life insurance riders Archives

Survivorship Life Insurance – What You Should Know

When it comes to life insurance, married people have two choices, individual policies or joint policies. Most couples buy separate policies for each person. But for some couples it makes more sense to get a single policy that covers both people. Choosing to buy a policy together you can buy a joint policy or a survivorship policy. A joint policy is known as a first-to-die policy. Meaning that though both people are covered the benefits are paid out when one of them passes.

Survivorship policies are called second-to-die insurance, meaning that benefits aren’t paid until both members pass away. Most couples don’t choose survivorship policies because it takes longer for the death benefit to pay out. However, survivorship policies are useful for estate planning and a source of money for children or grandchildren who may always depend on their parents. Below we’ll go into detail about how survivorship policies work so you can decide if one is right for you.

How Survivorship Life Insurance Works

A survivorship life insurance policy can either be a term or permanent policy. A term policy covers you for a certain number of years before you have to renew it. A permanent policy, on the other hand, covers you for the rest of your life as long as you pay the premiums. Most policies for survivorship life insurance are permanent. Most people buy survivorship coverage with permanent whole life or universal life insurance instead of term life insurance.

The reason is simple: most couples who buy a survivorship policy don’t want protection for a short time. Survivorship policies don’t pay out until both people who are covered die. So, when the first person covered by the policy dies, the second person must keep paying the premiums to keep the policy going. When both policyholders die, the death benefit is paid to whoever the policyholders named as their beneficiary. Permanent life insurance builds up cash value that can be used if necessary.

Reasons To Have A Survivorship Policy

Estate Planning

Typically couples with a high networth often buy survivorship life insurance so that their children will pay less in estate taxes once they pass away. When the first spouse dies, the other spouse will not have to pay taxes. However, if their combined assets are worth more than the federal exemption level, beneficiaries have to pay federal estate taxes once the second spouse dies. There are currently 12 states plus the District of Columbia that have even lower estate tax thresholds. And 6 states have inheritance taxes. If both spouses die at the same time, a survivorship policy can help pay estate taxes and other costs immediately. It can also help make sure that the beneficiaries get an equal share of the assets. Especially if the assets, such as a family business, are hard to sell.

Business Succession

Survivorship policies don’t necessarily have to be a married couple, it can be any two people, even business partners. When both business partners pass away, a survivorship policy can give the money needed to transfer the business to its new owner. If there is more than one new owner, the death benefit can be split amongst each of the business partners to make sure there is enough money to take over the business.

Caring For Permanent Dependents

If you have a child with special needs or another person who will always depend on you. A survivorship life insurance policy will make sure that you leave enough money for them to be taken care of for the rest of their lives. The money from the policy could be put into a special needs trust. So, that if both parents die, the child will still have some money.

Coverage With Medical Issues

When one spouse can’t afford individual life insurance because of a medical condition, but the other is in good health, a survivorship policy can be a cheaper way to get coverage.

More Affordable

Most of the time, buying a permanent life insurance policy can cost five to fifteen times as much as buying a term life insurance policy. But permanent survivorship life insurance policies can sometimes be cheaper in the long run than buying two separate policies.

You Need Cash Value

Survivorship policies can be set up so that the cash value of the policy helps the spouse who is left behind. Even though the death benefit won’t be paid out until both of the policyholders have died. Some permanent policies can build up a cash value that can be used while one of the spouses is still alive. If the policy builds up enough cash value, the surviving spouse can take out a loan from it to pay for funeral costs or policy premiums while the policy is still in force.

Policy Costs

In general, it costs more to buy two separate $1,000,000 policies than to buy a single $1,000,000 survivorship policy. It’s easy to see why. With two separate permanent policies, insurance companies have to plan for a total payout of $2,000,000. However, when two people are covered by a single life insurance policy, the total payout is only half as much. Individual life expectancy is also longer than joint life expectancy, since one insured person usually dies after the other. This means that second-to-die policies may be cheaper than first-to-die policies. But the actual cost of a life insurance policy can vary a lot depending on many things. Such as age, health, lifestyle, type of insurance, and the insurance company. Riders are extra features that can be added to a policy to make it fit the needs of the policyholder. Here are some examples:

Estate Preservation Riders – These are used for tax planning purposes when extra death benefits may be needed in the first few years of the policy.
Level Term Rider – Provides extra coverage for each insured person up to age 95. The rider, which each insured person must apply for on their own, can usually be changed to a whole-life policy if it is done before a certain age.
Monthly Deduction for Death and Disability Waiver – This benefit, which only applies to one of the insureds. Can help make sure the policy stays active by waiving premiums if the couple’s income drops because of death or disability.

Survivorship Pros and Cons

A survivorship life insurance policy can help you and your spouse take care of your family after you’re gone. However, this type of life insurance has some drawbacks. Before you buy a life insurance policy, you should think about the pros and cons to see if it’s the right choice for your family.

Pros

When deciding on a survivorship policy, most couples think about how much it will cost. Whether it’s first-to-die or second-to-die. The premiums on a joint policy are likely to be more affordable than the premiums on two separate policies. First-to-die policies cost more money than second-to-die policies. The ability to make your inheritance equal is another benefit of a survivorship policy. Forbes says that if you have more than one beneficiary, you can set up the policy through a trust that will divide your death benefit equally among all of your dependents.

Lastly, the process of getting a survivor policy is less strict than getting other types of life insurance. This means that if you or your spouse have health problems that might keep you from getting a traditional life insurance policy, you may still be able to get coverage through a survivorship policy.

Cons

Most couples think about how much it will cost when they choose a survivorship policy. Whether it’s first-to-die or second-to-die, the premiums on a joint policy are likely to be cheaper than the premiums on two separate policies. Policies that pay out more when the first person dies are called “first-to-die” policies. A benefit of a survivorship policy is that you can make sure that everyone gets the same amount of your inheritance. Forbes says that if you have more than one beneficiary, you can set up a trust that will divide your death benefit equally among all of your dependents.

Lastly, it’s easier to get a survivor policy than it is to get other types of life insurance. This means that even if you or your spouse have health problems that might keep you from getting a traditional life insurance policy, you may still be able to get coverage through a survivorship policy.

Life Insurance With EZ

Not sure what kind of policy you need or where to start? You have to compare plans to find the best one for your needs because there are so many different kinds of life insurance. You could use online tools or talk to an agent. Everyone has their own needs, priorities, and ways they can spend their money. 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.

10 Commonly Misunderstood Insurance Terms

Insurance lingo can be confusing, which can leave you feeling a bit overwhelmed, or even downright turned off if you’re trying to purchase a policy. Trying to understand terms like contestability period, underwriting, accelerated death benefit, and more can be enough to make you want to close your laptop and give up. Don’t worry, though, below are the most commonly misunderstood insurance terms with their definitions, so you can be a life insurance pro in no time!

1. Accelerated Death Benefits

Accelerated death benefits are a type of rider (see below) that can be added to a policy, which lets you use some of your life insurance death benefits before you pass away. This is usually meant for people who are terminally ill and need money to help pay their medical bills, such as bills for hospice care.

2. Annuity

You (or your beneficiaries) can choose how to receive your benefits after you pass away; an annuity is one choice that will give your beneficiaries an income for life. An annuity allows you to save money on taxes and is flexible in terms of how you get paid, when you get paid, and for how long you receive payments. Annuities are popular among retired people because they can offer protected income for the rest of their life.

3. Contestability Period

During the contestability period, which is a set amount of time after you’ve purchased your policy, your insurer will review your application to make sure you didn’t misrepresent anything; if you pass away during this time, your insurer might investigate (and possibly deny) claims. This period usually starts as soon as the policy is issued and will usually last for around 2 years.

4. Conversion Right

calendar with 31 days — *If you miss a premium payment, some insurers will allow you a grace period.*

If you have a term life insurance policy, you might be able to convert it into a permanent life insurance policy later on. Policies that include this option are known as conversion right term life insurance policies.

5. Grace Period

If something happens and you miss a premium payment, some insurers will allow you a grace period, or extra time to catch up on your payments, before they terminate your policy. This will usually only last around 30 days, and after it is over, you could lose your policy.

6. Insurable Interest

If you want to take out a life insurance policy on someone else (with their knowledge), you will have to prove insurable interest. This means you will have to show that you would suffer some kind of financial harm if the person were to die.

7. Living Benefits

Some life insurance policies will provide benefits while you are still alive, such as the accelerated death benefits mentioned earlier, long-term care benefits, and policy loans.

8. Preferred Rates

Cheaper, or “preferred,” rates are offered by insurers to applicants who are at a lower risk of dying. Life insurance companies decide who to offer preferred rates to by looking at health history, smoking habits, gender, and lifestyle.

9. Rider

This is an additional amount of coverage that you can add to your life insurance policy or an extra option that you can add for coverage, like a long-term care rider.

10. Underwriting

This is the process that insurance companies use to decide if they want to offer you a policy, and what your rate will be. When you apply for life insurance, a professional called an underwriter will look at multiple factors, including your health and lifestyle, and make a decision.

Need Help?

Hopefully, you’re feeling more confident now that you know these common terms, so now it’s time to find the right policy for you! Remember, 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 is money while they are grieving. There are many great affordable life insurance options to choose from that will provide enough money for your family, 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 specializing 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.

Is Residual Disability Insurance Enough?

Approximately 20% of Americans are living with some form of disability, and that can mean being unable to work, and dealing with a lot of financial strain. But if you can no longer work due to a disability, and you have disability insurance benefits through your job, you might get some financial help, depending on your policy’s definition of disability. And if you can return to work part-time, you can still receive partial disability, or residual disability benefits – this is great, but is it enough? And if your job doesn’t offer insurance with residual disability benefits, should you buy it on your own, or should you consider purchasing a life insurance policy with disability riders?

Definition of Disability

black and white picture of handicap sign — *Life insurance companies have different classifications of who can receive what benefits for how long.*

When it comes to receiving disability insurance benefits, it all depends on your insurance policy’s definition of disability: the definition of disability can differ between different insurance companies. Their different classifications of who can receive what benefits for how long include:

Total disability– You are completely disabled and you can’t work, and can receive your insurance benefits because you have lost your income source.
Partial disability– You can still work, but perhaps only part-time or on reduced duties, so you have lost part of your income. In most cases, you will still be able to receive benefits.
Extended partial disability– When your partial disability benefits run out, you might be eligible for extended partial disability, which is essentially the same as partial disability, but lasts for as long as you need with reduced benefit amounts.
Presumptive total disability– This is a form of total disability, meaning you will never recover from your disability due to loss of limbs, deafness, etc. There is no elimination period.

What Are Residual Disability Benefits & How Do They Work?

As mentioned above, when you are facing partial disability, meaning you can perform some of your duties at work part-time, you will receive residual disability benefits. Typically, you will get full disability benefits that last for 6 months and will then be reduced to a percentage of your monthly income, which will be based on how much income you have lost. Depending on your insurance company, though, a life insurance policy with a residual disability benefit rider could cover more.

Life Insurance Disability Benefits

So the question is: would the residual disability benefits on a disability insurance policy be enough for you or should you invest in a life insurance policy and add disability riders? Life insurance can be very affordable, and will be active for the rest of your life, not only while you are working, and can provide you with help if you become disabled. It will also leave your family with benefits in the event of your passing.

There are multiple long-term disability insurance riders available to add on to your life insurance policy, and many of them are free! In fact, this type of rider usually comes standard on a policy or can be added at no extra cost. Some different riders to consider include:

Waiver of premium– If you become totally disabled, and can no longer work or pay for your life insurance, this rider will cover your premiums until you’re no longer disabled, or until you reach a certain age, typically between 65 and 70.
Disability income rider- This type of rider provides monthly income payments if you are permanently disabled. Payouts are typically a percentage of the policy’s total coverage amount.
Long-term care rider– The money from this rider can help with living expenses if you have a chronic illness and are unable to complete daily tasks on your own.
Accelerated death benefit rider– You can get part or all of your policy’s death benefit while you’re still alive if you have a terminal illness. There are no restrictions on how the money can be used, which is great because you can use it to pay for medical care and treatments.

If you want extra protection, you can always have both disability and life insurance if you can afford it. If you cannot, though, consider looking more into life insurance and speaking with a licensed agent who can help identify which life insurance policy will suit you best, as well as which rider would be best in case of disability. Each company offers different rates and policies, which is why it is important to compare all of them.

Want More Information?

Before purchasing a life insurance policy, you should consider any additional riders you want to add on: riders are a great way to add coverage for unforeseen circumstances. If you need help finding a policy, or with reviewing your current policy, it’s in your best interest to speak to a local agent, who will help you compare plans and see which is the right fit for you. Consider also using online tools to see what is available. 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.

What is the Accelerated Death Benefit?

A life insurance policy is a great way to make sure your family is financially protected after you’re gone, but what if you become ill and your family needs financial help while you are still alive? Luckily there is a way to get benefits from your life insurance while you are alive. When looking for a policy consider adding an accelerated death benefit rider to your policy, which will provide you with money to be used for medical expenses if you become seriously, or terminally, ill. Do you have a family history of getting sick in your later years, do you just want to be cautious, or do you just want to be cautious? No matter what the reason, before you purchase a life insurance policy, find out how an accelerated death benefit rider can benefit you, and how it works.

What Is an Accelerated Death Benefit Rider?

sick person in a wheelchair being pushed by a young female — *An accelerated death benefit rider is beneficial to those who are terminally ill, and need help paying their medical bills.*

This type of rider allows you, the policyholder, to receive a portion of your death benefits before you pass away if you become terminally ill. It is a standard feature on most term life insurance policies; if it is not included in your life insurance policy, you have the option to add on this rider for an additional monthly premium fee. Generally this rider is meant to help with medical expenses, but you can use the money for anything you choose.

How Does an Accelerated Death Benefit Rider Work?

If you have an accelerated death benefit rider, most insurance companies will pay out if the insured is diagnosed with a terminal illness, and is expected to live no more than 1-2 years past their diagnosis. Every insurance company has guidelines on how much they will pay out on an accelerated death benefit rider; some will pay anywhere from 50-75% of your policy death benefit, and some will charge a one-time processing fee, usually $150. It is best to compare policies from different life insurance companies to determine which policy will provide the coverage amount you think you might need.

It is important to note that the benefits you receive for your medical expenses will be deducted from the death benefit your beneficiary will receive after you pass away.

Qualifying For An Accelerated Death Benefit

Accelerated death benefits are best for people with shortened life expectancies, or for those who have major medical bills due to an illness. The rider is triggered under the following medical circumstances:

Terminal illness– This is the most common reason to make a claim on an accelerated death benefit rider. To receive your benefit, you will need to provide certification from your doctor or a medical professional proving that you are terminally ill and have a life expectancy of 12-24 months.
Critical illness– You can also use this rider if you are diagnosed with a condition that will leave you with a shortened life expectancy, including cancer, heart attack, stroke, kidney failure, major organ transplant, or paralysis.
Chronic condition– Any condition that prevents you from performing 2 of the 6 daily activities for living (eating, bathing, toileting, continence, getting dressed, and mobility) will also allow you to make a claim.
Long-term care– If you must be permanently confined to a nursing home, hospice care, or an assisted living facility, you can use your benefits.

An accelerated death benefit rider will provide you with extra money to help with large medical bills that stem from a terminal or critical illness. Claiming on this rider should not be confused with borrowing cash value from a whole life or universal life insurance policy, but those permanent policies will likely also have the accelerated death benefit rider built in.

To learn more about accelerated death benefits and any other riders that you think could be beneficial to you, consider using online tools to see what is available, as well as working with an agent who will help you compare plans and decide 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.

7 Common Life Insurance Riders

Choosing a life insurance policy can be challenging, especially considering that basic life insurance policies sometimes don’t include the coverage you need. But the good news is that you often have the option to add one or more riders, or additional benefits, to your policy to customize it to your life and specific needs. For example, you can choose to add a disability income rider to your policy, which will help you financially in the event that you become disabled. This is just one example of a rider, but there are many different kinds that you can add on to your policy! Every policy is different, and every insurer will offer different riders, but knowing some of the most common life insurance riders can help you determine what kind of extra coverage you might need.

1. Guaranteed Insurability Rider

These riders, which are available on certain life insurance policies (like permanent life and term life), generally allow you the option to purchase extra coverage for your policy every 3 to 5 years, or even after a major life event, like getting married or having a child. The great thing about a guaranteed insurability rider? You can increase your coverage without undergoing another medical exam, so this rider is perfect for those who think their health might deteriorate in the future. It’s also a good choice if you’re currently on a tight budget, but want the option to easily increase your coverage in the future.

2. Accelerated Death Benefit Rider

Also known as living benefits, this rider will pay a portion of your death benefit while you are still alive if you are diagnosed with a terminal illness or a chronic illness that affects your daily life, or if you experience a critical illness such as a serious heart attack. This rider is available on permanent and term life insurance policies, and can help ease the financial burden of looking after someone who is chronically ill, or of end-of-life care.

caucasian man with crutches shaking a woman's hand — *If you lose your income due to an injury at work, a waiver of premium rider would exempt you from paying your policy premiums.*

3. Waiver of Premium Rider

Losing your income if you become disabled and unable to work would be a major strain on your family, especially if you are the main breadwinner in your family, but a waiver of premium rider would exempt you from paying your policy premiums until you could work again, so you wouldn’t have to worry about losing your life insurance. It applies if you are critically ill, seriously injured, or disabled, and if you are permanently disabled, you will pay for premiums by withdrawing from your death benefit. Before adding this rider, you will need to go over your terms and conditions carefully, because the term “totally disabled” differs from one insurance company to another.

4. Accidental Death Rider

An accidental death rider, also known as a double indemnity rider, will pay out two to three times the amount of your original policy to your family in the event that you pass away after a qualifying accident. Qualifying accidents do not include illegal activities and voluntary participation in dangerous activities. These riders can be added to term and permanent life insurance policies, and are especially beneficial if you have a hazardous job or are at risk of an accident at work.

5. Term Conversion Rider

This rider will allow you to convert your term life insurance policy into a whole life insurance policy without having to worry about going through the underwriting process, which could raise your rates if your health status changes. With a term conversion rider, you can bypass the underwriting process when converting your term life insurance policy into whole life insurance.

6. Child Rider

silhouette of a young girl in a wheelchair — *You can add a child rider to help pay for medical expenses and funeral costs in the unfortunate event your child passes.*

You can get life insurance for your children without a separate policy by adding a children’s term rider to your policy. In the tragic event that your child passes (until a certain age), this rider will pay a death benefit to help cover funeral costs or medical bills.

7. Long-Term Care Rider

A long-term care rider allows you to receive monthly payments if you become disabled or develop an illness that requires long-term care. This type of rider acts in a way as long-term care insurance, offsetting the expense of a nursing home or other type of long-term care.

One thing to be aware of when considering adding riders to your life insurance policy is that you cannot add one to a policy that is already active, so you need to decide what is best for you before purchasing a life insurance policy. If you are interested in buying a plan with additional riders, or switching plans to add any riders you think will be beneficial to you, 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.

What Is A Life Insurance Disability Rider?

Needing to take time off of work for injury or disability is more common than you might think. In fact, around 30% of Americans are forced to take some kind of disability leave during their working life, which can be a huge financial strain on their family. But did you know that your life insurance policy can also protect your family and finances in the event that you become disabled and are unable to work? Standard life insurance policies don’t cover disability, but many people are unaware that you can add what is known as a disability rider to a policy. One of these riders will give you added peace of mind, but there are few things that you should know about them.

What Is A Rider?

A standard life insurance policy will not cover all eventualities, but there is a way to extend your policy or to make your terms and conditions more flexible: you can add what is known as a rider to your policy. These optional additions cost extra, but give you benefits that fill the gaps of standard life insurance, and include things like extra coverage for accidental death or coverage for your income so your family doesn’t have to struggle in the event of your death.

What Is A Disability Rider?

blue handicapped sign — *Disability riders can help provide extra income when you are no longer able to work.*

An injury or disability can mean an extended period of time during which you are unable to work, as well as worries about how to take care of your family and finances. In order to protect you and your family in the event that this happens to you, you can choose to purchase a disability rider along with your life insurance policy. There are multiple types that you can choose from, or you can purchase multiple riders and combine them. Some of the most common ones include:

Disability income rider – Essentially, this type of rider allows your life insurance policy to also function as disability insurance: you will be provided with a monthly stipend in the event that you can no longer work. Many insurance companies will pay out 1% of the coverage amount of the insurance policy to help replace your income.
Waiver of Premium rider – Having this type of rider means you will not have to pay your life insurance premiums after you’ve been disabled and unable to work for 6 months (some insurance companies will also reimburse you for payments made during that 6-month period). With this rider, you’ll be able to focus on your healthcare expenses, and won’t have to worry about losing your life insurance coverage.
Presumptive total disability– If you have one of these riders, your insurance company will immediately pay out your full benefits if you lose sight in both eyes, your hearing, your speech, or the use of at least two limbs, whether you are working or not. With this rider, there is no period of time that you have to be disabled before you begin receiving your benefits.

If you want to add a disability rider to a life insurance policy, you should know:

You cannot purchase a disability rider if you are over the age of 65.
You cannot purchase a disability rider if you have pre-existing conditions.
There is a waiting period of up to 6 months before the waiver kicks in.

Do You Need A Disability Rider?

If you are deciding whether a disability rider is right for you, you should consider what kind of job you have, and how much you and your family rely on your income. For example, if you have a high-risk job where there is a higher likelihood of injury, a disability rider will be very beneficial to you, and will give you peace of mind knowing that you’ll be prepared in the face of the unexpected. In addition, one of these riders could be perfect for you if you are the sole breadwinner of your family.

When looking into a disability rider, you’ll find that they differ between life insurance companies: some insurance companies have different definitions of disability, as well as different coverage options for these riders. Before purchasing a life insurance policy with a disability rider, you should compare plans from different companies to find the one that suits you and your family’s needs best. To do this, 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.

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