Understanding Your Life Insurance Policy

A life insurance policy can be quite difficult to understand. Even though most policies attempt to make the varying parts easy to read, frankly, they’re still written in insurance, a language only understood by insurance reps and attorneys. However, if you know just a few of the key definitions and the location of important information in your policy, you’ll have a good grasp of the product that you own.

The first page of a policy contains much of the policy information. The policy number is on the page, the premium amount, the age of the insured when the policy was issued, the date of issue and the face amount of the policy. The first page also tells the type of policy. While some of the names of policies may not give you a clue whether they’re term or permanent plans, such as “the Cover Special Insurance Plan,” others include words like universal, indicating a universal insurance plan or term life, indicating a term plan.

Some people don’t understand the difference between term insurance and permanent insurance. Term insurance is pure insurance coverage. While some plans offer a feature that gives you back your premium at the end of the policy term, the policies cost more for this feature and if you put away the additional amount in a savings, you might fare better.

Permanent plans can be variable, traditional or universal. All of them cost more than term but all have an aspect of savings and either a level premium or a modified level premium. Variable universal life policies use sub accounts that resemble mutual funds for the savings aspect. Universal life policies and traditional whole life policies accumulate interest. However, the traditional whole life has guarantees in the policy and can never run short on funds if interest rates or investment rates are low.

If you can’t remember whom you named as a beneficiary but know you didn’t change it, look toward the back of the insurance policy. There’s normally a copy of the application near the last few pages of the policy. Everything you requested the night you took out the policy is on the application, including the beneficiary.

You can change your beneficiary any time you want. When you initially name the beneficiary, they must have an insurable interest. However, once the policy is in force, they no longer have to have an insurable interest or be a relative. If you want to change the beneficiary to the cat, you can once the insurance company issues the policy.

There are primary beneficiaries, secondary and tertiary ones. If the primary beneficiary dies, the money automatically goes to the secondary beneficiary and if they predecease you, then to the tertiary. You can name several people beneficiaries and divide the money by percentages. You can also make the designation per stripes or per capita. If one person of your group of beneficiaries dies, a per stripes designation passes the funds to their heirs. If you have a per capita designation, their share is divided among the remaining beneficiaries.

Jim Collier Insurance is an independent insurance agent Michigan agency based right here in the state of Michigan that has been providing expert insurance agent in Michigan advice to Michigan families for over a decade.

Life Insurance Beneficiary Designations

If you want to leave money to a specific person, there’s no better way than with a life insurance plan. While people can challenge a trust and hold up the distribution of funds in court for many years, there’s no way that they can challenge a life insurance beneficiary designation and win. Some have challenged the beneficiary designations but life insurance companies are obligated to pay the person named as beneficiary.

In cases where a divorced couple failed to change life insurance beneficiaries from the previous spouse to a new spouse, everyone knew the deceased would want the new spouse to have the money, but it was never changed. The insurance company can not make judgment calls so in these cases, regardless of what the true wishes were of the deceased, the ex-spouse receives the funds because that was what was on the beneficiary designation. Had the deceased taken a few minutes to fill out another form, his true wishes would have been followed.

Naming children as a beneficiary is quite tricky. Even though it seems simple enough, putting the name of each child can mean you omit someone born after the policy purchase. If you name all children born of the marriage and later divorce and remarry, the policy proceeds won’t go to any children born of that marriage. If you legally adopt a child, they are also not included in that designation. When you name children as beneficiaries, you need to check with the expertise of a local agent for the best wording. If your children are young, naming an insurance trust instead of them is far better. Any money that goes to minors needs to go through the court system if you don’t have a trust. A life insurance trust owns the policy and you can fund it with $1 and the life insurance policy. You then outline the use of the funds in the trust document.

Most of the time, life insurance proceeds go to a spouse, but if the spouse predeceases the insured, then he or she needs to change the beneficiary. Even if you have a secondary beneficiary, it makes the claims process far easier. Some older people want one child in charge of the funds and name them as beneficiary instead of naming all their children. They believe that child will pass the money to their siblings. While the parent may be right, there are two problems. The first is that there is no legal requirement for the adult child to do that. Even if everyone knew the intentions, no court in the world would grant that the beneficiary divide the money.

The second problem is gift tax. If the money per recipient is over the gift tax limit for the year, there is gift tax if the named beneficiary child gives the funds to the others. In order to avoid this, it’s best not to make the estate the recipient. Many states do not have an inheritance tax on life insurance proceed to a named beneficiary. However, if the proceeds go to the estate, there is inheritance tax.

Jim Collier Insurance is an independent insurance agent Michigan agency based right here in the state of Michigan that has been providing expert insurance agent in Michigan advice to Michigan families for over a decade.

The Best Life Insurance for Your Needs

Life insurance offers a way to provide for your family in the event that you die. You pay a premium to the life insurance company and in return for the small premium, it promises to pay your family thousands of dollars. If you don’t die before you no longer need the policy, whole life policies and return of premium term insurance offer an opportunity to receive money back. While the return of premium term insurance does just as the name implies, returns the premium you paid throughout the years, whole life insurance can give you a return over the funds you paid.

However, which type of insurance is the best for everyone? There is no clear cut answer since each policy type works best in different situations. While the whole life policies cash value is a nice feature, if you need a lot of insurance to cover short term needs and have very little money, the term policy is often the best type of life insurance for your situation. You can purchase large amounts to for very little money.

If you have a mortgage, need money for to finish paying for the expenses of a family in the event of your death or have large debts, term life insurance is often the route to use. However, there are some needs, which simply don’t disappear. The cost of burial is one of them. For this type of need, using a permanent policy is the best. You often can combine a smaller permanent, whole life policy with a term riders to take care of the immediate needs and those that you’ll have forever.

Other situations that require a permanent life insurance policy are estate planning and business buy/sell arrangements. In both situations, the parties can opt for a temporary term policy but eventually, they need to convert to a permanent plan. In estate planning in particular, the policy needs to cover the cost of the death taxes and remain owned by either a beneficiary of the estate or an insurance trust. Since premiums continue to increase as a person ages, purchasing a permanent plan as soon as possible is the wisest move.

Finally, life insurance is one method of saving funds on a tax-deferred basis. People not eligible for a Roth or traditional IRA and in need of life insurance can use the plans as a method of saving. If they need the funds, they don’t have to cash out the policy. In fact, that would trigger a taxable incident. Instead, they can borrow from the policy and never pay taxes on the growth. The difference between the interest accumulated and the interest on the loan is often just a fraction of a percent, far less than taxes. When the insured dies, the company subtracts the loan from the proceeds and there’s no taxable incident.

When looking for the best life insurance plan, looking first to your needs is the most important step. Once you establish your needs, you can then decide between a permanent plan, term plan or a combination of the two. The decision between plans at that point is a matter of cost versus return or simply overall cost.

Jim Collier Insurance is an independent insurance agent Michigan agency based right here in the state of Michigan that has been providing expert insurance agent in Michigan advice to Michigan families for over a decade.

Life Insurance Types

There are several different types of life insurance. First you can break down life insurance to whole life, endowment policies and term insurance. Whole life insurance costs more initially but it’s designed to have a lower premium in the later years. This type of insurance has cash value and provides coverage for your entire life.

Endowment policies are similar to whole life insurance except they have an expiration date. An endowment to age 65 ends at that age. You don’t lose anything, however, since the company writes a check for the face value of the policy. These types of policies are no longer popular and seldom sold. They are the most expensive type of insurance.

The third type of life insurance is term insurance. Term insurance also ends at a specified time but you don’t get anything back in most cases. However, it provides only insurance protection and is far more inexpensive than whole life insurance. The premium normally is quite low the younger you are but as you age, you’ll watch the premium increase along with the gray hairs in your head. By the age of 65, the price of the term insurance is to high for the average person to pay.

Within the category of whole life insurance you have a number of hybrid policies. The traditional whole life policy had a guaranteed cash value. Some of the older policies that were either participating or from mutual companies, also offered dividends if the company made more money than expected. You could borrow the money from the policy if you needed cash and all it took was signing a form. In exchange, you paid an interest rate on the money that was slightly more than the growth of the cash value, less any additions. Ultimately, the interest rate was less than a percent.

The loans on whole life insurance are nothing like loans to from a lending institution. They are more like loans from a 401-k. You don’t have to pay them back as long as there’s enough money in the policy to support the interest. When you die, if you don’t pay back the loans, the insurance company subtracts any loans from your policy before they give the beneficiaries the proceeds.
While the traditional whole life policy offers a guarantee and in many cases a dividend, there’s no risk assumed by the policyholder. These policies are variable and universal life insurance policies. The variable life policies are most frequently universal life policies also; they can be traditional life contracts that offer the variable options. These are sub accounts similar to mutual funds. The owner of the policy chooses the sub-accounts and the percentage of funds to invest into those accounts. Each month, the company sells a proportionate amount of the account to pay for the cost of the term insurance on the interior. The funds all grow tax-deferred.

The universal life based on interest works similar to the variable universal except the company credits the account with the prevalent interest rate. In both types of universal policies, if the policy doesn’t perform at specified level, the policyholder will find there’s not enough money to keep it going when the insurance premiums on the interior become too high. When this happens, the holder of the policy either forfeits the policy or increases the payment.

Jim Collier Insurance is an independent insurance agent Michigan agency based right here in the state of Michigan that has been providing expert insurance agent in Michigan advice to Michigan families for over a decade.

Saving Money On Your Life Insurance Policy

Although you may not want to think about it, life insurance is just one of those things you’ve got to pay for. Paying an outrageous price for your policy may not be on your top list of priorities. If you don’t have to pay a lot, there is no reason why you should be wasting money. Since this particular type of policy is just one of those things you’ve got to have, it may be beneficial for you to sit down and read about some of the ways you can save yourself a fortune.

Purchase a Combination Policy – It’s always beneficial to purchase a combination policy. Perhaps the company you purchase insurance from offers home, life, and auto insurance. If so, take advantage of the possible savings. Depending on the company you shop with, you may end up saving hundreds of dollars per month. Over the course of a year? Possible thousands.

Quit Smoking – If you’re a smoker, then you’re probably well aware of the fact that you’re at an increased risk of heart disease, suffering from a stroke, heart attack, developing lung cancer, and much more. The best thing you can do is quit smoking now in order to decrease your risk of developing health problems, as well as having to pay more for your life insurance policy.

Start Eating Healthier – Let’s assume you’re overweight, diabetic, and obese. Any of these must be listed on your policy and will ultimately increase your rates. In most cases, these health problems can be solved by adopting a healthy lifestyle that includes a daily exercise regimen and a healthier diet full of vegetables, fruit, lean meats, and dairy.

Purchase Only the Coverage You Need – Make sure that you ask questions about the policy you are purchasing and find out what exactly you’re paying for. If there are additional items on your policy that aren’t required, do not pay for them.

Pay Your Policy in Full – Paying your policy in full might be enough to save you a hundred bucks or more on your overall policy. If you can’t afford to pay your policy in full, your next best bet would be to make quarterly payments. If by chance you can’t afford to make those particular payments, then you may want to consider an automatic monthly draft. Try to do everything possible in order to avoid paying your policy right when it is due, as well as when it is late in order to avoid additional fees.

Maintain a Clean Driving Record – If you’ve got a list of accidents and speeding tickets on your driving record, you might end up being consider a reckless driver and have to pay more for your life insurance policy. For lower payments, try to stay as safe as possible.

Jim Collier Insurance is an independent insurance Oakland county Michigan agency based right here in the state of Michigan that has been providing expert auto insurance Oakland county Michigan advice to Michigan families for over a decade.

Reasons Why Everyone Needs a Life Insurance Policy

We’ve all heard of life insurance. Maybe you’re currently paying on your own policy, and then again – maybe you don’t have any insurance at all. Taking the time to find a good company and policy is your first step. Obviously, you don’t want to spend a lot of money. You also don’t want to pay for insurance if you don’t have to. The good thing is that paying for this particular type of insurance can and will come in handy – sooner or later.

It Provides Money For Overdue Bills – There is always a small chance that you’ll die suddenly. This is something that no one really has too much control over. If it happens, it happens, and when it does, your family is likely to be left with a myriad of expenses. Unfortunately, debt cares nothing about death. When you die, the people you owe still want their money. What’s even worse is that if you don’t have a life insurance policy, all your debt falls on your family – be it your spouse, children, parents, etc. Having a good insurance policy will insure that your loved one’s have a way of making that next house or car payment and keeping everything safe and secure by paying it on time.

It’s Considered a Financial Asset – In the event that you apply for a loan, you’ll more than likely be approved, especially if you’re the owner of a legitimate policy and have no history of overdue payments. Having this particular type of insurance policy might also improve your credit rating, making your more eligible for the things you want and need.

It Covers Funeral Expenses – Over the course of a lifetime, you’ll end up paying a great deal for your life insurance policy – even if you receive the cheapest policy possible. The reason is because even $10.00 per month eventually adds up. When you pass, your family won’t be left with the burden of not having any means of paying for your funeral cost because your policy will already have that taken care of.

It Can Help Protect Your Business – In the case that your business partner passes, your financial assets will be protected. You won’t lose all of your hard-earned money and have to start over again. Ultimately, the amount saved can add up to a lifetime of savings.

An Insurance Policy Protects Your Family – Other than helping your family catch up on possible old debts and upcoming bills, it will provide them with some cash to pick up at least of few of the pieces after your death. They will be able to find a new place if they cannot currently afford to live in the home, purchase a car, and continue to save up for college. Insurance money from a legitimate policy can sometimes add up to enough to cover years of living expenses.

Life Insurance – Do You Need It?

In laymen’s terms, a life insurance policy provides your family with money in the event of your death. No matter how optimistic we are, we all have to acknowledge the fact that we won’t be around for ever, and when one partner in a family dies, it can leave the remaining partner with a huge financial burden, particularly if there are debts such as a mortgage for example.

Even if you’re young and in perfectly good health, you still have no guarantee that you’ll be here tomorrow. In the United States for example, around one hundred thousand people die each year due to accidents in one form or the other. Basically, if you have any dependents who have to rely on your earnings, then life insurance is certainly something you don’t want to be without. After all, if you were to die tomorrow, what would happen to your loved ones if they suddenly have no money coming in? Will they be able to feed themselves? Would they end up homeless and on the streets because the mortgage can’t be paid? These are all things one needs to think about, unless of course you don’t have any remaining family.

Something else you need to bear in mind is that while you may be in good health now, you could end up with a fatal disease at any time, and if you were to be diagnosed with such a disease tomorrow, you’d have a very hard time getting insurance, hence the reason why it’s not the sort of thing you should keep putting off until tomorrow.

Having insurance doesn’t only mean your loved ones will receive a pile of money when you die, but instead, it can prove to be invaluable in other areas as well. For example, life insurance can make it possible for all your debts to be paid off should you die, and that includes your mortgage if you have one. Insurance can also ensure your kids can continue with their education, or that they can go on to university even if you’re not around to pay for it.

Just for a minute try to imagine how you would feel if your partner was the sole breadwinner in the family, and he or she suddenly died, leaving you with three or four kids to raise, bills to pay, a huge mortgage to pay, and etc. Where would you even begin? As cruel as it may sound, it won’t take long before the debt collectors come knocking on your door, and while they may offer a few sympathetic words regarding the passing of your spouse, they will still want their money.

The bottom line is; millions of people around the world are living a nice comfortable life one day, and then the next day they have nothing because the breadwinner in the family died unexpectedly. Contrary to what many people believe, life insurance doesn’t need to cost a small fortune providing you go about it in the correct way, Also, you need to remember that the longer you leave it, the more expensive it becomes because you’re getting older with each passing day.

Buying Life Insurance For The First Time? Great Tips To Make It Easier

For the first time buyer, it can be tough to choose the right life insurance plan. You may be wondering what type of policy will work for you, how much cover you need, and what company you should choose. While this experience can definitely be daunting, with the right tips to guide you, you can ensure you get the right coverage to keep you and your family safe, no matter what the future brings.

Understand Why The Insurance is So Important
The first thing you need to do is to understand why this insurance is so important to you. Sure, you have probably heard that it’s a good idea to purchase this type of cover, but you need to know why it is so important. This type of insurance helps to make sure that your family is financially secure if a parent or spouse dies. It can help to pay of a mortgage, deal with college expenses, and provide money for the family to live on if they need support. Starting out with this insurance while you are young is a great idea, because it insures that you get less expensive policies.

Decide on the Coverage Needed
Next, you need to decide on the coverage needed. The death benefit, is the amount of money that your family gets after you are gone. To figure out how much you need, often using an online calculator can help. There are a variety of formulas that can help you choose the right coverage amount, such as multiplying your gross yearly salary by 6-10. Using the right tools to figure out how much will be needed by your family can help you to best determine the life insurance coverage that you need.

Find the Policy that is Right for You
Now you need to figure out what policy is going to fit the needs that you have. There are various options available, including term life, universal life, variable life, and whole life insurance. No doubt, one of these options is going to work well for the needs that you have. Investigate each of the options carefully to determine which will provide you with the best cover for a price that works for you.

Check into the Company
Of course, the insurance plan that you choose will only be as good as the company behind it. It is important that you choose a good company to make sure they will carry out their part of the deal – paying the claim. Look at the financial strength of companies, which can be done by checking out the company with Standard & Poor’s or A.M. Best. Make sure the company has a good reputation, that they are financially secure, and that they are known for good customer service.

Learn the Important Terms
As you are looking for life insurance, you’ll quickly come across a variety of terms like death benefit, premium, cash value, dividends, and other terms. Make sure that you research and find out what the relevant terms mean. This way you can discuss this type of insurance from a knowledgeable position, which will give you the power to make the best choice for your needs.

If you are looking for a quality Miami Insurance Agency, Fiesta Insurance offers the best service around. We help our clients understand exactly what type of insurance coverages are best and which ones are more suitable for them. Call our Insurance Agency Miami today. Fiesta Insurance is happy to help you with all of your insurance needs.

Term Life Insurance – How You Can Save

For families, often term life insurance is a great option, providing a reasonably priced way to keep your family’s future protected. The good news is that there are ways that you can save even more on this type of a plan. Here are several great money saving tips you can use when making this purchase to save more money.

Tip #1 – Purchase at a Young Age
There are many younger people that don’t see why they need this type of insurance. Sure, you may not have as many financial needs, but you’ll also find that the rates are going to be cheaper at this point as well. If you can lock in plenty of protection while you are young, you will be able to get good prices, which saves a lot of money.

Tip #2 – Choose the Right Coverage Length
Another important tip that can help you save on your term life insurance is choosing the right coverage length. Each person is a bit different and the needs one family has will be different than another family. If you are younger, you may want to go with a 20 year term. If you are closer to retirement, going with a shorter term is a good idea. On the other hand, if you take out a 30 year mortgage, then going with a 30 year term is a great idea to make sure that your mortgage is covered.

Tip #3 – Look for a Break in Price
There are a variety of different price breaks that you may be able to get, depending on the coverage amount that you end up choosing. In many cases, you’ll end up paying less for more coverage. When you increase your coverage, you will often find that the price barely increases at all, making it well worth the bit of extra money.

Tip #4 – Get the Coverage Right for You
You’ll find that many life insurance agents try to get you to purchase more coverage than you really need. You need to make sure that financial loss can be replaced, but you don’t want to pay for too much coverage. Usually you’ll get the best coverage and the best deal when you go with an amount that is about 7-10 times the amount you make yearly.

Tip #5 – Try Different Payment Options
Another way that you may be able to save on this type of insurance is by going with a different payment option. If you pay the entire premium up front of you pay directly from your bank account with EFT, there is a good chance that you’ll end up getting a nice discount. You may even get a discount by choosing online billing options instead of paper billing.

You can get quality term life insurance without having to spend too much money. Keep these tips in mind and you’ll be able to find great ways to save.

If you are looking for a quality Miami Insurance Agency, Fiesta Insurance offers the best service around. We help our clients understand exactly what type of insurance coverages are best and which ones are more suitable for them. Call our Insurance Agency Miami today. Fiesta Insurance is happy to help you with all of your insurance needs.

Use These Tips To Purchase The Right Life Insurance Plan For You

While you probably know that you need life insurance, finding the right plan for your needs can be a bit difficult. There are many choices out there, and deciding on one is tough. If you want to make sure you choose the right plan, here are a few tips to follow.

Tip #1 – Know What You Need
You are the one that intimately knows about your own financial situation. Don’t let other people tell you what you need. To get a good idea of what you need, add your debt, the cost of a funeral, and income replacement for 6-12 months together. This will help you to come up with a good idea for protection. Taking a look at your finances and knowing what you need will help you to choose the best policy for your needs. Remember, insurance agents are trying to sell big policies and you may not need that much coverage, so look at your own situation and figure out your needs first.

Tip #2 – Understand the Options
You have a couple of options when it comes to life insurance – term versus whole. There are benefits to both options. Take a close look at the pros and the cons to both before making up your mind. Then make an informed choice when making up your mind. Don’t just choose one because an agent told you to.

Tip #3 – Realize That This is Protection
Many people look at life insurance as an investment, but really this is protection. Whole life and other universal policies do come with a savings option, but they cost a whole lot more. Instead of trying to invest in a policy, going with the protection of a term life plan and then using the savings to put in other investments may be a good idea.

Tip #4 – Comparison Shop
When you are looking for the right insurance, it is definitely a good idea to take some time to comparison shop. There are many companies out there offering policies that are very similar. Just make sure that you compare products that are similar for the best comparisons. This will help you to find the best product and the best possible price.

Tip #5 – Investigate
Before you make the purchase of an insurance policy like this, take the time to investigate. Take time to find out what is available and make sure that the option you choose is going to fit your budget and your needs. It’s also very important that you understand a contract before signing it. You don’t want to sign your name to something that you don’t understand. If you take the time to research and investigate life insurance policies and what you need, you’ll end up with a quality plan in the end that will keep you protected.

If you are looking for a quality Miami Insurance Agency, Fiesta Insurance offers the best service around. We help our clients understand exactly what type of insurance coverages are best and which ones are more suitable for them. Call our Insurance Agency Miami today. Fiesta Insurance is happy to help you with all of your insurance needs.

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