life insurance Archives - Page 21 of 27

Does Life Insurance Pay in Cases of Suicide?

Sadly, suicide is all too common: in fact, it’s the 10th leading cause of death overall in the United States. Many people think that if someone commits suicide, not only will their family be experiencing unimaginable grief, but their family will also be unable to access their life insurance benefits, because it’s a common misconception that suicide is not covered under life insurance. But that is not necessarily the case: when it comes to suicides, the reason life insurance companies have a “suicide clause,” or an exemption for death by suicide, is to prevent people from buying policies immediately before taking their lives so that their families can receive financial benefits – but that doesn’t mean that suicide is never covered by life insurance.

When Does Life Insurance Cover Suicide?

bar graph with red bars going upwards — *Suicide rates have steadily increased over the years, which is why life insurance companies have a suicide clause.*

Suicide rates increased around 1% every year in the U.S from 2000-2006, and have increased 2% each year after 2006; because of this, life insurance companies have actually changed their policies: while at one point, they never paid out benefits in cases of suicide, most are now better prepared to help family members if it does happen. Life insurance policies now cover suicidal death, as long as it occurs within certain periods:

Life Insurance Suicide Clause

This clause is a provision put into most life insurance policies that outlines the specifics of your coverage if you were to commit suicide. Generally the clause is a 2-3 year exclusion period, which means once you have had the policy for 2-3 years, depending on the insurance company, your family will receive your death benefits even if you commit suicide. On the other hand, if you were to take your own life during that 2-3 year period, the insurance company would have the ability to investigate your death and deny coverage, meaning your beneficiaries would only get a refund on premiums paid towards the policy, not the death benefit. This is meant to prevent any applicant from taking out a life insurance policy and then taking their life immediately after.

Contestability Period

In addition to the suicide clause, all life insurance policies have a contestability period, which is also generally the first 2-3 years of the policy. During this period, the insurance company has the ability to contest or deny a claim for a number of reasons, including if they believe you lied on your application, committed an illegal act that led to your death, or that you committed suicide.

Does Life Insurance Cover Physician-Assisted Suicide?

As long as your policy’s contestability and suicide clauses have expired, your life insurance policy might cover physician-assisted suicide, which is generally defined as someone dealing with a terminal illness giving permission to their doctor to administer lethal doses of medication to end their life. There are currently 11 states, and Washington D.C., that have laws protecting the right to assisted suicide:

California
Colorado
Hawaii
Maine
Montana
New Jersey
New Mexico
Oregon
Vermont
Washington

Make sure to check with your life insurance company if you have any questions about coverage, and always be honest when filling out your application. If you have a terminal illness, most companies will deny coverage, but some might still allow you to purchase a policy; however, if you lie about your medical condition, that is grounds for the insurance company to claim fraud, which would leave your family with nothing.

Payouts For Suicide

Before you can purchase a life insurance policy, the insurer will conduct an analysis of your physical and mental health. If you are living with depression, you will most likely be able to get a policy as long as you are getting treatment and taking your medication, but the rates and coverage you will be offered will be determined on a case-by-case basis. In addition, if you do not disclose any mental health conditions when you first apply for your policy, your insurance company could deny payouts in the event of a suicidal death.

If you are in crisis, call the toll-free National Suicide Prevention Lifeline at 1-800-273-TALK (8255) – this service is available to anyone, 24 hours a day, 7 days a week. All calls are confidential.

If you are looking for a life insurance policy, the best way to find the right one 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.

What is Life Insurance Laddering?

Life insurance policies are not only incredibly useful, because they provide your family with the money they need after you are gone, but they are also more flexible than you might realize. You have the option to build a life insurance plan that works for you, commonly known as an insurance ladder, or life insurance laddering. This can help you save money while ensuring that you have the right amount of coverage at every stage of your life, so your family is financially protected for a great price.

How Life Insurance Laddering Works

illustration of a person holding a ladder walking to a dollar sign being held up high — *Life insurance laddering allows you to have multiple policies for your different needs so you can save more money.*

At the most basic level, life insurance laddering provides you the option to buy multiple life insurance policies with different coverage amounts and durations. For example, you might want multiple term life insurance policies that will expire at different times; laddering your policies will provide you with protection for different needs, such as a 20-year term life insurance policy for a mortgage and a 10-year policy for your children’s college tuition, or student debt. Each policy will serve a different purpose in your life, and will prevent you from spending extra money for coverage.

Life insurance laddering is also a great way to make sure you’re not overspending on life insurance as you get older and pay down your bills, since your financial obligations will probably decrease over time, and you will need less coverage for expenses after you pass. Laddering policies will allow you to pay for the coverage you actually need and not the coverage you needed 10-30 years ago: for example, if you want a $1 million life insurance policy that would give you more coverage at certain periods in your life, you could ladder policies to achieve this with a:

10-year policy of $500,000
20-year policy of $300,000
30-year policy of $200,000

This way, you ‘ll get the most coverage when you’re younger and have more expenses, and will have less coverage – and lower premiums – as you get older and have fewer financial obligations.

Downsides of Laddering

Laddering is not for everyone, especially because you have to do some shopping and comparing to find multiple policies that fit your needs. One of the main downsides of life insurance laddering is it can be difficult to understand and manage the different policies; not only that, but your future needs are not defined yet, so choosing the right policies can be tough. To better understand if this strategy will work for you and help you save money, work with a licensed agent who can compare plans from different companies for you.

Can You Benefit From Life Insurance Laddering?

If you want access to different levels of benefits and want to reduce the price of your life insurance premiums, laddering policies could be right for you. Before considering laddering policies, though, speak to an agent, who can help you get a better understanding of what your future expenses and needs for your family might look like. You will also need to have an understanding of how much coverage you will need at different points in your life. Laddering will work for you if:

You have large, but temporary, obligations
You have pre-existing conditions that could increase the cost of your insurance down the road

As we said, life insurance laddering is not for everyone, but it can be helpful for families who want to save money on insurance premiums, or for those who know what their future financial needs will be. But doing the work to calculate all of your future expenses, on top of researching each type of policy, can seem like a lot, so your best bet is to use online tools and work with an agent who can help you compare different policies from different insurance companies. 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.

What is Insurable Interest in Life Insurance?

When many people think of life insurance, they think of purchasing a policy that will benefit their loved ones after they pass. But have you ever considered purchasing a life insurance policy on another person who you are financially dependent on? If you buy a policy to insure another person’s life that means you will be the beneficial owner, and will receive the benefits after the insured person dies; in order to purchase a policy and get the benefits, though, you will have to prove an insurable interest in, or financial dependency on, the insured person. Before you decide to buy a policy, you need to understand what insurable interest is, and know how you will have to prove it.

What Is Insurable Interest?

african american man and woman looking at each other — *You can take out a life insurance policy on a loved one as long as you can prove insurable interest.*

When it comes to purchasing life insurance, you can’t take a life insurance policy out on just anyone: if you want to buy a life insurance policy on someone else and be considered the beneficiary, you have to be able to show an insurable interest in that person, which means that you would experience a financial loss or other hardship in the event of that person’s death. A good example of people with insurable interest in each other would be spouses wanting to protect themselves from loss of income, or business partners wanting to protect their business from financial loss.

Proving Insurable Interest

Before a life insurance company will allow you to purchase coverage on another person, they will take steps to verify insurable interest, which will usually include requesting identification from the people involved and conducting a phone interview. During this phone interview, the insurer will ask about the relationship between the beneficiary and the insured, because you can only take policies out on certain people. Relationships that guarantee insurable interest are:

Certain essential employees– You can prove that you have an insurable interest in employees who are considered executives, such as the CEO or president of your company, or your business partners, because if they were to pass away your business would experience a loss of profits. Purchasing what is known as business life insurance is common practice.
Immediate family members– It is easy to prove insurable interest in parents, children, siblings, grandparents, and spouses.
Debtors– Creditors can ensure debtors, as long as the debtor consents to the coverage.

Other Relationships

extended family silhouettes with a city background — *Normally extended family members cannot claim insurable interest unless they have proof of dependence.*

As stated above, insurable interest is easy to prove for immediate family members and people who you have a business relationship with; it is harder to prove an insurable interest in other people and, unless you have proof of financial dependence, you will have a much harder time insuring:

Aunts and uncles
Cousins
Nieces and nephews
Stepchildren and stepparents

Insurable interest protects the insured, as well as the insurance company, from insurance fraud, so when applying for a policy, you will have to prove your relationship to the insured, and that you are at risk of financial loss if the insured passes away.

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

Key Person Insurance & Your Business

Running a company is not easy: not only are you busy with setting up your business, hiring the right people, and staying on top of your bills, you also have to worry about insuring your business so that you’re protected against property damage and lawsuits. But have you thought about insuring your most valuable asset, your key employee/s? There is a way that you can financially protect your business against the loss of a partner or other key employees and the damage this loss can do to the business you worked so hard to build: purchasing a key person insurance policy.

What Is Key Person Insurance?

silhouette of a hand picking up a silhouette of a man amongst other men — *Key person life insurance can help cover costs of hiring and training a new person to replace the key person of a business.*

Key person insurance is a life insurance policy that a business can take out on the life of an owner, executive, co-founder, business partner, or any other individual that is considered critical to the business, and whose death would hurt the company financially. Unlike with personal life and disability insurance, with key person insurance, a business entity buys the policy, is the beneficiary of the policy, and pays the premiums. The policy will help with any losses that stem from the death of your key employee, including protecting your company from profit loss, guaranteeing your business loans, and protecting your shareholders.

In the event of the passing of the key person, your business will receive the insurance payout, which can be used to:

Cover the cost of hiring and training a replacement for the key person
Offset day-to-day operating expenses
Supplement lost revenues until a replacement can be hired

In the instance that your company can no longer operate after the key person passes, the money can be used to:

Pay off any debts
Provide severance to employees
Distribute money to investors

Essentially, this type of life insurance will give your business options other than bankruptcy in the face of the loss of a key employee.

Which Businesses Should Consider Key Person Insurance?

This type of life insurance policy can be especially beneficial for small businesses or startups that have a small team, and are most often used to insure the owner or founder of the small business. But this doesn’t mean that this type of insurance isn’t also useful for larger scale businesses: every business has at least one key employee whose death would cause financial distress to the company.

How Much Does Key Person Insurance Cost?

red money sign next to a green question mark — *The price of key person insurance varies on multiple factors, which is why it is best to compare plans with an agent.*

The price of a key person insurance policy varies depending on multiple factors, including how large of a policy you would like to take out: you can request policies that pay out as little as $100,000 or as much as $1 million. Other factors that insurance companies take into consideration include the insured person’s age and overall health, as well as which type of insurance policy you decide to take out; for example, as with other types of life insurance, you can opt for either a permanent life insurance policy or a term life insurance policy, which is significantly cheaper. In order to find the right plan, you will have to compare different policies from different insurance companies, because they all offer different levels of coverage at different prices.

The best way to find the right key person life insurance policy for your business is by working with an agent who specializes in key person 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 for your business by a financial burden, check key person life insurance rates today.

How To Reinstate A Lapsed Life Insurance Policy

Forgetting to pay a bill can happen to anyone. It might even happen to you with your life insurance premiums, but it is important to be aware that missing payments can lead to the cancellation of your policy, and would leave your loved ones with nothing should something happen to you. If you are struggling to pay your bills and have neglected your life insurance premiums, have no fear! There is a way to reinstate a lapsed life insurance policy so your family is not left financially vulnerable.

What Happens When Your Life Insurance Lapses

calendar with the number 31 on it — *Most life insurance companies offer policyholders a 30 or 31-day grace period, but after that your policy will be lapsed.*

If you fail to pay your life insurance premium for a month, you won’t lose your policy: most life insurance companies offer policyholders a 30 or 31-day grace period after payment is due. Your policy will still be active during the grace period, so if you were to pass during this time, your beneficiaries would still receive the payout. Some insurance companies, though, will subtract the missed monthly premium payment from the death benefit.

You might even be able to go beyond a month without making a payment, depending on your policy:

Term life insurance policies have a 30 to 90-day grace period.
Permanent life insurance policies will allow you to go longer without making payments if you have built up cash value, which you can use to help cover premium payments.

If you go beyond your grace period, or you do not have cash value to cover your payments, your policy will lapse and you will no longer have coverage, which means the insurance company will not pay a death benefit to your beneficiaries when you die.

How Long Do You Have To Reinstate Your Lapsed Policy?

Depending on how long ago your life insurance policy lapsed, you may or may not be able to reinstate your lapsed policy. In most cases you can reinstate your life insurance policy within a certain time frame if you start making the premium payments again, including the ones you missed. Reinstatement procedures vary depending on how long ago the policy lapsed; for example, if your policy has been inactive for:

30 days or less: Most companies will allow you to reinstate your policy without any underwriting or medical questions. You will need to call your insurance company, fill out a reinstatement application, and pay your missed premiums.
30 days to 6 months: Most insurance companies will require you to answer a few health questions when filling out the reinstatement application. They will ask if there have been any changes to your health since the original policy was approved, and they could deny the reinstatement based on your new health status.
More than 6 months: Most insurance companies will require you to pass the underwriting process again.

Steps To Reinstate Your Policy

hand filling out paperwork — *To reinstate your policy, call the company as soon as possible and begin filling out the necessary paperwork.*

In order to reinstate your policy you must:

Contact your insurance company and ask how much you owe them.
Fill in all the paperwork and submit it to your insurance company.
Pay past due premiums along with any penalty/interest the insurance company might require you to pay.
Make sure that all of your future premium payments are made so you can prevent your policy from lapsing again.

Avoiding a Life Insurance Lapse

The best way to prevent a life insurance lapse is to:

Set automatic payments so that the premium is automatically deducted from your account every month.
Use your cash value to help cover premiums if you are having financial difficulties.
Switch from annual to monthly premium payments to help spread out what you owe, instead of paying one big lump sum.
If your policy does lapse, reinstate it immediately so it will be less expensive and you will not have to go through the underwriting process.

If something were to happen to you, your family would be facing emotional hardships, as well as financial ones. Life insurance is a great way to help your loved ones with those financial hardships, because the money they receive will help pay for expenses related to your death, and any other debts or bills they have. If you make the decision to get life insurance to protect your family, they will be taken care of, but you need to be sure that you continue to make your monthly payments. If you fail to make payments, the lapsed life insurance policy will be considered null and void, and your family will not receive any benefits.

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

Do I Need More Than One Life Insurance Policy?

If you’re in the market for life insurance, you’ll come across many different types of policies, and you might be unsure which is the best for you. If you already have a life insurance policy, you might be unsure if it still has enough coverage for your family as your needs change: maybe your mortgage payments have increased, or maybe an unexpected expense has hit your family budget. The question is, if there isn’t one policy that seems exactly right for you, or if you find that you need more coverage, can you choose to purchase more than one life insurance policy? And do you need to?

How Many Policies Can You Buy?

abstract question mark made up of little dots connected — Technically *there* is no limit as to how many life insurance policies you can get.

There are no laws or regulations regarding how many life insurance policies a person can have, so technically you are allowed to purchase as many policies as you want. For example, you can choose to purchase multiple term life insurance policies, which would provide coverage for things like your mortgage, college tuition, or final expenses, and a permanent life insurance policy, which would allow you to leave an inheritance for your children on top of all that.

It’s important to note, though, that while you can have as many life insurance policies as you want, life insurance companies might have some concerns about how many policies you have, so before purchasing more than one policy, you will need to determine if you need more than one.

Do You Need More Than One Policy?

There are certain scenarios in which it makes sense to buy more than one life insurance policy. These situations include:

You need more coverage– If you would like a higher death benefit, you can purchase multiple term life insurance policies and a permanent life insurance policy, or any other combination of policies. Having more than one will allow you to change your coverage amounts, and will help ensure that your family is fully covered throughout the years. For example, if you are growing your family and want extra coverage until your children become adults, you can purchase a second term policy to cover the next 15 or 20 years of their lives.
You don’t want to put all your eggs in one basket– Unfortunately, life insurance companies can go out of business, and if this happens to your carrier, you will lose your policy. In this case, your family will not receive a death benefit if something happens to you; if, however, you have multiple policies, your family’s financial stability will still be ensured in the event of your passing.
You own a business– If you are a business owner, you might need a separate life insurance policy to take care of your family, and one to cover business loans.

When applying for more than one life insurance policy, avoid applying for multiple policies at once: multiple concurrent applications can make it look like you are applying for more coverage than you really need, which can lead to you getting denied. If you are interested in purchasing multiple policies, the best thing to do is to speak with an agent and compare different policies from different companies before you make your decision.

Policy Riders

If you decide that you would like more coverage but do not want to buy another life insurance policy, you have the option of adding policy riders to a policy instead. There are multiple types of insurance riders that you can add on to a policy to get more protection in specific areas, and to fill coverage gaps. For example, you can add a term conversion rider when you purchase a term life insurance policy, which will allow you to convert your term life insurance policy into a permanent life insurance without undergoing a medical exam.

As your life changes and your responsibilities change, you might find yourself needing more life insurance coverage, and the best way to make sure your family is fully protected might be to have more than one life insurance policy. There are many different types of policies to choose from, so if you’re not sure where to begin, consider using online tools, or speaking with an agent. The right policy for you is out there! We have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Tag: life insurance