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Life insurance – Tackling the top reasons why we put off buying it

OK, thinking about your own mortality is not a topic anyone enjoys, but our own death is one of the few certainties in life. So why do 35% of Canadians not insure their own life to make sure their family or loved ones are financially protected? While the number of reasons likely match the number of people not insured, the following are the most commonly heard.

Reason #1 I dont have a need for life insurance:
Lets be honest, this reason is by far the most common and for most people untrue. Unless you are an individual who does not have children, has money on hand to cover all debts and funeral expenses, and does not feel the need to offset the loss of their income to a spouse, leave any additional money to family, or to a charity, then it may be true, you dont need life insurance. But few people have the funds readily available to fulfill all their wishes or meet their obligations after their death.

At the very minimum, if you have anyone who relies on your income for their day-to-day needs like a spouse or children, or if you have debts like a mortgage, then you likely need life insurance.

Reason #2 Life insurance is too expensive:
If in the past people have found life insurance to be too expensive it could be because of the type of coverage they were seeking, like whole or universal life insurance. Term life insurance is the most affordable of all the products and is very popular because of it.

Term 10 Life insurance, the most popular Term product in Canada, offers a premium guaranteed not to change for 10 years.

A male non-smoker seeking 100,000 in coverage could be paying as little as*:

1125 for a 30 year-old
2129 for a 35 year-old
3157 for a 40 year-old
4207 for a 45 year-old
5281 for a 50 year-old

A female non-smoker seeking 100,000 in coverage could be paying as little as*:

6106 for a 30 year-old
7112 for a 35 year-old
8133 for a 40 year-old
9163 for a 45 year-old
10219 for a 50 year-old

As you can see, for very little money a year, you can get 100,000 in life insurance coverage.

* Lowest quote online from October 2005 for a Term 10 policy, one of the most popular life insurance products in Canada. Premiums shown are the rates if paid annually.

Reason #3 I dont know anything about life insurance and dont know where to start:
A number of free online tools have been developed to help you decide which term life insurance product is best for your specific situation and how much life insurance coverage you should get.

1Term Life Insurance Analyzers. By answering a few simple questions, these tools will assess your needs and let you know what product is most commonly recommended for people with similar lifestyles.

2Term Life Insurance Calculators. These tools will help you put a pound value on the amount of coverage you need in order to ensure that your family, loved ones and your debts are covered in the event of your death.

Reason #4 Life insurance is a hassle to get:
Thanks to the Internet, getting term life insurance quotes is now fast and easy. If you want to shop around first, getting quotes online means you can avoid hard-sell tactics by someone sitting across from you. There is no sales pressure or obligation to buy when you get quotes online. Its easy, can be done any time at your convenience and is simply a better way to shop for life insurance because of it.

Have you filled in a life assurance application recently? Theres a little box that strikes fear into the heart of the slightly overweight. It simply asks you to state your weight. Do you go straight to the scales, undress to the state of nudity and jiggle about on the said scales, trying to pinpoint the lowest mark on the gauge? No, I thought not, you probably take a vague and over optimistic guess, write it in and swiftly move on to the next question. Most of us do it. Its not really cheating. You know youre going to lose it soon, before Christmasholidaysthe wedding. If only!

Now, one of Britains biggest names in life insurance, namely Scottish Provident, in an effort gain more accuracy in working out the risk factors, has added another innocent little question, i.e. When did you last weigh yourself? Aware of the fact that many people are self conscious about their weight and tend forget the odd few pounds gained since they were last on their diet to end all diets, they feel that this should help to give a true picture of their clients potential health risks. It should also be noted that there are some people who will lie in an effort to obtain cheaper premiums.

Scottish Provident are quite rightly concerned that they are being told the truth. The UK government are taking obesity very seriously and it has been announced recently that almost a quarter of us are overweight, and its thought by Cancer research UK that around a quarter of these are not interested in losing weight. We are second only to Greece in obesity levels as a nation.

The definition of obesity is based on the British Medical Associations Body Mass Index (BMI). To work this out, you need to know your height in metres and then multiply by the same figure. Take the result of this and divide by your weight, using kilograms. This gives you your BMI, which can be used to indicate if you are underweight, normal, overweight or obese. It will, however, overestimate fatness in people who are muscular or athletic. These figures are for adults.

BMI categories are

Underweight = less than 18.5
Normal weight = 18.5 to 24.9
Overweight = 25 to 29.9
Obesity = BMI of 30 or greater

In a recent study of 33,000 adults reported in the Lancet, the above figures for normal weight were agreed and there was a suggestion was that only adult patients with a BMI of 35 or above would present a serious lowering of life expectancy.

Most of the life insurance industry has accepted a BMI level of 30, which seems fair and even generous. For anyone with a BMI of over 30 your premium will be loaded and you may even be asked to take a medical examination. This means if youre overweight you could find your critical illness or life assurance premium could increase by 50% and it seems likely that for some, cover could be refused.

Its a risky business!

More and more people are buying life insurance online and the numbers seem to be doubling every two years. The reasons are clear. Prices are lower on the Internet and life insurance is fundamentally a simple insurance product.

Despite the underlying simplicity of life insurance, most web sites channel their online clients through a telephone based help and advice service manned by experienced personnel. They represent your safety net so if a little technical knowledge is called for, help is at hand.

But its always a good idea to have a few Top Tips in your back pocket when youre shopping online for life insurance. Theyll help you ask the right questions and find the best policy.

1.Always have your Life Insurance policy Written in Trust.

This means that in the event of a claim, the money goes directly and immediately to the person(s) you nominate when you first take the policy out. It also avoids all possibility of your estate having to pay Inheritance Tax on the proceeds of your policy and that could represent a 40% tax saving !

All you have to do is tell the online brokerage organising your policy that you want your policy Written in Trust and the names of the people who the life insurance company pay in the event of a claim. They will then sort it all out for you. The extra good news is that this service is invariably free of charge. So its a win win situation and there arent many of those around these days !

2.In the early years a Reviewable Life Insurance Policy will be cheaper but a Guaranteed Policy will work out a better buy in the longer term.

With a Guaranteed Policy the insurance company guarantees never to increase your policys premium.

With a Reviewable Policy you agree that your insurance company can review the cost of your policy at regular intervals. But dont be kidded in our experience a review is just another word for a price increase. After all, whos ever heard of an insurance company passing up a chance to charge you more! The review intervals are usually between 2 to 5 years but this does vary between insurance companies. You will find the details of the review intervals on the documents sent to you before you accept the insurance these are called The Key Features Documents.

So, comparing otherwise like for like policies, in the early years the premiums for a Reviewable Policy will undoubtedly be lower than the premiums for a Guaranteed Policy. Thereafter, the premiums for a Reviewable Policy increase eventually catching up with and overtaking, the premium for a Guaranteed Policy.

In our experience, you can expect the monthly premiums for a Reviewable Policy to exceed those of a Guaranteed policy in about 7 to 10 years and then within the following 10 years, more than double again. If your budget is currently tight then by all means choose a Reviewable Policy – after all your salary may increase in coming years and ease the strain. On the other hand, if the premiums for a Guaranteed Policy are affordable, we think they represent your best buy.

A footnote. Many insurance companies have stopped offering Guaranteed rates for standalone critical illness insurance policies. This because they have experienced much higher claim rates than they initially expected. However, you may still find a Guaranteed life insurance policy that also provides critical illness cover. As we have explained, Guaranteed rates are especially good value and if you can get a quote for a Guaranteed life policy that includes critical illness cover, you may have a real bargain.

3.Thinking about a Joint Life Insurance Policy?

A Joint Life Insurance policy is usually written on a first death basis. This means that the policy will pay out on the death of the first policyholder, subject to the policy being in force at the time. This leaves the second person uninsured and older. Older people can struggle to get life insurance at an affordable premium, so rather than a Joint Policy consider taking out separate policies now. Overall it will work out a little dearer – but you get twice the cover and double the peace of mind.

4.Taking out a Life Insurance Policy? Now would be an ideal time to include Critical Illness cover.

Are you likely to need Critical Illness Insurance in the future? Yes? Then consider adding it now to the life insurance policy youre arranging. Why? There are three reasons.

Firstly, a Life Insurance policy combined with Critical Illness cover will work out significantly cheaper than buying two separate policies. Secondly, as we have already explained in the footnote to Tip 2, you may be able to buy a combined Life and Critical Illness policy with a guaranteed premium. That could be a real bargain. Finally, premiums for critical illness cover increase rapidly as you get older so the sooner you take it out, the cheaper it will be.

5.it isnt confuse Terminal Illness cover with Critical Illness cover.

Theres world of difference between Terminal Illness and Critical Illness cover so its important to understand the difference.

Terminal Illness cover pays out the insured lump sum if a Medical Doctor diagnoses you with an illness from which the Doctor expects you to die within 12 months. Most good life policies automatically include Terminal Illness cover at no extra cost. Its basically an early, and welcome policy payout.

A Critical Illness policy pays out the insured lump sum if you are diagnosed with one of a wide range chronic illness and there is no life expectancy criteria. Indeed, with many of the insured illnesses you could expect to survive for many years. For example: certain cancers, heart disease, stroke, multiple sclerosis, loss of speech, sight or hearing, onset of Parkinsons or Alzheimers disease, third degree burns etc. Say you were an engineer aged 40 and you lost your sight. A Critical Illness policy would pay out immediately and that money could well be vital in helping you and your family through many difficult financial years ahead. If you just had Terminal Illness cover thered be no chance of a payout.

So as you can see, Critical Illness cover is far more comprehensive than simple Terminal Illness cover and for that reason critical illness cover always costs you extra.

Though Life Insurance is neither an investment plan nor a savings scheme, it still plays a significant role in the financial portfolio of most individuals. The main purpose of Life Insurance is to protect the dependents of a person from financial loss in the event of his death.

Financial obligations arise out of many situations in life like when getting married or divorced, having a baby, buying a house, sending your child to college, starting a business, taking care of a parent who is aged or sick or on retirement. If a person is shouldering these responsibilities he must ensure that these obligations continue to be fulfilled even after his death. If he has a family who depends upon his earning capacity, he is a perfect candidate for life insurance. A person should consider the long term as well as the short-term financial obligations to decide whether he needs life insurance. The questions to ask are:

1.Do you have people including family and business partners who are financially dependent upon you over a long period of time?

2.In the event of your death, do your dependents have enough assets and resources including liquid cash to take care of all their needs and to pay off your financial debts?

The second question requires a further assessment of the short-term financial needs of the family of the deceased. These include working out the following factors:

Inheritance procedures can be time consuming and the family will need funds till they get access to the property of the deceased.
The availability of other liquid assets like bank accounts or stocks can reduce dependency on life insurance.

The existence of a large amount of non-liquid assets as against liquid assets makes it necessary to have insurance.
The amount of debts and taxes the person stands to owe after his death.

Businessmen must ensure there is enough cash flow in the business for his inheritors to maintain his business.

Considering the above questions, one would find most people do need life insurance, though one can do without it if one has no dependents or young kids to support. Still, other obligations like a home mortgage or a sole proprietary business or planning for a comfortable retirement for yourself or your spouse are some of the reasons why a life insurance is still a good financial program to pick up.

Life insurance is a very important issue that you should address sooner than later. As we all know all good thing s come to end and in some sad unfortunate cases it is where we may have lost a loved one (suddenly) therefore leaving you unprepared for all the expense involved to give your dearly beloved a decent burialfuneral – so therefore Life insurance is the best plan B any one could have at times like this to help with funeral costs and any debts left behind by the deceased.

Just how important is Life insurance and what will you gain from coverage – well for one it offers peace of mind for those at troubled times where there may have been a bereavement or an accident and it also provides instant cash payouts if a death has occurred.. Insurance proceeds you will find are a reliable source that you can depend upon when times are hard and the going gets tough.

Claim peace of mind by going along to an insurance broker to talk on Life insurance. Insurance companies have well trained staff at hand that can give you good advice and support on what best suits you and your family`s needs and better still your budget. By doing this you will have secured your own and anyone close to you a little sense of security.

Insurance means assurance where you can rest assured that you have done the right thing. After talking to experts in the field of Life insurance you will find that they also can help with all types of insurance policies, like home content and accidental breakage. Payouts can help with hospital treatment and expenses that may incur from dental surgery even pet coverage options.

If you have a young family dependant of you then this is more reason to finalize some financial backing in your time of need should you be unfortunate to lose a partner or family member through a tragic accident or a sudden premature death.

Information on insurance policies can be found online. If you still feel a little apprehensive, don`t be, speak to others who have insurance and is familiar with the whole procedure – this may help you a great deal in understanding the importance of it all. Remember the decision is yours but if you decide to go forward with taking out some security like Life Insurance then you will find that you have made the best decision you are ever to make.

Its sad to think about, but life insurance is something that everyone needs to consider. In the event of an unfortunate loss, an individual often wants to have the peace of mind in knowing that hisher family will be financially secure.

Life insurance can be obtained in a number of ways, including from a national insurance provider, various credit cards andor certain employers. Depending on the amount of coverage, which is usually available in varying amounts, monthly payments will range from being affordable to very expensive. The amount of coverage that is selected will determine how much a family will receive if their loved one should pass away.

It is important for many individuals to purchase life insurance so that their loved ones will not have to worry about money in addition to being upset over their loss. When bills begin to come in and utilities are due, this can be a very difficult time for anyone who is also dealing with the loss of a family member. This is especially true if the loss was that of the familys provider, which often means that little or no income will be coming into the household. A life insurance policy will help to ease some of that stress by providing financial help to the family that is left behind. In order to make sure the proper beneficiary is noted on any life insurance policy, the holder must make sure to provide all of the requested information to the insurance provider.

If life insurance is obtained when the policy holder is young, it will be very affordable. The more time that passes and the older an individual grows, the more expensive the policy will be. In addition, anyone with known health problems will likely pay a much higher life insurance premium if they are fortunate enough to find a carrier to provide them with a policy. As unfortunate as it is, many life insurance companies will not provide coverage to anyone known to be in poor health. The wellness, or lack thereof, relating to a patient will likely be determined by a mandatory physical. While not all carriers require this procedure, some will before confirming coverage. This is their way of making sure that the policy holder is in good health before issuing any type of coverage.

On a final thought to life insurance coverage, it is not a pleasant thing to discuss or even consider. It is, however, a necessary part of every familys life.

If something were to happen to you, you would want to know that your family is taken care of. With todays economy as it is, more and more people have been trying to cut corners to help save on their budgets. A penny saved is a penny earned as they say. This goes towards saving money and trying to find low cost life insurance coverage that will take care of your familys needs.
Life insurance is pretty simple these days. If you are protected and you were to pass away, your beneficiaries will be left with a cash benefit. These benefits can be used towards anything that they need to use them for. They maybe used to replace lost income, medical expenses as well as funeral expenses. There is no certain set terms that these benefits must be used for.
Life insurance cash benefits are paid out by your terms in your written Life Insurance Policy and can protect a lot of things. If your spouse is dependant on your income for retirement, it can also help to keep those plans in tact. If you have a mortgage, it can help to pay off that debit so that your family will not loose their home. Perhaps you would like for your children to go to college, or you would like to leave money behind for them. With any decisions you make, you can do exactly what you have planned ahead for.
One great thing about Life Insurance benefits is that it is usually paid out tax-free. So when you look at the amount of coverage that you want to buy, what you actually see is what you will actually get. Its nice to know before hand that there is no guess work about how much will be taken out of your spouses or loved ones death benefits.
As you can now see, Life Insurance is very flexible. It makes a lot of sense for people now days, even if they have different goals in mind.
There are two types of Life Insurances. One is Term Life Insurance and the other is called Permanent Life Insurance. Lets first explore Term Life Insurance.
Term Life Insurance is a Life Insurance that last during a certain term. These terms can be from 10, 15, 20, 25 or even 30 years. During this time, your premiums are guaranteed not to increase. If you were to pass away during this time period, then your beneficiaries get the cash death settlement benefits. If you were to live longer than the given term period, you then have the option to continue your coverage for an annual, renewable premium, which is generally much higher. You can usually convert a term Life Insurance policy to a permanent one with out getting a medical exam.
There are two big ways that Permanent Life Insurance differs. First off, the policy is meant to last the rest of your life and as long as you continue to make the required premium payments. Secondly, part of the money that you pay in with is set-aside in an account where it can grow to cash maturity. These funds can be tapped into later on during your life. There are also several different types of Permanent Life Insurances, each with different advantages as well.
Be sure to find a Life Insurance Company and Agent that best suit your familys needs. Take the time to get at least three different estimates before selecting your company. These estimates are free and most agents are more than happy to even come to your home.

Life Insurance Medical history increases the cost for 66% of applicants

Lucky applicants for life insurance can be insured within 48 hours and at the premium quoted – but 2 in 3 applicants are faced with delays plus the prospect of having their premium loaded.

So who are the lucky ones? Basically, you’ll have to be as fit as a flea with no family history of serious illness, under 45, in an office type job and probably applying for less than 250,000 cover. For everyone else there is going to be some hassle.

When an insurer provides an initial quote for life insurance, all they know is your age, sex and smoking status. They use these details to make an initial prediction of how long you are likely to live and on that basis they give you an initial quotation. They call it their Standard Terms.

If you want to progress your application you’ll have a multi-page application to complete. This isn’t as daunting as it may seem, as most online operators take your details over the phone and send you a copy of the completed application for you to check over. But the questions are extensive and if you miss out anything that later turns out to be significant, your insurance may well be invalidated. So be warned and take care!

The insurers use your application details to look out for anything that signals current or future concerns about your health or life style. Besides the obvious questions that reveal health problems, they also evaluate your weight, alcohol and nicotine intake, and any potentially inherited health problems. So if your father died of a heart attack or mother died from breast cancer, they’ll be concerned.

Then there’s your life style. If you’re in a type of job where accidents do happen, construction jobs are a good example, or you are involved in any form of dangerous sport or flying, your premium is in line for loading. They’ll even want to know whether you regularly travel to countries that are known to represent health risks for visitors. And whilst the law doesn’t allow discrimination against same sex relationships, the insurance companies will almost always insist on a medical for these applicants.

Insurers freely admit that the number of questions they ask is increasing. They claim it’s to reduce the number of claims they refuse. Whilst that may be partly true, the trend has also coincided with an increase in the proportion of applicants who are seeing their premiums loaded. Some years ago it was nearer 40% – today’s for some insurers the level is virtually 66%.

How much extra might you be asked to pay? That’s a bit like how long is a piece of string. But to give you a feel, a woman aged 40 receiving medical treatment for post-natal depression was recently faced with a 50% loading on an initial quotation of 7.60. A woman whose mother had breast cancer similarly faced a 50 % loading. Seriously overweight people can also expect loadings of 50% to 100% or even refusal.

Faced with a loading what can you do? It’s important to appreciate that the insurance companies giving the cheapest initial quote are also likely to have particularly choosey medical criteria. That’s how they keep their quoted prices low. So if you’re faced with a loading, the best advice is shop around, Try one of the more expensive providers like Friends Provident who are sometimes a bit more lenient.

Whilst this may sound overly complicated, remember that over the years, an extra 10 a month on a 25 year policy represents 3,000 of your hard earned money. If you don’t have the experience or time to do this, and after few of us do, speak to an online life insurance broker.

Competition is high on the Internet and online brokers will normally reduce your premium by cutting their commission. Their systems are also well versed in finding alternative providers to alleviate loading problems. So keep things simple. Let your keyboard fingers do the walking and let the online broker do all the hard work!

We know the importance of life insurance as we want to make sure that our loved ones are taken care of when we die. But do some research so you’ll be sure to get the best possible coverage at the right price. Here are some helpful tips:

1.Shop for your life insurance coverage
2.Never buy more coverage than you need
3.Buy sooner rather than later
4.Realize the importance of reviewing your coverage
5.You will be paying more by paying monthly
6.Don’t rely solely on the life insurance offered by your employer

SHOP FOR YOUR LIFE INSURANCE

When it comes to life insurance, it pays to shop around because premiums can vary widely. And thanks to the Internet, it’s now easier than ever.Make sure the website considers the factors in your medical history that can affect the premiums.

BUY LIFE INSURANCE THAT YOU NEED

The key to purchasing the right amount of life insurance is to have enough to meet your needs. It’s important not to have too little coverage as it would be difficult to purchase if you get sick.

The healthier you are, the better the life insurance rates
Healthy people get better rates on life insurance. You will be asked to pay a higher rate if you smoke, take medications regularly, are overweight or have a bad driving record.

GET YOUR LIFE INSURANCE WHILE YOU ARE WELL

If you’ve been putting off purchasing life insurance because you don’t want to pay the premiums, you may be doing yourself a disservice in the long run. If you are in good health, buy it now.

YOUR LIFE INSURANCE COVERAGE SHOULD BE REGULARLY REVIEWED

You’ll want to make sure that a major life event such as the birth of a child, marriage, divorce or perhaps that the children are grown won’t leave you underinsured or overinsured.

MONTHLY PREMIUM PAYMENTS FOR LIFE INSURANCE COSTS MORE

You will be paying more for your life insurance if you pay your premium in monthly installments.

GROUP LIFE INSURANCE

Don’t rely solely on the life insurance offered by your employer
Many employers offer their employees some sort of group life insurance. But this amount of coverage is usually not enough and group life insurance policies are not portable, meaning that if you leave your job, you can’t take your life insurance coverage with you.

Life Insurance. How The New Regulations Affect Policies Written In Trust.

In his spring Budget the Chancellor Gordon Brown announced swinging measures to tackle the use of Trusts being used to avoid Inheritance Tax. The immediate reaction amongst the financial and legal fraternity amounted to panic and confusion. Within ten days of the budget speech the estimates of the numbers of people that could be hit by the new anti-trust provisions hit 4.5 million.

Then, following the publication of the draft Finance Bill, the estimates fell to 1 million people. So, with specific reference to life insurance policies written in trust, whats happening?

Well firstly before we go any further, we have to make the point that this article is commentating on the position based on the first draft of the Finance Bill and itll be early July 2006 before that bill becomes law. As I write, the legislation still has to pass through parliament and its possible that the situation could change yet again. If it does I will keep you informed.

Within weeks of the budget speech, the Government retreated from its previously held position that all life policies written in trust are caught by the new legislation. The current position is that if your life insurance policy was written in trust before budget day 2006, then the money in the trust remains totally free of tax and fees. The legislation is not now to be retrospective. Thats one headache dispensed with.

However, if your policy was written in trust after the Spring Budget Day in 2006, then the new tax rules do apply.

For most people, the purpose of writing a life insurance policy in trust is to ensure that the policy pays out quickly and directly to where you want the money to go often to a mortgage provider to repay the mortgage or to beneficiaries in the family to allow them to spend straight away as they like and tax free. These trusts that break upon death, are not now affected by the new regulations. Thats because only trusts that continue to hold money after the policyholders death are targeted by the new rules.

New life insurance policies written in trust will now be caught by a tax charge if the policys payout makes the deceaseds estate exceed the Inheritance Tax Threshold (IHT) of 285,000 and the policy is written in a type of trust known as an interest-in-possession trust.

Interest-in-possession trusts have been used to hold and invest the money paid out from a life insurance policy and pay the trusts income to the spouse. The capital then passes to the children on the death of the spouse. Following the budget, these arrangements will be subject to a 40% IHT charge when then money passes into the trust for your spouse – plus a 6% tax charge every ten years and an exit fee. These taxes can be avoided if the you give your spouse significant control over the trust, which many people may perhaps not want to do especially if they are in a second marriage with children from previous relationships. The alternative is to use a bare trust as this type of trust is not caught by the new regulations. However, if you do use a bare trust, the money automatically goes to your children when they reach the age of 18.

If you are buying a new life insurance policy and want to use it to pay off a mortgage or provide immediate money for your family if you were to die, then you should still consider writing our policy in trust. However, it becomes more important than ever to buy the policy through a broker who is fully versed in the current requirements for trusts and can ensure you get exactly the type of trust you need.