Low Cost Life Insurance in 5 Easy Steps

admin — Tue, 26 Jan 2010 08:37:39 +0000

1. Understand the purpose of life insurance.

The purpose of life insurance is to replace your income if you die before being able to build up sufficient financial assets. So, if you have someone depending on you to earn a certain amount of income during a period of time, life insurance is the way to go. Let’s say you are a young, 30-year-old husband and your wife is a stay-at-home mom. You have little or no savings, small children, a mortgage, and some bills as a result of buying furniture and appliances to establish a household. If you were to die, your family would be financially devastated. You are a prime candidate for life insurance. So, instead of buying a whole life policy, you take out a less expensive 30-year term policy. You invest the difference between what a whole life policy would have cost, and what your premium is for the term policy. Let us fast forward. You are now 60 years old. The children have grown up and have finished school, the mortgage and other bills have been paid off. For the past 30 years you have been making regular investments, which have grown to a substantial nest egg. At this point, there is no further need for life insurance. The insurance policy that you took out 30 years ago has enabled you to buy time by protecting your family while you were accumulating the nest egg.

On the other hand, if you are single with no dependents or retired and living on investments or retirement income, you probably do not need life insurance.

2. Keep insurance separate from investments.

One reason for consumer’s confusion about life insurance is that some companies combine investments with life insurance. In order to do a proper comparison, it makes sense to keep the two separate, since they are designed to meet two distinct needs. When we purchase most items we consider the cost per unit. For example, when we purchase ground beef we look at the cost per pound, when we purchase gasoline we look at the price per gallon. When we are considering term life insurance, we should look at the cost per unit. The way to evaluate term life insurance is to determine the cost per $1000 of coverage.

In order to do that, you divide the annual premium you are quoted by the amount of coverage you have determined that you need. For example, if you decide that you need $700,000 in coverage and the premium you are quoted is $3700, the cost per $1000 of coverage would be $5. 28 ($3700 ÷ $700).

Using this method, you are now ready to compare prices without getting into the “mumbo jumbo” about projected rate of return on your investment and building cash value and other terms that tend to distort what you are really trying to do – protect your family in case you die before you accumulate adequate assets.

3. Buy term insurance.

There are two kinds of policies: Term and whole life (or permanent or cash value). Term is pure insurance for a set number of years, 10, 15, 20, or 30 and it only pays a death benefit. Whole life, on the other hand, may provide interest and dividends. Since there are no dividends or interest involved, term insurance is generally less expensive than whole life.

So, the husband in Tip # 1 would be better served to buy the appropriate amount of term insurance to protect his family during their most vulnerable period. He could invest the savings he realized by not buying whole life insurance and into something like a stock mutual fund that will enable him to be financially secure later in life.

4. Ask for a change in rating class.

Let’s say you took out a policy four years ago right after you learned that you had high blood pressure. The company did a physical examination and, because of your high blood pressure, they placed you in a rating class with a higher premium than you would have been charged had you not had high blood pressure. Let’s further say that during the last four years you have taken control of your health, lost weight, exercised, taken your medication and now your blood pressure is normal. Under those circumstances, you can go back and ask them to review your medical status and put you in a rating class with a lower premium.

5. Get free life insurance quotes from top life insurance companies.

There are over 1500 life insurance companies. Premiums vary by hundreds of dollars for the same amount of coverage. For example, for $100,000 worth of term life insurance for a 35- year-old male, I recently found annual premiums that ranged from $886 to $2194.

Get instant life insurance quotes at http://www. howtocutexpenses. com

With over 20 years of experience as a personal financial educator and counselor, Vernon Williams has developed in depth knowledge of what it takes to achieve financial success. Today, he is a sought after trainer and speaker by organizations from both the public and private sector. He is the author of 425 Ways to Stretch Your $$$$ and 3 Rules that Guarantee Financial Success. Visit Vernon at http://www. howtocutyourexpenses. com

Cheap Health Insurance Made Easy

admin — Thu, 21 Jan 2010 04:27:43 +0000

Cheap health insurance has become the issue of the moment in South Carolina and across the country. More small businesses are increasingly unable to provide cheap health insurance plans to their employees because of the rising cost and the lack of federal and state legislation that would allow small businesses to purchase cheap medical insurance in pools. In the meantime South Carolina and other states are looking to cut the costs of the Medicare and Medicaid health insurance programs for the elderly and the poor. However, more affordable forms of health insurance plans are available as some private companies are experimenting with a new variation of cheap health insurance known as health discount plans. In the article that follows we’ll explain the various aspects of cheap health insurance in South Carolina and how to find a plan that works for you. Health Care Costs due to Managed Health CareThe current health care system in America is inaccessible to approximately 47 million poor and lower middle class people. In order to address the growing health care insurance crisis in the U. S. that resulted in health care cost growth in the 1970s and 1980s, health maintenance organizations (HMOs) sprung up. These were initially as non-profit groups designed to separate unnecessary tests and treatments from those that the patient required in an effort to keep costs down. Managed care organizations began screening requested procedures by physicians to pre-authorize what the HMO would or would not cover. However, the number of people who are the riskiest to insure-diabetics, cancer, etc. -continues to rise. Many South Carolina managed care industry experts say the cost of cheap health insurance is still high because of the existing pool of insured people who use the health care system more than an average amount. The other battle that is ongoing in South Carolina involves the health insurance companies and hospitals, the latter which cannot turn anyone away from care by law. However, as the number of South Carolinians who cannot afford cheap health insurance increases, hospital emergency rooms are handling the majority of the load. More people have to turn to hospitals as their primary health care givers given a lack of adequate or non-existant health insurance coverage. Cheap Health Insurance Plans Through the WorkplaceMost cheap medical insurance policies in South Carolina are usually written through group coverage offered at work by your employer through a private South Carolina cheap health insurance company. This is usually the more cost effective way to purchase cheap health insurance now available since a large number of employees allows South Carolina companies to reduce their insurance premiums. Similar to buying in bulk, the more health insurance plans a business can purchase for its employees the less expensive the insurance is per employee. In South Carolina, like the rest of the nation, the number of companies that can provide cheap health insurance for their employees is declining. Personal Health Insurance PlansHealth insurance plans can be purchased by individuals and families from virtually every insurance provider in South Carolina. Trying to purchase health insurance on an individual basis can be more expensive if the person already has a health problem, known as a pre-existing condition. Many companies will not cover people with pre-existing conditions if they have no continuation of coverage-renewing health insurance coverage after only a prescribed short period of time-picked up from an earlier cheap health insurance policy. South Carolina Health Insurance PoolThe South Carolina Health Insurance Pool is a state health insurance plan designed to provide coverage for those that either do not have or have lost medical coverage at no fault of their own and are uninsurable. The pool was created by the General Assembly to help people who couldn’t get health insurance coverage from any other source, including people with certain disabilities. Blue Cross and Blue Shield of South Carolina currently administers the pool. Coverage is available to a person who has been a state resident for at least 30 days and meets the following criteria:

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Low Cost Life Insurance in 5 Easy Steps

Cheap Health Insurance Made Easy