Why we support the petition for #NicsFight

 

On 2nd December Jill Insley wrote an article ( http://t.co/1Cx2wAzR  )  in The Observer about Nic Hughes whose critical illness claim has been turned down by Friends Life. A campaign has started to get Friends Life to overturn their decision and backed by @stephenfry on twitter the campaign is set to gain momentum.

We have decided to support the campaign and we want to explain our reasons why.

As we have previously expressed, we have had concerns for some time that the way that life insurance companies currently work may be leaving some customers exposed to the danger of a claim being turned down. When it comes to critical illness and life insurance there can be nothing worse than thinking you have done the right thing and protected your family with personal insurance cover only to find out when its too late that the insurance company has thrown out the claim due to ‘non disclosure’.

We accept that there are some occasions where due to deliberate non disclosure an insurance company will be quite within their rights to decline a claim.

However we believe there currently exists a grey area where it is much less clear that a customer has deliberately non disclosed. Misunderstandings concerning disclosure can and do arise and in the case of Nic Hughes it looks as though this might have been part of the problem.

We believe that the current underwriting practices used by most life insurance companies are adding to this problem. This is because most life companies often deliberately make the decision not to write for further medical information from the client’s GP at the application stage, even though the client might have disclosed one or more medical conditions on the application form. For medical disclosures such as heart disease and cancer, life insurance companies will nearly always prefer to write out to the client’s GP for further medical information. But there are many potentially ‘less serious’ conditions where the insurance company may decide not to bother with this stage of the process and to offer acceptance terms straight away.  In fact life insurance companies adopt this approach for the majority of applications.

The problem is that where there is no independent medical verification there can be an increased risk of misunderstanding and therefore of a claim being declined, which is potentially catastrophic for the policy holder.

Life insurance companies argue that if they were to write out for medical evidence in a greater number of cases that this would add to their costs and that it would delay customers obtaining cover. They say that customers want cover quickly and that if they can’t  get it quickly they will be put off taking out insurance. 

We disagree strongly and so do most of our clients. We think that the argument that the ‘client needs a fast turnaround’ is a smoke screen and that there may be other motivating factors.

Here @MoneysworthUK our clients tell us that the most important thing for them is to know that their cover is valid. Getting the job done right is much more important than getting a quick fix. In the main they positively welcome a GP report as part of the underwriting process, because it makes them feel safer that they haven’t accidentally left something out. That’s probably not surprising when you consider that the majority of our clients already have an existing health condition such as diabetes, heart disease, mental health etc.

In the case of Nic Hughes, had the life insurance company written out to the client’s GP for a report before making their underwriting decision then the current situation could have been avoided. If they had declined or postponed cover then Nic could have explored other avenues to see if other options were available. Instead of which the insurance company seems to have taken the easy route which has turned out to be easy for them but very difficult for Nic and for his family.  

In Nic’s case we think Friends Life should settle the claim. If you would like to sign the petition here is the link https://t.co/7KlFyuOL

Furthermore we think that Nic’s case illustrates the need for a reassessment of underwriting procedures across all life insurance companies. One possible way of dealing with this issue would be to make insurance companies fully liable for claims arising after a limited initial period – that would change the way life insurance companies approached their underwriting processes as they would not be able to rely on non disclosure at the claim stage. But it would leave customers knowing where they stand.

In the meantime until life insurance companies change their ways we think that ‘grey’ cases should be settled in favour of the applicants.

Tips for Easy Processing of Life Insurance Claims

A lot of people are investing in life insurance policies, so that it can help their loved ones financially in case of their death. Life insurance companies can easily collect their payments from you but claiming the insurance benefits can be hard if you do not have the necessary documents at hand. There are a lot of processes that the beneficiary has to go through before the claims can be received. Filing these paper documents is not easy if you do not know what to do.

There are also a lot of people who are processing their claims and insurance companies have to face all of these people's concerns. The amount of life insurance claims that will be received would also depend on the type of insurance that covers the beneficiary and the event that lead to these claims. In order for you to claim you benefits fast and easy, you will have to bear in mind these important reminders.

As the beneficiary, you should have the original documents related to the insurance policy. Make sure that you also have copies of those, in case they will be needed. Make sure that you have all the documents needed before processing the claims. This would also include your identification as the beneficiary who has the right to claim the benefits.

It is important that you get in contact with the insurance agent from whom the insurance policy was purchased. He or she will be able to give you the details and steps that you have to perform regarding claiming the benefits.

As the beneficiary, you should also be familiar with the insurance policy that you will be getting the claims. This information can be read in the policy documents and if you have questions you can also contact the insurance agent.

Consider also the length of time that you have to claim the benefit. There might be an unlimited time some insurance companies transfer the benefit to the state. This means that the process of claiming the benefit will be complicated. So better claim the benefit as soon as you have the documents needed such as a death certificate.

There are also different ways on how the money can reach you. You can either get it at lump sum or by installment. You can receive the claim after seven (7) days when the beneficiary has finished processing all the requirements.

Do not worry if you do not see any taxes taken from the amount you received. There would only be a tax of 55% in the excess of $1 million claim received.

Filing your claim can be hard and stressful at times, so make sure that you have copies of all documents needed. Make sure that you also know your insurance agent and the insurance company of the policy you purchased.

Check www.lifeinsurancequotes-online.org for available insurance that may fit your needs. It is also better if the beneficiaries have access to this information so that they can easily process the claims in cases such as death or accidents. Click here to get more information about life insurance claims.

Article Source: http://EzineArticles.com/?expert=Julius_Daviz_Galvez

Essential Details To Remember When Applying For Any Insurance Policy

If you care for your loved ones, then you should secure their future. This means anticipating contingencies and being prepared for them. One of the best ways you can do this is by securing the right coverage, especially in case of accidents. That's why it is highly encouraged to apply for the proper life, accident, and health insurance policies. This is especially true if you are the sole breadwinner of the family. You have to make sure that your kids will still have a bright future, no matter what happens. So how do you know what kind of insurance policy is right for you?

There are still lots of people who are skeptical about getting a proper coverage. There are many who are still without a decent policy, whether it is on their lives, health, or even on the vehicles they own. However, in these modern times, we have to realize that risks are growing each day as well. The more sophisticated society gets, the more risks we have to face. Hence, we have to make sure that the coverage we get will be able to answer to such risks. So the very first tip you apply for a policy is to assess the nature of the risks it covers.

For example, if the nature of your work is inherently hazardous, then you should take out an appropriate life insurance policy. Added to this, you should also have your health and accident coverage. If your job requires you to travel often, then secure travel insurance as well, unless your accident insurance gives more or less similar coverage. Next, check out the premiums that you have to pay. You have to expect that these policies will cost you. However, there are so many insurance companies out there that you can choose from.

Spend enough time assessing the various products of these companies and compare them. Go for the one that can give you the most comprehensive coverage at the price you can afford. Just be careful to properly understand the terms and conditions before signing anything. That brings us to our third tip which is to consult with an expert. Since we are not experts on this field, it's normal for us to entertain doubts. In order to clear up those doubts and secure the most suitable coverage, it's best to seek professional assistance. Consult with an experienced and reliable agent regarding your needs. That way, you will pay for the kind of coverage you want and deserve.

You can learn more about PPI and other forms of insurance by looking up online resources and reviews.

Article Source: http://EzineArticles.com/?expert=Merle_Bastilla

The Nature Of Risk And Life Insurance

Everyone knows that we get insurance to cover potential risks. Insurance premiums will of course be directly proportional to the level of risk that their attached policies are covering. This article explores the curious relationship between risk and insurance prices.

Different insurance products may have different interpretations of how risky certain things are. You would expect an eighty year old to pay lower car insurance premiums than a twenty one year old but, the same twenty one year old will come up on top every time when it comes to life insurance. It can therefore be said that different insurance products will have their own interpretations of risk

I'm going to take a risk of sounding patronising: do we really know what risk is? When you take a second or two to think, this question is actually far more expansive than it seems. Risk is actually derived from the Italian word 'rischio' meaning a source of peril.

Taking a look at my Oxford English Dictionary I get no fewer than six distinct meanings. When accounting for the life insurance industry jargon we get a seventh meaning referring to 'the risk' which in this context means whoever is being insured rather than an event that might cause loss or damage.

As a life insurance specialist two key element of what risk is have emerged to me, there must be an element of uncertainty, and there must be a potential for loss.

This is, however, seemingly too simplistic for the insurance industry to use. When calculating life insurance policy costs we also need to encompass a third ingredient which is a measurement that allows risk to be distinguished from uncertainty.

The probabilities of certain events happening, such as death or injury need to be calculated. This process involves using complex financial models based on past statistical data. While pricing factors such as age and sex are beyond your control there are some steps that can be taken to save some money. Smokers will always get a lousy deal when it comes to life insurance, so quitting can save you a packet. Insurance firms will class you as a smoker if you have consumed a cigarette in the last twelve months. If you're classed as overweight you'll also take a hit to the pocket. So cutting down on those excess pounds is a great idea.

Hopefully I have demonstrated how insurance and risk are intertwined and in order to understand the price of life insurance we must first define just what risk is.

Bryan Collins is a life cover specialist, specializing in Endowment Mortgage Insurance and Endowment Insurance

Article Source: http://EzineArticles.com/?expert=Bryan_I_Collins

The Importance of Life Insurance for Women

It is a common sight these days that most women are breadwinners of their families. In the past, women rarely get insurance because they do not know their financial value nor are they paid for doing jobs at home. Nowadays, insurance companies are encouraging women to buy insurance in order for them to secure not only their own life but also of their family members as well.

There are different kinds of life insurance for women. Each kind has its own advantages and you can choose which one is suitable for your needs. Some of these insurance policies which are commonly purchased by both men and women are term life policy and whole life policy. Here are some thoughts for you to ponder on why you should buy an insurance policy.

Women play a huge role in the society. Not only do they help mold the children to become productive members of the society but they also perform their household duties without asking for something in return. A mother's yearly salary is estimated to be $115,000. Many do not know about this, but a mother's job includes being a CEO, a tutor, driver, chef, and a whole lot more. Imagine the loss that the family will experience without a mother to perform all of these jobs. Definitely a mother is someone who is very important and it is strongly encouraged that her life should be covered by insurance.

There are women who are the breadwinners of their families. Purchasing insurance is one way of preparing for whatever accident that may happen in the future. In case of death of the breadwinner, the family is surely to suffer from financial difficulties. An insurance policy would somehow cover the financial loss for a certain period of time depending on the insurance cover chosen by the one paying for it.

There is no assurance that you will always have what you are experiencing currently. There have been a lot of uncertainties when it comes to the current economy as well. In cases where you get an accident or lose a job, the insurance can help you financially while you are in a crisis.

For women who live alone or have no relatives to turn to when they die, they can purchase a death insurance policy. The insurance company will cover burial expenses and other expenses that are left unpaid such as hospital bills and home utilities.

There are different insurance quotes for women. The earlier you purchase an insurance policy, the longer time you have to pay for it. This means that you only have to pay for lower amount each month for a number of years. There are also different factors that determine the insurance quotes for women. Some factors that are taken into consideration include age, annual salary and health condition, whether you have any vices such as drinking and smoking.

It would be best to purchase an insurance policy of your choice while you are still younger. For more detailed information about life insurance for women, you can visit this website. Learn and know more about the different types of insurance available at www.lifeinsurancequotes-online.org. Secure your life and your family as well by getting insurance.

Article Source: http://EzineArticles.com/?expert=Julius_Daviz_Galvez

Term Insurance: Ensuring a Safe Future

With the increasing risks, people want to safeguard their future, as well as the future of their near and dear one's. There are different companies who provide various types of offers to the people. There are insurances like life insurance, car insurance, child insurance etc. Term Insurance is one such insurance which is quite effective now-a-days. Some insurance is a life long. But in case of Term Insurance it covers a certain period of time.

This policy is a particular genre of policy over a certain range of time. The time period may be 5, 10, 15, 20 years or more. These are known as "level term" policies. If the specified time period is over the premium rates might not be valid anymore. The client must use some different modes of payment conditions. If the person expired within the stipulated time then the beneficiary will undoubtedly get the death benefit. A classic example is that if insurance is for a one year term, then if the person dies within the year the beneficiary can avail the full death benefit. If the person dies after one year, then the death benefit cannot be availed. There is absolute zero cash value in case of term policy.

There are many advantages of a term insurance policy. There is no cash value in case of Term policy. The term policy is less expensive compared to the permanent Life Insurances that exist in the market. Term Insurance is quite useful for people who have dependents to care about. As the premium is quite low so people can invest in other fields too. Term policy provides tax breaks. After the death of the person, the amount will act as an asset to the family. The people can easily pay the premiums even during career breaks. Term insurance plans are quite helpful both for single income as well as double income families too. In case of double income families, it helps to meet the investment goals, and in case of single income families, it helps the earning member to support the previous, as well as the next generation. As income rises every year, so it becomes quite easy to pay the premiums. Still there are certain disadvantages too. If the person believes that the defendant might not take care of the needs of the family after the death, then this policy becomes useless.

Different agents of different companies are available. We can buy the policies from them. But as the commission is quite less, so the agents are not keen to sell the policies to the people. Information regarding Term Insurance policies can be obtained from the internet. The companies provide many lucrative death beneficiary schemes. Furthermore, this may be beneficial to think about several simple items regarding recommendations coming from different organizations offering identical or perhaps related term plans.

Term life is undoubtedly a straightforward insurance coverage choice that's appropriate if you're seeking to guarantee your lifetime from minimal price associated with premium rates.

Article Source: http://EzineArticles.com/?expert=Dnesh_Khandelwal

Life Insurance Coverage and It's Advantages

Life Insurance has become one of the necessities for a person who wishes to give his family a safe and secure life even after their soul rests in peace. The insurance policy is a commitment made by an insurance company to pay to its nominee a specific amount if the policy purchaser dies during the term of the policy. You make sure that your family is left with a lump sum of money for financial protection.

To satisfy the actual needs of individuals from various walks of life you'll find distinct life insurance plans.

Term Insurance is with extremely low premium rates. This plan comes with a limited period which means this policy can be used only for a nominal period and after the maturity times you lose eligibility for any profits or allowances. In case if an insurance holder dies during the coverage period, the nominee gets a specific lump sum amount. This policy can be taken for 5, 10, 15, 20 0r 30 years.

Endowment Insurance Plans are for best saving plans which provide a specific amount at the end of specific term or maybe with the demise of the insurance holder. Even after the end of the plans the client will get supplementary advantages such as bonuses and profits. Usually this plan is available for 10, 15 and 20 years or up to a certain age limit.

Pension Plans are for you if you desire to lead a happy and respectful retirement life, a decent pension plan is a must. Pension plans help to provide better retirement days by securing amount while you are earning. Here, the policyholder can pay any large total sum or premiums for certain years to acquire an annuity throughout old age.

"With Money-Back Plan" you can enjoy insurance coverage along with savings. "In this policy all through the term" you are benefited along with fair dividends along with the final lump sum return.

The eligibility to apply for the life insurance policy is to attend the age of maturity. They can make a valid contract with any of the insurance providing company and can protect those with whom they have an insurable interest. One can also take policies on the life of one's spouse or children, on certain terms and conditions. Policyholder's state of health, the supporter's income and other significant aspects are being checked by the insurer before any approval. For working women who earn an income can also apply for the policy with the above conditions. In other cases, there is an obstruction clause that only female up to the age of 30 years, and if she does not have an income attracting Income Tax can apply for life insurance policies.

While taking a policy, you should ensure that you go through all the terms and conditions carefully, and all questions in the application form are correctly filled. Any parody, non-disclosure or deception in any document may lead to risk and your policy could be considered null and void.

There are several life insurance companies in the market, getting the right insurance policy at the right time is extremely critical. A comparison between different life insurance products and getting a quote, all at one place would be of significant help.

Article Source: http://EzineArticles.com/?expert=Dnesh_Khandelwal

Americans With Pre-Existing Health Conditions Don't Have Life Insurance

According to a new report from Genworth Financial, a large number of Americans with common, pre-existing conditions don't have life insurance. It is believed that the lack of insurance coverage is due to an inaccurate belief that because of their health issues insurance would be expensive, as well as their doubts over their insurability.

The study found that between 39% and 54% of Americans between the ages of 18 and 64 with common, self-reported pre-existing conditions hold no life insurance.

Some of the common and pre-existing health conditions that the respondents reported to be suffering from included, anxiety, asthma, depression, high cholesterol, hypertension, sleep apnea and weight issues.

In addition, over 118 million adults in the U.S. age 18 and above don't have life insurance coverage, which more than half the adult population (52%).

While many Americans are concerned that their health issues will drive up the cost of life insurance and make it unaffordable, this is not the case.

"We need to redefine the word 'healthy' in the context of insurance eligibility," says Janet Deskins, Genworth senior vice president for product development. "For adults with conditions such as anxiety, asthma, depression, high cholesterol and sleep apnea, life insurance can still be an affordable part of their overall financial plan, especially if they are actively taking steps to manage their condition."

The Genworth study also revealed that:

2012: Entire U.S. Adult Population 18+ (226 million)

    52% are uninsured; approximately 118 Million
    For those with Insurance, $152K is the average coverage amount

2011: Entire U.S. Adult Population 18+ (223 million)

    51% are uninsured; approximately 114 million
    For those with insurance, $155K is the average coverage amount

Within each of the populations identifying with the health conditions below*, a sizable portion is uninsured:

    Anxiety: 15 million total, 8 million (53%) with no insurance
    Asthma: 13 million total, 7 million (54%) with no insurance
    Depression: 17 million total, 9 million (53%) with no insurance
    High cholesterol: 26 million total, 10 million (39%) with no insurance
    Hypertension: 25 million total, 10 million (40%) with no insurance
    Overweight: 24 million total, 11 million (44%) with no insurance
    Sleep apnea: 12 million total, 5 million (42%) with no insurance

Be sure you take steps in getting yourself covered to ensure you are protected and have a financial plan for your future. Take our insurance quiz below to find out how much you know.

*Mid-point averages were used in coverage amount calculations.

Take our life insurance quiz and see how prepared you are at https://www.naalife.com/life-insurance-quiz.php.

Article Source: http://EzineArticles.com/?expert=Greg_Brunick

Step By Step Guide On How To Obtain Life Insurance

One of the primary motives why people acquire a insurance policy is the assurance that their dependents will get a prearranged sum of money in the event of their death. Getting a policy is crucial especially if you are the main source of income in your household or family. Apparently, the demise of the breadwinner signifies the loss of income for the family. As they say, life insurance is something that you need to obtain, but hopefully never have to use.

Guide on how to purchase a life insurance:

1. Determine the kind of policy that suits your needs

Term and whole life plan are the common types of policies that you will encounter as you begin shopping for a policy. Term life insurance expires for a definite period of time, such as 10 or 20 years. Conversely, whole life plan covers the policy holder until death. Your choice of policy should be hinge on your personal needs. You may prefer whole life plan or merely need a life plan for 20 to 30 years while rearing children.

2. Search out for free life insurance quotes

Internet has helped buyers get free online quotes without difficulty, but it is still advisable that you seek for the opinion of proficient insurance agents in your community. They can help you understand life plan even more, present you a wide range of options and provide you answer to your queries about certain policies that you cannot access from online quotes. Moreover, try to check with your human resources department at your job to recognize the life insurance options offered there.

3. Fill out the application form

Once you have made up your mind on which policy or insurer you want to choose, you can now start applying for a life plan. This necessitates a preliminary application that will also include few questions concerning your present and past health condition. Insurers make use of the information supplied on the form to help them in creating a policy.

4. Go through a medical exam

Most reputable insurers compel applicants to undergo a medical exam completed before they approve your application. Normally, this test should be paid by the insurance company, which utilizes it to confirm the information on your health history.

5. Understand the premium and coverage before buying it

After taking you medical exam, the insurer will design a policy for you that stipulate your coverage and indicates how much premium will be charged to you. You should get through the policy documents right before you sign it to verify if it suits your needs at a price you can afford.

6. Sign the policy and pay the premium

Lastly, sign the policy papers to obtain insurance coverage and pay the premium. Once you have completed these steps, you already have a life plan that will protect your dependents in case you die.

Mei Mayore is a dedicated life insurance agent who is keen to provide people fast and risk free life insurance quotes. Learn more things on how to achieve maximum savings and claim strategies by visiting Life Insurance Quotes Canada.

Article Source: http://EzineArticles.com/?expert=Mei_Mayore

Comparing Different Types Of Life Insurance: Whole Life Versus Term

No matter how well you manage your activities throughout your professional adult life and ensure that you and your family observe proper health practices to maintain youth and vitality, you can never completely avoid the risks of unfortunate incidents that can change your circumstances in an instant. You may be relatively young and make it a point to observe a healthy diet and get enough exercise to stay in your peak physical condition, but this would not be enough to guarantee a long, problem-free life; illnesses can still develop and accidents can happen when you least expect it.

Aside from keeping yourself physically healthy and vibrant in the hopes of living as many years as you possibly can with your loved ones beside you, preparing for the future security of your family should also include the task of properly setting up your finances. The most common and secure way to accomplish this is to purchase life insurance. Whole life insurance and term life insurance are two of the more popular options for securing your family's finances after you have passed away; it's best to know the difference between the two before making your selection so you can sign up for a policy that best fits your specific financial goals and needs.

Whole life insurance is a policy that, as the name suggests, remains effective throughout the insured's whole life. Life insurance plans under this category have fixed premiums that are typically much higher than those required by term life insurance policies. Whole life insurance has a cash value-something that is not present in term life insurance. Having a cash value means that it can be used to accumulate tax-deferred savings. In addition, whole life policies can also be a tool that can help you preserve the wealth that you plan to leave behind for your family or specific beneficiaries.

Term life plan, on the other hand, is generally a more affordable policy compared to whole life. It can protect your finances for about 10 or 20 years (the typical period options for this plan). After the indicated period, you can choose to continue receiving financial coverage, but the premiums will be significantly increased. The money your family will receive from your term life plan can be used to continue paying general expenses after your death (such as a mortgage or your children's education). The funds can serve as your beneficiaries' financial solution to the years of potential income that you have lost with the event of your death.

Before taking out an insurance policy, it is recommended that you do sufficient research on the type of coverage that would provide your family with the best benefits. It is also important to gather enough information about a few of your preferred insurance providers before deciding on signing a contract with a single one. You can arrange for a meeting with an agent who can thoroughly explain their policies; you can also request a whole life insurance online quote so you can get a clearer picture of how much the coverage will cost. Making secure financial arrangements is the best way to safeguard your family's financial future no matter what events take place.

It is important to secure the future of your family by having a life insurance. This can help you secure your finances at whatever events that may happen. Choose the life insurance that will suit your funds and your plans, get it from a renowned company that will surely provide you the best coverage for your family.

Article Source: http://EzineArticles.com/?expert=Tyrone_I_Fedler

Understand The Suicide Clause In A Life Insurance Policy

A policy holder who feels like he is down in the dumps would be tempted to take his own life only to leave his loved ones a considerable amount of money from a life insurance policy. Suicide of a family member is one of the most disheartening situations any family can encounter. This incident could also complicate the process of claiming the life insurance benefits. But the question whether an insurance company will grant the insurance benefits to the recipients will be hinge on clauses in the policy. There are instances when a policy's suicide clause holds back the redemption of the benefits. Sometimes the policy holder does not easily recognize this clause concerning suicide because some policies use languages like "intentional self-destruction" or "death by one's own hand" to describe the act.

Forms

A suicide clause is just one of the clauses or stipulations that you can find most life insurance policies, while the stipulations may also differ to some extent depending on the state or country. Some insurers include a free look provision that offers the policy owner a considerable period of time to review a policy after it was issued to for the buyer to decide whether he wants to purchase the policy. Incontestability clause prevents the policyholder from annulling the policy after it takes in effect for a definite period of time, except if the policyholder cease from paying the premium.

Purpose

A suicide clause states that policy benefits will not be granted to policyholder's beneficiaries if he ends his own life within a specific term following the inception of the policy. In circumstances a policyholder passes away within that period covered by the suicide clause, the insurer usually investigate the claim strictly to guarantee that the demise of the policy holder was not a case of suicide.

Benefits

A suicide clause guards an insurer against a circumstance where a policy holder commits suicide with the objective to give his recipients a considerable sum of money from life insurance claims. Considering the fact that contemporary life insurance policies can easily build up a face value of $100,000 or more, the clause can protect the insurer from disbursing such a significant amount of money.

Insurers are not the only one who benefit from suicide clause, even the desperate and emotionally distressed policy holders gains from this clause. For example, if a desperate policy holder learns that their beneficiaries might not get any benefits from their insurance plan if they commit suicide, the person may reconsider his attempt to commit suicide.

Time Frame

A suicide clause usually covers the first two years that the life plan has been in effect. In case the suicide transpired within that period, the insurer will just hand back to the policyholder's recipients any premiums that have been given to that point. If suicide happened subsequent to the clause period, the life insurance company cannot refuse coverage.

Mei Mayore is a dedicated life insurance agent who is keen to provide people fast and risk free life insurance quotes. Learn more things on how to achieve maximum savings and claim strategies by visiting Life Insurance Quotes Canada.

Article Source: http://EzineArticles.com/?expert=Mei_Mayore



A policy holder who feels like he is down in the dumps would be tempted to take his own life only to leave his loved ones a considerable amount of money from a life insurance policy. Suicide of a family member is one of the most disheartening situations any family can encounter. This incident could also complicate the process of claiming the life insurance benefits. But the question whether an insurance company will grant the insurance benefits to the recipients will be hinge on clauses in the policy. There are instances when a policy's suicide clause holds back the redemption of the benefits. Sometimes the policy holder does not easily recognize this clause concerning suicide because some policies use languages like "intentional self-destruction" or "death by one's own hand" to describe the act.

Forms

A suicide clause is just one of the clauses or stipulations that you can find most life insurance policies, while the stipulations may also differ to some extent depending on the state or country. Some insurers include a free look provision that offers the policy owner a considerable period of time to review a policy after it was issued to for the buyer to decide whether he wants to purchase the policy. Incontestability clause prevents the policyholder from annulling the policy after it takes in effect for a definite period of time, except if the policyholder cease from paying the premium.

Purpose

A suicide clause states that policy benefits will not be granted to policyholder's beneficiaries if he ends his own life within a specific term following the inception of the policy. In circumstances a policyholder passes away within that period covered by the suicide clause, the insurer usually investigate the claim strictly to guarantee that the demise of the policy holder was not a case of suicide.

Benefits

A suicide clause guards an insurer against a circumstance where a policy holder commits suicide with the objective to give his recipients a considerable sum of money from life insurance claims. Considering the fact that contemporary life insurance policies can easily build up a face value of $100,000 or more, the clause can protect the insurer from disbursing such a significant amount of money.

Insurers are not the only one who benefit from suicide clause, even the desperate and emotionally distressed policy holders gains from this clause. For example, if a desperate policy holder learns that their beneficiaries might not get any benefits from their insurance plan if they commit suicide, the person may reconsider his attempt to commit suicide.

Time Frame

A suicide clause usually covers the first two years that the life plan has been in effect. In case the suicide transpired within that period, the insurer will just hand back to the policyholder's recipients any premiums that have been given to that point. If suicide happened subsequent to the clause period, the life insurance company cannot refuse coverage.

Mei Mayore is a dedicated life insurance agent who is keen to provide people fast and risk free life insurance quotes. Learn more things on how to achieve maximum savings and claim strategies by visiting Life Insurance Quotes Canada.

Article Source: http://EzineArticles.com/?expert=Mei_Mayore

Article Source: http://EzineArticles.com/7368931

Scottish Widows Bottom For Critical Illness Pay Outs

I said recently that more needs to be done to address the number of critical illness claims that are being rejected. 

I was commenting following the publication of Scottish Provident's latest claims stats. But in the interests of balance I should say that I didn't mean to imply that Scottish Provident (at 7%) stood out from the crowd.

Scottish Widows do - at 13%! 

 Thats the figure for 2011 according a recent article by John Fitzsimons called Make A Successful Claim On Your Critical Illness Insurance'. Apparently that figure represents as 30% increase on the percentage of claims rejected by Scottish Widows the previous year!

This figure should cause everyone concern and definately requires further investigation. Don't forget that what we are talking about here is a bankassurance critical illness plan. This means that for millions of customers of the banking group a Scottish Widows critical illness plan will effectively have been the only choice offered to them.

If you have a Scottish Widows critical illness plan maybe its time to start asking some questions.

Diabetes? Tips On How To Apply For Life Insurance

Yes, you do have choices about how you apply for life insurance and if you have diabetes making the wrong ones could cost you.

So here are the tips

1)  Fully Disclose All Medical Information - cutting corners or forgetting to mention medical information risks making your cover invalid, but if you fully disclose all information you will have peace of mind knowing that the cover is valid.

2) Applying Direct To A Life Insurance Company Has Downsides - There is nothing wrong in applying direct its just that in doing so there's a very good chance that you will end up paying more than you need to because there's will be a good chance that another life insurance company would have charged a cheaper premium.   In fact if you already applied direct to a life company and have an existing policy you should still read the tips below and consider getting a second opinion. It wont cost you anything but could save you lots.

3) Research Is Important - Good research will pay dividends and can save you a small fortune. Unfortunately its not easy to do this yourself.

4) Use An Expert - Some companies specialise in offering a service for people with pre existing health conditions such as diabetes, providing a more expert service to help find you best deal www.moneysworth.co.uk are one such company who individually research every single case and provide this service on a non fee basis so they are able to provide you with an indication of likely premium before you apply. An expert will also be able to provide you with information about what other associated types of insurance cover might be available, such as critical illness or income protection.

5) Most Advisers Do Not Specialise In Diabetes - If they dont really specialise its unlikely that they will be able to perform the research to the same standard as a real specialist.

6) How to Spot A Non Specialist - There are a number of ways. 1) Check the website -if the company is genuinely offering a specialist service this should be clear visible on the webite. 2) When speaking on the phone are they asking you the right kinds of questions about your diabetes, do they sound like they are dealing in this day in day out? 3) Sometimes companies pretend to be expert, they tend to rush to the application stage before doing any research - If they quote a preium straight away its probably not a good sign. If in doubt a good questions to ask is what percentage of their clients have diabetes.

7) Think About The Future As Well As The Present - If you develop further complications or additional health conditions in the future you may find it more difficult to obtain cover in the future. As a diabetic if you develop cardio vascular disease in the future, as things currently stand in the market, you will not be able to obtain new life insurance from any mainstream insurer.  

8) Guaranteed Premium Rates Are Best - This means that the premiums cannot be increased in the future so you know where you stand so make sure that your premiums are not reviewable.

9) Remember That Once Your Policy Starts Your Insurance Is Guaranteed - Once your policy begins future health changes will not effect your cover or your premiums, which means you no longer have to worry about what the future may bring.

10) Prices for New Policies Will Go Up At The End Of The Year - This is true, especially so for females. If you have diabetes the process time from start to finish for life insurnace normally takes weeks rather than days. You can avoid the price hike by getting your cover in place before the changes take place - that probably means getting on with things now

If you would like a quote or would like to speak to an expert visit www.moneysworth.co.uk or call us on 0845 430 5200

Some Thoughts On Scottish Provident's Latest Critical Illness Claims Stats

The latest Scottish Provident set of claims statistics make for some interesting reading - there are both positive and negative points.

The £43 million in claims paid in the first half of the year is not an insignificant sum and the total now stands at over £1 Billion in critical ilness payouts since 1996. Thats a huge sum of money which will have benefited alarge number of people in their hour of need and proves what a valuable social function life companies perform.

Reading the more detailed report information provides a valuable insight., for example the average period from start to claim is 9 years and the average age at claim is 49.

The critical illnesses producing the highest amount of claims are Cancer 60%, Heart Attack 16% and Stroke 6% and the report further breaks down the cancer claims showing the biggest claim areas as breast 34%, bowel/colon 11%. malignant melanoma  and prostrate both at 7%.

But..... the report shows that 7% of claims were not paid and this remains a concern. The two reasons given are a) material non discloure at the point of application and b) not meeting plan definitions and the report provides some examples of each.

Non-Disclosure - There will always be a small number of applicants who deliberately withold relevant medical information and if they are intent upon doing so there then this is their responsibility alone and this is a point which should be acknowledged by those who are critical of the life insurance companies.

However we need to ask ourselves whether as an industry we are really doing all we can to try and avoid 'non deliberate' non disclosure. Furthermore we would do well to consider whether this is always a point of sale issue. It is a fair question to ask how much non disclosure might be resulting from the fast track underwriting process itself. Are we sure that the right messages are being sent out if we are asking only a limited number of questions or where we are asking questions which refer to certain health events only within the last five years? 

Interestingly a significant percentage of clients with pre existing health conditions express to us their preference for an underwriting process which includes the obtaining of medical evidence from their GP. They feel that this might cover  anything they accidentally failed to remember.

 What really would be of value would be to see insurance companies publishing comparisons between the rates of non disclosure applying to cases underwritten 1) without and 2) with further medical evidence.  

Not Meeting Claims Definitions - This remains a thorn in the side of the life industry and we need to consider whether there is not room for improvement in how this issue is being dealt with. What we have at the moment is a stand off between the life insurance industry who claim that they are comitted to paying all 'valid' claims and those who claim that the industry deliberately rejects some claims that should be 'valid'. 

But in a standoff not much progress is made.

What needs to happen is for both sides to sit down with each other and work together. The long term prospects for the sales of critical illness and other socially valuable protection policies would benefit considerably from involving the consumer in the design, decision making and marketing process. The same applies to a number of other issues currently affecting the life insurance industry (eg STIP, simplified products, activities of daily living, consumer education).

There is a fear among many consumers of non payment at claim. This fear is sufficient to stop some from buying and for some it provides a convenient excuse not to buy. But even among many of those who do buy there remains a nagging doubt that the insurance they have purchased will turn out to be 'invalid'.

A great deal more needs to be done to research this problem.

How Much Extra Are You Paying For You Health Condition?Or The story of Sarah and Sue

........and could you be paying less??

If you have a significant health condition such as diabetes or heart disease and your application for life insurance is accepted, almost always you can expect to pay higher premiums because of your health condition. Insurance companies charge more to cover the higher risk of the policy resulting in a claim.

But have you ever stopped to consider how the extra amount the insurance company wants you to pay compares with the rest of the market? If you did and you looked into this further you might be very surprised at what you might find.

Consider this example - Sarah and Sue are twin sisters aged 40, both non smokers and each requires £180,000 term life insurance over a 25 year term. The only difference between Sarah and Sue if that Sarah has no significant health conditions, whereas Sue has insulin controlled diabetes with average control.

Sarah is able to purchase the required cover from insurance company A at £15.34pm with insurance company B offering her the same cover at £15.73pm - or about 2.5% more than company A.

But for Sue its a different story. Due to her diabetes Company A's premium increases to £28.08pm. But company B now want a whopping £48.81pm!  - which is now over 73% more than company A, or an extra £6,200 over the whole term of the policy.

So why does the differential go from 2.5% to 73%?

The answer lies in the different underwriting decision that that the company A and company B make after looking at the medical information. Not all companies make the same premium pricing decisions. In fact each UK insurance company generally has well over a dozen different premium ratings bands from which to choose when deciding which one to put you into and the key thing is that they dont all choose the same banding!

The moral of the story is that if you have a significant health condition shopping around is even more important than normal and could save you a small fortune. Even if you have alreay purchased cover in recent year after being diagnosed with your condition it is worth doing some research to see if you can save yourself some money.

Finally if you find thought of doing the necessary daunting (which it certainly can be) why not get a specialist broker to have a look for you.

www.moneysworth.co.uk offer a no fee life insurance shopping service for people with health conditions. Its simple to use and Moneysworth do the research for you. You can also call with your enquiry on 0845 430 5200.

Non Disclosure Is False Economy

I have just read an article in todays Cover Magazine here http://tinyurl.com/7dlbkwe  in which Zurich's head of underwriting is quoted as stating that huge numbers of applications received contain 'embellishments' of the truth about applicants' health details.

Why would anyone wish to take out life insurance using information which if succesfully contended at claim stage by the life company might lead to the claim being disallowed? How pointless is that? In stead of (presumably) saving a bit on the premiums, non disclosure risks wasting every penny of the premiums.

Of course in such cases it won't be the person who is insured who will ever know. It will just come as an extra horrible shock to those who are left. Messy!

As so many of our clients at Moneysworth have pre existing health conditions (including diabetes, heart conditions and other health conditions), it is common for life insurance companies to write to our client's doctors for medical information before making a final decision. Though on the face of things this might be seen to cause a degree of anxiety during the waiting period, the reality is that at the end of the process clients can feel extra peace of mind, knowing that the insurance company holds a report from their doctor.

In fact in many cases clients say to us that they would prefer the life company to write to their GP so that they can feel safe knowing that medical information HAS been disclosed!

And of course by using Moneysworth our clients know that we have properly researched the market to find the best solution for them individually. Which is important when you consider that different insurance companies charge widely different prices for people with the same health conditions.

So if you have a health condition and want to apply for life insurance make sure that you fully disclose your health information and if possible use the services of a life assurance broker who really does specialise in helping people with pre existing health conditions. That way you will know that you are fully covered and at a good price. 

Ask the Expert: Disability Insurance Q&A

Ask the Expert: Disability Insurance Q&A with Industry Expert Steve Crawford

I recently spoke with Steve Crawford, President of Guardian Disability Insurance Brokerage based in Rockville, MD. He has been one of Guardian’s leading disability insurance producers nationwide for over a decade. Our discussion ranged over specialized topics I thought my readers would find interesting. In particular, we discussed how diabetics can get the best disability insurance policies, since many of my readers have diabetes and Steve is a diabetic himself.

Richard O’Boyle: When considering the long-term care insurance conversion options of some disability insurance policies, what should a consumer consider? Does it make sense to consider a separate long-term care plan altogether?

Steve Crawford: There are not many individual disability insurance policies on the market that have a long-term care insurance conversion option from the top tier disability insurance carriers. Some of the lesser companies and less comprehensive contracts offer this option, but it is not very common in the industry in terms of percentage of individual disability insurance policies sold. My recommendation to consumers is to own their own individual disability insurance policy during their working years, and sometime in their 50’s to also purchase their own individual long-term care policy. Usually there is about a 10 year period where somebody owns both, but they really protect against two different things.

Richard O’Boyle: When filing a disability insurance claim with your insurer, what should a consumer keep in mind and what are some reasonable expectations about the length of time to get the claim processed?

Steve Crawford: Most disability insurance claims are actually simple to process. When somebody has become blind, or suffers from ALS, or some other type of claim that is pretty cut and dry it is simply a matter of filling out the claim form and getting paid. When a claim is something a little more out of the ordinary, that’s when it may take some time to get paid. Usually the company is going to have a physician fill out the claims form to attest to the disability. A consumer should always remember that disability policies are all about “The Duties Associated with Your Occupation,” not about job titles. As a consumer fills out a claim form they should provide details about why the sickness or injury is preventing them from performing specific duties associated with their occupation, not about the inability to perform a job title. There are many qualified disability insurance claims consultants in the industry, and most of them can be located in the Claims Advice category of http://www.disabilityinsuranceforums.com/, they also tend to offer a lot of free advice on that message board.

Richard O’Boyle: If your disability insurance claim is denied, what avenues of recourse does a policy holder have?

Steve Crawford: You can work with a claims consultant, or an attorney specializing in disability claims to try to overcome a rejected claim. Obviously you can also file complaints with state insurance departments.

Richard O’Boyle: Individuals with diabetes are at increased risk for a host of health complications. How does that impact underwriting for disability insurance? What are some steps individuals can take when applying for disability insurance to improve their chances of getting a standard policy?

Steve Crawford: Diabetics have a very difficult, but not impossible road to obtaining a personal disability insurance policy. The insurance company is going to want to see excellent control of the disease, and that’s not something every diabetic can show. Diabetics who have had health complications, or don’t have perfect control will most likely have to take a graded risk policy from Assurity or Illinois Mutual. Diabetics who have excellent control, who are in good health, and don’t have a history of complications can apply with the top tier policies. They will most likely get a rated policy with a shorter benefit period if they are accepted at all. I recommend every diabetic who applies for disability insurance to work with a specialist in the area. It is not an easy road to get a policy as a diabetic, but it’s a road that is vital for every diabetic to travel.

Richard O’Boyle: If you are considering a private disability insurance policy, how realistic is it to assume that federal Social Security Disability Income will be available to you, and should that form a strong basis for taking a two-year benefit period?

Steve Crawford: Quite frankly that’s a horrible plan. SSDI is extremely difficult to qualify for. You have to be totally and completely disabled with no hope of recovery for a period of at least a year, and expected to last much longer. They deny an overwhelming number of their claim applicants. Any diabetic should get the maximum level of disability insurance protection they can get, and relying on SSDI for coverage is playing Russian Roulette with five bullets in the gun. SSDI is not a program any person should rely on for their family’s income protection.

à If you are in New York and would like to schedule a confidential, no-obligation consultation, please contact me directly. If you are not in New York and would like to speak with a licensed disability specialist in your area, please complete this information request form…

à If you are currently exploring your need for disability insurance, you are welcome to download our free Disability Insurance Worksheet to help you better assess how much coverage you might need.

(c) 2012-2015 Prism Innovations, Inc. All Rights Reserved. http://www.prism-innovations.com/

Disability Insurance: The Basics

Disability Insurance: The Basics
by Richard F. O’Boyle, Jr. LUTCF, MBA

Disability insurance, also called “disability income protection” or “disability income insurance,” is designed to pay you a monthly income in the event that you can’t work due to physical or mental incapacity.

Disability insurance can be one of the most difficult policies to understand, which makes it especially aggravating since most people who need it the most can be turned off by its perceived complexity. It’s advisable to thoroughly understand your disability insurance policy prior to receiving it, so that if you were to become ill or get into an accident, you will know exactly what is and is not covered. For those who find themselves overwhelmed, start by understanding just the basics. Any more intricate questions should always be discussed with a licensed insurance representative.

à If you are in New York and would like to schedule a confidential, no-obligation consultation, please contact me directly. If you are not in New York and would like to speak with a licensed disability specialist in your area, please complete this information request form…

à If you are currently exploring your need for disability insurance, you are welcome to download our free Disability Insurance Worksheet to help you better assess how much coverage you might need.

Definitions of Disability

How “disability” is defined is really the crux of why this type of coverage is so valuable to individuals and their families. It is also what creates a lot of distrust on the part of individuals and insurers alike. It’s crucial to discuss the actual definition of “disability” with your advisor at the time of application and again when your policy has been approved. Don’t wait until you are sick or injured. There are three possible definitions for disability:

1. Own Occupation Definition: The priciest of the bunch, the own occupation definition is usually only held by professionals and many jobs do not qualify for such a coverage plan. What the system basically dictates is that when someone has an own occupation definition, they can still receive disability benefits even if they have found a job elsewhere. What the insurance is based upon is the inability to complete tasks at a particular job, regardless of whether you have another profession you may continue with. The own occupation standard may change if you are still disabled after two years, and you might be required to work at an occupation that provides you with a percentage of your previous income.

2. Regular Occupation Definition: With the regular occupation or “modified own occupation” definition, you can’t be coerced or pressured into finding a different field to work in. If you can’t carry out your job responsibilities for your current occupation, then you should expect to receive total disability nonetheless. This is the most popular out of the disability insurance options, and allows people who have become sick or injured to still live out their dreams rather than just grasping for a job or money for the disability insurance anywhere they can look.

3. Any Occupation Definition: Finally, the strictest of the three policies is the any occupation definition. This is a rigidly issued policy because it deals with the idea that an individual is unable to successfully work in any occupation any longer. This happens often with older people, though people of any age may qualify. Situations that may warrant an any occupation definition include a serious accident, terminal or chronic sickness or severe mental illness.

Short Term Disability Insurance

There are two different types of disability insurance – short term and long term. Just as their names suggest, short term disability coverage provides a benefit that starts soon after you get sick or hurt, but is limited in duration. A long term disability policy may only kick in if your condition is more severe, but it carries the recipient further down the road.

Short term disability is usually processed within two weeks once an injury or illness has been reported. The benefit period typically lasts between 13 and 26 weeks, while this can vary depending upon the individual plan in question. Depending upon whom you work for at the time of your need for disability insurance benefits, your employer may authorize 100% salary replacement. It completely depends on the state you live in and who you work for.

In many instances, short term disability costs are covered by the employer, and then the benefits are taxable to the employee. Short term disability is great to have if you find yourself in a sudden accident or overcoming an unexpected serious illness. Most businesses will offer short term disability as part of the job, and you may receive a packet of information on it during your first day visit to human resources. Some companies sponsor private plans such as AFLAC through the jobsite which allow the employee to pay for the coverage themselves.

Long Term Disability Insurance

Since disability in the long term sense is more complex and open to risks like fraud, the process is lengthier. It usually takes between 60 and 180 days before you can receive a payment, with the most common time frame being around 90 days. Your employer may pay your premium of up to 70% of your pre-tax income, but some premiums must be paid by the employee. Most long-term disability insurance plans are privately paid for.

Group Disability Insurance

Group plans are cheaper for everyone involved, and usually do not require a medical exam. The company is always the policy owner in the instance of a group plan, and the individual may lose the policy if they lose their job. With an individual plan, there is more flexibility since you are the owner of the policy. Many companies offer some form of short term and long term disability insurance. It is sometimes the most cost effective way to ensure you will have appropriate financial support in the event of accident or illness. Keep in mind that if the employer is paying your insurance premiums, the benefit paid to you will probably be taxable as income, reducing its value.

How to Choose an Individual Disability Insurance Policy

Buying private disability insurance generally will give you more freedom to customize the plans features and enhance the income payment amount. Begin by selecting an insurance agent who has experience with disability insurance. The agent can help you “run the numbers” to see how much coverage is appropriate and which companies offer the most competitive plans. Keep in mind that when selecting a company, the lowest monthly premium is only part of the choice: find a company with a solid financial background and claims paying history. Always look for a policy that is guaranteed renewable and non-cancelable.

Choose a Monthly Benefit Amount: Use the Disability Income Insurance Worksheet to find an approximate range of monthly benefit that you should insure yourself for. Generally, an insurance company will allow a maximum amount of coverage of up to 60% of your recent earned income. Earned income for most professionals is income reported on your tax return from W-2 or 1099 sources.

Choose an Elimination or Waiting Period: Your monthly benefit payment usually does not kick in right away. Assess your “rainy day” savings to see how long you can cover your own expenses before you need the insurance company to start paying you. The longer the waiting period, the lower the monthly premium payment. Typical waiting periods are 60, 90, 180 and 360 days.

Choose the Benefit Period: The benefit period is the duration that the insurance company will pay you. You may select a period of 2, 3, 4 or 5 years; or else a benefit period up to age 65 or 67. The longer the benefit period, the higher the monthly premium payment. Some clients tie their benefit period to an expectation that they will qualify for federal Social Security Disability Income payments after two years. Lengthier benefit periods cover catastrophic conditions.

Choose Optional Riders and Supplemental Benefits: Private disability insurance allows you to enhance your policy with additional benefits. Most companies offer each of these riders in some form. Specifics will vary greatly from company to company.
- Waiver of Premium Rider: While you are on claim, you will not have to pay the monthly premium
- Cost of Living Adjustment Rider: Each year that you are on claim, the monthly benefit amount will increase
- Catastrophic Disability Rider: Your monthly benefit is increased dramatically if you become permanently and profoundly disabled.
- Future Increase Rider: Each year you can increase your monthly benefit amount (with a corresponding increase in the monthly premium) without a medical exam.
- Residual Disability Rider: If you are able to return to work following a disability claim, but are not functioning at 100% of your capacity, you will continue to receive a portion of your benefit payment.
- Retirement Income Protection Rider: A trust is established and the insurance company funds it with cash to serve as a supplemental retirement account, assuming that you had an active retirement plan at the time the policy is approved.
- Long-Term Care Insurance Conversion: When you reach age 65 or 67 you can convert your disability insurance plan (which would normally expire) into a Long-Term Care Insurance plan without a medical exam.

Underwriting Guidelines for Disability Insurance

Qualifying for a disability insurance policy requires a somewhat different application process compared to life insurance or long-term care insurance. In addition to standard medical underwriting, underwriters will ask questions about your occupation and financial history. Not all riders are available to all applicants.

Medical Underwriting: Disability insurance providers are looking for the likelihood not that you will die (mortality), so much as the likelihood that you will become incapacitated (morbidity). While a condition like arthritis might not impact your life insurance application, it would likely impact your chances of getting a cost-effective disability plan. Medical underwriting includes asking detailed medical questions, collecting copies of doctor records and running new blood. After analyzing your medical state, the insurer may offer you a policy, but exclude coverage for certain preexisting medical conditions, tag on an extra premium for a period of time or limit the inclusion of certain riders.

Financial Underwriting: Your “insurable income” may not be what you consider to be your actual income since the insurance company focuses on what you are actually “earning” in a given year. “Earned income” is your compensation. “Unearned income” is generally cash flow that would continue whether or not you were working, such as rental income, royalties, pensions, dividends and alimony. You will be required to submit your most recent tax filings as part of the overall application to justify the maximum benefit amount.

Occupational Underwriting: Jobs are ranked and rated according to how hazardous they are. The occupational rating also includes the actual duties performed in the job, size of the organization, level of education, moral hazard, time spent traveling, and other factors. For most policies, a minimum of 30 hours per week are required to be considered full-time. Home-based businesses generally are also acceptable occupational classes.

Making a Claim to Receive Disability Insurance Payments

Ultimately receiving disability insurance benefit payments from the insurance company hinges on which definition of disability is specified in your policy. This is where most people get turned off by insurance companies, in my opinion and experience. It is absolutely crucial to have a frank discussion with your agent at the time you are applying for the policy so that you understand what “disability” actually means. If you do meet the criteria and are working with a reputable company, the payments can mean the difference between financial stability and ruin for you and your family.

Remember that some disability payments to you may be taxable, depending on who paid the premiums: if your employer paid for part of your group coverage, then that portion will be considered taxable income. If you paid for the premiums out of your own pocket, then you can expect the benefit payments will not be taxable. This is a tricky area and often misunderstood, so please consult your advisor.

If your disability is not presumed to be permanent, the insurance company will expect you to have regular check-ups with an approved doctor, and perhaps even receive specific treatments or surgery to improve your condition. The company may also give you financial incentives to ease back to work part-time. In the event that you are seriously disabled and qualify for federal Social Security Disability Income payments, the insurer may reduce their payment to you according to the terms of your policy.

à If you are in New York and would like to schedule a confidential, no-obligation consultation, please contact me directly. If you are not in New York and would like to speak with a licensed disability specialist in your area, please complete this information request form…

à If you are currently exploring your need for disability insurance, you are welcome to download our free disability insurance worksheet to help you better assess how much coverage you might need.

Book Review: Retirementology

“Retirementology: Rethinking the American Dream in a New Economy” by Gregory Salsbury, Ph.D.
Review by Richard F. O'Boyle, Jr., LUTCF, MBA

There are literally hundreds if not thousands of books that try to tell you the “what, when and how much” of retirement planning, but few can tell us the “why.” “Retirementology: Rethinking the American Dream in a New Economy” by Gregory Salsbury, Ph.D. introduces the reader to the up-and-coming field of “investor psychology” which helps to explain why we treat money the way we do.

We all make mistakes – and this book tries to help the reader to understand why we: don’t sell losing investments and cut our losses; spend differently with a credit card than we do with cash; feel richer when the housing market appreciates; and many more common misperceptions about money that work to sabotage our financial security. It’s easy to highlight common money mistakes because there are so many of them. But it’s hard to solve these deeply ingrained problems.

What makes Dr. Salsbury’s book so admirable is his methodical and detailed action steps designed to reorient the reader away from these psychological traps with practical suggestions.

Many of my clients want me to “run the numbers” and tell them how much to save and where to put it. I often run into resistance when I recommend they make changes that go against their long-held beliefs about money – sometimes strategies used by their Depression-era parents. Money is always an emotional topic because we work so hard for it and most people feel they don’t have enough, giving a deep sense of insecurity. When an advisor challenges the client to make changes outside their comfort zone, it breeds fear and suspicion.

“Retirementology” provides the reader with a useful and occasionally entertaining foray into the field of retirement planning. I can appreciate the attempts to convince the reader to understand himself better and to take the necessary actions that can avoid future pitfalls. I wish more pre-retirees in the general public would add this book to the stack of repetitive “how much” planning books and understand the “why” better.

(c) 2012 Prism Innovations, Inc. All Rights Reserved.

Tricks of the Trade: How to Backdate a Life Insurance Application to Save Your Age

By Richard F. O’Boyle, Jr., LUTCF, MBA

Did you know that it’s possible to backdate a life insurance application to lock in a younger age? Most life insurance companies use what they call “insurance age” when calculating your initial monthly and annual premium. You get a year older six months before your actual birthday.

Each year you wait to buy insurance, the premium rises a little. But if you can lock in a slightly lower rate for 20+ years, that would save you money over time. Once your policy is issued, your rate is locked in for your whole life or the duration of your term. If you are older than 50 years of age, the monthly savings are even greater since costs rise faster for older people.

To illustrate, let’s look at an example:

I have a client who is a 33 year old female. Her birthday is September 1, 1977. We expect her health rating to be “Preferred” for a $1,000,000 Twenty-year Term Plan. My estimate is that the premium will be $720/year or $62/month.

But when we run the insurance illustration on June 1, 2011 (three months before her actual 34th birthday), the software says that she is 34 years old. That’s because according to the company, her “insurance age” went up six months before her actual chronological birthday. The premium for a 34 year old woman in this case is $780/year or $67/month – an increase of $60/year or $5/month.

We can backdate the application paperwork (by making a note in the appropriate section) and lock in her insurance age of 33 for the full duration of the term. That will save her $1200 over the life of the policy.

But there’s a cost to using this technique: You have to pay upfront all the monthly premiums back to the age change date. In this case if we write the application on June 1, 2011, we have to backdate it by three months to lock in her insurance age of 33. A back premium of $186 ($62 x 3) would be required at the time of application or at delivery. Basically you are paying $186 to save $1200. It will take about 37 months (at $5/month) to break even using this technique.

This technique works best with longer term life insurance plans, and especially Whole Life Insurance policies. With a Whole Life plan, the savings would be $ 34/month ($822 vs. $856) and the policy would be eligible for dividends three months sooner.


(c) 2012 Prism Innovations, Inc. All Rights Reserved.