The Ultimate Baby Boomers Guide to Life Insurance he Ultimate Baby Boomers Guide to Life Insurance
Contents Life Insurance Quotes for Baby Boomers- 3 Our Best Advice How the New Living Benefits Riders Add 8 Value to Life Insurance for Baby Boomers Three Mistakes for Baby Boomers to Avoid 13 When Applying for the Cheapest Life Insurance Life Insurance for Baby Boomers- 18 Four Ways to Lower Your Premium Seven Reasons to Use and Independent 23 Life Insurance Agent
Chapter 1 Life Insurance Quotes for Baby Boomers- Our Best Advice Do you need life insurance? Baby boomers may have more health problems, but also baby boomers have more reasons to buy life insurance. So how can you get insurance that will accomplish your goals? More importantly, can you get what you need at a price you can afford? Here is our best advice regarding life insurance quotes for baby boomers: 1. Use a Smart Quote Engine- Like Ours! Life insurance quotes for baby boomers are a little trickier, because there are generally some medical issues or medications to be considered. Most of the time, we tell you quote engines may not be very accurate. However, we have a quote engine that is different than most! Our quote engine gives you information about carriers that other quote engines don't. 3
After you enter in your: Age Gender Are you a smoker or a non-smoker? Desired term and amount of insurance You will see a list of carriers and the price they charge for different ratings. Better yet, you will also see: The underwriting guidelines for preferred plus, preferred, standard plus and standard. Guidelines for cholesterol levels, blood pressure levels and non-smoking. Quotes for some carriers also include guidelines for height and weight, personal medical history, family medical history, hobbies and driving. Information about the ratings and financial strength of the carrier. By using the underwriting guidelines you can get an idea of which rating you will be able to qualify for. Not all factors are in the quote engine, but many of the more common ones are and this allows you to get a better idea of what you will pay. 4
2. Tell All...the Insurance Carrier will Find Out, and it's Better if They Hear it From You Is your weight not quite in line with what you would like it to be? Do you smoke a cigar once or twice a week? Are you having a hard time keeping your blood sugar under control? Tell the truth, and nothing but the truth to your insurance company. If you don't, they will most likely find out anyway. Your life insurance medical exam and blood and urine testing will give the insurance carrier a lot of information. They will check a prescription database to see your medication history. They will check the Medical Information Bureau (MIB) for any reports about you. Furthermore, if you do manage to slip something by them, the contestability clause which is part of every life insurance policy means they could deny paying your death benefit. If you die within two years of the policy date and you were fraudulent on your application they may not have to pay. Tell the truth to your agent and they can help you send the information to the insurance carrier in the best way possible. 5
3. Speak to an Independent Agent As you know, you can't actually buy insurance through a quote engine. You may be able to request an application and complete a questionnaire that will answer many of the questions on the application. However, you will need to speak with an agent to fill out the application. On the agent's portion of the application it almost always asks if the agent asked all of the questions on the application. By choosing an independent agent, you get experience and an advocate. An independent agent can make sure the life insurance you've chosen will fulfill your goals. The agent will not only complete your application, they should also schedule your paramedic exam, and give you instructions to get the best results. They will make sure you apply to the best carrier for your situation. The agent will answer all of your questions. The agent should keep you informed as your application proceeds through the underwriting process. The agent should monitor your case and contact you if more information, or additional forms are needed. It's the agent's job to make sure the information needed to underwrite your application is obtained in as timely a manner as possible. 6
An independent agent should smooth the way for your application to get to the underwriter as quickly as possible, while keeping you informed. You want someone you can contact during the application process as well as after your policy is in effect for any questions or assistance you may need. The Bottom Line Life insurance quotes for baby boomers can start with a quote engine, but you need to speak to an independent agent to begin the processing of your application. Luckily, that is easy to do! Just run a quote, find a carrier you are interested in and click the button to get an application! If you don t want to do that, let your agent run the quotes, send you a list and point you to the lowest cost carrier that will work for you. A good agent will discuss your goals with you to make sure that your policy choice is the best one for your needs. 7
Chapter 2 How the New Living Benefits Riders Add Value to Life Insurance For Baby Boomers You know term life insurance provides death benefit financial protection for your spouse and family. However, you may not know that life insurance can be used for financial help when the insured has a critical illness. Here is how the new, no cost living benefits riders add value to term life insurance for baby boomers: What are the New Living Benefits Riders? Accelerated Living Benefits riders are offered by a few insurance carriers on their term life insurance for baby boomers. The way the Accelerated Living Benefits Rider works is that the insurance carrier allows you to take out part of the money from your death benefit early if you have a qualifying medical condition. Clearly, these benefits do not replace Long Term Care Insurance. They do not offer the same amount of protection, but they can provide an additional layer of financial security during a prolonged critical illness. 8
What's the Cost for the Living Benefits Riders? Nothing. The Living Benefits Rider won't cost you any extra money on your premium! It will afford you a significant peace of mind if you are at all worried about how you would pay for expenses during an illness. Of course, taking the money out early reduces your death benefit. However, the Accelerated Living Benefits Rider gives you the option to determine when the cash benefit will be most valuable to your family. In the past, policy owners in need of cash to live during a critical illness were often forced to sell their policies, sometimes for as little as pennies on the dollar. The insured received the money they needed to live, but when they died, their family received nothing. The Living Benefits Rider gives you a better option...you get the money you need to live, and your family receives the balance when you die. 9
What Kind of Health Conditions are Covered? There are three different Accelerated Death Benefits, each of which has different provisions for how much money can accessed. (These numbers are examples from specific insurance companies. The amounts will differ from insurer to insurer.) Terminal Illness: allows 100% acceleration of policy death benefit amount up to the initial face value (up to $500,000). (Each company may have different limits.) Chronic Illness: allows an annual maximum of 24% acceleration of the policy death benefit, up to 90% of the face value of the policy. In addition, the amount available depends on the severity of the illness and the age you are at claiming the benefit. Critical Illness: allows a maximum election of 90% of the policy death benefit. The amount allowed is based on the severity of the illness, its impact on life expectancy, and age at claim. How Can I Find Out if I Qualify? Accelerated Living Benefits are not available in every state, and are not offered on all term life insurance for baby boomers. To find out if you can qualify for a life insurance policy that has these free riders you should speak to an independent life insurance agent. 10
What Kind of Health Conditions are Covered? There are three different Accelerated Death Benefits, each of which has different provisions for how much money can accessed. (These numbers are examples from specific insurance companies. The amounts will differ from insurer to insurer.) Terminal Illness: allows 100% acceleration of policy death benefit amount up to the initial face value (up to $500,000). (Each company may have different limits.) Chronic Illness: allows an annual maximum of 24% acceleration of the policy death benefit, up to 90% of the face value of the policy. In addition, the amount available depends on the severity of the illness and the age you are at claiming the benefit. Critical Illness: allows a maximum election of 90% of the policy death benefit. The amount allowed is based on the severity of the illness, its impact on life expectancy, and age at claim. How Can I Find Out if I Qualify? Accelerated Living Benefits are not available in every state, and are not offered on all term life insurance for baby boomers. To find out if you can qualify for a life insurance policy that has these free riders you should speak to an independent life insurance agent. 11
The Bottom Line Your best source for information about term life insurance for baby boomers is an independent agent who specializes in people over 50. As industry experts, an independent agent can guide you to the carrier who offers you the best life insurance protection available to you. 12
Chapter 3 3 Mistakes for Baby Boomers to Avoid When Applying for the Cheapest Life Insurance If you are looking for life insurance, one of the things we always consider is price. After all you will be paying this for years to come. So, when evaluating your life insurance options for cost, you should ask the following three questions. You just might find that the cheapest life insurance isn't really the best option for you. 1. Can you qualify for the cheapest policy and does it fulfill your goals? You may think you qualify for a particular policy that you ve identified as the cheapest. How did you get the quote? Online by yourself? Talking to an agent? If you went online and ran a quote, it's only as good as the information you put into the quote engine. It's a guesstimate because a quote engine can't consider any of the facts it didn't ask about, and most of them don't ask much. 13
Our quote engine can help in this regard by showing you actual underwriting guidelines for cholesterol, heart issues, diabetes, build, etc. Each quote has a link to the underwriting guidelines of the company to help you determine your ability to qualify for the different ratings. The best quote is from an independent life insurance agent. They are more familiar with the underwriting guidelines from company to company and can point you to the company where you are most likely to get the cheapest life insurance rate. Remember, only an insurance carrier can make you an offer of insurance. The agent will give you their best guess based on the information they ask you. The more info you are asked, the more accurate your quote will be. 14
A quote is only a quote. The insurance carrier will collect all of the information necessary for them to underwrite your application, including but not limited to doctor records, hospital records, pharmacy database check, MIB (Medical Information Bureau) check. They will offer (or not offer) once they have reviewed everything. If you need a policy that will last for your lifetime, then a term policy is not right for you. And if you only need coverage for a limited period of time, then a permanent policy is probably too much coverage and you don't need to spend the money. A term policy is usually cheaper than a permanent policy (until you reach your late 70's or 80's). But you need the cheapest policy that also meets your goals and needs. 2. What are the conversion options? When comparing the prices of term policies, you should pay close attention to the policies conversion options. This option allows you to change your policy from a term policy into a permanent policy. Your new policy will be issued at the same underwriting rating you received for the term policy using your current age. There is no new underwriting required. 15
This provision can save you a tremendous amount of money if your health has worsened and you would be rated (higher premiums) or declined new coverage. Carriers vary significantly in their conversion terms. There are differences in the time you can convert. There are differences in the types of policies you can convert into, some have better guarantees than others. Carriers that are financially weak also pose a risk because if the company is sold, the conversion options are usually changed, and they are not as favorable to you. So if the cheapest life insurance policy has more-restrictive conversion options than a slightly more expensive policy or if the carrier is struggling financially is that policy really the best? Although the initial premium may be the least expensive, will that be the case over the life of the policy? 16
3. Does the policy offer the riders I want and how much do they cost? Be sure to check the availability and cost of the riders you want (e.g., disability income, child rider, waiver of premium, accelerated death benefit, etc.). There are many types of riders, and they vary from carrier to carrier. Remember not all companies offer the new living benefits riders. If you are interested in a rider that is not automatically included for free with your policy, you should discuss this with your agent to make certain it makes sense for you. Then your agent can help you find the cheapest life insurance cost including your rider. Online quote engines don't allow you to add the cost of riders into the pricing. The cost of your rider(s) may change which carrier will offer you the cheapest insurance premium. The Bottom Line Our quote engine is a great place to start looking for the cheapest life insurance, but policies are too complex to allow for you to simply type in some information and pick out the lowest price from the list of policies you receive. It requires an extensive knowledge of policies and carriers such as you ll find with an independent life insurance agent to find the truly most cost-effective policy. 17
Chapter 4 Life Insurance for Baby Boomers- 4 Ways to Lower Your Premium We are all getting older. There s no stopping the aging process, at least there s no way to stop getting older that any of us would like! And of course life insurance for baby boomers cost more than when you were younger. So, we present 4 solutions to lower the cost of your premium that you may not have thought of before. #1- Save Your Age Most insurance companies use age nearest to determine how old you are considered when applying for life insurance. So if you will be sixty on January 1, 2013, the insurance company will consider your age to be sixty on July 1, 2012, a full 6 months before your actual birthday. 18
You have the option to backdate your policy up to 6 months. The thing to remember is that you have to pay the premium from the policy date. Assume you are male and have just been approved for a $250,000 policy for 15 years at a preferred rating. The premium at age sixty is about $103 per month. But if you backdate the policy to June 30th, one day before your half birthday, you are considered fifty nine and the premium will be about $93 per month. This is a savings of $10 per month. In this example you would pay between 3 weeks up to 1 additional month of premium to put your policy in force. At $10 per month times 15 year, minus the 1 one premium, you would save about $1700 over the life of the policy. If you had to backdate this policy 3 months of premium to get the lower premium it would save you about $1500 over the life of the policy. If you can do it, check with your agent to see the numbers and decide if it makes sense for you. (A good agent should be telling you about this option!) 19
#2- How You Pay Makes a Difference Life insurance for baby boomers can be paid by several different modes. You can pay annually, semi-annually, quarterly and monthly. If you have a term policy the mode you choose will determine the actual cost. On a permanent policy there isn t any difference. If you pay annually, the premium is the least. In our prior example where we saved age, the cost would be $1060 per year. Semi-annually payment will be next in line. 2 payments of $541 will cost a total of $1082. This is an increase in premium of $22 per year. The total over 15 years is $330. That s not too bad. Quarterly payments will be $276 with an annual cost of $1104. The annual difference is $44 per year. The additional cost is $660 over the 15 year life of the policy. Monthly payments that are automatically deducted from your checking account are $93 per month, with an annual cost of $1116. Over 15 years you would pay an additional $840 per year. Only a few companies will bill you and allow you to mail in monthly payments. It s no surprise that this mode is the most costly. There are some companies that do not like the quarterly mode and you will find that this is the highest cost for them. 20
This example is based on a $250,000 face amount for 15 years. The more insurance and the longer the term, the greater the savings would be. Overall you can save some money on the premium if you can pay more in advance. #3- Table Shaving Programs Life insurance for baby boomers can have a big savings with a table shaving program. Only a few companies have this program and it is on permanent insurance only. Here s how it works: Your case goes through underwriting normally. Available ratings go from best downward are preferred best, preferred, standard plus (only some companies), standard and then table ratings (1-8 or A-H). One company has a program where if you qualify for a rating of Table 1, 2, or 3, you will be given a standard rating. This cuts the price down substantially (25% and up). There are a few companies with table shaving programs, each having its own qualifications. Consult your independent life insurance agent to see if you can benefit from this opportunity. 21
#4- Better Rating for One Controlled Medical Issue One of our carriers has a program where if you have one medical issue (and only certain ones qualify) and it is well controlled, they will not penalize your rating. So if you would qualify for preferred in every other way, you get preferred with this carrier. This is a unique program. For example, we recently had a client with medical issues that we expected to get a standard rating at best with all companies. He applied to this company and received a standard plus rating. This difference of one rating class saved him over $100 per month on a 20 year term. This will save him $24,000 over the life of this policy. Having access to this program, if you qualify, can save you a great deal of money over the lifetime of your policy. The Bottom Line Although life insurance for baby boomers is usually more costly than for middle age people, here are 4 strategies that can help lower your cost. If you can take advantage of one of these solutions to lower your premium it can save you significant amounts over the life of your policy. Remember to consult with an independent life insurance agent with experience in the baby boomer market. 22
Chapter 5 Seven Reasons to Use an Independent Life Insurance Agent When you begin to think about life insurance, you should carefully consider what services you want your agent to provide for you. Should you get life insurance from a captive agent who works for a particular company? We don't think so and here are seven reasons why an independent term life insurance agent might be a better choice: 1. Experience An independent term life insurance agent has experience with many different companies and policies. The will know many small differences from one company or product to another that can benefit you. They are often the best guide for helping you figure out which company and policy fit best for your situation. 23
2. Works with Many Companies Captive agents work for one particular company. They only know the products that company sells and more importantly these are the only choices they can offer to you. Independent agents, on the other hand, work with many highly rated companies. They understand the different underwriting guidelines of those carriers. They can help you choose one likely to give you a favorable rating. Having more choices will enable you to insure that you get the best life insurance for your particular situation. Whether you have underwriting issues or not, an independent agent opens up more options for you. 3. Aware of Special Offers An independent term life insurance agent will be able to help you take advantage of special offers such as "table shaving," which might allow a person with a serious health problem, like heart disease, diabetes, or cancer, to get Universal Life at a better underwriting rate than they could get for term life. he Ultimate Baby Boomers Guide to Life Insurance 24
Additionally, sometimes a carrier has a program that may just fit your situation. One carrier had a program for smokers. If you were buying a permanent policy and in the process of quitting smoking, they would give you non-smoker rates for the first 3 years, and if you had stopped by then, these rates would continue. There is and was no other carrier willing to do this. 4. No Extra Cost for Service It isn't often you get something for nothing, yet when you choose an independent agent you get someone whose goal is your best interest to guide you through the life insurance labyrinth. Your guide knows all about the details of life insurance, more than you would ever want to know and they give you the value of this expertise at no extra charge! Whether you use an independent agent, a captive agent or an in house agent, your cost for insurance never changes as these are set by the insurance company and filed with the state commissioner of insurance. he Ultimate Baby Boomers Guide to Life Insurance 25
5. Can Help Solve Problems Do you have? Health issues which concern you? Perhaps your weight isn't where it should be, or you smoke. Or maybe you race cars or participate in other extreme sports. Are you a private pilot? Any of these can increase your insurance cost. Some carriers have better underwriting guidelines than others for these issues. Do you know which carriers? Of course not! That's why an independent term life insurance agent is your best guide. An independent life insurance agent knows what carriers are looking for, and can help present these "issues" to in the best light. 6. Will Make Sure You Get the Right Insurance for Your Goals Do you really know how much insurance you need? Have you thought about how life insurance can help you meet retirement planning goals? An independent agent can discuss your options with you and help you choose the right amount and type of insurance. he Ultimate Baby Boomers Guide to Life Insurance 26
Not everyone understands the difference between term and permanent coverage. If you want permanent coverage, there are many options available, some offering more value than others. Also your permanent policy can be guaranteed up to age 85, 95, 100 or 121, or anywhere in between. Make sure you know what you are buying and that the policy will fulfill your goals. 7. Will Be Your Personal Shopper Ever wished you could have someone to sort through your choices and explain why one is better than another? That is exactly what an independent agent will do for you. Have specific questions? Get them answered in a timely manner by asking your personal agent. Their job is to help you understand your choices as well as understanding why one option is better for you than another. There are no stupid questions, it's extremely important for you to be comfortable with your purchase and to understand what you are buying! The Bottom Line Because life insurance is so important, you need expert help to make the best decision. Although you can get insurance without much guidance, it's not your best route. Take the time to understand your life insurance purchase, as you plan to have the coverage for a long time. As these seven reasons show, your best guide is an independent term life insurance agent. 27
Let Us Know How We Can Help! For more than 20 years, LifeNet Insurance Solutions has helped those in need of life insurance protection to obtain affordable coverage. As agents for most major national insurance companies, our aim is to provide you with the best possible experience. We do this by providing you with Outstanding service Clearly helping to define your objective Suggesting ways to lower your premium Providing you with the knowledge to make an informed purchase We re easy to find Our website: www.lifenetinsurance.com Our phone: 800-698-7033 28 28
The Ultimate Baby Boomer s Guide to Life Insurance Copyright Notice & Legal Notice 2015 LifeNet Insurance Solutions 11505 Eastridge Drive NE Suite 420 Redmond, WA 98053-5758 800-698-7033 Feel free to share this ebook (FOR FREE) with anyone you want to. All rights reserved. While attempts have been made to verify information provided in this publication, neither the author nor the publisher assumes any responsibility for errors, omissions, or contradictory information contained in this document. This document is not intended as legal, accounting or investment advice. The reader of this document assumes all responsibility for the use of these materials and information. For more information call Lenny Robbins 800.698.7033 29