Should I invite an life insurance agent into my home, or use an internet life insurance broker?

Life insurance is a difficult subject, it is a decision we all have to make, and a thing we all should have. Whether it be a simple policy that will pay out when we die so that our families are not overly burdened by our passing, or an investment for our retirement. The industry is full of difficult language, clauses, contracts, exceptions and fees. It is a minefield waiting to catch the unwary, and one that some people dread to walk upon.

That’s why we have insurance broker, and life insurance agencies. They are there to make the minefield seems a little less perilous, safer to walk through. They are there to make sure that you connect with the policy that suits you best, not one that suits the pockets of the insurance company better. They act as intermediaries between you and the complex facts, forms and figures required by insurance companies before they will agree to cover you.

In the old days it was common to get yourself an insurance agent, and they would come around to your house, partake in a coffee and some biscuits while they laid out their plans and proposals on your dining table. The whole night would be spent going through the facts, and figures, dealing with difficulties and coming up with a plan that you could both afford, and would cover you sufficiently in the event of your death.

More than likely, your insurance agent was a local person. Someone you would see in the local supermarket, who happened to be in the business and only covered the immediate area of their residence, more of a friend or acquaintance than someone trying to sell you something.

Times moved on, and we moved into the internet age.

Today you can have a similar discussion with a life insurance broker on the internet. They will discuss the same things, offer the same facts and figures (probably more now as they have so much more to offer at their fingertips than your neighbourhood agent had in their briefcase) and propose similar services. The only difference is they are not sitting in your home.

Or is that the only difference?

Consider the old scenario again. You would phone up your agent, arrange a time for them to come round and then spend the evening going over things. It wasn’t exactly dynamic was it? You had to dedicate an evening to the process, the only facts you were presented with were the ones they brought with them, and you sort of felt under a little pressure to sign something before the evening was out in case you were guilty of wasting their time. (If you didn’t sign the contract you would have to avoid them if you saw them in the street in the ensuing weeks).

Today’s world doesn’t work like that anymore. In today’s world we expect someone who is providing us with a service to have the world of technology at their fingertips, to be able to offer us any answer to any question. We expect them to be there when we decide, not at a mutually acceptable time; be it 3:30 in the afternoon, or at 8pm when we get home from work. We have the ability to double check any fact or figure they may quote us, instantly using the same internet technologies that they are using. And, a big and, we have the choice to say yes, or to say no, to move on and find someone else to help us – no hard feelings.

In short, in today’s world, we want answers to be fast, efficient and accurate. Forget the social chit-chat, we are discussing business, and when we are finished we want to continue with our normal lives satisfied with a job well done – mission accomplished.

An online broker offers all of that. They are sitting in their office when you speak to them (it can be a chat session, Skype phone call, or just exchanges of emails) so they have all of the facts and figures of their whole company at their fingertips (no more – “let me check with head office” – they are in the office). They are at work, and have lives of their own, so it is not in their interest to try and spend hours talking to you. They will professionally convey the facts and figures, discuss your concerns and worries, make suggestions about policies and terms and let you make the decision. There is no pressure to sign the deal before they leave, they can pick up the conversation tomorrow or the next day.

If you need time to look at the policy, simple, they email it to you and you take your time to read it, no one looking over your shoulder. You can still question any part of it as you would to an agent sitting next to you, or you can end the conversation there and say you will contact them again when you have looked through the documents.

Of course an Internet broker does lack some of the personal touch that a visiting agent used to have. But ask yourself a question; when was the last time you asked the man from the electricity company to come round for dinner when you were deciding which energy plan to use in your house? You didn’t did you? It was a service you needed, you handled it like any other service you need in today’s world, online or via the phone.

 

Choosing Life Insurance Beneficiaries

Nobody likes to think of dying, but as it is a fact of life it must be given consideration at some stage in your life. Normally people will start to think about things like life Insurance when they start families, relationships, or enter into agreements where security in the event of their death is required.

When looking into life insurance and signing up for a policy certain things must be taken into account.

Who are the beneficiaries going to be is an important one. Does any money paid out go automatically to your spouse, children or bank? If you are in a stable relationship, but not officially married, does your partner automatically receive payment or do you have to specify this.

(We have all seen news reports where people have died and their families have hit the headlines while battling amongst themselves for what monies the deceased had, or was entitled to from their insurance policy).

When you take out a life insurance policy of whatever form, there is a space on the policy document where you can name your chosen beneficiaries. If you fill this out any monies due at the time of your death will go directly to them, usually without question and within 30 days.

If you do not fill out this section of the document, any monies due at the time of your death will go to your estate (the collection of assets you owned at the time of death). This estate is handled “in probate” by a lawyer who decides depending on circumstance how the money is distributed.

Normally, the lawyer handling your estate has to respect the contents of a will and distribute the estate as the deceased required. This process can, however, be contested in court by relatives of the deceased for a multitude of reasons.

If you have completed the beneficiary part of your insurance document, it is your responsibility to make sure that it is up to date, changing it as your circumstances change. (For example; when you first got married you took out a life insurance policy and named your, then, spouse as the sole beneficiary. Later on in life you divorced and re-married. In the event of your death any monies due from the insurance policy will automatically go to your first spouse – unless you changed the beneficiary listed in the policy and named your current spouse.)

(Changing the beneficiary listed on your insurance policy is fairly simple, most insurance companies will just require that you fill out the appropriate forms and will then update your existing policy. Whereas changing a will usually requires the actions of an attorney and that the will is signed in the presence of witnesses)

When naming beneficiaries on a policy you have a number of choices:

  • You can name a sole beneficiary: In the event of your death the policy is paid directly to them.
  • You can name primary and secondary beneficiaries: in the event that the first beneficiary dies before you do the proceeds of the policy will go to the secondary beneficiary listed.
  • You can name a list of beneficiaries and specify what percentage each will receive at the time of your death. In the event of the death of one or more of the beneficiaries the figures will be adjusted to accommodate those remaining.

Can you name any one as a beneficiary?

Yes, you can name any one you wish as a beneficiary. They do not have to be a member of your family, or even connected to you in any way. In cases where a policy holder has no direct descendants it has been known for them to name someone unrelated to them who may have cared for them, or even charitable organisations.

It is, however, important to inform the beneficiary that you have named them as such, because if the life insurance company cannot locate the listed beneficiary after a certain period the proceeds of your policy will revert to your estate. (Which, in the case of no descendants, may revert to the province)?

So, when you take out that insurance policy think about whether you wish to name a beneficiary, or let the proceeds go to your estate, which will respect the contents of your will.

Grandparents Insuring Their Grandchildren

We all know how much grandparents love their grandchildren. It’s as if grandchildren are the younger versions of their mothers and fathers. Grandparents love their grandchildren, and they absolutely love being able to care for them. A number of grandparents are considering the financial futures of their grandchildren. This is especially the case if the parents are not in the best financial situation. A number of grandparents have considered obtaining life insurance for a grandchild in order to make sure that their grandchildren are thoroughly protected financially. While life insurance for a grandchild is nothing new, the concept of grandparents taking out life insurance policies on their grandchildren may be something that more individuals will consider. With many grandparents in their senior years, a number of them may have the resources to assist their grandchildren. For those grandparents that want to leave behind something for their grandchildren’s future, obtaining life insurance for a grandchild seems like a very good option.

What is Grandchild Insurance?

Life insurance for a grandchild is something that is not mentioned as much as other life insurance options. However, this type of life insurance is readily available for any grandparent that is interested in investing in their grandchildren’s future. Life insurance for a grandchild can be purchased from a major life insurance company. There are some stipulations for this type of insurance. Usually, there is an age limit to which the life insurance policy applies. These particular life insurance policies usually allow for coverage to begin several weeks to a few months after birth up to age 21 and in some cases 25. The life insurance for a grandchild must be purchased during these ages to ensure coverage. The reason that so many insurance providers promote life insurance for a grandchild is that grandparents can help build their grandchildren’s financial futures. Likewise, grandparents can obtain low rates on premiums for life insurance for their grandchildren. In many circumstances, this type of insurance is usually a lot easier to obtain than other insurance products. With life insurance for a grandchild, there is usually is not a health exam required and the premiums are so low that it is actually advantageous for grandparents to consider assisting their grandchildren’s financial future.

Why Many Grandparents Want to Insure Their Children?

There are a number of reasons why many grandparents want to apply for life insurance for a grandchild. As is the case, many grandparents see themselves as second parents to their grandchildren. Oftentimes grandparents are found buying gifts and providing financial support to on a consistent basis. This is especially case if the mother and father are not in the best financial situation. Circumstances such are the reason why life insurance for a grandchild is another reason why some grandparents choose to obtain this type of coverage. Even if the mother and father are not able to properly care for the grandchild after the grandparents’ demise, the child will still have a base of financial security. Life insurance for a grandchild is an excellent way for grandparents to give their grandchildren a head start in life. The money that is set aside in the insurance policy will grow over time and in some cases the grandchildren will be able to borrow against the money if so desired. These are just some of the many reasons why grandparents want to obtain life insurance for a grandchild.

What Are the Benefits of Grandchild Insurance?

Whenever life insurance for children is mentioned, there are a number of people that are somewhat on the fence about its value. Some people wonder why should anyone take out life insurance for a grandchild? This is a very good question because it really gets people thinking about all the things that could happen that would put a child’s financial future in jeopardy. The whole purpose of life insurance for a grandchild is to allow grandparents to make sure that their grandchildren’s future is secure. This type of life insurance provides benefits over the course of a child’s entire life. This is incredibly beneficial as most people usually have to buy their own life insurance when they are older. Also, life insurance for a grandchild is a benefit because it allows the money to accrue and eventually the child is able to borrow against the money if so desired. This is a benefit for any child that may want to obtain money for educational purposes. Likewise, if at some point the child wants to obtain additional coverage, they can do so and usually there is no health exam required. All these examples are reasons why many grandparents choose to obtain life insurance for a grandchild.

Thus, one of the best gifts that grandparents can give to their grandchildren is a life insurance policy for a grandchild. It is one of the best ways to ensure that grandchildren are financially secure in the future.

Life insurance for cancer sufferers

Insurance companies are in the profession of making money from their policies, they take a gamble on each policy they issue that they will gain more in premiums (and interest accrued on investing those premiums) they will be required to pay out in claims. It is not in an insurances company’s best interest to take on a policy that is likely to require a higher pay-out, than the amount paid in.

With regards to life insurance this poses a problem for people who are known to have existing medical conditionals, inherited diseases, or are diagnosed as critically ill (or any other factor that may reduce their life expectancy).

It is not in a life insurance company’s interest to offer them normal life insurance policies – they will probably lose money on the deal.

How does this affect Cancer patients, specifically those recovering from cancer treatment?

First of all, if you started your life insurance policy before you were diagnosed as having cancer, your insurance company cannot – by law – cancel the policy. This is especially important with regard to permanent insurance, and your policy is guaranteed for your whole life (as long as you keep up the payments). With “term” life insurance problems can arise at the end of the “term” as your insurance company may be loathed to renew the term upon news of your diagnosis, even if you are in recovery.

With annual term policies, you are advised to check your documentation, as although the concept of annual term policies is that the insurance company guarantees to renew you policy each year. Also there may be the ability to convert the Term insurance into a permanent product without having to prove good health.

Some insurance companies will outright refuse to accept a policy for someone who has, or is recovering from cancer, whereas others will accept a policy depending on the type of cancer.

Companies that do insure cancer, or ex-cancer patients will normally accept a policy holder if they had prostate, breast cancer (usually only stage one) or testicular cancer. They may also accept clients who had a cancer that was caught, and treated at an early stage.

Insurance companies that do provide Insurance for those recovering from cancer will normally require the following:

  • You must have gone for more than a specific period since your last cancer treatment (this can be as much as 5 years, but varies from company to company).
  •  You must be medically diagnosed as cured, or in remission.
  • You must have medical evidence (a certificate from your medical advisor) of your continued good health.

Even with the above conditions met, most life insurance companies will charge you a greater premium than that offered to the general public.

Sometimes it may be easier to get life insurance through your work if you are a recovering cancer patient. This is due to the fact that certain insurers are allowed to insure a whole collection of people (usually over 50) without individual medical conditions being taken into account.

Facing the possibility of not being able to obtain insurance because of your current or previous condition, it may be worth your while looking at your insurance needs:

  • Are you looking for insurance to pay off existing financial commitments in the event of your untimely death? You can opt for paying larger premiums to the company that you hold a debt with so as to clear it as early as possible.
  • Do you require insurance to take care of your funeral costs? A simple savings plan may be your best choice here, making sure that enough is put by and safe in an account you hold to pay for any immediate after death costs.
  • Is the insurance required to make sure your family are taken care of in the event of your death? Again a savings plan or investment plan may produce a larger return than a normal insurance policy. This has similar advantages to permanent life insurance, I that you can withdraw from your investment if you require funds for a specific reason (subject to the terms and conditions of your investment plan), and in the event of your death the amount in your investment portfolio will be passed on to your next of kin.

So if you are a cancer sufferer, or recovering from cancer, you do not need to despair that you cannot take out life insurance (or find it too expensive or restrictive to make it viable), you can always use standard investment tools to make sure that your next of kin are not overly burdened financially should you face an untimely death.