Reader’s Question:

I’ve heard a lot about how much coverage one should have under a life insurance policy (my neighbors here in Minnesota just loves to talk about these things!), How much universal life insurance, in essence, would you recommend?

Lee

Minneapolis, MN

This is a very good question. Everyone who wishes to have life insurance coverage should know how to recognize how much life insurance would be adequate for their needs. Many experts say you have to get a coverage amount that is ten, twenty, thirty times your annual income as a good rule of thumb. While this may be a good estimates, you can never really be sure if these are enough or in the other hand, this may be too much and you might end up wasting too much money on life insurance that could have been put to good use elsewhere. Where do you even begin?

It would be highly advisable that you get a good understanding of your family, your household, your kids (anyone who relies on you there in Minnesota, financially) needs. On an annual basis, try to determine how much you spend on bills, groceries, mortgage, loans, debts and any other financial obligations that you may have. You will now have a way of more precisely identifying how much money your beneficiaries would need in order to survive decently in the event that you pass away.

Let’s say you do pass away, how much money or income do you want to leave your beneficiaries? For how long? Also, who will take care of burial costs? Let these questions guide you in determining the right kind of life insurance policy for you with the right amount of coverage.

Reader’s Question:

What are the benefits that I can get from universal life insurance policy aside from the flexibility in the amount applied to life insurance policy?

Janice

Fort Collins, CO

A universal life insurance policy is a term life insurance policy that has element of savings. If you are a policy holder of a universal life insurance policy, you can adjust the amount of premium applied to the life insurance protection and savings anytime. Reducing the amount can be easy but if you want to increase your life insurance, the life insurance company may require you a proof of insurability.

Owning a universal life insurance policy has several advantages. With this type of life insurance policy, the death benefits are level or do not increase. The proceeds are paid upon the death of the policyholder and are free from income tax. Universal life insurance allows the policy owner to increase or decrease the amount of saving. Increasing the amount of life insurance requires the policyholder to present an evidence of insurability. Because of the saving element, this life insurance policy accumulates cash values tax deferred. The policy owner can access this cash in case of an emergency. Lastly, an increase in cash value increases the face amount or death benefit accordingly.

There are also disadvantages when you purchase a universal life insurance policy. The premium of this type of life insurance is a little high but the extra premium is worth it if you want to save money. In the event of a decline in interest rate, the amount of premium may be required to increase. Otherwise, the policy may lapse. The policy holder can actually reduce the amount of the amount of his/her life insurance as an alternative to this situation.

Reader’s Question:

If I die, what can my family expect to receive from my universal life insurance policy when they file a claim?

Paul

Westminster Colorado CO

Your family is lucky to have someone like you who cares a lot about them, Liam. Your family should be informed that universal life insurance claims in Colorado and most places in the US are usually handled by the home office of the life insurance company. They will need to inform the company and fill out a request form. Leave them a copy of your insurance policy so that they don’t have a hard time filing the claim.

Normally, insurers are required to pay beneficiaries at least eight percent interest starting from the date of death so it is in their best interest to settle their claim immediately. Your beneficiaries will receive the amount specified in your universal life insurance policy, though the insurer may sometimes adjust this amount depending on specific provisions in your life insurance coverage, like if you have any outstanding loans against the cash value of your policy or if you have accrued dividends which can be added to the amount of the benefit.

Your family also has the option to either receive the bulk amount immediately, leave the proceeds with the company and let it earn interest until they are ready to claim it or convert the proceeds into monthly income, sort of like pension for them in your absence.

Why don’t you take a look at the different options available from insurance companies. Just type in your zip code to receive free universal life insurance policy quotes. This will give you a better idea of what kinds of benefits your family can receive from universal life insurance policy before you finally decide to purchase it.

Reader’s Question:

Why should I go with a Universal Life Insurance Plan? Are they better than the whole life policy that I currently have here in North Carolina?

 
Enrico

Charlotte, NC

 
Universal Life Insurance Plans are a type of whole life or permanent life insurance coverage that is geared more towards individuals who are investment-oriented and would like to have more control of how your money is invested. Universal Life Insurance policies also reflect the kind of risk tolerance that you would have when investing.

So a Universal Insurance plan can also be seen as a life insurance policy with a sort of mutual fund attached to it. The goal is to grow your money or the Cash-Value amount of your policy in the long-term (and while the policy is still in force). Admittedly, this kind of policy is not for everyone and it would be a good idea to have some basic knowledge about how investment portfolios work.

The only real difference between a traditional whole life plan and a universal life insurance plan is that you are given control over how your money grows. If you are somewhat of a risk-taker, even a conservative one and recognize that you can make money (a lot of it) by investing and also wants the capability of choosing what kind of investment mechanisms your money should be going into, then a Universal Life Insurance Plan might be for you.

This kind of policy has a lot of promise, but like anything there will always be some amount of risk involved so consult a life insurance agent or broker there in North Carolina, and ask as much questions as you feel necessary to understand this kind of coverage.

Reader’s Question:

I’ve decided to get a universal life insurance policy from a reputable company here in New Jersey, I would need to undergo a medical exam, what should I expect during this exam?

Clyde

Elizabeth, NJ

Congratulations on deciding to get life insurance! Now comes what seems to be the most awkward part of the application process to a lot of people, getting through the physical or medical examination required. For those not in the know, the reason life insurance providers sometimes require people to undergo a medical exam would be to determine how much risk you pose of dying soon. This would give the life insurance provider a good idea if they would need to charge you higher life insurance premiums due to the increased likelihood that they will have to pay death benefits too soon, or a low one, to keep your business for a long time.

Here are a few things to remember when you go to your life insurance medical exam there in New Jersey:

1. You will be asked about your medical history, as well as your family’s medical background.
2. You will be asked about your lifestyle activities, if you participate in hazardous activities, smoking .
3. Your height and weight, blood pressure as well as taking of blood sample and urinalysis.
4. Contact Information to your doctor.
5. Total amount of life insurance coverage that you are buying for your policy.

It would be best to consult your life insurance provider directly and ask specifically about the kind of tests that will be needed to be done. You should also refrain from getting a No-Exam life insurance if you are looking to save on life premiums since it would be much more expensive.

Reader’s Question:

I currently own a 2-year old life insurance policy but I’m not satisfied with the premiums I’m paying. Can I do something to get cheaper life insurance rates?

Baron

Lafayette, IN

Yes, the good news is that there are still some effective ways to get savings on your life insurance coverage. Here are a few tips that could prove quite useful to you:

1. Make Sure You Have the Right Policy

Paying for the wrong kind of policy is an utter waste of money, but you’ll be surprised at how often this happens. If you just need coverage for a certain period of time, such as while raising a family or paying your mortgage, then go with a term life insurance plan. Want to accumulate substantial amount of money and have permanent coverage? Then a whole life insurance plan is recommended.

2. Take Advantage of “Price Breaks”

With most life insurers today, choosing a higher coverage amount (a.k.a. death benefit or face value) can actually give you lower rates. So if choosing between a $350,000 policy and a $450,000, going with the latter can actually save you money.

3. Live a Healthier Lifestyle

Taking care of your health and quitting smoking can do real wonders in keeping your rates affordable. There is no better time to start this than now.

4. Go with Annual Payment Plans

If your life insurer offers this, consider paying your coverage a year in advance. This entitles you to get discounts or lowered premiums.

5. Look for Discounts

Discounts abound, and you want to make sure to ask your insurer about those you might be eligible for. This is an almost effortless to get savings out of your life insurance bills.

6. It Wouldn’t Hurt to Shop Around

There are hundreds of life insurance companies out there and it would be a good idea to run a free quote check from insurance comparison portals (like this website) to know what is being offered. There are times when the only way to get cheaper life insurance is to switch carriers.

Reader’s Question:

What is Equity Universal life insurance index? How is it different to other types of universal life insurance like variable life policy?

Tina

Jackson MS

Just like any other type of permanent life insurance, Equity Universal insurance index provides life insurance protection as well as an investment aspect commonly referred as the cash value. Similar to a variable life insurance, a portion of your premium pays for an insurance protection to your family through a death benefit claim while the rest is invested to stock or bond accounts.

Equity universal life insurance index deviates from any other kind of universal life insurance in the sense that it adopts a different system for its cash value. The policy’s unique feature is its cash value is tied up to the performance of an index such as the Standard and Poor’s 500-stock index. This means that you have the chance to earn profit out of the index’s gain when it goes up but if it performs poorly or declines, you are usually guaranteed of a minimum return like 2 percent.

Attracting consumers to invest in this type of policy is somewhat beneficial to the economy especially that the stock market these days has been performing unfavorably. But the question is, whether you, as the potential buyer, should own this type of insurance or not. Albeit this policy may seem to be a good one because of the insurance and investment opportunity it has, there are still some people that have several issues towards it.

On average, these policies entail a variety of investment expenses that can eventually pull down your long-term return potential. As opposed to a variable life insurance, the costs that come along with an equity index universal life insurance are not explicitly broken out. Say for an instance, after giving in to the investment and policy’s expenses, do you still have enough premium left to give you the amount of insurance coverage you need? So when choosing an investment type of policy, consider the following: 1) Is it liquid and safe? 2.) Can you access the money when you need it? 3.) Is there any tendency that I will lose the principal? 4.) Is there an opportunity for a good rate of return 5.) Will it incur taxes? If structured properly, an EIUL can outperform other investments since it can grow during the accumulation phase and can be withdrawn without any tax consequence.

Reader’s Question:

This is the first time that I would search for my life insurance so I need some expert’s advice. How do I find the best universal life insurance companies here in Arizona to offer me good quotes that I can choose from?

Antoine

Scottsdale, AZ

There are a lot of helpful resources that you can find online aside from the Websites of life insurance companies that provide Arizona life insurance quote on several policies. If you take advantage of the availability of the Internet, you can truly make your loved ones more financially protected should you depart this life. A lot of new life insurance providers come to play which makes the business more competitive, thus more options for you to get the most suitable Arizona life insurance quote for you.

A simple way to find the best life insurance companies is to review the various kinds of insurance you carry such as auto and home and see if your insurer or insurers also offer life insurance policies. It would seem sensible to obtain term life insurance quote from them first for you to be familiar with their terms and conditions aside from the kind of customer service they offer so that you can get the best value of your money for your life insurance plan.

Since this is your first time to search for your Arizona life insurance quote, it is better that you fire up your search engine to get the most affordable life insurance quotes. However, make certain that you obtain life insurance quotes from several insurers. These life insurance quotes that you see online are not only free but you can get accurate information quickly.

Reader’s Question:

I’m looking to get my first universal life insurance policy for my work here in Georgia, I’m wondering how I should go about doing this?

 
Ayers

Savannah, GA

 
For many people, choosing a life insurance policy is a big deal, and it should be! With literally hundreds of insurance companies out there, you would want to make sure that pick the right kind from the right provider. Life insurance is a long term commitment so you want to make sure you get it right (so you won’t end up knocking yourself on the head ten, twenty or even thirty years down the road).  So here are a few tips and suggestions to help you get that very first life insurance policy of yours there in Georgia:

1. Ask yourself why you need life insurance
Knowing why you need life insurance, whether for work as you stated or maybe to give you, and your family security for the future in the event of your untimely demise, would help you narrow down your choices and give you a greater chance of finding the life insurance policy best suiting your needs.

2. Know what kind of policy to get
If you are just looking to get life insurance coverage due to the nature of your job then Term Life Insurance would be best. This is a type of life insurance coverage that is much cheaper, simple and is meant to be kept for only a certain period of time.

3. Shop Around
The Web is a great resource for those looking to get quick, accurate life insurance rates to compare. You should at least get five quotes before considering a provider.

Reader’s Question:

Exams are a pain so I tend to smoke to keep bring down the tension afterwards. It’s the only time I smoke, I swear! Will this boost up the premiums if I get a universal life insurance policy in Stamford?

Zachary

Stamford, CT

Oh, Zachary, lots of people say the same thing about their smoking habits. A lot of my friends say that they smoke only when they drink beer or only after eating or only when they’re incredibly stressed out at work – but the one stick a day quickly develops into a one pack a day habit. It is a habit that various research have closely linked to lung diseases, particularly cancer; hence, it is a widely recognized health risk to be a smoker.

Nevertheless, I guess most life insurance companies in Connecticut do recognize the need to provide life insurance coverage to smokers as well as non-smokers. However, considering the proven health risks, it does tend to boost up premiums compared to non-smoker levels, particularly for whole life insurance policies. Since you’re considering universal life insurance, however, the variability of both premiums and returns from this type of life insurance may help shield you from the usually high premiums. You might want to look into equity-indexed universal life insurance and compare the terms and conditions with traditional fixed universal life insurance.

An efficient way to do this is to request for free online quotes from this site (just enter your zip code). You can then compare smoker life insurance coverage available to determine which one offers the best value for you. Just remember to be frank about you smoking habits so you get accurate quotes. Best of luck, Zachary.