Life Insurance 101
Right now you are probably thinking, is it the right choice to purchase life insurance?
Now, more than ever, the answer is definitely a YES.
Most people fall onto the bad habit of putting their purchase off for the hopes of finding better rates. This leads to them passing away without ever getting insured. The result? Families with little to no money to pay the bills and keep the family home.
You don’t want that to happen.
Think of it this way:
”Can my family live a comfortable life like it is when I still share them my payroll?”
If you want your family to be able to get by and keep your family home, it’s best to get life insurance now.
There are four primary role players in a life insurance policy:
Insurer– the company who has provided you the life insurance policy and issued a contract. This entity is the one responsible for paying your beneficiaries a lump sum after your death. These companies are rated based on their financial strength. The higher the rating, the better company credibility.
Insured- the individual whose lifespan the policy is based on. The life insurance policy is named under the insured person.
Owner- this can be the insured, a relative of the insured or a company paying for the life insurance policy.
Beneficiary- a person, trustee or any other entity that will receive the death benefits after the insured passes away. This does not necessarily mean that it is the family member of the insured, but in most cases, it is.
Life insurance is a guaranteed one-way contract
A life insurance policy is a unilateral contract between a life insurance carrier and the owner of the policy.
The insurance company will be the one making all the promises and guarantees. The company will also be the one accountable in paying out the death benefit to the beneficiaries. The insured only has to fill out an application form and undergo a medical exam (in some cases, there are policies that no longer require a medical examination). During the application, the insured has the responsibility to pay the premiums in order to get the benefits of being approved of the policy. The legally enforceable responsibility of paying out the death claim is also the sole responsibility of the life insurance carrier.
Life Insurance Is Cheap, Don’t Believe the Bad News
One reason why most Americans shrug off the decision to get life insurance is the stigma of life insurance being expensive.
From the Life Insurance Barometer Study, the cost is the number one reason why most Americans refuse to purchase life insurance. 80% of consumers ”misjudge” the cost of term life insurance.
The Millenials overestimate the price of life insurance by 213% and Gen Xers by 199%.
If you’ve been putting off your decision to buy life insurance because of the price, just know that premiums do get even more expensive as you age. Truth is, the premium you might get on your 60’s could be entirely the same policy you could have purchased at a lower price in your 30’s!
Have you been declined of life insurance? Have you been classified to belong only on a substandard rating because of your BMI? Worry less, Hi BMI specializes in high-risk cases. We have helped hundreds of individuals find the best policy with the premium that fits their budget.
We surely can help you find the right policy that fits your needs.
But, Why Should I Even Get Insured?
The real question is— Why shouldn’t you?
If you are the sole provider of the family, do you think your family could live a comfortable life after your death? Would they be able to pay off any significant debts or keep your family home?
Getting life insurance is solidly securing your family’s financial stability.
Here are 5 Great Reasons Why You Should Get Insured TODAY
1. Life Insurance is A Great Income Replacement
If you are the breadwinner of your family, do you think they would be able to make as much money as you do after the event of your death?
Income replacement is the first reason why the modern provider should get life insurance.
Getting a term life insurance for the number of years you still need to pay off the remainder of a major debt such as a mortgage. If you have pending amounts to be paid from an educational loan, auto loan or from a credit debt, getting a term life insurance to pay off the remainder of the debt is a smart choice. If you still have 20 years to pay for your family home, then purchase a 20-year term life insurance. If you are still alive at the end of the policy, you can always ask your life insurance carrier about the convertibility feature. This way, you can shift to a whole life insurance so you can get your death benefits.
The death benefit from your whole life insurance will be paid out to your beneficiaries or family members. With that, they’ll be able to fend for some of the bills and pay out the remainder of your debts if you still have any.
2. Life Insurance Can Be A Sound Plan for Your Estate
Do you have a high net worth? Do you own a thriving business? Then life insurance is a great way to pass dollars along to your beneficiaries without the huge tax.
For you to save thousands of dollars on estate taxes, a life insurance comes in handy.
Life insurance can help your family spend on your business or estate’s regular expenses and upkeep. Given that it can take months to sell your estate even in a hot market, or years for your business to be acquired- life insurance can cover all these costs. With the help of life insurance to back up your family from expenses, they will have enough time to find the best bid for your business to be sold. They would not need to rush into a sale for your estate, which lets them find the top dollar.
But what if you have a business partner willing to acquire your business?
Your business partner can purchase a portion of your business without the hassle. They will need to enter a buy-sell agreement. The payout for the acquisition will be paid to the deceased partner’s nominees. This does not give you a stake in the company, but you are sure that your family receives a decent amount by the time you pass away.
3. Life Insurance Secures Your Retirement
The best part (personally) about owning a life insurance is having a sound retirement plan. With a life insurance plan, you are ensured to have a regular stream of income every month. Once you pay off the premium in an annuity, you create your own pension plan. Put in some money for your life insurance and worry less about monthly income once your retirement comes along.
4. Life Insurance Helps You Leave a Legacy
Leave an inheritance for your children. Donate a piece of fortune to your favorite charity.Leave enough money for your spouse and your beneficiaries.
Life insurance saves you from the costly probate and the proceeds are usually tax-free for all your beneficiaries. This lets your loved ones inherit all the money you worked hard for- without the huge tax!
There’s no better feeling than knowing that your family will be able to keep your family home after you pass away. Since life insurance coverage can help your loved ones pay off the remainder of your mortgage, you’ll be able to leave them a home.
Imagine your grandchildren playing on your own lawn– it’s priceless.
5. Life Insurance is Cheapest When You Are Youngest
Yes! Purchase a life insurance policy while you are still young and in the best health.
This is because most life insurance companies prefer younger people over the aged ones. Younger people tend to have the best income-making capacity, so it’s easy for them to purchase.
In turn, the younger you are- the better your approvability will be. Purchase a life insurance before you get the price of growing old- some medical conditions that can add up to the price of your premium!
If you happen to have dependents (income-dependent spouse or children), or you have co-signed a loan with any of your family members, a life insurance policy is a great backup. If you are currently paying a student loan or a home loan, purchasing a term life insurance policy with the number of year left to pay the entire loan is a great choice.
Still single? Coverage costs are much lower for individuals without dependents.
Who knows? Life insurance might come handy if you are to support your aging parents or you need to fund your siblings’ education.
Two Kinds Of Life Insurance That You Must Get
There are normally two kinds of life insurance policies that are prescribed to overweight, and even normal individuals.
Term Life Insurance
This is the cheapest type of life insurance policy that’s mostly recommended for individuals raising a young family. Not only do term life insurance come in cheaper premiums, but the convertibility feature makes it a good start.
If you are still planning for your children’s future and educational plan, term life insurance is great since it does not interfere with your expenses. Given that the premiums can be low on price, you can get a term from 10, 20, 25 even up to 40 years.
Term Life Insurance is a great choice if you are paying off some significant debts such as mortgages, auto loans, educational loans, and credit debt. If you have 25 more years to pay off your family home’s mortgage, it’s best to get a 25-year term life insurance policy.
If you are still alive after the entire duration of the term policy, you can always give your life insurance carrier a call and ask for the convertibility feature.
Whole Life Insurance
Most individuals that have outlived the term of their term life insurance policy converts to whole life insurance. Also called permanent life insurance, guaranteed universal life and cash value life, whole life insurance builds up its cash value.
This type of life insurance has you covered as long as you live. The cash value builds up through the years. A death benefit is also paid out to your beneficiaries through installments or lump sum after the event of your death.
Permanent life insurance is more expensive than term life insurance. However, this can have you covered even up to 121 years.
Top MYTHS About Life Insurance: DEBUNKED
- Life Insurance Is A Great Investment
This has been a misconception that’s been going along for decades. There are a lot of financial gurus that do not consider life insurance as an optimal investment. People see life insurance as an investment as it can help them acquire a business or buy a home- but, it does not bring in more money just like investments are supposed to do.
Rather, it’s more of like an emergency fund that can be used for a longer time and can save your family from financial constraints brought by your sudden death.
Some whole life insurance policies do have investment features that offer a good degree of tax relief. In most cases, stocks are still a better tool for investing.
- You Can Only Qualify For A Substandard Rating If You Are Overweight/ Obese
No, no and no. First thing’s first, BMI is not the only factor that can classify you into a health rating. In fact, there are other life insurance carriers that would not even ask about your weight.
You will be classified into a certain health class according to the results of your medical examination, your lifestyle and your BMI.
If you are overweight but never puffed a single cigarette, then you might as well be classified into a better health class with a cheaper premium rate. Remember, not all companies use the same chart to classify their applicants.
- There’s Nothing You Can Do If You Have Been Declined By A Life Insurance Company
Wrong. Being declined of a life insurance company after your application is not the end of the world. There are hundreds of companies out there that can be considerate on your situation and your current weight. Companies use different charts to classify their applicants, and your weight might still be approved by another life insurance carrier.
The key to being approved is to find the best independent agent that can shop for you.
Hi BMI specializes in high-risk cases involving overweight or obese individuals. With our access to dozens of top-rated life insurance companies, we surely can find you the best policy with the most affordable rates.
Work With An Independent Agent That Knows Exactly What You Need
The life insurance industry is a game of closed deals, commissions, and cons. Some insurance agents may try to sell you policies you do not really need. These agents are tied up with a single company that tries to market their own life insurance products. Purchasing from these agents will cost you the earth- given that the extra zeros are to pay out their commission from closing a sale.
There are many online tools that can help you decide how much money you must put into your policy. However, having expert advice is the best way to go about in purchasing an annuity. This comes crucial if you are diagnosed to be overweight, underweight or obese. You will pay even more if you have to work with a novice who does not understand the health ratings and how life insurance carriers classify applicants.
We at Hi BMI can help you shop for the best life insurance carriers and policies that suffice your personal needs and the needs of your family.
Do you want to be approved of life insurance and belong to a health class where the premium fits the bill?
Our dedicated and knowledgeable underwriting experts can help you save up to 68% by selecting the best life insurance carrier that supports your anticipated health class.
We have helped hundreds of people find the best policies that support their families, and there’s no doubt we can do the same for you. Plus, it’s free to get a quote and get the process running.
YES, it’s entirely free!
Get a quote from us now and get insured right away!