Life Insurance Lowdown

I don’t think you can disagree with me if I say that today you can get a life insurance policy at the price of peanuts. Life is indeed getting cheaper. Longer life expectancies and improved technology are other factors that have brought down insurance rates. Insurance companies have also become more efficient at collecting information and assessing potential candidates.

However, the good news doesn’t seem to have reached a majority of Americans. There are quite a few people still holding on to more expensive policies that they bought years ago or they many not have insured themselves highly enough. According to experts, the salary that many employers offer their staff isn’t enough to leave dependents. The paradox here is that though it is cheaper than ever to complement their coverage with other policies, not enough people are doing it!

The funny thing is that while it becomes increasingly difficult to keep yourself healthy thanks to increasing health insurance policy, life insurance has become cheaper. And most insurance firms are not sure how long this downfall will continue! Just look at these figures: In 1990, a healthy 40-year-old man would have paid $1,405 a year for $500,000 in insurance for a 20-year period. That same policy now costs less than $400!

If you are healthy, you could save money by replacing the older insurance with a new 10-year term policy for $525 a year or a new 20-year term policy for about $1,000 a year. The savings are even higher for policies for $1 million or $2 million in coverage. However, about 24 million U.S. households have no life insurance, according to recent research. Consumers cite a number of reasons for not taking insurance including plain laziness, confusion and concerns about cost. And nearly 20 percent say it is ‘unpleasant to think about dying’!

William McCullough from Brooklyn, recently pleaded guilty to masterminding a scheme in which a small network of co-conspirators pretended to have dead relatives in order to collect more than $500,000 in life insurance payments. McCullough is supposed to have operated this scheme in collusion with his stepfather, Michael Brant, 42, who worked for Prudential Insurance as a group life claims examiner. App.com reports:

Starting in December 2000, McCullough devised a scheme to defraud Prudential by submitting false life benefit claims from AOL Time Warner employees who were not dead. McCullough and Brant recruited five additional people from their Brooklyn neighborhood to serve as the beneficiaries on fraudulent group life insurance claims to Prudential, the indictment states.

Read more: Man admits to life-insurance scheme that netted $500G

Here’s some good news for members of the Rhode Island National Guard. Under legislation signed recently by Governor Carcieri, the members would be eligible for higher life insurance reimbursements. Eyewitnessnewstv.com reports:

The legislation would increase life insurance premium reimbursements for any members of the National Guard who have been mobilized for more than 30 days.

Read more: National Guard members to get higher life insurance reimbursements

Here’s a bit of news that will cheer nearly 25,000 minority North Carolinians who now stand to benefit. The North Carolina Insurance Department recently announced a settlement with Western and Southern Life Insurance Co. Myrtlebeachonline.com reports:

A multistate examination led by Ohio insurance regulators and involving North Carolina officials, found that the Cincinnati-based company charged higher premiums to black customers for life insurance, industrial life insurance or monthly debit ordinary insurance from the 1950s through the 1970s.

Read more: Settlement with insurance company announced

The General Body of Voluntary Firemen in Peru (CGBVP) has recently announced that the Peruvian firefighters will finally be receiving life and disability insurance. The number of firefighters or ‘bomberos’ as they are generally referred to as is quite small, still it has taken so much time for life insurance to come their way. To be exact, the number of these brave firefighters today stands at 8,331.

These firefighters provide their services solely on a voluntary basis and truly carry out a humanitarian act that needs to be really appreciated. It may be noted that quality preparation and training ahs ensured that the death index amongst the firemen is minimum.

This insurance cover will be issued by ‘Essalud’ and endorsed by ‘Positiva Seguros y Reaseguros’ and will compensate firefighters in the age bracket of 15 to 70 years. The life insurance cover will be applicable for accidental death and total or partial permanent disability.

ING has recently introduced ING Instant Term, term life insurance available for immediate issue. This will be sold through bank and credit unions. This offering is specially aimed at low and middle income customers. This insurance will be issued by ING’s ReliaStar Life Insurance Company and the entire transaction is expected to be quick and hassle free. The most important aspect of this offering is that the applicant does not have to go through any medical exams or lab tests. All they have to do is approach the designated staff in a participating financial institution and answer some quick questions about themselves and their medical history. The staff will take their word for it and after concluding that the request is genuine and conforms to the required criteria; issue the insurance cover document to the customer there and then.

The product is an answer to a need gap arrived at from a study conducted by LIMRA International. The report states that at least 26 percent of U.S. households with less than $75,000 of household income do not have life insurance coverage. In households where the household income is less than $35,000, the number of uninsured goes up to 50%.

A new way of making good money out of life insurance has come to light. One that is not technically illegal but does not fall under the purview of being legal too!

Off late some senior citizens are being urged to late out a life insurance policy as large as $ 1 million or more. The kind benefactor loans them money to pay for the first two installments. After this the senior is expected to sell the life insurance to the person who gave him the money in the first place. This he does gladly, since he is being offered a sum equivalent to 1% of the $ 1 million that he is insured for. After this the buyer of the insurance sits back and waits for the senior citizen to ‘die’. After the death, the new owner of the insurance becomes the recipient of the $ 1 million for which the senior was insured. 

The senior does have the option to keep on paying the yearly premiums and maintain the policy but the sheer size of the premium prevents him from doing so. And he is therefore quite happy with the 1% that he receives for his ‘work’ that roughly translates into $ 10,000.

Prudential Financial, Inc. recently announced a new tool that can assist families in selecting the right amount of life insurance cover for women. ‘The Value of All You Do’ Calculator, now available on the company’s website, estimates the economic value of many services women provide for their families, such as managing the home, caring for children, running errands, preparing food, and tutoring. Finanzen.net reports:

Wives are less likely to own life insurance than their husbands at nearly all income levels, according to LIMRA, 2005. In addition, a 2006 study by Salary.com concluded that the value of the things moms do can amount to an average annual salary of $85,876 for working momsand $134,121 for stay at home moms.

Read more: New Life Insurance Calculator for Women Estimates `The Value of All You Do’

Imagine being able to take a life insurance policy in less than 15 minutes! No, I’m not joking and such a thing actually happens. Only that it happens in a country that is a very good friend of ours — Mexico. Insurance firms in quite a few companies are impressed with this system which gets you an insurance in lesser time than it takes you to have a cup of coffee! May be you could even walk into an insurance firm during your coffee break to get the work done….

A group of financial planners have found a method to deliver an insurance policy in the shortest time possible. All they do is harness the power of the Internet. They use it to access and send data, process it and deliver it in the shortest time possible. moneymanagement.com reports:

They do this by using electronic applications that are e-mailed to head office, put through an underwriting system, and sent back as a policy document before the client has even finished their coffee.

Read more: I’ll have my life insurance to go, thanks

Regulators from the Minnesota Department of Commerce recently fined Indiana-based Conseco Inc., and California-based Pacific Life Insurance Co. a combined $3.4 million. This fine was to settle charges that the two insurance companies sold unsuitable investments to Minnesota consumers. Bizjournals.com reports:

The companies also were charged with using unfair and deceptive advertisements by some agents in the state. The state reviewed possible misconduct at Pacific Life Insurance dating back to January 1985.

Read more: State fines two out-of-state insurance companies