Life Insurance Lowdown

I know this bit of news comes all the way from UK. But the crass denial of basic rights to patients… cancer patients, had me fuming, and well, I couldn’t go on without writing about it. Thousands of people suffering from cancer are being denied insurance in the UK. This, despite the fact that medical advances have increased survival rates dramatically.

Many of these sufferers are not even being allowed to take a life cover and other forms of insurance. This puts their homes at risk AND causes needless distress. The situation is particularly acute for women with breast cancer, who are being overcharged for cover by as much as £36,000 over the life of a policy. Telegraph.co.uk reports:

"Insurance companies are not always taking the impact of new medicines into account," Anna Woods, of Breast Cancer Care, said yesterday. "New treatments are increasing survival rates all the time and the companies are not keeping track enough."

Read more: Thousands of cancer patients ‘unfairly’ denied life insurance

While life insurance is intended to provide a prop to your family in the event of your premature death, sometimes it can cause a bit of problem. Though income tax does not apply to a life-insurance payout, estate tax does and it could take away a really big chunk of your insurance amount. One of the options to avoid this is by creating a life insurance trust.

If you have a substantial policy that could push the value of your estate above the tax threshold (currently $2 million) you could be in trouble. One way out is to create an irrevocable life-insurance trust, a legal entity that will own the policy while you’re alive. The trust will pay the proceeds to the beneficiaries you’ve designated after you die. A trust works with both cash-value (whole, universal) and term policies.

Are your heavy financial obligations like a big credit card debt or mortgage loan bogging you down? If yes, then do go out and get yourself a life insurance policy. I know this sounds a bit off, but just imagine if you were to… well, die and leave behind huge debts for your family to repay, they wouldn’t remember you too kindly. Also that will leave your family with a financial problem that may be too huge for them to correct and they may be forced to take some drastic actions. So, if your death would leave anyone in a financial bind, then you had better get serious about shopping for life insurance.

People with heavy financial obligations can use life insurance to ensure that their debt is covered. And because life-insurance death benefits are exempt from federal taxation, many financial planners use clients’ life-insurance benefits to help pay for the estate taxes generated upon the death of a loved one. While deciding how much and what kind of coverage you need will depend on your financial position and obligations, here are a few tips that will ensure that you don’t get taken for a ride:

• Ensure that your insurer provides you with an illustration for the policy that you have chosen. If they don’t, look for another insurance company.
• Get yourself a level-premium policy. Before you buy your life insurance policy (term or permanent) you must ensure that your illustration guarantees that your premium payment will not increase over the duration of your coverage.
• It is important for you to determine the duration of coverage is important. This will help you ensure that you get the right type of policy for you and also that you keep the premium payments affordable. One way to do this is shop around and get rates from multiple insurance companies.
• Most important: Ensure that your insurance carrier has the financial stability to pay your claim in the event of your death. Know the financial soundness of your insurer.

Did you know that there are nearly 68 million Americans without life insurance coverage. A bigger problem is that those who do have insurance are often grossly underinsured, setting their families up for financial disaster if tragedy were to strike. Hispanicbusiness.com reports:

"If you don’t own life insurance or haven’t recently reviewed your coverage, September is the ideal time to set aside excuses, stop procrastinating and meet with an expert to determine if your family is adequately protected,” said Sigi Pazos, spokesperson for Life and Health Insurance Foundation for Education (LIFE) . “Remember, life insurance isn’t really for you — it’s for those who depend on you. Having the right amount and type of life insurance in place guarantees your loved ones will be ok financially, no matter what tomorrow brings.”

Read more: September’s Life Insurance Awareness Month Calls Attention to the Need for Financial Protection

Did you pay all your bills this month? Don’t worry, I’m not trying to spy on you. But there are some people (rather companies) who are doing the spying. Yes your insurance company wants to know if your credit score is all right. Unfair? You bet! Do you have a choice? NO. Personalinsure.about.com reports:

Missing as little as two payments on credit cards or other financial obligations could lead to your insurance premium possibly doubling. If your credit score is bad you could pay more when getting an insurance quote.

Read more: How Your Credit Score Can Change Your Insurance Quote or Insurance Policy

The Internet has become a constant in our lives and today; it has even revolutionized the way we shop. We buy everything from pet food to expensive furniture and gifts on the Internet and you can even shop for loans and insurance while sitting at home. However, you cannot get into an agreement on the Internet with your eyes closed. It is important to keep this in mind when shopping for life insurance online. It is important that you shop around and do your homework well before settling for one firm.

Yes, you need to shop around even for life insurance. Different companies offer different rates and you can get the best deal possible when you shop around. Another benefit is that you will be able to determine which insurance coverage best fits your needs.

Quite a few people find the idea of life insurance distasteful. What you should realize is that it is essential in protecting the fiscal health of your spouse and children should they find themselves fiscally taxed due to your death. Bestsyndication.com reports:

There are some important things to consider when buying a policy. Be sure to shop around before buying life insurance. Consumers can buy insurance directly from an insurance company via the Internet or over the phone. Buying this way is usually cheaper than going through an insurance agent because the agent receives a commission, called a “load,” when they sell a policy.

Read more: Does Term Life Insurance Make Economic Sense?

Getting a life insurance policy involves going in for a physical — something many people don’t like and get quite nervous about. If you belong to that category, you’d probably be interested in buying a life insurance policy that doesn’t require a physical exam, but be warned, you could be making a huge financial mistake. Wgtndailynews.com reports:

"While it may be more convenient to buy insurance that way, it will cost you a fortune in the long run," says Byron Udell, founder and CEO of AccuQuote, a Web-based company that offers free online insurance quotes. "These policies are significantly more expensive than their fully underwritten counterparts because the insurance company isn’t being given the opportunity to really evaluate its risk."

Read more: Life insurance Without an Exam Not a Good Idea

While each individual life insurance policy may be different depending on the policyholder’s needs, there are certain factors that remain constant and affect your life insurance costs. One of the most common factors that can have a great impact on your life insurance costs is — believe it or not — cholesterol. Nearly 50 percent of adult Americans have cholesterol levels that are not within the general desirable range. While this is definitely bad for your health, it also puts a lot of strain on your life insurance policy.

While a slightly elevated cholesterol level will not generally impact your life insurance costs, if you have cholesterol level is severely elevated, or if you have slightly elevated levels combined with another negative underwriting factor (such as blood pressure or weight), your costs may be higher. So how do you remedy this problem? Check your cholesterol levels regularly and find out ways to lower the high levels. This can help you both physically and fiscally.

Signed up for a company life insurance policy that you don’t want now? Chances are that your company’s HR asks you to wait till the financial year-end even though life insurance firms allow cancelation of the policy anytime. Azstarnet.com reports:

The life-insurance option is part of a larger, "cafeteria" benefits plan, which is governed by IRS rules that do not permit changes in benefits more than once a year, explained

Read more: Canceling life-insurance benefit is difficult because of IRS rules