What I didn’t want to enter into the equation, however, was a long presentation by an insurance salesman on a topic I didn’t know much about: whole life insurance. But that’s what I got, and it didn’t end well.

Unfortunately, the wrong insurance salesman tried selling whole life insurance to us, and the ordeal was so confusing and full of insurance salesman cliches that it could have been cast for a short video on how not to sell insurance.

We were young and had enough income to buy a condo and consider adding to our family — which sounds like the best time to buy life insurance. If one of us died, having a child, mortgage and other expenses would be too much for the other to pay without insurance.

An insurance salesman knocks on the door…

I thought it was a pretty straightforward scenario, and one that could be solved relatively quickly with an insurance expert. I called an insurance agent, and we set up a time for him to come over and explain policies to my wife and I.

I didn’t know then what I know now about life insurance — that a term policy was much better for our needs than whole life.

When the salesman arrived at our door, his first and only pitch was for whole life insurance. I don’t remember all of the details, but the main thing that stands out is how he kept trying to show us how whole life insurance was an investment we should take advantage of.

What is whole life insurance?

Before getting into the investment pros and cons of a whole life policy, it’s first worth understanding what whole life insurance is.

As the name states, it’s insurance coverage for your whole life. You’re covered until death, when your beneficiary will receive the benefits.

That sounds great until you look at the high costs compared to term life insurance — which covers a certain number of years, such as 20. And since our family was just starting and we wanted to cover our family’s expenses if one of us died during our working lives or while our child was under 18, term life insurance seemed a better fit.

But not to the salesman who was in our dining room. Whole life was what we needed, he said, and was a great investment opportunity that we shouldn’t pass up.

Problems with whole life

After spending an hour explaining how in 30 years or so we could reap the benefits of a whole life policy as an investment, other problems about the policy kept popping up in our minds. Pushing life insurance as an investment was reason enough for us to decline whole life insurance from this guy, but he kept going.

As an investment, if it’s something I didn’t understand, then I saw no reason to buy whole life policies.

He talked about the price of whole life insurance, which I don’t remember the specific numbers, but I do remember it being at least triple what I later found out to be the cost of term life insurance.

Looking at the numbers now, term life insurance is incredibly cheaper than whole life. After a 20-year term policy, I could either drop the coverage, test for a new policy, or pay more to continue the same policy.

What term life insurance isn’t

Term life insurance is meant to insure you for a specified amount of time. Since your major earning years are when this is needed the most, a term policy of 20-30 years is a smart idea.

A whole life policy covers you for your entire life, and your heirs will get the face value of the policy when you die. Any savings that you’ve built up in the policy but haven’t used goes back to the insurance company when you die.

A term life insurance policy doesn’t have a savings account. That financial move is left to you to do on your own. This is the key part that kept bugging me during the insurance agent’s spiel to us in our home.

Why would I use a whole life insurance policy as an investment when I could take the difference in the price of the premiums between whole life and term life policies and invest it myself?

That’s the kicker that got us to get the guy out the door.

To learn more about whole life insurance, the Whole Life Rebellion starts May 31 as a way to educate consumers about the risks of investing in whole life insurance. 

How a Whole Life Insurance Salesman Confused Me Into Not Buying is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

Works for Healthy Individuals

This policy type is specifically designed for individuals who are relatively healthy and may also be referred to as simplified issue. The purpose of simplified issue life insurance coverage is to give individuals a faster track to receiving your life insurance policy without all of the headaches and delays typically associated with medical exam life insurance.

Does This Mean I Can’t Get Coverage if I’m Ill?

Bear in mind that if you are not in good health, this doesn’t mean you are ruled out of getting any benefits from a policy. It just likely indicates that a no exam life insurance policy as simplified issue may not work out for you. There are other types of policies, like guaranteed issue. Don’t give up hope- just use this as a chance to set a meeting with your life insurance specialist. You’d be surprised at your options, and you might just need a push in the right direction to accomplish things!

So Many Benefits Available With a No Exam Policy

Although not everyone will qualify for no exam life insurance, it is a great option for those who meet the requirements. It can make your life a lot easier if you had previously been dreading getting a life insurance policy, so you should speak with someone in the insurance industry to learn more about how this can help you. Some online life insurance agencies offer information on their website regarding different plans, and companies that offer it. Getting more information makes a lot of sense if you’re considering this possibility.

Some of the biggest benefits of having a policy like this are the speed in receiving it, the convenience of not having to get the exam, and if you have not been to the doctor in some time you can actually save money by going this route because you can skip companies finding out that you have high blood pressure or any other condition. Going this route certainly makes things easier all around.

Ultimately this empowers you more with regards to your health but avoids all of the traditional headaches associated with a medical exam. No-exam life insurance is very easy and quick to obtain and it is a no-brainer for those individuals who are in relatively good health and want to provide a financial benefit for their loved ones if they were to pass away. If the concern over the time and hassle of getting an exam with your life insurance policy has been what’s holding you back from getting the protection you need for your family’s future, reach out to a life insurance agent to learn more about how the no-exam policy can be the right fit for you.

Benefits of a No Exam Life Insurance Policy is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

This guest post on motherhood is from Catherine Alford at Budget Blonde. After you read her post, head over to her website, where I’m guest posting today.

Having and raising children is expensive, and I should know because I got a two for one special with my adorable boy-girl twins. In fact, by some counts the cost of raising a child to adulthood can be around $245,000 not including college! That’s insane!

Even though I don’t feel that raising a child actually costs that much for most families, mine included, having children is still a big financial burden if you aren’t adequately prepared for motherhood.

Because I’m a planner by nature and like to have things as organized as possible before I make any big, life-altering decisions, I approached motherhood with that same attitude.

I asked everyone I knew how to get prepared financially for motherhood and now that I’ve been through it myself, here are my top 4 ways to do so:

Research, Research, Research

As I said before, I like to be organized and prepared for any big decision in life. When I first found out I was pregnant, I did a lot of research about how much money I needed to set aside before the arrival of our twins and motherhood.

I asked my mom, my mother-in-law, and my friends who were already mothers to weigh in on this important topic. What I heard from them varied quite a bit, but it gave a good basis to get started prepping financially for motherhood. All in all I decided to save $10,000 before the twins came, $5,000 for each.

Set Up a Targeted Savings Account

Once I had a number in mind, I set up a targeted savings account and started socking money away. I set up my “baby fund” with Smarty Pig, but there are other banking institutions that allow you to create several targeted savings funds too.

A targeted savings account is key to save up for motherhood because it keeps this money separate from your other savings, like your emergency fund, a vacation fund, or whatever other savings you have set up.

This really reduces the temptation to raid the fund to pay for something else besides baby purchases. After all, if your savings account says “baby” on it, you’re much less likely to take away from it. (If you have questions about Smarty Pig feel free to e-mail me, and I can send you an invite!)

Consider Life Insurance

If you haven’t already thought about life insurance before getting pregnant, now is the time to do it. It might a bit morbid to think like this, but it’s especially important to have life insurance for yourself and your child’s father in case something were to happen to either of you.

As mentioned earlier, raising a child is very expensive and it would be all the more difficult to do it alone if something were to happen to either of the baby’s parents. Life insurance can help ease that burden at least a little bit, so it’s worth checking into if you haven’t already.

Get a Will

Again, a little morbid I know, but having legal documentation in place is all the more important once you have a child. Having a basic will drawn up on your behalf is fairly inexpensive and will provide a lot of peace of mind in case you or your child ever has to deal with a death in the family. During that time of grieving, the last thing you want to deal with are complicated estate laws, so a will help simplify that process.

How did you prep financially for motherhood?

Catherine Alford is the go-to personal finance expert for educated, aspirational moms who want to recapture their life passions, earn more, reach their goals, and take on a more active financial role in their families. She is also founder of www.BudgetBlonde.com and the innovator behind the web’s most comprehensive course on how to Get Paid to Write for Blogs.

4 Ways to Prepare Financially for Motherhood is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

The answer is yes and you might be surprised at just how many people still need to have life insurance over age 60.

We’ll explain some of the main issues that might cause you some concern including changes to your health, underwriting guidelines for people older than 60 years of age, reasons you might need life insurance and what products are available.

Applicants Over 60 with Health Issues

The good news is that for many people, people looking for life insurance over age 60 in this day and age are a lot more health conscious than they used to be.

Additionally, rapid advances in medical technology and pharmacology have come a long way in the successful treatment of both disease and a multitude of health conditions.

Simply put, life insurers have also begun to take notice because it’s not as hard to get approval for an affordable life insurance policy even if you have health issues.

The key point any insurer wants to know in respect to any health issues, and for any age, is whether the condition is under control.

Some insurers are also more lenient for people who want life insurance over age 60 when it comes to height and weight ratios. This is also applicable to slight increases in cholesterol and blood pressure levels. Being older can also get you a break in some instances even if you have health issues as it relates to your family history.

Even though you might be somewhat overweight and have slightly higher cholesterol and blood pressure level increases, there are certain key birthdays where many life insurers will actually give you a break on a number of health issues simply because you turned a year older.

Regardless of your age even if you’re seeking life insurance over age 60, the health issue won’t be too much of a problem if the condition is being well managed. This assumes you don’t have other underlying health or lifestyle conditions such as smoking.

How Underwriters View People Over 60

The main concern for many people who are age 60 or over is whether there will be any changes to how you are tested. To qualify for any standard life insurance policy, you will still be required to take a medical exam.

For people who seeking life insurance over age 60, there will be some additional tests required by some insurers. The types of tests are not very invasive and are simply used to be more thorough.

The additional tests vary from insurer to insurer and also vary depending on your age group.

The main point is that these additional tests, if and when required by the insurer, shouldn’t be a cause for a concern.

You should also keep in mind that independent agents can find you an appropriate insurer if you are concerned about what tests are required.

This varies from insurer to insurer so it’s always best to use an independent agent to find those companies which will cut you a break, which can mean big savings. 

Reasons for Life Insurance Over Age 60

There are still plenty of good reasons why some over age 60 might still have a need for life insurance. Some of these reasons someone seeking life insurance over age 60 might still need life insurance include:

• Pay for estate and inheritance taxes
• Pay for final expenses
• Offset the potential loss of retirement income to a spouse at death
• To cover business insurance needs such as key man life insurance or a business partner
• Pay off debts
• To cover a spouse’s debts in common law states
• To provide a financial legacy to children and/or grandchildren
• To provide funds to your favorite charity

Products Available After Age 6o

You can still buy most life insurance products after age 60 such as Term Insurance and Permanent insurance including Universal Life, Indexed Universal life and Whole Life for example.

However, some term products are not going to be available or will not be available after a certain age.

For example, age 58 is the last year that you will still be able to buy a 30-year term policy as after age 58 there is no life insurer which will offer this product after this age.

Similarly, age 63 will be the last year that you will be able to buy a 25-year term life policy. However, you can still buy shorter terms such as a 20 year or a 15 year term for example.

Where to shop

You should always use the services of an independent agent especially if you are 60 or older. Independent agents can research numerous companies and find not only which ones are the most affordable but also which companies are the most lenient.

This post is written by Chris Huntley, a licensed life insurance agent in 48 states. He is director of marketing at JRC Insurance Group and blogs about life insurance at InsuranceBlogByChris.com

Life Insurance Over Age 60 — Cost and Tips on Approval is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

Do you smoke? Or maybe you’re trying to quit? Both of these cases can impact shopping for life insurance. Whether you smoke or not, life insurance is extremely important especially if you have dependents counting on you for financial support.

These dependents could include your spouse, your children, relatives you help take care of, or even someone who may have helped you out in the past by co-signing a loan for you. Each of these individuals would be financially impacted if you died. Term life insurance can financially help those you leave behind if you died prematurely. For young, healthy, non-smoking individuals, term life insurance is very affordable.

But what about for those who use tobacco, nicotine, or marijuana products? Let’s talk about that.

Who does the life insurance industry consider a “smoker”?

You may already assume that those who smoke are going to have higher premiums than those who don’t, but non-smokers versus smokers is not always so clear. For example, if you are a tobacco chewer, some life insurance carriers may still classify you as a smoker.

These products are considered by insurance carriers when you apply for life insurance:

• Cigarettes
• Cigars
• Pipes
• Chewing Tobacco
• Electronic cigarettes
• Nicotine gum and patches
• Marijuana

When you apply for life insurance, questions are asked about tobacco and drug use. Whatever answers you give will be confirmed with a medical exam. An insurance medical exam includes both a urine and blood test, both of which can reveal traces of nicotine and THC (the chemical in marijuana.)

Price difference between smoker and non-smoker?

The life insurance price difference when comparing smoker rates to non-smoker rates is pretty significant. For the average 40-year old male who does not smoke and is in good health, a 20-year $200,000 term life insurance policy is about $22 per month. This same policy for a 40-year old male in good health but does smoke is about $54 per month. While that is still a reasonable cost to protect your loved ones, it is more than double that of a non-smoker.

Whether you smoke and how much you smoke puts you into a “risk class” that determines your premium amount. Risk classes are determined during the underwriting process.   Underwriting is when the life insurance company assesses the risk of insuring you.

Risk classes for non-smokers applying for life insurance are typically:

• Preferred Best: Applicants are in excellent health and do not participate in high-risk activities, and have a clean family medical history.
• Preferred: Applicants are in very good health with a few minor health issues.
• Standard: Applicants are in good health but have some issues whether they are health, lifestyle, or family history related.
• Sub-Standard (normally categorized into “Table” classes): Applicants are in a state of health with one or more chronic illness or they regularly participate in high-risk activities.

Risk classes for smokers applying for life insurance are typically:

• Preferred Smoker: Applicant uses tobacco products, but otherwise is in excellent health.
• Standard Smoker: Applicant is in less than perfect health and regularly smokes or uses a tobacco product.

While it’s next to impossible to obtain non-smoker rates if you smoke cigarettes, there are instances in which you can get non-smoker rates if you use the other products.

Cigars

If you are an occasional cigar smoker, which most insurance companies consider this to be one cigar a month or less, you may qualify for non-smoker insurance rates. You may also qualify for non-smoker rates if you don’t inhale when you smoke cigars, which is typical. In both these cases, the urine samples you give during your medical exam would need to come back with little to no trace of nicotine. If you are the one-cigar-a-month-or-less user, it is important to schedule your medical exam thoughtfully. You may not want to schedule your exam for the morning after the annual poker party.

Pipes

Some life insurance companies feel that smoking a pipe does not carry the same health risks as other tobacco use and will rate applicants as non-smokers no matter how often you smoke a pipe. Other life insurance companies will give you non-smoker rates if you pipe smoke only as long as no nicotine is detected in your urine test, which means you aren’t a daily smoker since cotinine usually takes 1-3 days to leave your system. And then there are the life insurance companies that will automatically give you smoker rates if you smoke a pipe. It really varies by company, so it’s important to work with a life insurance agency that is familiar with the workings of different life insurance carriers.

Chewing Tobacco

While some insurance carriers will issue smoker rates for chewing tobacco use, there are some that do not have any problem with it. The qualifications for non-smoker rates for chewing tobacco use vary by carrier. While some will issue non-smoker rates for chew use as long as no cotinine shows up in the urine test, others will issue even if it does test positive.

E-Cigarettes

The FDA has not formally endorsed e-cigarettes as a safer alternative to cigarettes, but they are generally considered safer than tobacco products because they don’t burn and it’s the tobacco smoke that is most harmful. However, the product has not been around long enough for in-depth research on the long-term effects and the life insurance industry rates the usage accordingly.

If the life insurance company sees nicotine in the medical exam findings, the applicant typically will be classified as a tobacco user. There are nicotine-free e-cigarettes cartridges, but at this time the life insurance industry is still hesitant on ruling them out of the smoker class. Because of insufficient evidence, the industry does not know if vapor inhalation from e-cigarettes causes health problems or not. However, some insurance companies will give non-smoking rates to those who use vapor-based e-cigarettes versus heat-based.

If you have been using e-cigarettes to quit smoking and no longer smoke regular cigarettes and also rarely use e-cigarettes, disclose in your application that you seldom use them. If no traces of nicotine show up in your urine sample, there is a chance you would be qualified for non-smoker life insurance rates.

If you have quit smoking altogether, including using e-cigarettes, after you have already purchased life insurance, you should inform your insurance carrier. If you have been smoke-free for at least 12 months, there is a good chance your premium costs would decrease. Your age does come into play when you reapply though so the sooner you quit the better your chances of cheaper life insurance.

Nicotine Gum and Patches

Are you using cessation products to quit smoking? These products may include gum, lozenges, patches, and e-cigarettes. Because there is nicotine in these products, some life insurance companies will still classify you as a smoker even if you don’t actually smoke anything. The use of these products will cause cotinine to show up in your urine test which would be enough for the carrier to issue you smoker rates.

To be offered non-smoker rates, you have to be cigarette-free for at least 12 months. Let’s say you have been using a cessation gum to quit smoking, but you have only been cigarette-free for 5 months. Even though you currently do not smoke, you will still get the smoker-rate because it has not yet been at least 12 months. However, if you have been cigarette-free for at least a year and still, for example, chew Nicorette Gum daily there are insurance carriers who will offer you non-smoker pricing.

While one company may give non-smoker rates to gum and e-cigarettes, another company may only give non-smoker rates to gum. These examples are why it is very important for you to be very detailed about your tobacco and nicotine product use on your life insurance application.

Marijuana

Now, marijuana use is a horse of a different color. Right now, how insurance companies rate marijuana use is all over the map. Some carriers will outright deny you coverage because they consider marijuana a serious drug and your regular use puts you at risk. Others are more than willing to offer coverage, depending on certain qualifications. If you smoke marijuana only once or twice a year, it is possible that a carrier would offer you their best non-smoker rating. Others may give you a smoker-rate for this. Regular marijuana use is typically given a smoker-rate, but you can definitely still get life insurance coverage.

The reason you use marijuana can also affect how the insurers rate you. Most will rate differently for medical versus recreational use. For medical marijuana use, there are some carriers that will even narrow it down to serious versus not-so-serious conditions, such as marijuana for glaucoma versus marijuana for back pain. In the serious medical condition cases, the company may just underwrite the condition and not the marijuana use. It really varies per company.

As you can see, working with a life insurance agency is really the surefire way to get the best coverage possible. Using an online life insurance company like Quotacy ensures your case is being taken on by professionals who know the little idiosyncrasies of each life insurance carrier. They will know the right carriers to shop your application at. Life insurance will provide you with peace of mind knowing that your family will be financially secure in the event of your death. See how little it will cost by getting a free and anonymous term life insurance quote today.

Do you have a term life insurance policy in place? Did tobacco use affect your rate?

Natasha is the Marketing and Social Media Coordinator for Quotacy, an online life insurance agency for the modern consumer. When not at work, you can typically find her volunteering at the local Animal Humane Society or curled up on her couch watching Netflix… unless it’s football season, then the Packers game will be on. You can connect with Natasha on LinkedIn.

How Tobacco and Marijuana Use Affects Life Insurance Rates is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

In addition to being an expensive habit, smoking cigarettes is unhealthy and has other high costs, such as for medical care and life insurance.

Here are some of the high costs of smoking cigarettes:

Buying cigarettes

A pack of cigarettes costs $5 to $15 per pack, depending on what state you live in. A pack a day at $10 per adds up to $3,650 per year.

Work productivity while smoking cigarettes

Ohio State University researchers found that smokers average five breaks per workday, resulting in less productivity at work than nonsmokers. Smokers also take 2.5 more sick days per year than nonsmokers.

That lost productivity and extra health care costs for smokers costs employers $5,816 more per year, the researchers found.

Health care

Health insurers can charge smokers 50 percent more than nonsmokers under the Affordable Care Act. Why the higher cost? Because people who smoke cigarettes spend more time in the hospital and will likely die sooner than nonsmokers.

Dental care also increases for people who smoke cigarettes, with an increased risk of gum disease, among other ailments.

Higher insurance costs

Because smoking causes people to die younger, they’re more of a risk for a life insurance company and their premiums will cost more. People who smoke cigarettes They die 10 years earlier, according to the Centers for Disease Control and Prevention.

BestLifeQuote.com reports that a 45-year-old man who smokes cigarettes will around $300 per month for a 20-year term life insurance policy of $500,000. A nonsmoker would pay about $80 per month for the same policy.

Homeowner’s or renter’s insurance is 20 percent higher for smokers, mainly because they’re a bigger risk for starting a house fire. Auto insurance rates can be 5 percent higher for smokers.

The High Costs of Smoking Cigarettes is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

And, to complicate matters, there are many mortgage life insurance products available that confuse matters even further.

It’s important to buy some form of life insurance to cover your mortgage because if you don’t, your surviving family members may not be able to pay for the mortgage and the lender could foreclose on the home.

Most lenders generally want the mortgage amount paid off in full when the principal signatory passes away. The lender may allow the survivor to reapply for a new mortgage afterwards, but each lender has their own policies which vary.

Let’s clear up the confusion so you understand your choices.

What is Mortgage Protection Insurance (MPI)?

Mortgage Protection Insurance, also known as Mortgage Protection Life Insurance, is a product offered through lenders indirectly through a life insurance company, or is sold directly by a life insurance company.

There are variations of these products available. Some products are similar to a decreasing term life insurance policy, while others are a level term type of policy.

Some of the policies available will pay the death benefits as a lump sum while others will pay out death benefits as an annuity to cover the mortgage payments over time. Policies which pay out death benefits as a lump are more expensive than those which pay out as an annuity.

There are also variations of these products which contain attached riders which will also provide coverage for accident and sickness such as if you can no longer work, or to cover the life insurance premiums so coverage will continue. Needless to say, this additional coverage is convenient but is also more expensive.

Also, some policies will make the lender the beneficiary while others will allow you, as the policy holder, to name your own beneficiary. The advantage in the latter is that it allows your beneficiary to use the funds in any manner they choose.

What Type of Mortgage Life Insurance to Buy?

It depends on your situation. If you are young and healthy, you might be better off either buying a level term policy on its own by using an independent life insurance agent because they can find you the best rates. Your beneficiaries can use the payout to either pay the mortgage off and/or use the outstanding balance anyway they need.

You could also opt for a decreasing term policy where the amount of death benefits diminishes over set time increments.

Or, you could opt for a more specific MPI product which offers additional protection for accident and sickness or cover your premiums if you can’t work.  Keep in mind that these types of policies that offer this more comprehensive form of coverage are provided by life insurance riders and that this additional coverage will cost more.

If you are elderly and/or have health issues, you might be better off applying for a life insurance product which does not require a medical exam through either the lender or a private life insurer. The cost of life insurance is more but at least you can feel confident that the mortgage will be covered. Otherwise, if you try to buy a policy on your own you could end up being declined.

We recommend that before you decide, consider speaking to an independent life insurance agent. They can discuss your particular situation and needs. The agent can explain what choices you have and then they can perform the comparison shopping for you to find you the best deal.

Otherwise you will be stuck with what a private lender or a private insurer will charge. You can likely find a much better rate by using an independent agent.

Also remember that you can stagger or layer several life insurance policies together so you have several policies to cover different needs. If you have a policy strictly for you mortgage, you can cancel it when the mortgage is paid off and still have the other policies in force.

And finally, you need to keep in mind what you want for your family and what they will need.

Need Help with Mortgage Life Insurance?

Mortgage life insurance can be a complicated issue especially with so many products available. And, everyone has there own particular needs when it comes not only to life insurance but also for life insurance to coverage a mortgage.

To help you decide, we suggest that you contact the independent brokers at JRC Insurance group today because we can provide you with the advice you need to help you make that crucial decision. 

This post is written by Chris Huntley, a licensed life insurance agent in 48 states. He is director of marketing at JRC Insurance Groups and blogs about life insurance at InsuranceBlogByChris.com.

Life Insurance to Cover a Mortgage is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

“What type of life insurance is available?”

“Which is the best life insurance to buy?”

The first question is easy to answer, so let’s look at all the available types of  life insurance.

Types of Life Insurance

Life insurance basically comes in two types:

• Term Life Insurance
• Permanent Life Insurance

Term Life Insurance

Many people are familiar with term insurance but don’t realize that it comes in many formats with different names. So, let’s look at these types of life insurance in more detail.

Term life insurance is the most basic form of policy available and also the most affordable as it covers you for death benefits only. Although term provides coverage for life, you buy it in periods of time known as terms such as for 10, 20, 30 years. It can also be bought for an age specific time such as age 65.

You can also buy specialty term products such as a 1 year term renewable or a 5 year term which is ideal for business or SSL loans.

Basic Term Life Insurance Policies

Term insurance comes in three types of policies:

• Level Term – This means that the premiums you pay for a specific death penalty remain the same through the life of the term. This is the most common form of term policy sold today. It’s ideal for many life insurance situations such as income replacement and debt coverage.

• Decreasing Term – This policy sees a periodic reduction in your death benefits at various time increments throughout the term. Your premiums remain the same. This policy is ideal if you need life insurance for a mortgage or see a decreasing need for higher amounts of life insurance down the road.

• Increasing term – This simply means that both your death benefits and premiums increase at various time increments throughout the life of the term. This type of policy is less common but can be ideal for a young family starting out on a tight budget.

Other Specialty Term Policies

You have possibly seen these types of life insurance policies advertised as the following:

• No-Medical Exam Life Insurance

• Guaranteed Issue Life Insurance

• Funeral and Burial /Final Expense Life Insurance

• Graded Death Benefits

The key features of these types of life insurance policies are that they do not require a medical exam and provide coverage for lesser amounts of life insurance. Although convenient to buy, we don’t recommend them simply just for their convenience.

Many of these policies will cover you for life or are age specific such age 85 for example, so make sure you ask about how long they are in force.

These types of life insurance policies cost more and have less coverage because the insurer is taking a much higher risk to cover you because they have less medical information about you.

Some companies also have a graded death benefit waiting period where you must remain alive for a certain period of time such as 2 or 3 years before the policy will pay out benefits to your beneficiaries.

If you are young and healthy, we recommend that you buy a standard term policy with a medical exam because you will save a lot more money.

But, if you have serious health issues, need coverage immediately or only need limited coverage for final expenses, or you are elderly, then one of these types of policies might be your better option.

Permanent Life Insurance

These types of life insurance policies are different than term policies. They provide death benefits just like term but also have an additional feature as they also provide a cash value accumulation feature which grows throughout the life of the policy.

Most policies guarantee a minimum amount of interest so you might not gain as much during years when the market is prosperous, but you also don’t lose as much when the market tanks.

Another feature is that these types of life insurance policies cover you for your entire life and don’t have to be renewed.

The final feature which they showcase is that you can also borrow against the cash value and have the option to either repay the loan or chose not to do so but simply choose to opt for your death benefits to be reduced instead.

Because of the cash value accumulation feature, these types of life insurance policies tend to considerably more expensive than term life insurance policies because your premiums go towards three separate areas:

• Death benefits
• Cash Value Accumulation
• Administration Costs

There are two basic types of permanent policies which are sold in variety of hybrid formats by different insurers, but the two basic types include:

• Whole Life
• Universal Life

Whole life is somewhat more rigid as premiums and death benefits remain the same. Also, the insurer chooses where and how the cash value accumulation portion is invested.

Whole life policies are offered as “Participating Whole Life” which does offer you an option about the investment portion, and “Non Participating Whole Life” which does not offer any options.

Whole life policies are best used by those who aren’t comfortable in managing their money and prefer others to do so on their behalf.

Universal life insurance is similar to whole life but is more flexible as you can buy policies which allow you to alter your death benefits and your premiums during the life of the policy. They also allow you to choose which investment vehicle the insurer uses to invest the cash value accumulation portion.

Some of the hybrid varieties of these types of life insurance policies which you might see advertised include:

• Indexed Universal Life
• Variable Universal Life (Must be sold by a licensed securities agent only)

Most permanent policies are best purchased by those who are high income earners, or have a significant estate, or where you have maxed out your 401(k) and other tax breaks.

Which Life Insurance Policy is Best

There’s no easy answer for this because the needs for each person and family is different.

Before you decide among the types of life insurance, we highly recommend that you take the time to learn more by speaking to an independent agent such as those here at JRC Insurance Group because we can help you decide and explain what you need to know.

This post is written by Chris Huntley, a licensed life insurance agent in 48 states. He is director of marketing at JRC Insurance Group and blogs about life insurance at InsuranceBlogByChris.com.

Types of Life Insurance — Which is Best? is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

Years before I seriously considered buying my first condo, I had heard that a 20 percent down payment was the norm. I couldn’t imagine having that much money set aside as a down payment. Regrettably, I didn’t buy as soon as I wish I did, and kept living in apartments for a few more years as I tried to save for a down payment.

The down payment requirements aren’t as strict as you might think, however, with banks offering home loans for as little as 3 percent down if you have good credit.

Fewer people are buying homes, whether because they can’t afford it or because it’s cheaper to be a renter. Home ownership rates in 2014 dropped to a 20-year low, with 64.5 percent of Americans owning a home — down from 69 percent a decade earlier, according to the U.S. Census Bureau.

If you want to someday avoid paying rent by owning a home outright, then owning a home is the way to go. But even if you can’t come up with a down payment, there are still ways to buy a home. You just have to be a little creative and willing to take a few more risks.

Here are six ways to either buy a home outright by coming up with the total cost, or finding a reasonable down payment that doesn’t require years of saving for your first home:

1. Soak your retirement account

This may not be an especially appealing way to buy a home, but it’s possible if you’re willing to pay a 10 percent penalty on the retirement account withdrawal and pay taxes on it. If you’re under 59.5 years old, you can pull money out of a 401(k) to buy a home, but you’ll have to pay fees and taxes that you wouldn’t if you were of retirement age.

A Roth IRA might be easier to take money out of because it’s an after-tax account and you’re only taxed on earnings.

You can also borrow money against your retirement account to make a down payment on a house, though if you lose your job the money will have to be repaid within 60 days.

2. Have a low-budget wedding

With the average wedding costing $20,000, some couples are opting to skip the expensive wedding and put the money toward a down payment on a house.

In a survey by ERA Real Estate, nearly 60 percent of women in a survey were willing to give up a honeymoon for a down payment.

It’s at least a conversation worth having as a new couple.

3. Parental loan for down payment

Your parents may be kind enough to offer you a home down payment as a gift. But don’t do it because it would be subject to the gift tax.

Instead, have a lawyer write up a promissory note and sign a contract. Like pulling money out of a retirement account, this option may not be so easy to do, especially if you don’t like seeing your parents at Thanksgiving when you haven’t made the monthly loan repayment to them in a few months.

4. Borrow against your life insurance

A whole or variable life insurance policy may allow you to borrow against the principal, without having to repay the loan. This will mean less money for your heirs when you die, however.

You’re basically borrowing money from yourself. Some lenders may only allow you to borrow up to a certain percentage of the cash value you have in the policy.

5. Rent to own

If the house you’re renting is for sale, or could be, offer the owner some extra monthly rent money that would go toward credit for buying the home eventually.

This option may require a larger down payment to give the landlord — which could be done with some of the steps above — but it would allow you to remain a renter for awhile longer while building equity in a home you’re going to buy in a year or so.

Or pay more than the purchase price of the home, essentially getting an interest-free loan for a year while you live in the house as a renter. The rental money for the coming year could be added up as a down payment.

6. Co-signer for a home loan

If your parents don’t want to loan you money for a down payment, ask them to co-sign on the loan.

It can make you a better loan risk and won’t require as good of a credit score to get a home loan. The downside is that your parents are also responsible for the loan, so if you don’t make mortgage payments, it would hurt their credit.

Those are some ways to either avoid a down payment or make it easier to get if you haven’t saved for it. What down payment options have you used?

6 Ways to Come Up With Down Payment for a House is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

Everyone wants to prepare for the worst possible situation to protect their families and buying the right life insurance policy provides this protection.

But how do you know which type of policy to buy?

Many agents want to pitch whole life insurance, as it provides lifetime coverage, but then other experts like Suze Orman and Dave Ramsey argue to never buy whole life.

While term vs. whole life insurance is a hot debate, there are some instances when you should always buy term. Let’s review them quickly so you never make the mistake of buying whole life insurance when term is the right choice.

When Term is Better than Whole Life

There are an abundance of reasons when it is much better to buy term than whole life. Term life is not only much cheaper to buy, it can also be used to fill in a lot of short term life insurance gaps so your loved ones won’t be left financially exposed.

Here are some of the many scenarios when term life insurance can be the ideal solution:

1. Income Replacement – When you only want life insurance to replace your income were you to die unexpectedly, then term insurance will suit your needs perfectly. Most people simply elect the term period that most closely lines up with their projected retirement age.

2. Only Need Insurance for a Specific Time – If you just need a policy for a short period of time or a specific longer period of time, ranging anywhere from a 1 year renewable term, or coverage for 30 years or even up to a specific age such as age 65, term can be used for almost any need. 

3. Business Loans – Almost any business loan you obtain needs to be life insured and you can get custom term products to cover the period you need for any business loan.

4. Cover your Mortgage – Term life insurance is ideal for mortgages. You can choose between a level term policy so any proceeds above and beyond the mortgage  payout goes to your family, or choose a decreasing term policy where the coverage diminishes over set periods of time.  Note: the maximum age you can purchase a 30 year term life insurance policy is 58 years old.

5. Children’s Tuition – If you have co-signed a tuition loan for your children or simply want to ensure that they will have the tuition money available down the road then a term policy can address these needs.

6. Buy Sell Agreement – When you enter into a business partnership, you will want the parameters of the partnership covered by appropriate yet affordable life insurance.

7. New Children – You may have just had your first child, and if you want coverage quickly and a policy that is affordable to financially protect your new offspring, a term policy is the way to go.

8. Recently Married – If you just married then you will want to get a policy to financially protect your partner. Also, in common law states, just keep in mind that when you marry someone, you also become liable for your partner’s debts so you want to financially protect yourself.

9. Key Employees – If you have very important employees that are vital to your business success and continued prosperity, you will want to get a term life insurance policy so your business can continue to operate.

10. Sole Proprietors – If you are self employed, you will likely be wracking up business debts and have business obligations that continue even after you die, you will want life insurance so your family members can properly dissolve your company and not be financially burdened.

11. Supplement Work Life Insurance – You may have purchased life insurance through your employer, but you will want to supplement this coverage with a separate policy. The reason is because the policy you buy through an employer is only good as long as you are still employed with them.   

12. Funeral and Burial Costs – Funerals in the U.S. are expensive and if you want to ensure that your surviving family members don’t have to pick up the bill, a term policy is ideal to cover these costs.

13. Locking in a Premium When Younger – Term insurance is especially cheap when you are young. Since you are going to need it sometime you should buy a policy when you are young as you can save you a lot of money because the cost of insurance increases as you get older.

14. Pay Estate Taxes and Create Estate Liquidity – When settling an estate you could be overwhelmed with estate taxes. Having a separate term insurance policy which can be paid as a lump sum can alleviate that problem and provide other badly needed assets.

15. Charitable Donations – You might want to leave some money to your favorite charities and a term policy would be the ideal way to achieve this objective.

Keep in mind for numbers 12, 14 and 15, many advisors would recommend lifetime coverage.  However, Dave Ramsey would argue to buy term and invest the difference, and you’ll save up just as much to be able to achieve your financial goals as what the whole life insurance would pay out.  If you’re absolutely dead set on permanent coverage, you might consider guaranteed universal life insurance instead.

This post is written by Chris Huntley, a licensed life insurance agent in 48 states. He is director of marketing at JRC Insurance Group and blogs about life insurance at InsuranceBlogByChris.com.

15 Instances to Buy Term Instead of Whole Life Insurance is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.