5 Ways Disability Insurance Kept Life Normal for This Athlete

5 Ways Disability Insurance Kept Life Normal for This Athlete

by | May 5, 2021 | Disability Insurance | 0 comments

Scott Rider is one of the most optimistic and energetic people you could meet. He’s an avid biker, engaged in his community, and loves nothing more than to spend time with his family.

He also needs help tying his shoes.

At 47, this Olympic-caliber runner, athlete, businessman, husband and father found out he has Parkinson’s disease. So much in his life has changed in the years since he’s been living with this degenerative disease. But one thing hasn’t: his financial well-being. He credits disability insurance with making that possible. You can watch his story here.

You see, disability insurance is there if you get sick or injured and are unable to work. It replaces a portion of your income until you recover and can return to work. Or in Scott’s case, the payments continue for the rest of his working career since he will never be able to return to the job he loved.

Many people don’t think about getting this important—but often overlooked—insurance. Scott is a big advocate for disability insurance because it allows him to really live his life and enjoy it.

Here’s what he says about his coverage:

  1. Disability insurance allowed me to protect my most valuable asset, which wasn’t my house or car or investments, but my ability to earn a living.
  2. When I had to scale back and then quit working, the bills kept coming. Disability insurance payments stepped in so that I could meet those obligations.
  3. My wife didn’t have to head into the workforce after being a stay-at-home parent because we had an income stream.
  4. We are still in our dream home, and we could pay for our daughter’s wedding because I had disability insurance.
  5. My wife’s and my retirement are secure because we didn’t have to touch our retirement savings when I became ill.

“Parkinson’s disease changes life enough, but disability insurance makes it as close to normal as possible. I’m so incredibly grateful that my income continues and makes life possible for my family. It would look so different without disability insurance,” says Scott.

If you work and rely on your income, then you need disability insurance.

You can check with your benefits administrator to find out what coverage you may have through work and then talk with an insurance professional about the benefits of having an additional individual disability policy. Scott had a combination of both, which he says helped him maintain his family’s lifestyle.

16 Commonly Misunderstood Insurance Words

16 Commonly Misunderstood Insurance Words

by | April 27, 2021 | Annuities, Disability Insurance, Financial Education, Life Insurance, Long-Term Care Insurance | 0 comments

Underwriting, premiums, contestability period—terms like these can make insurance words seem like a foreign language. 

Fortunately, a good insurance professional can help you make sense of it all. So can the definitions below. We explained them in recognition of Financial Literacy Month. Read on to understand some commonly misunderstood insurance words.

16 Commonly Misunderstood Insurance Words

  1. Accelerated death benefit:  An accelerated death benefit, often as a rider (see below) to a policy, lets you use some of the life insurance death benefit before you die. This is an option if you’re terminally ill. People often use the accelerated death benefit to pay off debt, cover hospice costs or take a special trip with their families.

     

  2. Annuity: These are financial instruments that some insurance companies offer that allow you to save money on a tax-favored basis and create an income for life. You choose one that meets your needs, such as how you will pay for it (immediately or over time) and when you will start taking your payments and for how long. Annuities are popular among retired people because they can offer protected income for life.

     

  3. Contestability period: A contestability period is a set amount of time after a life insurance company issues your policy. During this time, the company can review your application to make sure you didn’t misrepresent anything. The contestability period starts as soon as the policy is issued. It usually lasts one to two years. Its purpose is to protect the life insurance company from fraud.

     

  4. Conversion right: Some term life insurance policies let you convert them into permanent life insurance policies later on. This is a great way to keep your coverage and build wealth. (Learn more about permanent life insurance below.)

     

  5. Death benefit: The death benefit is the amount of money your beneficiaries receive from the life insurance policy. You typically don’t have to pay taxes on the death benefit.

     

  6. Disability: A disability is more than just an injury or illness in the world of disability insurance. Many companies’ maternity leaves are covered by short-term disability, for instance. Some disability policies cover lost wages due to depression, mental illness and complications from drug and alcohol abuse. It all depends on the policy, so make sure to read yours carefully. Learn more about disability insurance.

     

  7. Grace period: Like many credit cards, some insurance policies may offer a grace period. This is the amount of time your policy remains in force if you don’t pay your premium before the due date. The grace period usually only lasts about a month.

     

  8. Insurable interest: Life insurance policies require you to have an insurable interest in the person named in the policy. This means that you would suffer some kind of financial harm if that person were to die. 

     

  9. Living benefits: Some life insurance policies provide benefits while you’re still alive. Some of the most common living benefits are accelerated death benefits, long-term care benefits and policy loans. Learn more about the living benefits of life insurance.

     

  10. Long-term care insurance: Long-term care insurance steps in if you can no longer care for yourself for an extended period of time. It can cover nursing home, adult day care or home health care costs. There are several different policy options for long-term care. Learn more about long-term care insurance.

     

  11. Permanent life insurance: Permanent life insurance pays a death benefit just like term life insurance. But unlike term life insurance, permanent life insurance provides lifelong protection for as long as you pay the premiums. It also accumulates cash value on a tax-deferred basis. You can use this money to buy a home, supplement your retirement income, cover an emergency expense and more. It’s a great option if you’re looking to build your wealth while also protecting your family financially. Learn more about permanent life insurance.

     

  12. Preferred rates: A preferred rate is a less expensive rate for life insurance. It’s offered to applicants who are at a lower risk of dying. Some of the factors life insurers consider when offering preferred rates are a person’s health history, smoking habits, gender and lifestyle.

     

  13. Premium: A premium is the payment an insurance company requires in order to keep your policy in force. Depending on the policy, you might pay your premium annually, quarterly, monthly or some other frequency.

     

  14. Rider: A rider is an additional amount of coverage you can add to your main insurance policy. It gives you extra coverage for your exact needs. Common insurance riders are long-term care riders and accelerated death benefit riders. (Check out the definitions of long-term care insurance and accelerated death benefits above.)

     

  15. Term life insurance: Term life insurance is the most common and affordable type of life insurance. It provides coverage for a specific amount of time (the term). The term is usually 10, 20 or 30 years. Your beneficiaries receive a payout (known as a death benefit) if you pass away during the term. Learn more about term life insurance.

     

  16. Underwriting: Underwriting is the process an insurance company uses to decide two things: if they want to offer you a policy and at what rate. A professional called an underwriter does the underwriting. When it comes to life insurance, the underwriter looks at factors like a person’s age, health, lifestyle and more to make those decisions. 

To learn even more about insurance and get coverage, reach out to an insurance professional. We have helpful information on how to choose a qualified insurance professional. And you can easily find one in your area by using our Agent Locator.

Life Insurance Isn’t a Waiting Game

Life Insurance Isn’t a Waiting Game

by | April 12, 2021 | Financial Education, Financial Planning, Life Insurance | 0 comments

Americans can no longer make excuses for why they haven’t purchased life insurance. According to the 2021 Insurance Barometer Study, those who are uninsured appear to want more convenience in the life insurance process, citing that they haven’t been approached about it (46%), it isn’t offered through their employer (42%), and they haven’t gotten around to it (62%) as reasons they don’t have coverage.

But a silver lining to the COVID-19 pandemic is that obtaining life insurance has never been simpler. This means that no one—especially the 31% of people who say they’re more likely to buy life insurance because of the pandemic and the 47% who say they haven’t gotten around to it—has a reason to wait to purchase life insurance.

Plus, our data shows that people don’t regret purchasing life insurance. In fact, they regret not purchasing it earlier, with 39% of those who have life insurance saying they wished they’d purchased it at a younger age.

These findings are from the 11th edition of the annual Insurance Barometer Study released jointly by LIMRA and Life Happens, which examines the financial attitudes and behaviors of Americans, with an emphasis on life insurance.

Heightened Interest, But Little Action

We also found via the survey that interest in life insurance is at an all-time high. Currently, more than half (59%) of those who don’t own life insurance say they need it. For the uninsured, the top five reasons for not owning it include:

  1. It’s too expensive (81%)
  2. Other financial priorities right now (75%)
  3. Not sure how much I need / what type to buy (65%)
  4. Haven’t gotten around to it (62%)
  5. Don’t like thinking about death (51%)

Results reveal that the obstacles stopping uninsured Americans from purchasing life insurance really shouldn’t be preventing them from getting it. Here’s why.

Myths not Real Roadblocks

One of the biggest myths around life insurance is that it’s expensive. But more than half of people overestimated the cost of a term life insurance policy, believing it’s three times or more than it actually is. This was especially true for Millennials, with 44% estimating that the annual cost of 20-year $250,000 level term life insurance for a healthy 30-year-old would be more than $1,000, when it’s closer to $165.

Despite these myths and reasons for not owning life insurance, the pandemic did lead some to purchase life insurance for the first time, with Millennials (24%) and Black Americans (17%) the most likely to have done so in the last year.

Another myth is that it’s difficult to obtain life insurance. In the past year, in response to the pandemic, life insurance companies pivoted to help consumers expedite the buying process online, from their homes. Streamlining the process with simplified underwriting has also influenced the consumer’s likelihood to buy coverage: 48% of people said that they are more likely to buy via simplified underwriting, with the top benefits of this process being that it’s fast and easy (64%) and avoids the medical exam, blood and urine samples (56%).

The Financial Gender Gap

The Barometer findings show more men than women agreed with common myths around life insurance. In particular, men (35%) believed the myth that life insurance coverage through an employer is generally enough, 13% more than women (22%). Additionally, just 22% of women said they were very or extremely knowledgeable about life insurance compared with 39% of men. This may contribute to why only 11% of women obtained life insurance for the first time in 2020 with the impact of COVID; instead, paying monthly bills (29%) and saving money for an emergency fund (26%) ended up being the top concerns for women.

Shifting Priorities and New Concerns

COVID-19 has changed the financial concerns and priorities of all Americans. The research shows 42% of Americans would face financial hardship within six months if the primary wage-earner were to die unexpectedly. This just underlines how critical adequate life insurance coverage is in protecting a family’s financial future. As people’s overall financial concern continues to rise—up 20% over the past two years—life insurance can be a source of security. With nearly have (45%) saying that they have put off purchasing life insurance, it’s clear that there is no better time to act than right now.

We All Have Our Reasons

In recent years, there have been changes in why Americans say they own life insurance, with the most common reason for owning life insurance—burial/final expenses—showing a sharp decline in 2021 to 83% from its peak of 91% in 2018. At the same time, supplementing retirement income increased to 63%, along with transfer of wealth/inheritance, which came in as the second most popular reason for owning life insurance at 68%.

More findings from the 2021 Insurance Barometer Study can be viewed here.

Study Methodology

In January 2021, LIMRA and Life Happens engaged an online panel to survey adult consumers who are financial decision makers in their households. The survey generated over 3,000 responses. The results were weighted to represent the U.S. population.

Women and the Life Insurance Gender Gap

Women and the Life Insurance Gender Gap

by | March 23, 2021 | Life Insurance | 0 comments

Women’s History Month is a time to reflect on women’s many contributions to American life. It’s also a time to gauge how far women have come in achieving true equality. 

Many people are aware of the gender pay gap of women earning on average only 82 cents to every dollar earned by men. Another troubling financial reality people are less aware of is the life insurance gender gap.

Initial findings from the 2021 Insurance Barometer Study, by Life Happens and LIMRA, show that just 47% of women have life insurance, versus 58% of men. That’s a big difference. But many women may have an inkling that this disparity isn’t good: 32% of those with no life insurance say they need coverage, and 11% of those with coverage admit they need more. 

Reasons Behind the Life Insurance Gender Gap

  • Women’s lower earnings lead to less coverage. Life insurance coverage limits are often a multiple of your annual earnings. According to the Bureau of Labor Statistics, men earn an average of $55,744 while women earn an average of $46,488. Using a common multiplier of 10 (with 10 times your salary being a general rule of thumb for how much life insurance you might need) would mean the average woman could end up with $925,600 less coverage than an average man.
  • Women’s unpaid labor is undervalued. More than one in four mothers stays at home with her children. And many other moms work reduced schedules to accommodate the needs of their families. While these women may not earn large paychecks (or any paycheck at all), the value of their unpaid labor is immense. Salary.com pegs the value of childcare, housekeeping and more that stay at home moms provide to be worth $178,201 a year.

    This reality is further compounded if a breadwinning spouse or partner gets life insurance through work. While life insurance from your employer is almost never enough, it is an important starting point for many families. Life insurance through a job usually only covers the worker.
  • Women lack financial literacy. A study by FINRA revealed that women answered only 48% of financial literacy test questions correctly. Meanwhile, men answered 58% correctly. A lack of confidence in their financial know-how may keep many women from getting the life insurance they truly need.

Closing the Life Insurance Gender Gap

There’s a growing awareness about the outsize contributions women make toward the care of their families. This unpaid labor is not cheap to replace, which makes life insurance for women a necessity.

Women can help close the life insurance gender gap by taking stock of their life insurance needs using the Life Insurance Needs Calculator, exploring life insurance basics on this site, and talking to an insurance professional about coverage. Check out our helpful information on how to choose a qualified insurance professional. Then use our Agent Locator to find one in your area. (You may be surprised by how many are women!)

5 Myths the Black Community Has About Life Insurance

5 Myths the Black Community Has About Life Insurance

by | February 24, 2021 | Financial Planning, Life Insurance | 0 comments

Financial planner Delvin Joyce has worked hard to dispel myths that the Black community holds about life insurance.

The founder and president of Prosperity Wealth Group in Charlotte, N.C., regularly helps members of his local community get coverage. Here are the biggest misconceptions he encounters from his Black clients. 

1. Life insurance is only for final expenses. Delvin says he frequently advises his clients that they need more than just “burial insurance.”

“They truly believe in life insurance, but sometimes they can’t see its usefulness beyond paying for a funeral,” he explains. To help them see life insurance’s many benefits, Delvin approaches the topic with a financial-planning objective.

“We discuss how it can help with income replacement, debt protection, paying for kids’ college educations, and more,” he says. Delvin also stresses the many ways that life insurance can help build wealth. Learn more about what life insurance can cover.

2. Life insurance will leave my kids on Easy Street. Many of Delvin’s hard-working Black clients fear their kids will become unmotivated if they receive an unexpected windfall. Delvin says he can understand their feelings.

“A lot of us had to pull ourselves up by our own bootstraps,” he says. “Fortunately, you can avoid that situation with proper estate planning and a living trust. This can help ensure your kids grow up with that same hard work, determination, and grit that you did.”

3. I have enough life insurance through my job. Coverage from your employer usually isn’t enough. Your employer can also trim or drop coverage at any time. Finally, you also lose that benefit if you change jobs, lose your job, or retire. 

All these reasons underscore why most people need to supplement any coverage they get through their job.

4. Life insurance only benefits me if I die. Delvin says many of his clients fail to consider the many ways that life insurance can benefit them while they’re living.

“I tell them about chronic illness riders and how cash value accumulation in permanent life insurance can support their other financial goals,” he says. (Learn more about the living benefits of life insurance.) Delvin stresses that wealth building is especially important given all the recent focus on the Black-white wealth gap.

5. I don’t need something like $1 million of coverage. Delvin says clients often underestimate how much coverage their family really needs. That’s because expenses like a mortgage, car payments, future college tuition bills, and more can add up fast. Fortunately, life insurance usually doesn’t cost anywhere near what most people think. “People overestimate the cost of term life all the time,” says Delvin. “They’re usually pleasantly surprised at how affordable it really is.” Learn more about what life insurance costs.

Working with an insurance professional like Delvin is a great way to learn more and get coverage. Check out our helpful information on how to choose a qualified insurance professional. Then use our Agent Locator to find one in your area.

Join Life Happens’ Twitter Chat for Insure Your Love

Join Life Happens’ Twitter Chat for Insure Your Love

by | February 2, 2021 | Life Insurance | 0 comments

Join Life Happens for a Twitter Chat during Insure Your Love month this February. We’ll discuss new data that shows Americans are shifting their priorities and focusing on financial security in response to COVID-19.

The pandemic has helped many of us appreciate the little things more than ever, those small wins that carry us through a tough time. We hope this chat serves as a reminder that life insurance is a simple act of love you can take today to ensure your loved ones are protected financially tomorrow.

Date: Thursday, February 11 from 1 to 2 p.m. EST

Where: Join us on Twitter using your personal handle or your company’s handle.

Hashtag: Use and follow #InsureYourLoveChat during the above timeframe

Life Happens will moderate the discussion and drive the conversation on Twitter using the questions and statistics below. Remember, you’ll have to use the #InsureYourLoveChat hashtag in each tweet.

All statistics below come from the study “Life’s New Appreciations,” Life Happens, 2021.

Q1: The pandemic has shifted our priorities, helping us appreciate the little things and small wins. What are some small wins people can accomplish financially that might be simpler than they think? #InsureYourLoveChat

Q2: Three quarters of Americans agreed that it’s important for them to get their finances in order this year. How can they best start working toward that goal? #InsureYourLoveChat

Q3: We found that 58% of Americans said COVID-19 has drastically changed which milestones they’d like to accomplish in life. Does this statistic surprise you? #InsureYourLoveChat

Q4: Some traditional milestones like marriage and having children are less of a focus this year. Meanwhile, achieving financial security is still at the top. What changes have you noticed in the way people approach their overall financial picture? #InsureYourLoveChat

Q5: Over half (55%) of Americans said this past year was the first time they spoke with a loved one about life insurance. What would you say to help that other 45% get the conversation started with their loved ones? #InsureYourLoveChat

Q6: Americans had more financial discussions over the last year, which included the need for their significant other to buy life insurance and reviewing their existing policy. How are you raising awareness about life insurance this month? #InsureYourLoveChat

The basic motivation behind the purchase of life insurance is love. Help us spread awareness of Insure Your Love during February, the “month of love,” by using #InsureYourLove on social media all month long.

Why Single People Need Life Insurance

Why Single People Need Life Insurance

by | January 27, 2021 | Life Insurance | 0 comments

Many people wonder if single people need life insurance.

It’s easy to believe the answer is “no.” After all, the main purpose of life insurance is to provide cash to your family if you were to pass away. So it seems logical to think you don’t need life insurance if a spouse or kids aren’t depending on your earnings.

However, there are definite times when single people need life insurance. Here are some of the most common reasons to consider life insurance if you’re flying solo. 

7 Reasons Why Single People Need Life Insurance

You have debt. 

Not saddling others with debt is a major reason why single people need life insurance. This is typically the case when there’s a cosigner on your loan or when you share a mortgage with a friend, relative or someone else.

Private student loans can be especially burdensome to your cosigners. That’s because unlike federal loans, they aren’t discharged when you die. This could leave a cosigner like a parent on the hook for many thousands of dollars. Shared mortgages could also leave your fellow borrower in the same predicament. 

An easy and affordable solution if you have debt like this is to get term life insurance. It will step in and pay off your portion of the loan if you were to pass away prematurely. 

You have people who depend on you.

Just because you’re single doesn’t mean people don’t depend on you. Perhaps you’re a single parent with young children. Or you have aging parents or disabled siblings who rely on you. If anyone counts on your income to make ends meet, you almost certainly need some form of life insurance.

You own a business.

In most cases, the financial institution that issues your business loan will require you to have life insurance. That’s to ensure they get their money back if you die before the loan is paid off.

Life insurance is also needed when you have a business partner. Your death will probably leave the business in a lurch. Fortunately, there’s special insurance known as “key person” insurance that can help keep the business afloat in the event of your untimely passing.

You want to pay for final expenses.

Did you know that a funeral can easily cost more than $10,000? (The FTC outlines out all the costs of a funeral in case you’re curious.)

A potential five-figure price tag for a proper burial is a big reason why single people need life insurance. Without it, your friends and family will be on the line to cover those costs. (Or you might not have the send off you would want.)

You want to grow your wealth. 

Life insurance isn’t just there to take care of things if you’re not around. It can also benefit you while you’re living if you have permanent life insurance.

Permanent life insurance gives you a death benefit while also accumulating cash value on a tax-deferred basis. You can use that accumulated cash to increase your personal wealth or to buy a home, supplement your retirement income, cover an emergency expense and more.

You want to lock in coverage while you’re young and healthy. 

Your health affects whether you get life insurance and how much you pay for it. Generally speaking, younger people in better health have an easier time getting life insurance. They also usually pay less for it.

For these reasons, it’s often a good idea to lock in coverage at an affordable rate when you’re young and healthy. If you wait until you develop a health condition, it can be difficult (if not impossible) to get life insurance coverage. This can be tough news to swallow if you have a partner or children depending on you by that time.

You want to leave a legacy.

Leaving money to a beloved school, religious organization, charity or person is another reason why single people need life insurance. Some or all of the policy’s proceeds could help further a mission near and dear to your heart. It could also help someone realize their dreams if you choose to give the money to someone you care about.

These scenarios show why single people need life insurance. If any one resonates with you, show yourself some love by talking to an insurance professional about your options.

We have helpful information on how to choose a qualified insurance professional. And you can easily find one in your area by using our Agent Locator.

8 Small Steps Toward Financial Protection

8 Small Steps Toward Financial Protection

by | January 14, 2021 | Financial Fitness, Financial Planning, Life Insurance, Retirement Planning | 0 comments

About half of all Americans make New Year’s resolutions. Along with exercising more and eating better, many people aim to get a better handle on their finances. 

If you’re in that camp, we’re here to help. Here are some surefire steps to create a more financially secure future for you and your loved ones. 

  1. Create a budget.

The first step toward getting financially fit is to create a budget. Everyone needs an understanding of how much they’re earning, how much they’re spending, and how they’re going to meet their current and future financial goals. The Federal Trade Commission has information on how to create a budget. Once you outline your budget, make sure to stick to it. Also make sure to regularly revisit it and adjust it as needed.

  1. Control and minimize debt.

Your budget will help you keep track of where your money is going. It will also help you identify areas where you’re overspending. It’s critical to cut out any excess spending. Also work to minimize your debt load. So long as you have debt, you’ll be responsible for paying interest. (So definitely make an effort to pay more than the minimum on your credit card each month!) Set goals to pay off your debt and track your progress. 

3. Automate an emergency fund.

An emergency fund is money you set aside for unforeseen expenses. They could be an unexpected home or car repair or a job loss. Most financial professionals recommend having three to six months of basic living expenses in an emergency fund. However, it takes time to build those funds. Automate the process by having part of your paycheck deposited into a special emergency fund account. You can also have your bank automatically transfer funds to a savings account earmarked for emergency expenses. Even a small amount each week can help you get there. 

  1. Get life insurance to protect your loved ones and review it annually.

Life insurance provides your loved ones with money to maintain their lifestyle if you die. This money is known as the death benefit and it can replace your income, pay off debts like a mortgage, and cover funeral costs. It can also help with future expenses like college tuition, retirement, and much more. Experts recommend having life insurance that equals between 10 to 15 times your gross income. For a working idea of how much you need, use an online calculator like the Life Insurance Needs Calculator. Then work with an insurance professional to explore your options and get the right coverage. Make sure to review your life insurance annually or after a big life change like buying a new house, having a baby, or changing jobs.

  1. Protect your paycheck with disability insurance and review it annually.

Disability insurance is one of the best ways to protect your most important asset: your paycheck. Disability insurance typically replaces 50% to 70% of your earnings if you’re unable to work due to a disabling illness or injury. An easy way to calculate how much you might need is to use an online calculator like the Disability Insurance Needs Calculator. Make sure to review your coverage with your HR department or insurance professional as your salary increases.

  1. Keep beneficiaries up to date.

It’s important to update the beneficiaries on your financial accounts like your life insurance or 401(k). This is especially true after major life events such as a marriage, divorce, birth, or death. Not having the right beneficiary can lead to money going to the wrong person or delays in disbursing money. 

  1. Put a will in place.

A will is a document that allows you to specify certain things after you die. They can include how your assets will be distributed, who will make sure your wishes are carried out, and who will take care of any minor children. Without a will, the state could decide who gets your children and more. Fortunately, the process of creating a will is not as complicated as many people believe. And it’s well worth it since it spares your loved ones from all kinds of headaches. A lawyer can help you create a will and discuss other issues like power of attorney.

8. Save for retirement.

Tap into any  available resources to help grow your retirement nest egg. That includes enrolling in your company’s 401(k) plan or looking into other retirement savings options like an IRA. Definitely take advantage of any “matching funds” your company makes to your 401(k) contributions. Matching funds are like “free money.” What’s more, the contributions you make to your 401(k) reduce your taxable income.

Make 2021 the year you become financially fit by following these steps. Each one will create a better, more protected future for you and your loved ones. 

What to Know About Life Insurance for Diabetics

What to Know About Life Insurance for Diabetics

by | December 7, 2020 | Life Insurance | 0 comments

Many people falsely believe that life insurance for diabetics doesn’t exist. In reality, there are quite a few life insurance options for the 34.2 million Americans who have diabetes.

While diabetes remains a health challenge for many, it is still very possible to secure good life insurance as a diabetic. Here are some key things to know about getting life insurance if you have diabetes.

Insurance companies consider many factors.

In addition to knowing whether you have diabetes, a life insurer may also want to know:

  • Whether you have Type 1 or Type 2 diabetes
  • The age you were diagnosed with diabetes
  • What medications you’re taking
  • Your height and weight
  • How well you’re controlling your diabetes
  • Your glucose levels
  • If you have other health conditions like heart disease and/or high blood pressure
  • If you smoke
  • Your overall medical history
  • Your family history

Some life insurers offer something known as “clinical underwriting.” (Underwriting is when an insurance company evaluates you for coverage.) This type of underwriting takes a more holistic view of your health instead of zeroing in on certain risk factors. An insurance professional will know more about companies that offer clinical underwriting.

Life insurance for diabetics underwriting varies by insurer.

One person who knows a lot about life insurance for diabetics is Jake Irving. He’s is a licensed insurance agent and owner of Willamette Life Insurance in Beaverton, Oregon. Irving specializes in helping people with diabetes get life insurance. He says that every insurer has different underwriting guidelines when it comes to life insurance for diabetics.

Even still, Irving says that most insurers care about your age at the diagnosis. “Being diagnosed earlier in life means there’s more time for related complications to develop,” he explains. That may make it harder to get coverage.

Most insurers will also care about any severe diabetic complications. “Having a diabetic coma, an amputation, or a hospitalization are the big three they care about,” says Irving. “But having any one doesn’t mean you can’t get coverage.”

Finally, people with Type 2 diabetes typically have an easier time securing life insurance than people with Type 1 diabetes.

Life insurance for diabetics is often (but not always!) more expensive.

People in good health who don’t smoke generally get better life insurance rates than people with health conditions and smokers. That said, Jake says he’s had diabetics qualify for preferred insurance rates. Preferred is the best rate category available for life insurance.

Nontraditional plans are an option.

One nontraditional option is graded life insurance. With this option, your beneficiaries only receive a percentage of the full life insurance payout if you pass away before a set waiting period. A typical waiting period is two years.

Another option is guaranteed issue life insurance. With this option, you get a limited amount of coverage on the spot. You are not required to have a medical exam or even answer any medical questions. Just know that you may only get a limited amount of coverage and that the rate may be high. There’s also often a waiting period as well.

Controlling your diabetes can help you get better coverage.

Life insurers look more favorably on diabetics who are working on managing their condition. This could mean regularly visiting your doctor, taking your prescribed medication, maintaining a healthy weight, and having lower A1C and glucose levels.

Jake says that it may even be possible to secure a better rate once you control your diabetes. This is especially true if a good amount of time has passed since a hospitalization from diabetes. (Just know that the incident may remain on your health record and affect your rate.)

Working with a licensed insurance agent is your best bet.

Ideally, you want an independent agent who has relationships with many different life insurance companies. This means they can shop around for the best possible coverage for you. It also means they can turn to other carriers if your application is rejected.

You might even consider an agent like Jake who works with high-risk applicants. These kinds of agents are especially knowledgeable about which carriers are most likely to offer you the best policy.

Start the process by learning how to choose a qualified insurance agent. An easy way to find a qualified insurance professional in your area is to use our Agent Locator.

10 Advantages of Hybrid Life Insurance with Long-Term Care

10 Advantages of Hybrid Life Insurance with Long-Term Care

by | November 17, 2020 | Financial Education, Life Insurance, Long-Term Care Insurance | 0 comments

You probably know about hybrid cars. But do you know about about hybrid life insurance? 

This coverage combines long-term care and life insurance into one policy. Like hybrid cars, these hybrid policies are increasingly popular. That’s because they have some unique benefits. 

How It Works

Most people bought long-term care insurance as a standalone policy in years past. Today, it’s becoming more common to buy the coverage as a policy that also includes life insurance. 

The long-term care portion of the policy pays for care if you develop a health condition and need care. Meanwhile, the life insurance portion gives your loved ones financial support if you were to pass away.

You receive the long-term care benefit if you develop a health condition. And your loved ones get the full death benefit if you never use the long-term care benefit. 

10 Advantages of a Hybrid Life Insurance Policy

  1. More complete coverage. A hybrid life insurance with long-term care policy lets you—and your loved ones—benefit from two very important coverages. 
  2. Easier to get.  The medical underwriting for a hybrid life insurance policy is often more relaxed than for a standalone long-term care insurance policy. In fact, some hybrid policies only have you answer a few health questions. 
  3. Flexible payment options. There are two ways to pay for a hybrid life insurance: with a lump sum or with annual payments. 
  4. Tax savings. Life insurance payouts to your loved ones aren’t taxed. And premiums paid for long-term term care insurance can sometimes be deducted from your state and federal taxes. 
  5. Less time and effort. It’s often easier to research, buy and manage one policy than two separate policies.
  6. Fewer premium hikes. Many people worry about cost. That’s because standalone long-term care policy premiums could increase dramatically. Hybrid policies typically offer more pricing stability. 
  7. Possibility of a death benefit. Typically you forfeit the premium dollars you’ve paid for a traditional policy if you never need long-term care. With a hybrid policy, your loved ones receive the full death benefit if you never need long-term care. Some policies even guarantee a small death benefit no matter what. 
  8. Option to lock in your premium. Some hybrid life insurance policies let you lock in your premium payments. 
  9. Option of a money-back guarantee. Some hybrid policies return the premium paid if you decide you don’t want the policy after a set time.
  10. Ultimate peace of mind. Hybrid life insurance coverage erases worries about potential long-term care costs and helps ensure your family’s financial future. Who doesn’t need that?

Getting Coverage

A licensed insurance professional can help you determine if a hybrid or a standalone policy is the right fit and find one that works with your life and budget⁠. Get started today by learning about the three main ways to get long-term care insurance. Also check out our answers to commonly asked questions about long-term care insurance. 

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