Monday, June 21, 2010

Explaining Life Insurance Policies

A good agent can go a long way toward explaining your life insurance policies to you, and it’s highly recommended that every family or business person work with an experienced agent who will take the time to explain what policies they offer. Here are some important things that you want to know from your agent.

• How much money your loved ones will receive when you die
• How long your policies will be in force
• How much money you are paying
• If and when your policy eventually ends
• Whether or not you are building any cash values on your policies

The answers to these questions determine what kind of policies that you have.
While you hope that money would never replace you in your loved ones hearts, a large death benefit (Term Life Insurance) amount can go a long way toward keeping groceries on the table, making sure that you don’t lose your house or that dream of a college education for your children.

Term Life Insurance is setup to provide insurance for a set period of time; 1 year term, 10 year term, 15 year term, 20 year term, and 30 year term. The advantage of Term Life Insurance is that it offers the most protection for the least amount of money, especially for younger people.

Although permanent life insurance can be more expensive, it does have its place as it provides life long guarantees, especially for seniors and older Americans. The insurance companies know that when you purchase these policies they will eventually have to pay on those claims.

The main thing to think about when purchasing life insurance is how the insurance money will meet your family’s needs, especially if you were to die before paying off all of your bills. That is why working with an agent can be beneficial. Agents will help determine your true needs with their experience and product knowledge.

Contact Newsad Insurance Services for all of your life insurance needs.

-Tom Newsad

Thursday, June 17, 2010

Smokers vs. Non-Smokers

Remember, life insurance companies base their issuing of life insurance on age, sex, and health status. Smoking has been proven to increase your health risk as you age and to make it more expensive to purchase life insurance. For these reasons, finding an independent agent to sell you life insurance is even more important for smokers. Some companies do specialize in writing life insurance for smokers at lower rates, so be sure to always shop around for the lowest rates when buying life insurance on smokers and non-smokers. When agents are captive to their carriers they may not always find the best rates for their clients. For this reason, independent agents offer the best avenue for “shopping."

- Tom Newsad

Life Insurance Isn't Really That Scary

Most people don’t really want to talk about life insurance. Words like death and mortality, and the costs associated with funerals and final expenses aren’t topics anyone likes to talk about. While it’s definitely not an issue at the top of anyone’s list, there are some steps you can take that can make the process a little less overwhelming.

First, get the scoop from a qualified source. Think of that first meeting as more of an educational experience than an “answer everything” session. I like to ease into things with a little fact finding process, painless to you, called the DIME process, (Debt, Income, Mortality, and Education) or if you prefer the official phrase, Life Insurance Needs Estimator. I know, it sounds daunting, but really it’s just a matter of sitting down with your advisor and answering a few questions. And don’t worry, the questions are easy…they’re all about you after all.

After you ace this quick Q&A, your advisor will have the tools to start working towards a more customized plan for you, one that includes all those unique, individual circumstances.

For example, while making sure that funeral and final expenses will be paid for is important to older Americans, younger families need to also plan out how they will pay for their children’s education, especially while the parents are in their earning years. Your insurance agent should answer those important questions like protecting income and providing future education for all family members. Here’s a good starting point: Be sure to provide 2 years of annual salary for loved ones to readjust after the passing of a family member.

Next, your life insurance and financial advisor will help you with those finer details such as taking mortgages, credit card debt, and student loans into consideration. Consulting with your estate planning attorney or tax advisor will round out the remaining points of a sound financial plan.

Oh, and keep in mind that at your death, your investments do not pass through probate. Probate is a legal process that takes place after someone dies. Probate usually involves a lot of paperwork and court appearances and includes proving in court that the person's will is valid, identifying and inventorying the deceased person's property, property appraisal, paying debts and taxes, and distributing the remaining property according to the will. Only life insurance products provide a tax free distribution of death benefits.

I hope you found this helpful in taking those first steps towards securing your future. For all of your life insurance needs, contact Newsad Insurance Services.

- Tom Newsad