Ensuring your loved ones’ security when you can’t.

Who needs life insurance? Anyone who has people depending on them financially, such as a spouse or children. Life insurance guarantees they can go on financially in the event of your death. It’s not fun to think about, but it’s an integral part of providing for the financial well-being of your dependents:

1. What are the types of life insurance?
2. What determines your eligibility and the cost of life insurance?
3. What if I have an older policy? Should I keep it?
4. What are some other uses of life insurance?
5. What should you look for when shopping for life insurance? Is it less expensive to buy direct on the Internet than to go through a local professional?
6. Why should you buy life insurance from Prime of Life Insurance?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. What are the types of life insurance?

• Term insurance protects you for a limited period of time, commonly anywhere from 10 to 30 years. If you survive the term, the insurance ends, and you get nothing back. It’s the least expensive type of insurance and is quite affordable for most people. However, it does not last forever, and people often end up wanting insurance to last longer than they originally plan.
• Permanent insurance provides both insurance in the event of death and a cash value or savings component that builds up over time. If you continue to pay your premiums, you can maintain the coverage no matter how long you live. There are many varieties—whole life, universal, variable, and more—so that you can tailor it to your situation. Permanent insurance costs more at younger ages and less at older ages than term insurance.

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2. What determines your eligibility and the cost of life insurance?

Typically, your cost and eligibility for life insurance is based on age and health. The younger you are, the lower your premiums and the better your chance to qualify. Companies will also look closely at your medical history, e.g. if you’ve had serious heart problems, you may not be accepted or will have to pay higher rates. We can often find coverage even if you’ve been declined elsewhere because we deal with many insurance companies with different health criteria—contact us if you’ve had problems.

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3. What if I have an older policy? Should I keep it?

Good question, and not easy to answer. It may be a good deal, and you should keep it. If you’ve developed health problems since getting the policy, you may not be able to get coverage now. However, because people are living longer than they used to, life insurance rates have actually gotten better over time. You may be able to “trade in” or replace an older policy, perhaps using the cash value in that policy, and get more coverage for the same or lower premiums.

If your policy is at least 10 years old, you should definitely ask for a comparison. It is not easy to evaluate and compare policies, and you should be cautious when considering a replacement. You should never cancel an existing policy until you have a new policy and are certain that you want to keep it. We will be happy to evaluate your older policy and advise you on the pros and cons of replacing it.

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4. What are some other uses of life insurance?

1. Business—if you are in a business partnership or own your own business, you may want life insurance to guarantee that your share of the business will be purchased to others without difficulty in the event of your death. If you have a business loan, you will probably be required to obtain insurance by your lender.
2. Estate planning/taxation—the estate tax laws are in transition, and it may be hard to predict if you will have to pay estate taxes. Nonetheless, life insurance – sometimes purchased by your trust – can provide immediate liquid funds to pay estate costs and taxes as needed. You may want to consider second-to-die insurance which will pay estate taxes at the death of the second spouse.
3. Charitable purposes—you may want to leave money to a favorite charity. You can leverage your assets to purchase life insurance to do this.
4. Retirement income – if you purchase a permanent life insurance policy that builds up substantial cash value, you can later annuitize it. This means that you cash in some or all of the savings and turn it into a steady stream of income.

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5. What should you look for when shopping for life insurance? Is it less expensive to buy direct on the Internet than to go through a local professional?

1. Be sure to buy from a company that is highly-rated financially—we recommend an A++ or A+ rating from A.M. Best, one of the best known insurance ratings company.
2. With term insurance, check that the premiums are guaranteed for the whole period of insurance. Also get a convertible policy so you can change to permanent insurance later if that’s more appropriate.
3. In almost all cases, insurance is not less expensive on the Internet. This is because insurance rates are approved by state insurance departments and companies are not allowed to discount rates, except for group coverage. So you will pay the same rates whether you spend hours trying to find the best deal on the web or seek the help of a local professional.

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6. Why should you buy life insurance from Prime of Life Insurance?

Prime of Life Insurance is an independent company that represents many leading insurance carriers. We can check many companies and find the best one for you. A significant advantage of consulting us is that we can pre-screen your health conditions with different companies to see which company and policy fits you best. If you live or work in New Hampshire, Maine or Massachusetts, give us a call.

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