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Amber Said:

I am looking for a good company to go to for life insurance. What company doesn't increase their premiums?

We Answered:

Why do you need life insurance? I don't know your situation, but lets say you are married, own a home, have kids, and have some consumer debt such as credit cards. You probably don't have lots of money saved, so the need for life insurance is very high. In later years, your kids move out, your mortgage is paid off, and you shouldn't have too much consumer debt. You are retiring and you better have lots of money saved. So the need for life insurance is low.

There are two goals you should have in mind right now.
1) Protect your family's assets now since you don't have much saved.
2) Accumulate wealth so that you don't need life insurance anymore or as much coverage.

Life insurance will provide income to your family in the event of your death. Saving your money somewhere else such as bank accounts, IRAs, 401(k), mutual funds, bonds, etc will build wealth for you.

No one knows your financial needs right now. $50,000 coverage seems a bit small. I don't know where you live, so $50,000 may be enough if you live in a very rural area. If you live near a metro city such as New York City, $50,000 is definetly not enough.

I have always sold 20-35 year term insurance. All the other types of life insurance makes no sense because they bundle insurance and savings together. At the same time, I set up an investment plan for them. I have them open an IRA account and recommend what they should have in it. If they have an IRA account, most of the time I can find better investments that has lower expenses and have higher rate of return.

If you invest $200/month for the next 20 years in a mutual fund that has an average 10% rate of return, you can potentially have $153,140. In 30 years, you can potentially have $455,865. I'm being very conservative with 10% because the average rate of return on mutual funds I offer ranges from 9-15% in the past 10 years. You don't have to put in $200/month into your IRA account. You can put in as little as $25/month if you don't make much money right now.

When you buy a new life policy, you want to read the policy right away. You only have certain time limit (about 1 to 2 weeks) to read it and then decide to cancel it and get all your premiums back.

I work at Primerica Financial Services and the things I mentioned is what they do for families. Besides providing life insurance and investments, they also help families get out of debt, and create a financial plan to reach whatever goal the client has.

Mae Said:

Is it wise to change life insurance company after paying more than 10 years of premium?

We Answered:

It is a very dumb thing to do. The new policy will carry a much higher premium than the old policy.
Also., there will be a new contestable period, during which fhe company can simply void the policy if they find out information that wasn't on the application.
This is called " trwisting, " that is, enticing a customer to drop an old policy in favor of a new policy. It is unethical, and in many cases, illegal.
What will your mother gain? Abvsolutely nothing. What will your cousin gain? A new policy commission.

It sounds like your cousin found a promisingm nbew career in selling life insurance, but after a new agent goes through cousins, aunts, uncles, etc, those eads suddenly become awfully hard to come by.

This is a dumb thing to do. I urge her, just say NO!

Vickie Said:

universal life insurance premium?

We Answered:

The funny thing about a universal life policy is that you can set your own premium. Most policies will give you guaranteed coverage period for a set premium. This secondary guarantee means that even if the policy runs out of cash it will be guaranteed for that long. It might also last longer if it gets better than projected performance. So once you go through underwriting, you need to choose two out of three: premium, face amount and/or length of coverage. Let me know if you have any questions.

Mitchell Said:

How does life insurance agent earn if no commission comes from insurance company?

We Answered:

1) This would be a fee for service senario much like investment advisors, where they will charge you X amount of money per hour for consultation services, whether you buy or not. Just like a lawyer charges you whether you win or not, or whether it even goes to court.

2) I would assume this would have to be legally disclosed to the client before any services are rendered.

3) There would be none. No residual income...if you provide good service/advice they will come back...that's your future earnings.

4) Depends on your local laws on whether it would fall under good and services taxes or just under a flat income tax fee. Would likely depend on whether it's an incorporated individual or a person in an independent self-employed advisor role.

Lori Said:

Should one consider hiding a smoking habit from a life insurance company?

We Answered:

Well, that's kinda dumb to not mention it, as they're going to TEST for it, and it's going to come up positive. Denying tobacco use isn't going to do anything except annoy your agent (after all, he's trying to work for you, and you're lying to him!) and get you declined.

If you're buying a very small policy, like $10,000, where they won't test, then yes, the company can deny a claim based on fraud - which is what he's doing.

Next time he complains about insurance rates, remind him that the high fraud rates (and attempts) help contribute to high rates - and HE advocates fraud.