[...] In a reminder that Universal Life insurance (a form of permanent life insurance) premiums are not fixed, a recent class action lawsuit in CA ended with a federal judge ruling that Conseco Life Insurance Co. cannot triple premiums for 50,000 policy holders who have had their policies since the late 80s and early 90s. The courts got involved because the proposed premium increases were so significant, but the complexities of universal life insurance include a lot of flexibility in terms of premiums. [...]
This Wall Street Journal article from last week reminds me of the advice we hear about things that sound too good to be true. Viatical settlements or “life settlements” are arrangements in which investors (or intermediary companies) purchase existing life insurance policies from people who they think (hope?) will die within the next few years. The investors then continue to pay the premiums on the policies until the original policy owner dies. [...]
One of the advantages of permanent life insurance is that there are all sorts of riders that you can purchase along with the policy. Two that could be particularly useful are available through The Hartford: The LifeAccess rider and the Disability Access rider. The LifeAccess rider aims to take the place of a long term care insurance policy for people who have life insurance but not a separate long term care policy. The Disability Access rider provides a safety net for people who don’t have short term disability insurance coverage (the rider does not provide long term disability coverage). [...]
[...] Term life insurance policies are a lot less expensive than permanent policies, so for people who needed to buy life insurance during the recession, term products were likely more popular. But now that the economy is showing signs of recovering, people may be more apt to purchase higher-cost permanent life insurance policies that grow cash value or include an investment component. It will be interesting to see how the numbers play out for the rest of 2010… will term life insurance policy sales bounce back, or will the growth of permanent policies continue?
[...] A financial advisor can provide advice, but there are also lots of financial advice websites that can provide guidance for people trying to figure out what to do with any sort of windfall, including life insurance proceeds. Planning now for what you might do with life insurance money will likely make things easier if and when you find yourself receiving life insurance following the death of a loved one.
[...] For some people, the benefit is worth it. But for most of us, it makes sense to buy a term policy and keep our investments separate from our life insurance. But either way, the Consumer Boomer article provides a good summary of how the various types of coverage work. If you’d like to get quotes for your particular life insurance needs, we’re be happy to help.
[...] SB 147 will allow up to $100,000 of life insurance proceeds to be exempt from the insured’s creditors. This law will go into effect on September 1, 2010. Until then, the current cap of $50,000 will apply. 26 states have an unlimited exemption for the protection of life insurance settlements from an insured’s creditors. The new Colorado law will bring the state a little closer to the protections offered to beneficiaries in other states [...]
[...] Any publically owned company (as most health and life insurance companies are) has a responsibility to its shareholders to do what is in the best financial interest of the company. In the case of life and health insurance companies, premiums are typically invested before they are used to pay claims, and it makes sense that they should be invested in the stocks that will make the most money. [...]
[...] Roy Bubbs, President and CEO of Hooper Holmes, noted that life insurance carriers spend an average of $500 to underwrite an application, and he believes that his company’s product that reduce that amount by half. My guess would be that it will also speed up the underwriting process, much as the electronic application process for health insurance policies reduced underwriting times for some policies from weeks to days over the last decade. [...]
[...] Permanent life insurance is a good option for some people. But if you choose to purchase it, make sure that your decision is based on independent research or advice from a qualified professional who does not have a vested interest in your decision. The premiums – and thus the commissions – are significantly higher on permanent life insurance policies; if the person advising you to opt for a permanent policy is also making a commission based on the policy you buy, you might want to get a second opinion.