing to think about. A policy for accidental death is a type of life insurance that pays out if the insured dies in an accident. Accidental death policies usually pay the policyholder’s beneficiary a reward if the policyholder dies in an accident. Accidental death plans will never cover deaths caused by illness or natural disasters, no matter how long you own the policy.

Working With EZ

As we’ve seen, those suffering from depression, anxiety, or PTSD face a difficult scenario. But it doesn’t have to be disastrous. The milder your symptoms are and the better you manage your condition, the more likely it is that you will be able to obtain coverage at a cheaper rate. This also applies to your overall health. People with chronic diseases or poor habits, such as diabetes and alcoholism, will be scored similarly to those with depression or anxiety.

 

It is critical to weigh ALL alternatives here. This is where EZ comes in. EZ is dedicated to getting the best coverage at the greatest price for you and we want to make it as simple as possible for you to do so! We are here to help you. And the best part is that all of our services are completely free of charge. We will help you with everything from answering all of your inquiries to selecting a policy, completing the application procedure, and providing support after your plan has been implemented. To begin, enter your zip code into the bar below or phone us at 877-670-3560. If you or someone you know is suffering from depression, anxiety, or suicidal ideation, please call 1-800-273-8255.

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ILIT: Understanding Irrevocable Life Insurance Trust

ILIT: understanding irrevocable life insurance trust text overlaying image of insurance agent holding a family An irrevocable life insurance trust (ILIT) gives you more control over your insurance policy and how your beneficiaries will get the death benefit when you die. A life insurance policy is an investment and an asset. So, it will be part of your estate after you die. Because of this, the death benefit, or proceeds, can be subject to an estate tax if all of your assets are worth more than the federal exemption limit.

How ILITs Work

In estate planning, a trust is a separate entity that holds your assets, such as money, real estate, and personal items. So that they can be given to your heirs after you die. An ILIT is a trust that you can’t change your mind about. It holds your life insurance policy for you so that it doesn’t count toward your taxable estate. 

 

The trust is the policyholder, so you don’t have to worry about anything to do with ownership. The death benefit is no longer part of your estate and does not add to the value of your estate for tax purposes. It also won’t have to go through probate, which is the legal process of getting your estate in order. Your heirs can get the full amount of the death benefit. Here’s the process:

 

  • You set up your ILIT
  • You give your existing life insurance to the trust, or you have the trust “buy” a new policy. Then you put money into the trust so it can pay your premiums.
  • The trust is the beneficiary of your life insurance policy. So when you die, the policy pays the death benefit to the trust. The benefit is not counted toward your estate tax. 
  •  The ILIT will give your trust’s beneficiaries the death benefit based on your instructions. Which are written in the trust document. 

Setting Up An ILIT

ILITs are hard to understand and have many tax effects. When setting up a trust, it’s important to talk to an attorney to make sure it’s done right and works to your advantage. Once you’ve started putting together the trust you’ll find there are 3 designations that need to be made:

 

  • Grantor – You, the person who makes the trust
  • Trustee – The person you elect to manage the trust for you
  • Trust Beneficiaries – The people you have chosen to receive your assets listed in the ILIT after you have passed away

To actually set up the ILIT you have a few steps. First, you open and finance the ILIT and fund the trust to keep up with the premiums for your life insurance policy. Second, you’ll transfer or buy a new life insurance policy into the trust. Lastly, you’ll select a trustee and choose how the ILIT will distribute the benefits. Be careful as these instructions can not be changed later.

Benefits Of ILITs

Using an irrevocable life insurance trust can help you save on taxes and give you more control over how the death benefit from your life insurance is used.

Minimizing Estate Taxes

If you have a life insurance policy when you pass away, the death benefit is considered an asset. So, it is added to the total value of your estate. However, if you put the life insurance into an ILIT, the money from your death benefit would not be counted as part of the estate and will not face taxes. If you don’t include your life insurance, you may also be able to lower the total value of your estate before the federal exemption level and avoid paying taxes on it. 

Death Benefit Can Pay Estate Taxes

All of the money and things you own make up your estate. If your estate is worth more than the amount the law says is exempt, federal estate taxes will have to be paid. In 2020, the amount that won’t be taxed is $12.92 million. This means that a person can leave $12.92 million to their heirs without having to pay any estate taxes at all. Also, if the two people are married, the exemption would double to $25.84 million. If the trust is set up right, the money from your death benefit can be used to help pay taxes on your other assets.

 

For example, let’s say you have a $15 million estate made up of real estate, retirement accounts, and stocks. Your beneficiaries would have to pay estate taxes for that amount. Your trustee could pay that tax with the money from your death benefit. This lets you beneficiaries get the full value of all other assets outside of the ILIT.

State Estate Taxes

Even if you don’t have to pay the federal estate tax, depending on where you live, you may still have to pay the state estate tax. When compared to the federal level, the amounts that are exempt from these estate taxes are much lower. Here are the states that charge an estate tax and their asset exemption limits:

  • Connecticut – $12.92 million
  • Hawaii – $5.49 million
  • Illinois – $8 million
  • Maine – $6.41 million
  • Maryland – $5 million
  • Massachusetts – $12.92 million
  • Minnesota – $3 million
  • New York – $6.58 million
  • Oregon – $1 million
  • Rhode Island – $1,733,264
  • Vermont – $5 million

You Control The Benefits

With a trust, you, as the grantor, can give specific instructions about how the death benefit will be used. Usually, the beneficiary gets the money from a death benefit in one lump sum or several payments over a set amount of time. With an ILIT, you can give extra instructions. Like holding back money if the beneficiaries are too young. Or even setting aside portions of the money into investment accounts that can be accessed later. Having the money from a life insurance policy owned by an ILIT can help protect the benefits of a trust beneficiary who gets government help. Like Social Security disability income or Medicaid. The Trustee can keep a close eye on how the trust’s money is spent so that it doesn’t affect the beneficiary’s ability to get government benefits.

Disadvantages of ILITs

ILITs could help people reach certain tax and estate planning goals, but ILITs can also have the following problems. Before starting an ILIT, think about these things.

No Modifications 

Once you give your life insurance policy to an ILIT, you can’t give it to another trust or entity. This is because you’ve given up all rights to your coverage. Imagine you set up an ILIT and named your spouse as a beneficiary. After a few years, you get a divorce and want to take your spouse off the policy. There is no easy way out of this situation unless specific language was added before the trust was put into action.

Potential Taxes

If you die within the first 3 years of setting up your ILIT, the trust’s life insurance policy may be automatically added to your estate. If the payout from your life insurance is part of your estate, it could be taxed along with the rest of your assets.

You Don’t Own Your Life Insurance

With an irrevocable life insurance trust, the policy is owned by the trust and not by you. Most of the time, you can’t change your life insurance policy after you set up an ILIT. Your trustee is in charge of making sure that your policy is managed and paid out according to the rules of the trust.

Choosing Life Insurance

If you are setting up an ILIT and choosing a new life insurance policy at the same time, you are in a great position to choose the best policy for your needs. This could be a term policy, which lasts a specific amount of time. However, it’s more likely with an ILIT that you will choose a whole life policy. The good news is, there is no rule about what kinds of life insurance you should include in your ILIT. To make sure you get the results you’re aiming for you may want to work with a lawyer, a financial advisor, and an insurance agent. Among the three, you’ll make sure all your bases are covered when you set up your ILIT.

Who Should Get an ILIT

ILITs are best for people with a high net worth who want to avoid paying higher estate taxes if they don’t have to. Parents who want the money to go to their minor children can also use an ILIT. This makes sure that the money goes to care for their children and doesn’t get stuck in court. 

 

Most people won’t need to include the complexity of an ILIT in their end-of-life planning like paying for a funeral or cremation. So a strong will, a revocable trust, and an insurance policy will be enough for their estate plan. Since the trust can’t be changed once it’s set up. It’s best for people who have special needs when it comes to estate planning.

Working With EZ

Your family will still have bills to pay after you die, and they will need your help more than ever. The last thing you want them to worry about while they are grieving is money. There are many great options for low-cost life insurance that will give your family enough money for a low monthly price. Working with an agent who specializes in life insurance is the best way to find the right policy for you and your needs. At EZ.Insure, we know that you and your family want the best coverage but we also know you have to stay within your budget.

 

So, we will do everything we can to find you the best policy at the best price and we want to make it as easy as possible for you to do so! We’re here to help, and the best part is that everything we do is free. We will help you with everything, from answering all of your questions to helping you choose a policy and finish the enrollment process. We will also help you after your plan has started. To get started, just type your zip code into the bar below or give us a call at 877-670-3560.

Ways Your Lifestyle Affects your Life Insurance

Ways Your Lifestyle Affects your Life Insurance text overlaying an image of a table with fruit, workout equipment, a prescription and a stethoscope on it There are several factors that determine life insurance costs within a plan. The cost of a policy can be based on how long you are expected to live as well as your risk category. The three most common risk classifications are preferred, standard, and substandard. The Standard risk class is typically the starting point for underwriting life insurance. It represents a risk comparable to that of others of the same age and gender. 

 

Then, a life insurance underwriter looks for risk factors that may increase or decrease your likelihood of dying before your natural life expectancy. If you have a lower risk of premature death, you may qualify for preferred risk classes. If you have a higher risk, you are assigned substandard risk classes. The higher your risk, the more expensive your life insurance policy will be.  The cost of a policy can change based on your age, gender, family medical history, overall health, and your lifestyle choices. This is measured by comparing your stats to those of other people whose lifestyles are similar to yours.

 

If you are in a high-risk group (substandard), it means that statistically, you are more likely to die at a younger age. As a result, your policy will be more expensive because the insurance company assumes you will pass away younger. Therefore, you’ll make fewer payments than people in a low-risk group. There are some things you can’t change, like your age and your family’s health history, but there are choices you can make that will affect how long you’ll live. 

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Smoking

People who smoke are more likely to have greater health problems down the road. Some of these health issues would be cancer, heart disease, strokes, lung diseases, diabetes, and asthma. This makes smokers a bigger risk for insurance companies, so your life insurance policy will cost more. Even if you only smoke a few cigarettes every now and then, you are still considered a smoker. 

 

When applying for life insurance, be sure to give honest answers about your life choices. Such as smoking because if it leads to an illness down the road and the company did not know about it, there is a chance your family might not get the money from your life insurance policy.  Also, there is a chance that you could also be medically checked before getting insurance. Which could show that you have nicotine in your system. 

 

Note that “smoking” includes more than just cigarettes. It also includes vapes and e-cigarettes, cigars, pipes, nicotine replacement therapies. As well as any other way to get nicotine into your body. 

Alcohol

Drinking alcohol once in a while won’t change your premium, but if you drink often, this is another thing you may need to think about when applying for life insurance. Drinking consistently has been shown to lead to illnesses such as liver disease, cancer, kidney problems, heart problems, and high blood pressure. If a health problem caused by drinking ends up being fatal, the insurance company can void the policy. Unfortunately, this means that your loved ones won’t get the money you worked so hard for. 

Risky Hobbies

Your insurance policy will be more expensive if you are considered a high-risk insurance candidate because your chosen ventures could harm you or be fatal.

 

These activities include scuba diving, hang gliding, race car driving, flying a plane, off-roading, parasailing, bungee jumping, and any extreme sports. Of course, this only applies if you do these things fairly often. If you go scuba diving once in a while, such as when you’re on vacation, it won’t necessarily affect your insurance premium. 

 

Basically, the more often you do these things and the more dangerous they are, then the more likely it will be that they will affect your life insurance premium. We know that these types of activities really keep life interesting and fun, but be sure to keep in mind the risk that comes with it.

Hazardous Job

Your job can also affect how much your life insurance plan costs. This is because your chosen occupation can be considered more dangerous depending on what it entails. For example, someone who works at a desk during regular hours is thought to be less of a risk and therefore pays less. On the other hand, someone like a construction worker would have to pay more. Because their job has more risk factors, such as being on the roof of a tall building or using power tools. 

 

In this case, there isn’t much you can do to reduce the risk, unless you can find a job that is safer and less risky. Most of the time, this is too much to ask, since changing your whole career is usually a very stressful thing to do. 

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Your Body Mass Index (BMI)

Based on your height, your weight affects how much you pay for life insurance. A build chart is used to figure out how your height and weight compare to each other. Then, your results are compared to the death rates for people who have a similar build. If you are more or less than the preferred ratio, you will be seen as a higher risk and have to pay more for your insurance.

 

This is because being overweight makes you more likely to have health problems. Such as heart disease, high blood pressure, type 2 diabetes, stroke, cancer, or a mental illness. On the other hand, being underweight can cause anemia, osteoporosis, and a weaker immune system.

 

Something to be aware of is that if you lose or gain weight right before you apply for insurance, it is unlikely your rate will go down. You will have to show that you can consistently keep your weight at a healthy level. You can show that you’ve been working toward a healthier lifestyle by taking up a sport, going to the gym. Or even working with a personal trainer. However, be aware that your insurance rates won’t go down if you make big changes all at once. 

Driving Record

Unsafe driving is a factor that can lead to fatality at a young age. Something like receiving multiple speeding tickets would show insurance companies that you are not interested in your own as well as others safety on the road. Also, if you drive carelessly, it may be a sign that you are also careless in other areas of your life. 

 

Insurance companies will be looking at the most recent part of your record. Which is usually the last 5 years when deciphering your policy rates. When they are looking at your record, small parking tickets aren’t considered a large red flag. 

Illegal Substance Use

Drugs are bad for your health and can even be lethal. Especially if you are considered an abuser of drugs or take prescription medication constantly. The price of your life insurance will change if you use illegal drugs like marijuana, cocaine, heroin, and so on. The medical test you have to take before getting life insurance will show if there are drugs in your system. Whether you said so on your form or not. If you test positive for drug use, you will need to show further proof that you don’t use such substances. Otherwise your application will be denied. Those working on sobriety will have to show that they are not still using illegal drugs in order for an insurance company to consider their application. 

 

The same as the other life choices, if you don’t tell your insurance company about your drug use and then perish in a drug-related accident. Your loved ones will not get the money from your life insurance, even if you’ve paid your premiums overtime.

Frequent Foreign Travel 

Traveling has its own risks, which is why if you travel a lot, your life insurance premium might be higher. The price will depend on how often, when, for how long, and where you travel. The destination is important because some countries are safer than others. For example, some countries have higher crime rates or have a higher risk of individuals getting diseases that can kill. The amount of time you spend at your destination and the number of times you travel will also affect your costs as they affect the level of risk. Flying is linked to how often you travel. Since it is a high-risk way to travel, the price of your life insurance policy will go up if you do it often. 

Medical History

Your medical history shows how often you go to the hospital or the amount of doctor visits. If you put yourself in dangerous situations often and end up needing medication, surgery, or treatment. This will, of course, affect your insurance. 

Work With EZ

At EZ.Insure, we know that you want the best coverage for you and your family. But you also have to stick to a budget. That’s why we’re committed to finding you the best policy at the best price. And we want to make it as easy as possible to do so! We’re here to help, and the best part is that everything we do is free. We will help you with everything. From answering all of your questions to helping you choose a policy and finish the enrollment process. We will also be there to assist you after your plan has started. To get started, just type your zip code into the bar below or give us a call at 877-670-3560.

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Whole Life Vs Term Life Insurance

whole life vs term life insurance text overlaying image of two different colored doors There are many aspects of life that are beyond our control, most of all being when it will end. Even though you have no control over that. You can take steps to ensure that your family is not put in a financially precarious situation when the time comes. It’s time to look into purchasing life insurance. And once you start searching, you will notice that there are many different kinds of policies available. The first thing you have to decide between is if you want temporary (term) or permanent life insurance (whole life). Most people have trouble deciding which one is a better fit for them. Some even end up switching from one to another. To start you need to understand the fundamentals of each, including the pros and cons. Below we’ll look at each policy and then compare them for you.

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Term Life Insurance

Term life insurance is the more affordable of the two, because unlike whole life insurance, it does not last forever. You have the ability to choose how long you want to be insured when you purchase this kind of policy. The length of time (known as the term) can typically range anywhere from 10 to 30 years. But there are companies who offer shorter or longer terms as well.

 

Your beneficiary will only receive the face value of the policy from your estate. And there is no cash value that can be withdrawn from the policy before you’ve passed away. This is one of the primary differences between your two options. People who want to be covered for a set amount of time, such as while they are still making payments on their mortgage or other loans, are the best candidates for this kind of insurance policy. Additionally, if needed, you can convert your term policy to a whole life policy.

Types Of Term Life Insurance

There are several types of these policies. Below we’ve highlighted a little bit of each of them to give you an idea of how term life insurance works.

Level term

This type of term life insurance policy is the most common type and is often the type people choose. The reason for its popularity is simple. Both the death benefit and the premium are set when you purchase your policy. Meaning they don’t change during the entire term. You’ll never suddenly have to pay more a month or suddenly have a smaller death benefit. Making this type straightforward and easy to manage and afford.

Annual renewable

Coverage under an annual renewable life insurance will last for 1 year. You are able to renew your policy every year however, the premium will rise each year due to your age. This type of policy is best for meeting short-term needs for life insurance coverage. This is because the policy will eventually become expensive the longer you have it. If you want a longer coverage it’s more beneficial to choose a different option.

Increasing term

With these policies your death benefit will increase at a steady predetermined rate over the length of your term. For example, your health benefit could increase by 5% every year. Meaning over the course of your term your coverage becomes more valuable. However, increasing benefits typically means increasing premiums. 

Decreasing term

This policy is the exact opposite of an increasing term policy. With these your death benefit will decrease over your term but your premiums will remain the same. But why would anyone want a smaller death benefit? Great question, this type of policy is typically meant for someone who wants to make sure a specific loan or debt is covered once they pass. For example say you have a large mortgage and you want to make sure it’s paid off for your family if you pass away. As you pay off your mortgage while you’re alive the death benefits decrease, matching the loan amount. That way when you pass the amount your family would need to finish off the loan will be available to them. This ensures they can remain in their home and not have extra stress of worrying on top of their grief. 

Return-of-premium

Return-of-premium life insurance, also referred to as ROP insurance, is a type of term life insurance that will return your payments in the event that you outlive your coverage. The premiums for ROP policies are significantly higher compared to those of other term life insurance types. On the other hand, you may find that the possibility of having your premiums returned to you is a valuable feature of this kind of insurance policy.

 

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Whole Life Insurance

Whole life insurance is a life insurance that will remain in effect for your whole life. Because of this, the cost of this policy is significantly higher than the cost of term life insurance. These policies come with a cash value that makes these policies an investment as well as provide protection. You can borrow money or take money out of the cash value of your policy whenever you need and a portion of your premium payment is always added to the cash value of your policy. If you pay your premiums in accordance with the guidelines set forth by the government, you will be able to withdraw tax-free the majority or all of what has accumulated in your account.

Types Of Whole Life Insurance

Just like with term life insurance, there is an array of options available to policyholders when it comes to whole life insurance. This gives you the ability to select the precise coverage you require along with the benefits you desire:

Indexed

A type of permanent life insurance that includes a cash value, which earns interest based on an investment index chosen by your insurer. For the vast majority of individuals, purchasing indexed whole life insurance is not the most prudent financial decision. It is possible that your cash value will grow faster than it would under a traditional whole life policy. However, this rate will be lower than what you would receive from a savings or checking account. The minimum rate of return on your cash value is determined by your provider and the majority will also determine your earnings’ maximum rate of return. In addition, these policies may not be the best option because cash value accounts incur fees, whereas traditional savings accounts do not.

Modified

The initial payments for a modified whole life policy, also known as a modified premium whole life policy, are affordable. After the initial payment period (2 to 5 years) finishes, the premium will increase once and then remain constant for the remainder of the policy’s term. Rather than waiting until you’re older to purchase coverage, you can obtain a higher death benefit sooner by purchasing a modified premium policy. Even if you cannot currently afford the higher premiums but are confident that you will be able to in a few years. During your initial payment period, it may not be possible to add to the cash value.

Simplified issue

Simplified issue whole life insurance is a permanent form of life insurance. Therefore, you are covered for the duration of your life. However, its coverage is less extensive and it is restricted to those aged 45 and older. If you apply for this type of policy, you will not need to undergo a medical exam. Instead, you will be asked a few health-related questions. Insurers will charge you a higher premium for a lesser coverage amount with this policy because the health evaluation is not as thorough. The expedited application process will result in almost immediate coverage. However, you should be aware that even with simplified issue policies, there are still conditions that can prevent you from acquiring coverage.

Guaranteed issue

Guaranteed issue life insurance does not require any type of medical underwriting. In other words, neither a medical exam nor questions about your medical history will be required. There is a catch -this type of life insurance requires you to pay a higher premium in exchange for a smaller death benefit. In addition, after purchasing this type of policy, you will be subject to a waiting period. During which death benefits will not be paid out.

 

In addition, you will not be covered if you die from certain causes (such as suicide) in the first few years after purchasing the policy. This doesn’t mean that guaranteed issue policies have no value. Due to the guaranteed issue nature of these policies, they can be a lifeline if you are over a certain age or have health issues that make traditional insurance policies unaffordable. In most cases, however, the maximum coverage amount for these policies is $25,000.

The Differences

Both term and permanent life insurance require a monthly premium payment. In exchange, your beneficiaries will receive a predetermined amount of money (your death benefit) upon your passing. The length of the policy is the primary distinction between these types of insurance. 

 

When purchasing term life insurance, you will be required to choose the duration of your coverage, typically between ten and thirty years. Your policy will terminate at the end of that period. If you outlive your policy, your beneficiaries will not receive any death benefits. You will then be required to decide whether to purchase a new policy or extend your current one. In both scenarios, your premiums will likely increase because you will be older and may have developed health problems. 

 

A major disadvantage of term life insurance is the possibility that your policy will expire and you will have to extend or repurchase it. However, with whole life insurance, you may pay higher premiums, but the policy covers you for the remainder of your life. In addition, many whole life policies have a cash value – similar to a savings account – that accumulates money over time.

Which Is Best For You?

When selecting the life insurance policy that best meets your requirements, you must consider your assets, loans, budget, and desired duration of coverage. Do you want to ensure that expenses such as mortgage payments and college tuition for your children are covered? Then a term plan is an excellent and inexpensive option. Do you want to accumulate a cash value that you can borrow against and that your family can use when you die? Then your whole life will function better for you.

 

The premiums for both whole life insurance and term life insurance are fixed for the duration of the policy. But whole life insurance is more expensive because it remains in effect until death. Whereas term life insurance expires after a set period of time. If you are on a tight budget, you should purchase term life insurance, but if you want to build cash value or have long-term dependents, you should purchase whole life insurance. 

 

We recommend consulting with a licensed agent before selecting a life insurance policy. They will be able to discuss your options and determine the best plan for your requirements. Don’t wait until you need life insurance to compare rates from the listed, highly-regarded insurance providers. Always check multiple sites to ensure that you have negotiating power and that you are aware of the unique benefits of each company. Ensure that a difficult time for your loved ones will not be exacerbated by a financial burden by comparing life insurance rates today. Start comparing today by entering your zip code in the box below or giving us a call at 877-670-3560.

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Individual vs. Group Life Insurance: Which is Best For You?

individual vs group life insurance which is best for you text overlaying image of a group of people Life insurance is an important way to ensure your families stability if anything should ever happen to you. Oftentimes you will need to go out and get a life insurance policy on your own. But sometimes your employer will provide you with a life insurance plan through their company. This is known as a group life insurance policy. If your employer does offer a group life insurance plan you might be thinking ‘great now my family is covered’. But is it really good enough to have just a group life insurance policy?

 

It might not cover everything your family needs. Even with this plan you might need to consider also getting an individual life insurance policy. In order to know which plan is best for you, or if you need both you will need to weigh the pros and cons of both types of plans against your lifestyle and needs.

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Group Life Insurance

Most of the time when looking for life insurance, you have to fill out an application. If you’re accepted, you can buy a policy that covers you. Group life insurance is different because it is given to a group, like a company’s employees. With a group policy, employees usually get a base amount of coverage and, in some cases, the chance to add more coverage by taking it out of their paychecks. One important thing to remember is that this kind of group coverage usually only lasts as long as you work for that company. If you leave your job, you might not be able to keep your group life insurance policy. 

Group Life Insurance Pros and Cons

The advantages of group life insurance are that there is no medical underwriting, or very little if any. If your employer has a group policy, you may be able to get insurance without having to answer questions about your health. Or get a physical as your employment makes you eligible. Most of the time, group life insurance is a simple offer that can be accepted without any questions about your eligibility. And more than likely it shouldn’t cost you anything. If a company advertises life insurance as a benefit for employees, they will usually pay for the premiums. 

 

Now the downside of group life insurance is that there may not be enough protection within the plan options. You also often do not get to pick how much coverage you receive. It is up to the company you work for. The amount of coverage you actually need depends on your life and personal responsibilities. But a good rule of thumb is to think about how many years of your income you’d like your family to have if you died. You will need to compare that to the amount of coverage your group plan has offered. Then decide if you need to get additional coverage or if your group plan is enough.

 

Also remember after leaving a company, there is a chance you could lose your life insurance policy. Some group policies end when you leave the company, but there are others that are “portable,”. Which means you can turn a group life insurance policy into an individual policy. You will need to look over the details of your plan or speak to an agent to find out the specifics of your life insurance coverage.

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Individual Life Insurance

Life insurance is essentially a contract between an insurance company and you. It says that in exchange for a monthly premium, when you pass away the life insurance company promises to pay a set amount of money to your beneficiary, or beneficiaries. With individual life insurance policies, you purchase them on your own and you can choose either a:

 

  • Term life insurance policy – This is the most common type of life insurance and generally the most affordable. You choose a specific duration of coverage typically between 10-30 years. Your premium will remain the same throughout the entire term. If you pass away during the term your beneficiaries will receive your death benefit tax-free. If you outlive your policy, you may be able to extend coverage in 1-year increments. There are also some types that will let you convert to a permanent life insurance policy.
  • Permanent life insurance policy – This type of policy, also known as traditional life insurance, is guaranteed to remain in effect for your entire life, as long as you stay up to date on your premiums. In addition to giving your beneficiaries a death benefit when you pass away these policies also often come with a savings component. Meaning as you pay your premiums you will start to build a cash value that also increases with interest. With enough cash value your policy can actually begin to pay for itself from the savings component.

Within these two types of life insurance are several subtypes. Giving you a large variety of options to find a plan that is perfectly suited to your needs.

Individual Life Insurance Pros and Cons

Even if you have group life insurance, it’s a good idea to learn more about individual term life insurance as well. First you will need to figure out what kind of life insurance you need. Then weigh the pros and cons of each. For pros, when you buy a life insurance policy for yourself, you can take it with you wherever you go. As long as you pay your premiums, your policy is good. It doesn’t rely on you staying at the same job as your group life insurance. Other benefits include:

 

  • Choosing how much coverage you want and how long the term lasts. Death benefits from term life insurance can range from $50,000 into the millions, with policies lasting anywhere from 1 for 30 years.
  • Younger and healthier enrollees generally have lower premiums, and if you buy a level-premium term life insurance policy your rate will never go up while the policy is in effect. Meaning the younger you are the easier it is to lock in a more affordable rate compared to buying when you’re older.

As for the cons, you have to pay for it out of pocket. The rate you pay will depend on how healthy you are and lifestyle. People who are older, not in great health, and smoke cigarettes are likely to pay more for their insurance compared to a younger, healthier person who doesn’t smoke. 

 

Additionally, you can be turned down after applying for your policy. During the process of underwriting, insurers do a risk analysis. Which weighs out how risky it is to insure you. Meaning they might not give you a policy if something in your past raises a red flag and makes you too much of a risk. 

Do I Need an Individual Life Insurance Policy If I Already Have A Group Policy?

When deciding on the amount of coverage or how many policies you need, it’s important to consider any dependents you may have. For example, if you are single, healthy, and have no dependents you’re less likely to need extra life insurance. As long as your group policy covers your current debts and any funeral expenses, you should be ok with just a group plan.

 

On the other hand, if you have a family you need to take them into consideration. Suddenly losing your income due to your death can be a scary situation especially when you are the sole provider of your family. If your family relies on your income and would have trouble paying bills without it, an extra life insurance policy is a smart investment. It helps you ensure that between the death benefits from the group policy and your individual policy all of their needs will be met.

 

If you do need extra coverage, one thing to look into is whether or not the insurance company your employer has chosen offers extra life insurance. Meaning you can raise your death benefit and pay the difference of raising it. This can be a cheaper way to add coverage to your current policy without having to go through underwriting since you already have the policy through your job.

 

Another thing to consider is the type of group policy you have. If your employer’s group life insurance is a term policy, you might be better off with an individual whole life policy. This is because you can outlive your term policy and end up having no death benefits when you pass away.

Working With an EZ Agent

It’s important to remember that your needs for life insurance will probably change as time goes on. A few things that can cause a change with your life insurance policy would be aging, number of dependents, health status, and job status. The choices you make about life insurance today aren’t set in stone. You can add or take away policies in the future. Just keep in mind that as you get older, you are more likely to have health problems and have to pay a higher premium.

 

Everyone has their own needs, priorities, and ways they can spend their money. At EZ.Insure, we know that you want the best coverage for you and your family. But you also have to stick to a budget. That’s why we’re committed to finding you the best policy at the best price, and we want to make it as easy as possible to do so! We’re here to help, and the best part is that everything we do is free. We will help answer all of your questions as well as help you choose a policy and finish the enrollment process. We will also continue to assist you after your plan has started. To get started, just type your zip code into the bar below or give us a call at 877-670-3560.

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Do I Need Life Insurance if I Don’t Have Dependents?

If you’re single and have no children, you’re not alone in thinking that life insurance is not a necessity for you. But even if you don’t have anyone who financially depends on you. There are a lot of reasons why life insurance is important. Not only do situations change over time, but if you wait until you’re older to purchase a life insurance policy, it will cost more than it would if you were to purchase one right now!woman in a white t-shirt thinking with the article title next to her in a thought bubble

Why You Need Life Insurance Even if You Don’t Have Dependents

You Might Have Dependents One day

Life is full of unknowns, including where your future will take you. Just because you don’t have any dependents now doesn’t mean you won’t later on in life. If you meet that special someone, and get married and decide to have children later in life, you will need to consider a life insurance policy. When it comes to life insurance, it’s generally best to think about the future, rather than your present situation.

You Want to Help with Your Funeral Expenses

Even though you might not have any dependents, someone in your family is going to have to be financially responsible for your death. On average, a funeral can cause around  $15,000. Which is a lot of money to expect your family to take on in the event of your passing. Having a life insurance policy, even if it’s a basic one such as a final expense life insurance policy, can ensure that these expenses are covered. So no one in your family has to be financially burdened with the costs.

You’re a Family Member’s Caretaker, or Might Become One image of a younger woman helping an elderly man out of a chair

As parents or grandparents age and potentially become ill, one of their children/grandchildren will often take on the responsibility of taking care of them. This can include cleaning the house, cooking, helping pay bills, and doing any number of household chores. If you are or might end up in this situation, and something were to happen to you, everything that you did for your parents would have to be done by a nurse. Which could cost your family money they might not have. Having a life insurance policy would provide your family members with enough money to get the care that they need.

You Have Other Potential Beneficiaries

Just because you don’t have any dependents, doesn’t mean that you don’t have possible beneficiaries. It could be anyone in your life that could benefit from a life insurance payout. Like your parents, siblings, or anyone else you choose to leave money to. 

Finding the Right Plan

A life insurance policy is the right choice for everyone, no matter if you have dependents or not! But if you’re not sure which policy is best for you, your best bet is to compare policies from different companies. There are many great affordable life insurance options to choose from that will provide enough money for your beneficiaries, for a low monthly price. 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.

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EZ.Insure is privately owned and operated by Licensed Agent Clelland N. Green and (Benepath Inc.) d/b/a Benepath Insurance Agency. Invitations for applications for insurance on EZ.insure are made through Clelland N. Green and Benepath Insurance Agency, only where licensed and appointed. Clelland N. Green and Benepath Insurance Agency are licensed to sell insurance products in the following states: AL, AZ, AR, CA, CO, CT, DE, FL, GA, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WA, DC, WV, WI, WY and licensing information can be found here.
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