Term Life Insurance Laddering Approach

In a blog post in April 2009, I wrote about Layering Term Life Insurance to provide different levels of coverage over a period of time.  Layering or laddering several different term lengths can help address different time horizons associated with different needs for life insurance. As an example, a 35 year married man with two young children (ages 7 and 13), earning $75,000 annually, has 20 years left on his mortgage (currently $250,000).  He and his wife expect both children to attend college.  Here’s how a laddering plan would work for this client: Purchase a 30 year term policy with a $2,250,000 death benefit (Income...

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Applying for Life Insurance – Do Medical Exams Scare You?

I wish I had a dollar for every prospective life insurance client I spoke with who was nervous about getting their blood drawn.  I have even had a few people decide against purchasing life insurance because they couldn’t confront “the needle.”  Medical exams, including blood tests, are part and parcel of the life insurance application.  It provides valuable data to the underwriter as to what type of risk you present to the life insurance company.  Along with a review of your application and medical records, the underwriter will determine your health class and premiums you pay for the policy. For those of you who are...

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Life Insurance Awareness Month – with an Assist from Lamar Odom

As a fan of the Los Angeles Lakers (sorry Celtics fans), I have seen some great players over the years – Jerry West, Wilt Chamberlain, Magic and Kareem, Shaq and Kobe, to name-drop a few.  When he plays his heart out, I can utter the name Lamar Odom in the same breath with the others.  Up until recently, I considered Lamar to be one of the greatest underachievers in the history of the game.  He elevated his game this past year...

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Life Insurance for Stay at Home Moms

“Are you working?” I asked the young mother of two whose husband was purchasing a life insurance policy for himself.  She answered, “no, I’m a stay at home Mom.”  The husband told me they had thought of purchasing a policy for her, but since life insurance is “income replacement,” they would wait until she went back to work before they would consider a policy for her. I bluntly asked him, “if your wife were to pass away, what would...

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Benjamin Franklin

I thought long and hard on President’s day of a relevant topic to post, but I could not think of an adequate tie-in. However, all those thoughts of men in white wigs reminded me that, although never president, one of the founding fathers of the U.S. is also responsible for starting the modern-day insurance system in the U.S. In 1751, according to PBS.org, Benjamin Franklin and his Union Fire Company met with other Philadelphia fire-fighting companies to discuss the formation of a fire insurance company. Out of those discussions, the Philadelphia Contributionship was formed, which was the first successful fire insurance company in the...

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Primary and Contingent Beneficiaries

One question that comes up fairly regularly in filling out a life insurance application is who should my beneficiaries be and what’s the difference between a primary and contingent (or secondary) beneficiary? A beneficiary is a person or entity entitled to receive the death benefits paid under a life insurance policy.  A beneficiary can be primary or contingent (or secondary). If the primary beneficiary is alive when the insured dies, then the primary beneficiary receives the death benefit.  If the policyholder has named a contingent beneficiary, the contingent beneficiary will receive the death benefit only if the primary beneficiary...

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Factors to Consider When Purchasing a Life Insurance Policy

Insurance Company Financial StrengthWhether you are purchasing term insurance, return of premium life insurance, whole life, universal life or survivorship life insurance, one of the most important issues to consider is the financial strength of the insurance company that’s providing  the insurance. After all, you want to make sure the company will still be in business when your beneficiaries need to receive the insurance benefit. To check the financial health of an insurance company, you should turn to one or more of the companies that make a business of analyzing companies in the insurance industry. The best known rating services...

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