Tips for deciding how much life insurance you need.

Tips for deciding how much life insurance you need.

How much? How long? Those are the two biggest questions when it comes to buying life insurance. This article gives you some tips for answering the How Much question and a simple needs calculator. See also “Tips for deciding how long you’ll need life insurance.”

By Mary Pollman – SelectQuote

There are very few things in life that don’t have limits. You love spending time with your children. But 24 hours a day, every day, would be too much of a good thing. Two hours a day would be too little.

The same goes for Life Insurance. What you want is balance — the proper type and the right coverage for each stage of your life. Then Life Insurance can be the most affordable financial security you can give your family.

Most people have no idea how much Life Insurance they need. Questions to answer are how much income would you have to replace if a breadwinner died? How much is your mortgage? What debts do you have? What will education and living expenses be until your last child finishes college? What are your assets?

There are several “rules of thumb” for how much Life Insurance you should have. Financial expert Suze Orman says you need 20 times your annual salary. While this might take your breath away, here logic makes sense. Let’s say you make $50,000 a year. Today, most safe investments pay a maximum of 5% a year. So it would take $1,000,000 in insurance to replace that $50,000 a year.

Of course, your personal situation could be markedly different. L.I.F.E. ( http://www.life-line.org/build/insurance_needs_calculator/index.php?pt=lfinc ) has a handy calculator that will give you an objective view of just how much coverage you need.

Also, a good life insurance agent who can really get down to the details of your situation. This does not require someone coming into your home. There are many independent companies with licensed agents online who can provide you with expert counsel by phone at no cost.

About the author. Mary Pollman, CLU, has been writing about life insurance, long-term care insurance and annuities for more than 20 years. She has contributed to insurance publications, websites, consumer product literature and agent training. Mary held senior management positions in communications and marketing with two life insurance companies. She is an editorial advisor to SelectQuote.

We can show you a better way to insure your mortgage. A SelectQuote Licensed Expert can show you excellent alternatives to mortgage life insurance: level-premium term life insurance policies – with and without return of premium – from the highly rated Term Life Insurance companies we represent. Quotes are free. Call toll-free 1-888-739-7965. Or go to our website, www.selectquote.com/home9 .

Tips for deciding how long you’ll need life insurance

How much? How long? Those are the two biggest questions when it comes to buying life insurance. This article gives you some tips for answering the How Long question. See also “Tips for deciding how much life insurance you need.”

By Mary Pollman – SelectQuote

It’s not smart to have life insurance any longer than you need to. Just as you don’t keep buying auto insurance after you’ve sold your last car, you don’t keep paying for life insurance after your last dependent is out of the house – or after you have investment gains or other ways to take care of him or her.

Being objective about life insurance
But like the question of How Much (See “Tips for deciding how much life insurance you need”), the question of How Long can be hard to answer objectively. Let’s say your daughter is your only dependent. Can you drop your policy in 15 years when she graduates from college? To many of us, that sounds a bit abrupt. So maybe you buy a 20-year life insurance policy to make sure she gets through graduate school and ‘finds herself’ financially. Good idea. But it’s usually a bad idea to keep full coverage for many years after your kids are supporting themselves.

Plenty of savings? You may not need life insurance.
You should project where your savings and your investment portfolio are going when you think about how long you’ll need life insurance. When you’re farthest from your savings goal, you should have the most life insurance. When your savings goal is met, you can cut the life insurance back – and if you’ve been very successful, you may not need life insurance at all.

How long if the policy is for business?
What if you’re buying life insurance for something other than traditional family protection? If you’re buying it for business reasons, your long-term planning should make it obvious how long the insurance is necessary.

Here’s an example. Let’s assume you’re a landscape architect. You have a partner, and you’ve discussed what is called a “buy-sell.” You have each bought life insurance policies covering the other.

If your partner dies, you use the proceeds of the policy payout to buy out his family’s interest in the business. If you die first, your partner does the same thing.

You can peg the policy amounts to the value of the business. And you can decide how long the policy should last by deciding how long you’re going to care about the business.

Let’s say your partner dies in 15 years, when you’re 60. Just as you originally planned, you use the policy proceeds for the buyout. But if he dies in 25 years, you’re 70 and retired. Now maybe you’re perfectly happy letting his daughter have his share of the business. You really ceased to need the life insurance policy about five years ago, so that’s when it should have ended.

Permanent life insurance
Only in a few rare cases is the answer to “How long should I own life insurance?” “As long as you possibly can.”

If you have a spouse or child with serious, long-term health problems that may bankrupt them, no matter how big a savings nest egg you can pass on, you probably need permanent life insurance – life insurance that lasts as long as you live.* Or if you want to provide funds to pay Estate Taxes, permanent life insurance could be beneficial.

‘How long do I need life insurance’ can be a complicated question to answer. And a mistake can be really expensive. So talk to a good life insurance agent. Their advice won’t add a dime to your premium. And it may save you a pretty penny.

* “Permanent” life insurance policies mature and pay out at some point – typically when you’re age 90 or age 100. If you live that long, they’re not “permanent.”

About the author. Mary Pollman, CLU, has been writing about life insurance, long-term care insurance and annuities for more than 20 years. She has contributed to insurance publications, websites, consumer product literature and agent training. Mary held senior management positions in communications and marketing with two life insurance companies. She is an editorial advisor to SelectQuote.

“How long” is an important question, especially with term life insurance. SelectQuote has the experience and tools to help you come up with a realistic answer. Whether you need 10-, 15-, 20- or 30-year term life insurance, a SelectQuote Licensed Expert can show you exceptional options from highly rated life insurance companies. Call us today, toll-free at 1-888-739-7965 . Or go to our website, www.selectquote.com/home9 .

Life insurance company ratings: What you should look for

They’re not infallible guides, but insurance ratings services are the customer’s best tool for gauging the quality of a life insurance company. Here’s a quick guide to the best-known services.

By Mary Pollman – SelectQuote

When you’re shopping for life insurance, cost is usually the first thing you focus on. But as soon as you’ve picked a group of policies in your price range, your next step should be some online research on the quality of the life insurance companies offering them.

The best place to do that is the websites of the insurance ratings services.

Start with A.M. Best (www.ambest.com)
Start your search by Googling “A.M. Best” or enter their url in your browser.

Finding a rating is relatively easy. There’s a “Ratings & Analysis” box at the upper left on the A.M. Best home page. Make sure the “Insurance” radio button is selected, then enter a company name in the box and click on “Find.”

If you’re researching a company that’s part of a large insurance group, odds are the next page will list several sister companies. We searched on “Genworth,” and a list 17 company names came up. The companies under one corporate umbrella can have very different ratings, so make sure you know which of the companies would be issuing your policy. SelectQuote makes that easy. When you click on “Companies We Represent” on SelectQuote’s home page, you see the companies’ full names.

A.M. Best rating is the benchmark
A.M. Best highlights and bolds the companies’ ratings under the “Financial Strength Ratings” headings. That rating is probably the most important tag any life insurance company wears. When a company is referred to as an “A+ company,” that doesn’t mean they’re A+ with S&P or Moody’s or Fitch. It means they’re A+ with A.M. Best.

Best’s all-important Financial Strength Ratings scale is as follows:

Secure Vulnerable
A++, A+ (Superior) B, B- (Fair)
A, A- (Excellent) C++, C+ (Marginal)
B++, B+ (Good) C, C- (Weak)
D (Poor)
E (Under Regulatory Supervision)
F (In Liquidation)
S (Rating Suspended)

Insurance company ratings can change rapidly
At the bottom of the Best page that lists the companies in a corporate group, e.g., all the Genworth companies, you’ll see the date and time of your search. Ratings can change rapidly.

In the past, Best batched their ratings releases once a year, but their antenna have been sharpened and their practices have changed due to some miscalls or late calls they made in the 1980s and ‘90s. A few life insurance companies were placed under “regulatory supervision” (they were no longer being run by their managers but by the insurance regulators of their domiciliary states) while their official A.M. Best rating was still A+. Oops.

A.M. Best now issues rating updates weekly, and if a company’s situation is volatile, the Best rating may change at any time.

Additional information from A.M. Best will cost you
If you click on an individual insurance company name in the list, you’ll go to a page with a little more information – such as the date Best assigned the company’s current rating. But if you really want to find out what Best thinks about the company, look under the “Reports and News” subhead and click on the “news and press releases” link.

Because Best publishes weekly and daily email newsletters and a monthly print publication, you are likely to find that they have gathered quite a bit of news on the insurance company in question. But to read an article, you have to subscribe to the Best publication that carried it. If you want to read the detailed A.M. Best analyst’s report on the company, you can, but the download will cost you $75.

Other insurance ratings services
A.M. Best isn’t the only rater of life insurance companies. Standard & Poor’s, Moody’s and Fitch also rate insurance companies’ financial strength.

Standard & Poor’s (www.standardandpoors.com)
S&P doesn’t post ratings on their website, and they charge quite a bit for their information. One-page press releases announcing ratings changes run $100 apiece. A full analysis of an insurance company costs $400. However, in the search box on the home page, I entered a full company name, and on the search results screen, an article digest happened to mention the company’s rating. You may also get lucky.

Moody’s (www.moodys.com)
Moody’s seems to offer the opportunity to register for free access to their insurance company ratings information. But after I had filled out the lengthy registration form and clicked on the checkbox beside “I agree to Moody's Terms Of Use and Privacy Policy,” a popup box appeared telling me I had to scroll through the terms of use and privacy documents. I had already done so, but I did so again. And again. I switched to another computer and used another browser. Still no luck. I couldn’t get Moody’s system to accept my checkoff. So I was forced to give up.

Fitch (www.fitchratings.com)
Fitch analyzes how well capitalized insurance companies are. Fitch makes it easy to view its rating for a company. Just enter the company name in the search box on the home page. However, you have to be a paid subscriber to see the press release announcing the rating or to see the research behind the rating.


Bottom line: You get the most – and the most highly regarded – information on insurance company quality from A.M. Best. Don’t buy a life insurance policy until you at least know what the insurance company’s A.M. Best rating is. Checking the other insurance ratings services – S&P, Moody’s and Fitch – won’t hurt, but you may not learn much.

About the author. Mary Pollman, CLU, has been writing about life insurance, long-term care insurance and annuities for more than 20 years. She has contributed to insurance publications, websites, consumer product literature and agent training. Mary held senior management positions in communications and marketing with two life insurance companies. She is an editorial advisor to SelectQuote.

If you already have group life insurance, do you need individual life insurance?

Group life insurance is great, but if that’s all you have, there’s a big hole in your family’s life insurance safety net.

By Mary Pollman – SelectQuote

In 2006, 47% of all life insurance in force was group life insurance.* Many Americans have no life insurance except group life insurance. Should you? Here are some tips to help you decide.

1. Think about whether your group life insurance death benefit would meet your family’s needs if something happened to you. The national average for group life coverage is $50,200, according to the ACLI,* but the range is broad. Some employers’ plans offer a flat $10,000 or $20,000 of coverage no matter what your salary is. Others peg the benefit to your annual salary – 1x, 2x or 3x. (2x and 3x are only available to managers, at many companies. Or these higher amounts are only available if you pay part of the premium.)

If you have a family to protect, many advisors say you should have life insurance that would pay at least 7x your annual salary. So, while group life insurance will help get you there, it usually isn’t all you need.

2. Think about how long you’re likely to work for your current employer. Your group term life insurance generally terminates when you leave your job. If your new employer has an equivalent group life plan, you’ll be fine. But they may not. As with all other employee benefits, the trend is away from employer-paid to employee-paid. So you may get equivalent group life coverage, but you may not get it free.

Or, you may want to consider self-employment as your next career move. If group life insurance was all you had, you’re suddenly uninsured. Some employers offer group life insurance plans with a conversion option – an option to turn your group life coverage into an individual life insurance policy. But that’s rare unless you have been contributing to the premiums in the group policy.

3. Think about whether you can pass a medical exam for individual coverage. This is one of the big pluses for group life insurance. Most individual life insurance policies are medically underwritten. You’ll be asked health questions, and typically, you’ll have to have a medical or paramedical exam. Group life insurance usually involves no health questions at all – let alone an exam. So, if your health isn’t good, group life insurance can be very important for you.

4. Think about what you can afford. Group life insurance is one employee benefit that is still free to employees in many companies. Individual life insurance, obviously, is not free, however if you are in reasonably good health and you use a licensed independent sales agency to shop highly rated Term Life Insurance companies for your best rates, you should find it surprisingly affordable.

Group life insurance premiums are, up to a point ($50,000 coverage) tax-free, which isn’t the case for privately owned life insurance. If you own an individual life insurance policy, you pay the premiums with after-tax dollars, but the death benefit is tax-free.

Group life insurance is a good thing. But very few group life policies pay as much as families need when a breadwinner dies. And your group life coverage may disappear when you change jobs.

Group life insurance is a nice supplement, good while it lasts. Not the foundation of your insurance portfolio. As long as your health and your budget allow, your mainstay should be individual life insurance, owned by you.

* From an article on the website of the American Council of Life Insurance (ACLI), “House Passes TRIA Reauthorization with Group Life Insurance Provisions,” September 19, 2007. (http://www.acli.com/ACLI/Newsroom/News+Releases/NR07-061.htm)

About the author. Mary Pollman, CLU, has been writing about life insurance, long-term care insurance and annuities for more than 20 years. She has contributed to insurance publications, websites, consumer product literature and agent training. Mary held senior management positions in communications and marketing with two life insurance companies. She is an editorial advisor to SelectQuote.

Term Life Insurance with Money Back

Return-of-Premium (ROP) term life insurance has become very popular. It’s no wonder. You can get all your premium payments back if you’re alive and well at the end of the policy term.

By Mary Pollman – SelectQuote

Ah, simplicity. That’s one of the things to love about Term Life Insurance. It always a little sad when an insurance company turns a straightforward term life insurance policy turn into a patchwork of special features and odd contingencies – “The policy does this if you get disabled; this if you die in an accident; this if you die but not in an accident, this if your spouse dies first . . . “
But biased as we are toward simplicity, there is a variation on the basic level-premium term formula that’s very attractive. It’s Return-of-Premium (ROP) term.

And it’s really simple.

How a Return-of-Premium policy works
If you buy a basic, non-ROP 30-year term life insurance policy, you pay the same amount every year for 30 years. When 30 years is over, your bet with the life insurance company is up – and though you win (in a manner of speaking), they keep the money.

If you buy a return-of-premium 30-year term life insurance policy, same thing. Except that you get your money back.

You will pay more for return-of-premium policies. And you don’t get your money back with interest. The interest is what the life insurance company gets out of the deal – for having taken a risk with you for 15, 20 or 30 years. It seems pretty fair.

Most ROP plans are structured so that you not only get back your money at the end of the term, you can get some of it back if you surrender the policy early. There will be rules about how the early refunds work, so be sure to read the fine print.

ROP makes a big decision a little easier
If you’re hesitating about buying life insurance, even though you know you need it, an ROP policy may make the decision easier. For example, you may not be 100% convinced you need a life insurance policy for 30 long years, but if you know you’ll be getting all your money back, it’s easier to go ahead and do it.

It’s important to be comfortable about the insurance company’s longevity when you’re buying this kind of policy – but then that’s paramount with any life insurance policy.


About the author. Mary Pollman, CLU, has been writing about life insurance, long-term care insurance and annuities for more than 20 years. She has contributed to insurance publications, websites, consumer product literature and agent training. Mary held senior management positions in communications and marketing with two life insurance companies. She is an editorial advisor to SelectQuote.
----------------

ROP or not ROP. For many term life insurance buyers, that is the question. A SelectQuote Licensed Expert can help you find the answer. They can show you options for term life insurance policies with and without return-of-premium. All from companies with high ratings. Quotes are free. Call toll-free 1-888-739-7965. Or go to our website, www.selectquote.com/home9 .

Life Insurance Policy Riders: Worth the Money?

By Mary Pollman – SelectQuote

Life insurance is such a simple concept. I pay X for a policy that will pay Y if I die in the next Z years.

So why do so many life insurance policies seem so complicated?

One reason is riders. Riders are add-ons. They give you an extra benefit for an extra cost. Sometimes that’s good. But sometimes it’s like the upsell at the cash register – Would you like fries with that? – when all you really wanted was the burger.

The add-ons are expensive
At fast food establishments, the add-ons are expensive if you consider the inherent value of the item. Fountain drinks, for example. They may cost the restaurant less than a dime in syrup and soda water. They may cost you a dollar.

That’s the way it is with some life insurance riders too. The base policy may be a great value. But that’s typically not true of riders. So if you load up the policy with riders, you may be adding attractive features, but you should be aware that you’re probably paying top dollar for them.

And sometimes the add-ons sound a lot more useful than they really are.

Case in point: The Accidental Death Benefit rider
A rider that is often sold with term life insurance policies is the Accidental Death Benefit rider. If you buy one of these riders, and if you die in an accident, you’ll typically get the same death benefit as your base term life insurance policy. So, if you buy a $500,000 base term policy and add an Accidental Death Benefit rider, your family will get an extra $500,000 – a total of $1,000,000 – if you die in an accident.

$500,000 Base Policy Death Benefit
$500,000 Accidental Death Benefit (same as base policy amount)
-------------
$1,000,000

At first blush, it kind of makes sense. But actually it’s rare that a family really needs extra money just because the breadwinner died in an accident. Often, it’s just the opposite – a long illness followed by death can be a much bigger financial drain.

Better solution: Just buy more term life insurance – or buy nothing
So, in this case, either your family really needs $1,000,000 no matter how you die, or they’ll be okay with the $500,000. In the former case, you should just buy more low-cost term. In the latter, you shouldn’t buy anything extra at all. In either of these cases, the Accidental Death Benefit rider is the wrong way to go. The one who really benefits is the life insurance company who got you to pay XX% more in premiums without taking on much risk that they’d actually have to make that big payout.

About the author. Mary Pollman, CLU, has been writing about life insurance, long-term care insurance and annuities for more than 20 years. She has contributed to insurance publications, websites, consumer product literature and agent training. Mary held senior management positions in communications and marketing with two life insurance companies. She is an editorial advisor to SelectQuote.

Get good advice on whether riders will add value to your policy – or just expense.
A SelectQuote Licensed Expert can show you options for term policies from highly rated Term Life Insurance companies, and they can give you candid advice on which riders are worthwhile. Quotes are free. Call toll-free 1-888-739-7965 . Or go to our website, www.selectquote.com/home9 .

Term or Permanent Life Insurance: Which Should You Buy?

There is rarely a good reason to pay the high price of permanent life insurance. The big difference between term and “perm” isn’t protection, it’s cost.

By Mary Pollman – SelectQuote

The point of life insurance, for most people, is to provide a substitute estate in case their life isn’t long enough to permit them to create one the regular way – by spending 50 or 60 years earning and investing. If life is cut short, life insurance steps in and compensates.

If you have a young family and a fledgling career, it’s quite a while before you’re going to have a comfortable bank account and a healthy and hearty investment portfolio. You need life insurance. Or maybe you’re making nice progress on that investment portfolio, but you have three kids in college simultaneously. If something happens to you, your assets may not quite get all three of them to graduation. So you, too, need life insurance.

A temporary versus a permanent need for life insurance
In either of these cases, your need for life insurance protection is temporary. In fact, in most people’s lives, the need for life insurance is temporary. Many continue to own expensive permanent policies, paying hefty premiums year after year, long after the policies have outlived their usefulness – long after their loved ones have ceased to need protection, or after their assets have grown to the point where they [the assets] can do all the protecting that’s necessary.
There are certainly cases where permanent life insurance is appropriate. Let’s say you have a child with Down Syndrome. That child will need your support long after you’re gone. It’s hard to be sure your assets alone will be adequate. Your need for life insurance could definitely qualify as permanent. Or you may want to buy a policy to benefit a charity. In that case, you have to buy permanent life insurance so there’s no (or almost no) chance you can outlive the policy.

However, in many, many cases, people can foresee an end to their need for life insurance, can estimate how many more years they’ll need it. If that’s the case for you, term is probably the way to go.

Getting the most life insurance for the money
If the goal is maximizing the payout to your family for the price you pay, term almost always beats permanent. Bottom line, you should approach your research on life insurance with the assumption that your need is probably temporary and that term will be the better fit. Prove to yourself it’s not before you pay the high price of permanent life insurance.

About the author. Mary Pollman, CLU, has been writing about life insurance, long-term care insurance and annuities for more than 20 years. She has contributed to insurance publications, websites, consumer product literature and agent training. Mary held senior management positions in communications and marketing with two life insurance companies. She is an editorial advisor to SelectQuote.

----------------
There’s no better guide to help you explore the wide world of quality term life insurance than SelectQuote. A SelectQuote Licensed Expert can show you many options for term policies from highly rated Term Life Insurance companies. The term policies are inexpensive. The quotes are free. Call toll-free 1-888-739-7965. Or go to our website, www.selectquote.com/home9 .

Do You Need Mortgage Life Insurance?

By Mary Pollman – SelectQuote

Home means security – physical and financial. But home also means risk. The mortgage is most families’ biggest liability.

So when we think about how much Life Insurance we need, we usually start out thinking about how much it would take to cover house payments. Our biggest fear is that, without our income, our loved ones may no longer have a roof over their heads – or they may still have a roof, but not of the same quality or quantity.

That’s why Mortgage Life Insurance has such intuitive appeal. I die; my mortgage is automatically paid off. I will have enabled my family to maintain their standard of living. I will have taken care of my spouse’s biggest financial worry.

Why Mortgage Life Insurance is usually a bad idea
Or will I? Maybe my spouse would rather figure out some way to continue making mortgage payments and put my death benefit proceeds into a college fund for the kids instead. Or maybe my family would rather sell the house and get something smaller in order to make my death benefit last longer – buy more groceries, pay more utility bills. They don’t get to make decisions like that if my death benefit automatically goes to the mortgage company.

It’s always a good idea to be a little cautious of narrowly focused insurance – and mortgage life insurance is narrow. It solves just one of the family’s financial problems. If you die, they may have quite a variety of financial problems.

Mortgage Life Insurance has a poor payout record – per the NAIC
There are other issues with mortgage life insurance. The National Association of Insurance Commissioners (NAIC) says that only 40 cents of every dollar spent on mortgage life insurance is ever paid out in benefits. This contrasts with 90 cents of every dollar spent on ordinary term life insurance policies. I can think of at least two reasons for this:

1) The policies are far more expensive than ordinary term life insurance. Whatever the death benefit is, I’ve paid a lot more for it.
2) With many of these products, the policies are tied to the mortgage such that, when the house is sold and the mortgage is paid up in the transaction, the policy ends. I paid the insurance company lots of money in premiums. And I have nothing whatever to show for it.

Should you ever consider buying mortgage life insurance?
So, is the message simply ‘don’t buy mortgage life insurance?’ Not quite. It’s more like ‘don’t buy mortgage life insurance if you’re healthy.’ If you’re not healthy, mortgage life insurance has a big advantage: No physical exam is required. One of the reasons it’s expensive is that it’s very easy to get.

But if you’re healthy, you’ll get better coverage at a far better price with a good 15-, 20- or 30-year level-premium term product. If something happens to you, a) your spouse (instead of the mortgage company) gets the death benefit, and b) your spouse gets a much bigger death benefit for the same premium. So, if the priority is paying off the house, there’s a lot more cash available to do it. AND, there’s cash for other needs, current and future.

Note on decreasing term life insurance
This is a type of life insurance that’s rarely seen in the marketplace these days, but if it is, it’s usually in a mortgage term life insurance product. With a policy like this, your death benefit drops year by year, because it’s pegged to your mortgage – which gets smaller as it gets paid down. But the premium payments don’t go down. They stay the same from day one. The insurance company will say that’s because, though the amount they have to pay if you die is going down, the risk that they’ll have to pay it is going up, simply because you’re a year older. So, they argue, it all evens out. That may be a defensible argument, but it just doesn’t “feel right” to most consumers, and decreasing term has fallen out of favor in the marketplace.

Note on return-of-premium term life insurance policies
We mentioned the NAIC statistic – 40 cents paid out for every dollar paid in on mortgage life insurance. Progressive insurance companies are turning the tables completely, offering term life insurance that pays a dollar back for every dollar you put in – if you live. (If you die, the policy will provide a much better payback than dollar-for-dollar.) If you buy one of these return-of-premium (ROP) policies and hold it to term, the company will have made enough on your premium dollars that they can afford to give them all back to you.

It’s a good idea to consider ROP products whenever you’re shopping for term life insurance. But there’s a neat wrap if you’re buying a policy mainly to offset a mortgage liability. Get a 30-year mortgage. Buy a 30-year ROP term policy. When the 30 years are up, the house is yours and all the insurance premiums fly back home too. Sweet.

About the author. Mary Pollman, CLU, has been writing about life insurance, long-term care insurance and annuities for more than 20 years. She has contributed to insurance publications, websites, consumer product literature and agent training. Mary held senior management positions in communications and marketing with two life insurance companies. She is an editorial advisor to SelectQuote.

--------------------

We can show you a better way to insure your mortgage.
A SelectQuote Licensed Expert can show you excellent alternatives to mortgage life insurance: level-premium term life insurance policies – with and without return of premium – from the highly rated Term Life Insurance companies we represent. Quotes are free. Call toll-free 1-888-739-7965. Or go to our website, www.selectquote.com/home9 .

How To Do Well on Your Life Insurance Physical

The results of your life insurance physical have a big influence on whether you qualify for the best rates. Here are six ways to make sure you do your best.

By Mary Pollman – SelectQuote

If you have been shopping, you already know the life Insurance policies with the lowest prices always require some kind of physical exam.

Life insurance physicals are usually done by parameds. The paramedical firm calls you. You set the appointment. They send a technician to your home or office. The exam is over in 15 or 20 minutes.

Not very difficult. But VERY important. The results of your life insurance physical have a big influence on whether you’ll qualify for the best rates – or even good rates. So you want to do your best on this test.

Here’s how to do your best on your life insurance physical.

1. Schedule the exam for morning, because you should avoid eating or drinking anything, except water, for 8 to 12 hours before you’re tested.
2. Schedule the exam for a place where you’re relaxed. Having it at the office might be convenient, but if you have a stressful commute and the phone starts ringing the minute you walk in the door, don’t do it there. On the other hand, if getting the kids off to school and yourself off to work makes morning at home the most stressful part of your day, a mid-morning exam at the office might be perfect. Being relaxed will mainly impact your blood pressure.
3. Another way to lower your blood pressure reading is to have the exam technician take that last, after they have asked the health questions, taken the urine sample, etc. You’re usually much more relaxed then.
4. Avoid strenuous exercise for at least 24 hours before the exam. If an hour on the Stairmaster or at the gym is part of your daily routine, give yourself the day off. Exercise can temporarily elevate blood pressure.
5. We’ve emphasized blood pressure because your underwriter will. He or she will also zero in on your cholesterol. Eating right for a few days before the exam can make a notable difference in your cholesterol reading. Stay away from fatty foods, rich desserts and alcohol for three or four days. Go for the green leafies, fresh fruits and whole grains.
6. If you take any medications, stay on your regular schedule – including the day of the exam. This advice will seem obvious if you take medicine to control cholesterol or blood pressure, but it applies to any prescription medicine you take.

Good scores on your life insurance physical can really pay off.
For example, for a 45-year-old man, Preferred rates can beat Standard rates by 35-40% with some life insurance policies.* Being rated Preferred can save you hundreds of dollars a year. Your rating is based to a great extent, on the results of your life insurance physical.

By the way, life insurance exams are completely confidential, but you have a right to the results. Just let the company from whom you bought the policy know you want them.

About the author. Mary Pollman, CLU, has been writing about life insurance, long-term care insurance and annuities for more than 20 years. She has contributed to insurance publications, websites, consumer product literature and agent training. Mary held senior management positions in communications and marketing with two life insurance companies. She is an editorial advisor to SelectQuote.

· We looked at Banner OPTerm 20 at $500,000 as an example. A 45-year-old male would pay $1,205 if rated Standard, $755 if rated Preferred – a savings of over 37%.

*Banner OPTerm 20-Year: OPTerm 10 issue ages 20-80. OPTerm 15 issue ages 20-70. Opterm 20 issue ages 20-65 and 20-62 Oregon only. OPTerm 30 issue ages 20-50 and 20-45 Oregon tobacco classes only. Premium rates vary by coverage amount: $100,000-$249,999, $250,000-$999,999 or $1 million and above. Premiums quoted include $50 annual policy fee. Premiums are guaranteed to stay level for 10, 15, 20, or 30 years, respectively, and increase annually after initial guarantee period. OPTerm policies can be issued in preferred plus non-tobacco (no tobacco use in past 36 months), preferred non-tobacco (no tobacco use in the last 24 months), standard plus non-tobacco or standard non-tobacco (no tobacco use in past 12 months) and standard tobacco classes. OPTerm 10, 15 and 20 substandard policies can be issued through Table 4. OPTerm 30 substandard policies can be issued through Table 12. Coverage can be renewed to age 95. OPTerm policy form #RT-97. Forms and policy provisions vary by state. Not available in all states. Policy descriptions provided here are not a statement of contract. Rates as of 8-14-07. Advertising Compliance #07-082

----------------------

Get coaching on your life insurance exam from SelectQuote.
Part of our service is the personal advice we provide our customers – helping them decide what life insurance policy is best for them and then helping them get the best rates for it. To reach a SelectQuote Licensed Expert. Call toll-free 1-888-739-7965. Or go to our website, www.selectquote.com.

Life Insurance: The Five Most Costly Mistakes People Make

Comparing monthly life insurance premiums isn’t enough. If that’s all you look at, you can fall into a number of traps. Here are some of the biggest ones to avoid.


By Mary Pollman – SelectQuote

Buying too much life insurance
This is especially tempting for new parents and new homeowners. Your sense of risk is at an all-time high. So it’s a good time to get out pencil and paper and coolly calculate. What are your expenses? How much are they likely to increase as time goes by? Is there another earner in your family? How much of the expense can they handle without you? Come up with realistic numbers. Do it before you go shopping for life insurance.

Buying too little life insurance
This can be costly, not to you, but to your family. Classic worst-case scenario: Breadwinner dies with little or no life insurance. Nonworking parent has to get a job after years out of the work force; has to pay for child care; sell the house to reduce mortgage payments; cut corners on cars, vacations, clothing, maybe even food; trim plans for the kids’ education. It’s scary, but it happens – way too often.

Buying life insurance for too long a time
Some people think the only kind of life insurance to buy is “permanent.” But permanence costs money. The life insurance company takes extra risk – and charges you for it – because they don’t know how long you’ll live and, therefore, the total premiums you’ll pay vs. the death claim they’ll pay. Many people don’t need life insurance after their kids are through school and their assets have built up. So they don’t have a permanent need for life insurance. Again, it pays to do a little math. Calculate how long before your last child leaves college and think about whether you’re likely to need life insurance (or as much life insurance) after they graduate. (Suze Orman suggests you have life insurance until your youngest child is 24 years old.)

Buying life insurance for too short a time
The danger with not getting a policy that lasts long enough is that it can cost a lot of money to get another one. Assuming you’re in excellent health, 10-year term at 35 may cost you $280 a year for $1 million in coverage. 10-year term at 45, same million-dollar coverage, could be $600 a year – more than 100% higher.* That assumes you’re still in great health. Of course, there’s always the chance your health may change in that 10 years so that life insurance could be much higher – or can’t be bought at any price.

Buying life insurance too late
People do tend to procrastinate when it comes to life insurance. Buying too late can be very expensive. When you start to develop signs of heart trouble, for example, you may suddenly become very interested in life insurance. Unfortunately, that’s when many life insurance companies become uninterested in you. Or, they may take you on as a “special risk” at high prices. If you’re healthy, you may still find that buying too late is costly, because life insurance premiums escalate with age.

Not shopping around
You should do price shopping and “brand” shopping. Brand shopping first. After you have a ballpark idea of what kind of coverage you need, look at quality companies. See what they have that fills the bill. After you’ve narrowed it down to a list of solid options, pick the one with the best price.

Clearly, there are icebergs in these waters. And avoiding the “big five” can be hard to do on your own. What’s really too much life insurance for me? What’s too little? Do I need a policy for 15 years, to cover my mortgage? Or 30 years until I reach retirement?

My advice? Get advice. Do your own homework, but get the advice of a professional, too. Agent commissions are built into the price of a life insurance policy, so get everything you’re paying for.

About the author. Mary Pollman, CLU, has been writing about life insurance, long-term care insurance and annuities for more than 20 years. She has contributed to insurance publications, websites, consumer product literature and agent training. Mary held senior management positions in communications and marketing with two life insurance companies. She is an editorial advisor to SelectQuote.

* Banner OPTerm 10-Year: OPTerm 10 issue ages 20-80. OPTerm 15 issue ages 20-70. Opterm 20 issue ages 20-65 and 20-62 Oregon only. OPTerm 30 issue ages 20-50 and 20-45 Oregon tobacco classes only. Premium rates vary by coverage amount: $100,000-$249,999, $250,000-$999,999 or $1 million and above. Premiums quoted include $50 annual policy fee. Premiums are guaranteed to stay level for 10, 15, 20, or 30 years, respectively, and increase annually after initial guarantee period. OPTerm policies can be issued in preferred plus non-tobacco (no tobacco use in past 36 months), preferred non-tobacco (no tobacco use in the last 24 months), standard plus non-tobacco or standard non-tobacco (no tobacco use in past 12 months) and standard tobacco classes. OPTerm 10, 15 and 20 substandard policies can be issued through Table 4. OPTerm 30 substandard policies can be issued through Table 12. Coverage can be renewed to age 95. OPTerm policy form #RT-97. Forms and policy provisions vary by state. Not available in all states. Policy descriptions provided here are not a statement of contract. Rates as of 8-14-07. #07-081

Avoid the costly mistakes people make when they buy life insurance.
What do you really need in terms of coverage amount and coverage length? Which life insurance companies are best? A SelectQuote Licensed Expert can help you sort it out. We can help you avoid costly life insurance mistakes and give you free quotes from the highly rated Term Life Insurance companies we represent. Call toll-free 1-888-739-7965 . Or go to our website, http://www.selectquote.com/home9