What Is a Life Underwriter Training Council Fellow (LUTCF)?

Underwriters' meetingNew insurance agents can get a grounding in the basic skills, such as underwriting, needed to succeed in the field by becoming a Life Underwriter Training Council Fellow (LUTCF). After completing the required training, agents will have greater expertise in prospecting, selling, practice management as well as insight into practice specialties including life and health insurance, employee benefits and annuities. Having a LUTCF also can aid new agents in acquiring a job with an agency and in marketing themselves to prospective clients.

The LUTCF is overseen by the National Association of Insurance and Financial Advisors (NAIFA). The training and testing are provided by education company Kaplan through its College for Financial Planning division.

LUTCF Certification Requirements

The core of the certification requirements for the LUTCF is a set of three courses. Each course consists of eight weeks of instruction followed by a week for review and testing.

The first course is an introduction to life insurance and managing a life insurance practice. It covers business planning, ethics, life insurance product basics, risk management, prospecting, selling skills and financial planning.

The second course goes deeper into life insurance as well as annuities, mutual funds and insurance for health, disability, long-term care, group coverage and property and casualty. Risk management, retirement and estate planning are among the subjects covered in the third course.

The third course deals with risk management applications. It covers retirement and estate planning as well as special situations.

The courses are available as self-paced prerecorded lectures. They are also taught live and via interactive online classes. After completing each of the three courses, students must pass a two-hour test. To pass, they must correctly answer 70% of the 50 questions on each test.

The training costs $950 per course for a total of $2,850. The only prerequisite for the LUTCF is to belong to NAIFA, which has a sliding membership fee scale. People in their first year in financial services pay $10 to belong to NAIFA. The fee increases annually until it reaches $56 a year after a member has five years of experience in the field.

After receiving the designation, LUTCF designees can renew it by paying a $50 renewal fee every two years. As part of the renewal process, they also have to demonstrate that they have completed three hours of ethics continuing education every two years. In addition, LUTCF holders must agree to follow standards of professional conduct and be subject to a disciplinary process.

LUTCF Holder Jobs

Insurance worksheetsLUTCF seekers are usually insurance agents at the start of their careers. They may be interested in obtaining the designation as a way to convince potential employers of their commitment and knowledge about the life insurance industry. Having the LUTCF initials on a business card is also seen as an aid in marketing to prospects. The LUTCF is an optional certification and does not confer any specific powers or privileges on holders.

The designation has been around since 1984 and approximately 70,000 people have earned an LUTCF during that time.

Comparable Certifications

There are only a few entry-level certificates available to life insurance agents. In addition to the LUTCF, new agents can choose from:

Financial Services Certified Professional (FSCP) is offered by the American College of Financial Services, which originally co-sponsored the LUTCF with NAIFA. In 2013 the organizations ended their association and the American College of Financial Service began offering the FSCP. It requires passing seven courses on financial services and ethics topics at a combined cost of $3,230.

Registered Financial Associate (RFA) is a designation from the International Association of Registered Financial Consultants. It is offered to agents and other financial professionals who have already received a life insurance license, Series 65 securities license, bachelor degree in a related field or any of a number of professional designations, including a LUTCF. RFAs also have to pay a $250 fee. The only requirement other than that is to pass an examination on the organization’s code of ethics for financial professionals.

Bottom Line

Business meeting

The Life Underwriter Training Council Fellow (LUTCF) certification is one of the first designations sought by beginning life insurance agents. To get one, students have to learn about life and other forms of insurance, mutual funds, annuities, employee benefits and financial advising, in addition to managing a life insurance business, prospecting and selling.

Tips on Insurance

  • A consumer considering purchasing life insurance can increase the chances of making a good decision by having a relationship with a trusted and experienced financial advisor. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • Entry-level designations for financial services professionals like the LUTCF indicate that an advisor is interested in learning about the field and following best practices. More advanced certifications such as Chartered Life Underwriter and Certified Financial Planner are likely to indicate that a professional is a more experienced and well-informed source for financial advice.

Photo credit: ©iStock.com/FangXiaNuo, ©iStock.com/hfng, ©iStock.com/jhorrocks

 

The post What Is a Life Underwriter Training Council Fellow (LUTCF)? appeared first on SmartAsset Blog.

Source: smartasset.com

Understanding Long-Term Care Insurance

A lot of us don’t like to think about this, but inevitably there will come a time where we will all need help taking care of ourselves. So how can we start preparing for this financially?

Many people opt to purchase long-term care insurance in advance as a way to prepare for their golden years. Long-term care insurance includes services relating to day-to-day activities such as help with taking baths, getting dressed and getting around the house. Most long-term care insurance policies will front the fees for this type of care if you are suffering from a chronic illness, injury or disability, like Alzheimer’s disease, for example. 

If this is something you think you’ll need later on, it’s crucial that you don’t wait until you’re sick to apply. If you apply for long-term care insurance after becoming ill or disabled, you will not qualify. Most people apply around the ages of 50-60 years old. 

In this article, we will discuss long-term care insurance, how it works and why you might consider getting it.   

How long-term care insurance works

The process of applying for long-term care insurance is pretty straight forward. Generally, you will have to fill out an application and then you’ll have to answer a series of questions about your health. During this point in the process, you may or may not have to submit medical records or other documents proving the status of your health. 

With most long-term care policies, you will get to choose between different plans depending on the amount of coverage you want. 

Many long-term care policies will deem you eligible for benefits once you are unable to do certain activities on your own. These activities are called “activities of daily living” or ADLs:

  • Bathing
  • Incontinence assistance
  • Dressing
  • Eating
  • Getting off and/or on the toilet
  • Getting in and out of a bed or other furniture

In most cases, you must be incapable of performing at least two of these activities on your own in order to qualify for long-term care. When it’s time for you to start receiving care, you will need to file a claim. Your insurer will review your application, records and make contact with your doctor to find out more about your condition. In some cases, the insurer will send a nurse to evaluate you before your claim gets approved. 

It’s very common for insurers to require an “elimination period” before they start reimbursing you for your care. What this means is that after you have been approved for benefits and started receiving regular care, you will need to pay out of pocket for your treatments for a period of anywhere from 30-90 days. After this period, you will get reimbursed for your out-of-pocket expenses and from there.

Who should consider long-term care insurance

Unfortunately, the statistics are against our odds when it comes to whether or not we will eventually need some type of long-term care. Approximately half of people in the U.S. at the age of 65 will eventually acquire a disability where they will need to receive long-term care insurance.  Of course, the problem is, long-term care can be really expensive. Unless you have insurance, you’ll be paying for your long-term care completely out-of-pocket should you ever need it.

Your standard health insurance plan, including Medicare, will not cover your long-term care. The benefits of buying long-term care insurance are that:

  • You can hold on to your savings: Many uninsured seniors have to dip into their savings account in order to pay for their long-term care. Because it’s not cheap, many of them drain their life savings just to be able to pay for it.

 

  • You’ll be able to choose from a larger variety of options: Being insured gives you the benefit of being able to choose the quality of care that you prefer. Just like with anything else, you get what you pay for when it comes to healthcare. Medicaid offers some help with long-term care, but you’ll end up in a government-funded nursing home. 

 

How to buy long-term care insurance

If you’ve recently started thinking about shopping for long term-care insurance, you’ll want to keep a few things in mind:

  • Do you mind being insured on a policy with an elimination period?
  • Can you afford all of the costs including living adjustments?
  • Are you interested in a policy that covers both you and your spouse, otherwise known as “shared care”?

There are a few different ways to go about getting long-term care benefits. You can either buy a policy from an insurance broker, an individual insurance company, or in some cases, your employer. Obtaining long-term care insurance through your employer is probably going to be cheaper than getting it as an individual. Ask your employer if it’s included in your benefits. 

Many people also opt to shop for hybrid benefits insurance policies. This is when a long-term care policy is packaged in with a standard life insurance policy. This is becoming a lot more common in the world of insurance. Keep in mind that the approval process may be slightly different for a hybrid insurance policy than of that of a stand-alone long-term care insurance policy. Make sure to ask about the requirements before you apply. 

Best long-term care insurance packages

There are not very many long-term care insurance companies that exist as there once was. It’s hard to wrap our heads around purchasing something that we don’t yet need. However, here are a few examples of companies that offer competitive long-term care packages:

 

  • Mutual of Omaha: This company offers benefits of anywhere between $1,500 and $10,000. While the main disadvantage of this company’s packages is that they do not cover doctor’s charges, transportation, personal expense, lab charges, or prescriptions, you CAN choose to receive cash benefits instead of reimbursements. This company also offers discounts for things like good health and marital status. This company’s insurance policies offer a wide range of options and add-ons so you can make sure that all your bases are covered.

 

 

  • Transamerica: This company’s long-term policy, TransCare III, is good if you don’t want to hassle with an elimination period. If you live in California, this may not be the best choice for you because California’s rates are a lot higher than the rates in other states. Your maximum daily benefit can be up to $500 with this program, with a total of anywhere between $18,250-$1,095,000. 

 

 

  • MassMutual: Popular for their SignatureCare 500 policy which comes in both base and comprehensive packages, is a long-term care and life insurance hybrid. This is very appealing to many seniors wanting to kill two birds with one stone. This company also has a 6-year period as one of their term options, which is pretty high.

  • Nationwide: This program sets itself apart from many other programs available because it allows you to have informal caregivers like family, friends, or neighbors. You will receive your entire cash benefit every month and it is up to you to disperse the funds as you would like. Currently, this company does not have their pricing available online, so you will need to speak with an agent to discuss prices.

 

Understanding Long-Term Care Insurance is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

Touring Remotely? Questions to Ask During Virtual Apartment Tour

Whether you’re apartment shopping in a different city or doing your own remote research at home, virtual tours can come in handy. These allow possible renters to scope out living spaces with more comfort and convenience than ever. But with all the perks that this virtual advantage brings, it can still present some drawbacks compared […]

The post Touring Remotely? Questions to Ask During Virtual Apartment Tour appeared first on Apartment Life.

Source: blog.apartmentsearch.com

Your Car Insurance Company is Probably Planning to Rip You Off — Unless You Do This

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Watch out for your wallet! Do you live in one of the five U.S. states where car insurance rates are going up this year?

According to industry reports, rates are going up this year in Florida, Indiana, Massachusetts, New York and Rhode Island. For example, New York rates are expected to rise by 1.2%, and Indiana’s by 1.1%. Annoying, isn’t it? Here you are, probably driving less than ever, and they want to raise your car insurance premiums.

They’re ripping you off. The good news? There’s something you can easily do about it.

A website called Insure.com makes it super easy to compare car insurance prices and make sure you’re not getting ripped off. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

Are you driving less than 50 miles a day? Do you have zero DUIs on your record? You could qualify for discounts.

Using Insure.com, people save an average of $540 a year.

Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He lives in one of these five states, and he’s mad about this.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

What Causes of Death are not Covered by Life Insurance?

The death of a loved one is hard to take and while a life insurance payout can ease the burden and allow you to continue leaving comfortably, it won’t take the grief or the heartbreak away. What’s more, if that life insurance policy refuses to payout, it can make the situation even worse, adding more stress, anxiety, anger, and frustration to an already emotional period.

But why would a life insurance claim be refused; what are the causes of death that may cause your life insurance coverage to become null and void? If you or a loved one has a life policy, this article could provide some essential information as we look at the reasons a death claim may be refused.

What Causes of Death are Not Covered?

The extent of your life insurance coverage will depend on your specific policy and this is something you should check when filing your life insurance application. Speak with your insurance agent, ask questions, and always do your due diligence so that you know what you’re buying into and what sort of deaths it will provide cover for.

Life insurance policies have something known as a contestability period, which typically lasts for 1 to 2 years and begins as soon as the policy starts. If the policyholder dies during this time, they will investigate and contest the death. 

This is generally true whether her you die of a heart attack, cancer or suicide. However, if this period has passed, they may only contest the death if it results from one of the following.

Suicide

Suicide is a contentious issue where life insurance is concerned. On the one hand, it’s a very serious issue and one that’s often the result of mental health problems, so there are those who believe it is deserving of the same respect as any other illness. 

On the other hand, the life insurance companies are concerned that allowing such coverage will encourage desperate people to kill themselves so their loved ones will be financially secure.

It’s a touchy subject, and that’s why many companies refuse to go anywhere near it. Some will outright refuse to pay out for suicide, but the majority have a suicide clause, whereby they only payout if the death occurs after a specific period of time.

If it occurs before this time, they may return the premiums or pay nothing at all. And if they have reason to believe that the policyholder took their own life just for financial gain, they will almost certainly investigate and may refuse to pay.

Dangerous Hobbies and Driving

If you die in a car accident and it is deemed that you were driving drunk, your policy may not payout. Car accident deaths are common, and this is a cause of death that policies do generally cover, but only when you weren’t doing something illegal or driving recklessly.

Deaths from extreme activities like bungee jumping or skydiving may be questioned, especially if these hobbies were not reported during the application. 

Illegal Acts

Your claim can be denied if you are committing an illegal act at the time of your death. This can include everything from being chased by the police to trespassing. A benefit may also be refused if you die for an intentional drug overdose using non-prescription drugs. 

Smoking or Pre-existing Health Issue

Honesty is key, and if you lie during the application or “forget” to tell them about your smoking status or pre-existing medical conditions, they may refuse to payout. It doesn’t matter if they performed a medical exam or not; the onus is not on them to spot your lie, it’s on you not to tell it in the first place.

This is one of the most common reasons for an insurance contract to be declared void, as applicants go in search of the cheapest premiums they can get and do everything they can to bring those costs down. They may also believe they will get away with their lies, either because they will give up smoking in a few months or years or because they will die from something other than their preexisting condition.

But lying in this manner is risky. You have to ask yourself whether it’s worth paying $100 a month for a valid policy that will payout without issue or $50 for a policy that will likely be refused and will cause endless stress for your beneficiaries.

War

Life insurance benefits generally don’t extend to the battlefield. If you’re a solider on the front line, your risk of death increases significantly, and many insurance policies won’t cover you for this. This is true even if you’re not in active duty at the time you take out the policy. More importantly, it also applies to correspondents and journalists.

You don’t invalidate your policy by going to a war-torn country and reporting, but if you die resulting from that trip, your policy will not payout.

Dismemberment

Your life insurance policy likely won’t pay for dismemberment or critical illness, but there are additional policies and add-ons that will provide cover. You can get these alongside permanent life insurance and term life insurance to provide you with more cover and peace of mind. 

They will come at a significant extra cost, but unlike traditional life insurance, they will payout when you are still alive and may make life easier after experiencing a tragic accident or serious illness.

We recommend focusing on getting life insurance first, securing the amount of coverage you need from a permanent or term life policy, and only then seeing if there is room in your budget for these additional options.

How Often Do Life Insurance Policies Payout?

We have recommended life insurance many times at PocketYourDollars and will continue to do so. We often state that it is essential if you have dependents and want to ensure they’re cared for when you die. But as much as we recommend it and as simple as the process of applying often is, there is one simple fact that we often overlook:

Life insurance companies rarely payout.

It’s a stat you may have seen elsewhere and it’s 100% true. However, contrary to what you might have heard or assumed; this is not the result of a refusal to pay the death benefit when the policyholder passes away. Sure, this accounts for some of those non-payments, but for the most part, it’s down to one of the following:

The Policyholder Survives the Term

The majority of life insurance policies are set to fixed terms, such as 10, 20 or 30 years. If anything happens during this period of time, your loved ones collect your death benefit, but if you survive, the policy ends, no money is paid out, and if you want another policy you will need to pay a larger sum.

The Policyholder Accepts the Cash Value

Whole life insurance policies are like investments crossed with life insurance. Your loved ones get a death benefit if you die, but it also accrues interest and can be cashed out. When this happens, the insurer collects, you get a sum of money, and it feels like a win-win, but in reality, the insurer has just dodged a bullet.

The Policyholder Stops Making Payments

As soon as you stop making your premium payments, you lose cover and you run the risk of your policy being canceled. This is true for pretty much any type of policy and it happens regardless of the policy term. 

Unlike a credit card company, which may chase you for payments, a life insurance company will place the burden of responsibility on you. After all, a creditor loses money when you don’t pay, whereas a life insurance company comes out on top.

This often happens when individuals take out substantial life insurance policies at a young age, only to suffer drastically changing circumstances. Imagine, for instance, that you’re 20-years-old and you buy a house with your spouse-to-be, with a view to settling down and starting a family. You assume that you’ll need it for a long time, so you take out a 30-year-term.

But 10 years down the line, your spouse leaves you, the family you wanted didn’t happen, and you’re all alone with no dependents, and with growing debts, bills, and obligations. At that point, life insurance becomes a burden, so you may stop making payments, thus allowing the insurance company to profit from 10 years of insurance premiums.

Summary: It’s Not That Cut-Throat

You don’t have to look far to find consumers who feel they have been wronged by life insurance companies, consumers who will expend a great deal of time and effort into calling out these companies for their perceived wrongdoings. But they often exaggerate the situation due to their extreme anger and this creates unrealistic anxieties and expectations.

The truth is, while there are people who have been genuinely wronged, they are in the extreme minority. The vast majority of family members who were refused a death benefit were let down by the policyholder and by the lies they told on their policy.

Policyholders lie about their weight, smoking status, and medical conditions, and when caught up in this lie, they often claim they made an honest mistake. But the truth is, most life insurance companies will overlook simple mistakes and only really care when it’s obvious that the policyholder lied. 

And let’s be honest, it doesn’t matter how forgetful you are, you’re not going to forget that you’re a chain smoker, alcoholic, drug user, extreme sports fan or that you recently had a medical crisis!

If the policy was filed honestly, you shouldn’t have an issue when you collect, even if it’s still in the contestability period. As discussed above, life insurance companies stack the dice in their favor. They use statistics and probability to carefully set the premiums and benefits, and they rely on policyholders forgetting to pay and outliving the term. They don’t need to “rob” you in order to make a profit. So, be honest when applying and you won’t have anything to fear.

What Causes of Death are not Covered by Life Insurance? is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

How to Decide If Pet Insurance Is Worth the Cost

Woman deciding if pet insurance is worth the cost

Last fall, our greyhound Tivo refused his breakfast on a Friday morning. He didn’t eat or drink water all day, and we were worried. That night, we took him to the 24-hour emergency veterinarian and Tivo was diagnosed with a bacterial stomach bug and dehydration. We went home with antibiotics, a saline IV, and a $200 vet bill.

Thankfully, we could afford this bill for unexpected emergency care for Tivo. But if he were diagnosed with a chronic condition or needed a very costly intervention, we might find ourselves facing some heartbreaking financial decisions.

Pet insurance is often touted as a solution to these worries. With pet insurance covering some costs of veterinary care, you’re never forced to choose between your beloved pet and your finances. However, does this kind of coverage make sense for most pet-owners?

Here’s what you need to know about pet insurance so you can keep your fur babies bright-eyed and bushy-tailed for years to come.

Premium costs

As with human health insurance, pet insurance charges you a monthly premium for your pet’s coverage. According to Value Penguin, the average monthly cost for canine pet insurance is $47.20, and the average for feline insurance is $29.54 for accident and illness coverage.

Of course, this doesn’t tell the whole story of what to expect from premium costs. Many pet insurers increase premiums with the age of your pet. Which means the $47 per month you pay to keep your 4-year-old pup healthy could rise with his/her age, making the premiums harder to keep up with just as they’re more likely to need age-related medical intervention. In addition, different breeds can have different premium prices, since there are some hereditary conditions that various breeds may be more prone to.

However, even with these potential issues, there are some methods to keep premiums manageable. For instance, some tried and true insurance reduction strategies work just as well for your pet’s health insurance as they do for your own. These include increasing your deductible, reducing the percentage that the insurance reimburses, or limiting the annual payout rather than choosing unlimited coverage.

These strategies can keep your premiums affordable while still helping with big veterinary bills. But you need to be prepared to pay anything above and beyond the coverage limits you set up. (See also: 8 Ways to Lower Your Vet Bills) 

Coverage

It’s also important to note that pet insurance does not necessarily cover every kind of health cost for your pets. To start, unlike (some) human health insurance, most pet insurance will not cover preventive care and annual exams. So you will need to plan for these costs on top of your premiums.

Pet insurance policies generally come in two varieties: accident and illness policies, and accident-only policies. In general, accident-only policies do not raise their premiums as your pet ages, making this kind of insurance more affordable long-term. However, accident-only policies tend to be cheaper because your pet is less likely to get injured than fall ill. If you decide to invest in pet insurance, getting both accident and illness protection will likely offer you more protection.

That said, each insurer gets to decide which illnesses, conditions, and services it covers, and not all ailments are covered. Many insurers also do not cover the diagnostic exam for a particular illness, even if the treatments are covered. Make sure you pay attention to the details of what your potential insurer will cover before signing up for coverage.

As with many types of human health insurance, most pet insurance policies exclude preexisting conditions. Unfortunately, some insurers consider health problems to be "preexisting" if they crop up within a year of the purchase of your policy. Insuring your pet when they’re young is the best way to avert the preexisting condition coverage gap.

Finally, pet insurance coverage is usually handled via reimbursement. That means you’ll be on the hook to pay the vet bill at the time of service, and you’ll submit your receipts to your insurer to receive reimbursement. (See also: 7 Things You Need to Know About Pet Insurance)

Should you buy pet insurance?

With all the caveats, coverage gaps, and reimbursement requirements, pet insurance is not necessarily a slam dunk for everyone. In fact, many consumer advocates recommend that pet owners put aside an amount equal to the annual premium into a savings account each year. This will give you the same peace of mind that you can cover any potential health care needs for your pet while also allowing you to keep the money if you never need to use it.

However, if you struggle with financial discipline, this strategy will leave you in a difficult situation if your furry friend needs an expensive procedure. Pet insurance can provide you with the protection your pet needs even if you struggle with money. 

Show your love with an emergency fund

Whether or not you decide to purchase pet insurance, remember that you’ll have to pay upfront for any veterinary procedures. With insurance, you will get reimbursed for covered care, but you will still need to have access to funds to pay for Mittens’ kidney stone removal or Rex’s arthritis care at the time of care.

This means that one of the best ways you can protect your furry friends and avoid heartbreaking financial choices is to have an emergency fund. With or without pet insurance, set some money aside for the unexpected so you can enjoy your four-legged family members for years to come. (See also: 7 Easy Ways to Build an Emergency Fund From $0)

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With pet insurance covering some costs of veterinary care, you're never forced to choose between your beloved pet and your finances. Here's what you need to know about pet insurance. | #pets #petcare #insurance


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What Are the Consequences of Not Having Life Insurance?

Before I started writing in the personal finance space, I spent nearly 8 years working alongside my husband in a funeral home. My husband Greg worked as a mortician, and I was the Director of Family Services. I learned so much about living and dying during my years in the mortuary business, but there’s one that stuck with me — the real-life consequences of not having life insurance. 

I clearly remember speaking with dumbfounded families who couldn’t believe their husband or father (or wife or mother) never had life insurance in place. Some didn’t have enough money to cover final expenses like the funeral bill, and others confided in me they had no idea how they would pay their bills.

This saddened me greatly since I know first-hand how inexpensive life insurance can be — especially if you’re young and healthy. After all, I’m a 40-year-old woman and I currently have two term policies worth $1 million dollars that set me back a grand total of $53 per month. 

Why People Don’t Buy Life Insurance

The main reason consumers don’t buy this important coverage is simple — they get busy and forget. Most of us know we need life insurance in place during our working years, and that’s especially true for those of us with kids. But it’s easy to let life get in the way, and for the purchase of life insurance to wind up on a list of other to-dos that we never get to. 

Not only that, but people don’t want to think about dying. I specifically remember a family I met in the funeral home who just lost a husband and father who wasn’t even 40-years-old. In tears, his wife explained that he had told her he was going to buy life insurance dozens of times, but that he hated even dealing with death. He had a $20,000 life insurance policy through work, and he knew he needed more, but he didn’t want to face his mortality in his free time. Unfortunately, his family paid dearly for that decision.

A final reason people don’t buy life insurance is cost. The thing is, term coverage is so cheap that almost anyone can afford it. People just think it’s expensive, so they shy away from taking the next steps. Life insurance is also just another bill to pay, and many can barely keep up with the bills they have.

That’s probably why so few people have enough coverage. Here are some statistics that should scare you:

  • Only around 60 percent of Americans had life insurance in 2018, according to LIMRA’s 2018 Insurance Barometer Study
  • Among those with life insurance, 1 in 5 people know they do not have enough
  • Consumers surveyed tend to overprice life insurance; millennials in particular believe that life insurance costs 5x the actual amount for a policy

Consequences of Not Having Life Insurance

Based on those statistics, not enough people have life insurance and those who do may not have enough coverage to last. But, what can this mean for your family? Here are the main downsides you’ll face when you don’t buy life insurance now, before it’s too late:

Your Income Disappears

Income replacement is one of the most compelling reasons to buy life insurance, and that’s especially true if you have kids. You don’t want your income to suddenly disappear, leaving your family in the lurch. However, this is exactly what happens when you die without life insurance. All of a sudden, your family is left trying to cover regular bills and living expenses without your income.

That’s why many experts suggest buying at least 10x your income in term life insurance coverage. This way, your family will have some cash they can use to replace your income while they mourn and get back on their feet.

Your Debts Don’t 

Your income may disappear when you die, but your debts certainly don’t. With that in mind, you should buy life insurance coverage that will cover major debts you have like your home mortgage, your family car loans, and any credit card debt you have.

If you don’t buy life insurance and you die before your time, your family will be left trying to cover all your debts without your help. It’s shameful to leave them in this position — especially when term life insurance coverage can easily be purchased for the price of a dinner out per month. 

Your Family Could Need a GoFundMe to Pay for Your Funeral

During my final years in the funeral industry, GoFundMe came about. I cannot tell you how many families came in to plan their services without any money only to find that, no, the funeral home wouldn’t let them make payments. After that, they’d set up a GoFundMe and solicit donations from family and friends to pay for a service. 

This always made me sad, mostly because families shouldn’t have to struggle or fundraise to pay for final expenses. I always thought that, if only their loved one had a small term life insurance policy, they would have been able to grieve without the added stress.

You Will Not Leave a Legacy

Finally, life insurance offers you the chance to leave a legacy behind. This could mean leaving enough money to pay for college tuition for your children, or having a broad enough policy so your spouse or partner never needs to work again, paving the way for them to stay home and nurture your kids. When you have enough life insurance so your family is taken care of, they will never forget it.

The opposite is also true. Many whose loved ones die without life insurance wind up angry and resentful at their partner for leaving them in such a position. I know because I saw it with my own eyes, and I felt their exasperation as they tried to figure out what to do.

Purchase Life Insurance the Painless Way

Here’s the thing: Buying life insurance doesn’t have to be complicated or stressful. I know because I have purchased $1 million in life insurance coverage, and because the second policy I bought online didn’t even require a medical exam. 

The purchase of life insurance can be painless and fast if you plan to buy basic term coverage, and it can also be significantly cheaper than you think it would be. These tips can help you get the coverage you need without any added hassle or stress.

1. Shop Around and Compare Quotes Online

First, you should absolutely shop around and compare life insurance quotes online, mostly because this is such an easy task. A range of online life insurance providers including Haven Life and Bestow make it easy to price out a policy in a matter of minutes online. 

To get a quote from Bestow or Haven Life, for example, all you need to supply is your birth date, your height, your weight, and your zip code. You don’t even need to enter your contact information or your email to get a free quote with either company.

You can also check out our guide to the Best Life Insurance Companies of 2021, which lets you read reviews of all the top providers and compare rates from multiple providers in one place. 

Whatever you do, don’t go with the first life insurance company you come across. Make sure you compare policies in terms of their monthly cost, the amount of coverage, and how long it lasts. Then, and only then, can you know you’re getting the best deal.

2. Play Around with Coverage Amounts

You also need to have a general idea of how much coverage you want and need. We mentioned that most experts suggest buying at least 10x your income in life insurance coverage, but it may be prudent to buy more term coverage than you need. After all, there’s no such thing as having too much life insurance in place, but you can definitely not have enough.

You’ll also want to decide how long you want your policy to last. Most term life insurance policies last for 10, 15, 20, or 30 years, letting you tailor your policy to your needs.

If you’re young and you have young kids, you may want a 30-year policy that will provide income replacement for your entire working life. If you’re in your 40’s and you plan to retire at 55, on the other hand, you may feel comfortable with a policy that lasts for 15 or 20 years. There is no “right” or “wrong” answer, but these are factors you should consider.

3. Look for Providers that Don’t Require a Medical Exam

According to LIMRA’s 2018 Insurance Barometer Study, half of all consumers say they are “more likely to purchase life insurance if priced without a physical examination.” And, can you blame them? Medical exams require a blood draw, and you have to set aside time in your schedule for them to boot. It’s easy to procrastinate and never buy a policy when a medical exam is required.

Fortunately, many life insurance providers don’t require a medical exam. Instead, they rely on algorithms to determine who is the greatest risk, and who can purchase coverage that begins right away. The second policy I purchased for myself came from Haven Life, and it did not require a medical exam. 

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I was in my late 30’s when I purchased this policy for $750,000, and I only pay around $27 per month. I applied for this policy online and had coverage the next day, and all without seeing a nurse or facing the dreaded needle prick.

The Bottom Line

Since you took the time to read this piece, you are probably on the verge of buying life insurance. You already know you need it, so don’t let another day go buy without coverage. You may not think something could happen to you in the next week or the next few months, but life doesn’t always go as planned. If you’re unlucky, your untimely death may be no exception.

Take the time to get a quote for life insurance, and you’ll never have to wonder what your family would do if you died. Life insurance lets you continue providing for them even after you’ve left this Earth, and there’s nothing more thoughtful and loving than that. 

The post What Are the Consequences of Not Having Life Insurance? appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

Skipping Renters Insurance? Why That’s a Bigger Risk Than You’d Think

As a finance writer, I am surrounded by people who know a lot about managing money. But even those with the most money know-how can still miss financial must-haves.

For instance, in a recent conversation, a few of my coworkers stated they didn’t have renters insurance. This puts them among the 59% of renters who don’t have renters insurance, according to a poll from the Insurance Information Institute. On the other hand, 95% of homeowners carry homeowners insurance.

Granted, renting comes with fewer property responsibilities than owning. But don’t assume you can skip insurance for your home simply because you’re leasing it. Go without it and you’ll expose yourself to some major risks.

See why opting for a policy is protection you can’t live without, and learn how renters insurance can help smooth over the following five major renting crises.

1. Damaged Belongings

If you’re asking yourself whether you need insurance as a renter, a better question might be, Can you afford not to have it?

If the relatively small cost of a renters insurance premium—typically between $15 and $25 per month—seems too expensive, consider the alternative, suggests John Espenschied, agency principal of Insurance Brokers Group.

“Imagine replacing all your clothes, furniture, electronics, food, personal items, and priceless personal memorabilia,” he says. With renters insurance, the insurer will cover most or part of the value of damaged items. Without this coverage, you’re completely on the hook for all those costs.

Espenschied tells a story of one of his clients, a young woman to whom he recommended rental insurance multiple times. She declined the coverage.

Months later, there was an electrical surge in the building. “It took out everything she owned that was plugged in, including the TV, computer, and several other items,” Espenschied explains. These items were permanently damaged and unusable.

Had she opted for renters insurance, Espenschied could have helped her submit a claim and get the money to replace those belongings. Unfortunately, without the policy there was nothing he could do.

Don’t put yourself in the same position—get a renters insurance policy. On top of that, take steps to document all belongings and valuables so you can prove ownership in a renters insurance claim.

2. The Temporary Loss of a Habitable Home

Some disasters—such as fires, flooding, and electrical issues—can require extensive repairs and render your rental uninhabitable. Your landlord will usually handle these repairs, but if you lose the use of your home, your landlord might only be required to refund a prorated rent for the days you can’t live in your rental.

But if you’re out of a place to live, your daily rent rate might not cover any decent hotels or other temporary housing options.

But there’s good news: “Most renters insurance policies can help you in the event something happens to your apartment or house and you have to live elsewhere while it’s repaired,” says Jennifer Fitzgerald, CEO and cofounder of insurance comparison site PolicyGenius.

Typically, you can find a hotel nearby and your renters insurance will cover the costs of your stay until you can resume habitation of your home.

3. Stolen Belongings

Renters insurance typically includes coverage for theft and burglary too. If your home is broken into or burglarized, you can file a claim with your renters insurance provider to replace any stolen or damaged items.

“It even covers your belongings when they’re not physically in your home,” Fitzgerald says. “So if you take your laptop with you to the local coffee shop or on vacation and it’s stolen, your policy could help cover the costs of getting it repaired or replaced.” Renters insurance will usually be the policy that covers theft of personal items from your car too.

If your home is broken into or your purse is stolen from your car, promptly notifying authorities is an important step—filing a renters insurance loss claim will usually require a police report of the theft.

4. Personal Liability for Legal Damages

The most important protection your renters insurance provides, however, might be personal liability protection.

“If your dog bites someone or a food delivery person slips and falls, you’re covered,” says Stacey A. Giulianti, chief legal officer for Florida Peninsula Insurance. Instead of being held personally responsible for those damages, your insurer will step in and help. “The carrier will even hire and pay for an attorney to defend any resulting lawsuit.”

This can be especially important if you are found responsible for damage to adjacent properties as well, Espenschied says. For example, renters insurance will cover you if your toilet or tub “overflows and leaks into the neighbor’s unit below, causing damage to their personal property and cost to repair the building.” You may also be covered if a kitchen fire in your apartment causes damage to the unit above you.

The damage and loss can easily add up to tens of thousands of dollars. In cases like these, renters insurance can be the difference between smooth recovery and huge financial loss or even bankruptcy.

Make sure you understand your coverage. “Every policy is different, so talk to an agent and read your policy terms,” Giulianti warns.

5. An Eviction for Violating Your Lease Agreement

Many lease agreements include a clause in which the tenant agrees to purchase a renters insurance policy. These common clauses usually clarify that the landlord’s property insurance coverage does not extend to your personal belongings.

If you sign a lease with such a clause, you are agreeing to maintain this insurance coverage throughout your residency there. If you fail to get a policy or allow it to lapse, your landlord is within their rights to serve you with a “comply or quit” notice and possibly begin eviction proceedings.

If you don’t currently have a policy, reconsider getting renters insurance. Alongside a healthy emergency fund, having the right insurance can bring vital financial security to your life. For the cost, renters insurance provides protection and peace of mind.

“Most renters can get a policy for around $20 per month,” Fitzgerald says. “That’s a small price to pay when you think about the fact that if you don’t have renters insurance, you’ll be forced to cover the cost of replacing any and all items damaged.”

Procuring a renters insurance policy is a smart step toward financial security. With the right policy, you can avoid debt in an emergency and protect your possessions and your home. If you’re ready to buy a home, learn more about the ins and outs of home mortgages in Credit.com’s Mortgage Loan Learning Center. And to be financially prepared for anything, it’s also a good idea to build your credit score so you can qualify for loans and other credit when necessary. See where you stand with a free credit score from Credit.com.

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The post Skipping Renters Insurance? Why That’s a Bigger Risk Than You’d Think appeared first on Credit.com.

Source: credit.com

What Is Gap Insurance, and What Does It Cover?

Woman about to drive off in a carWhen purchasing or leasing a new car, you have several insurance coverage options. When selecting coverage, you will likely know if you want to have collision coverage or not, but will you know what gap insurance and whether to select that option? If you are driving your owned vehicle or a leased one, and it is totaled, your collision coverage insurance will cover your vehicle’s cash value. The coverage will help you to purchase a another car. However, what if you owe more on your car than it’s worth? That is where gap insurance comes in. Here’s what you need to know about this type of coverage.

What is Gap Insurance?

Gap insurance protects you from not having enough money to pay off your car loan or lease if its value has depreciated, and you owe more on your car than it is worth. It is optional insurance coverage and is used in addition to collision or comprehensive coverage. It helps you pay off an auto loan if a car has been totaled or stolen, and you owe more than its worth. Gap insurance might also be known as loan or lease gap coverage, and it is only available if you are the first owner or leaseholder on a new vehicle.

Some lenders require individuals to have gap insurance. In addition to collision and comprehensive coverage, gap insurance helps prevent owners and leasers from owing money on a car that no longer exists and protects lenders from not getting paid by a person in financial distress.

How Gap Insurance Works

Car crushed by a fallen tree

If you buy or lease a new car, you may owe more on the vehicle than it is worth because of depreciation. For example, let’s say you purchase a new car for $35,000. However, a year later, the car has depreciated and is only worth $25,000, and you owe $30,000 on it. Then, you total the car. Comprehensive insurance coverage would give you $25,000, but you would still owe $5,000 on the vehicle. Gap insurance would cover the $5,000 still owed.

Without gap insurance, you would have had to pay $5,000 out-of-pocket to settle the auto loan. With gap insurance, you did not have to pay anything out of pocket and were likely to purchase a new car with financing.

What Gap Insurance Covers

Gap insurance covers several things and is meant to complement collision or comprehensive insurance. Gap insurance covers:

  • Theft. If a car is stolen and unrecovered, gap insurance may cover theft.
  • Negative equity. If there is a gap between a car’s value and the amount a person owes, gap insurance will cover the difference if a car is totaled.

Gap insurance also covers leased cars. When you drive a new, leased car off the lot, it depreciates. Therefore, the amount you owe on the lease is always more than the car is worth. If you total a leased car, you’re responsible for the fair market value of the vehicle. If you lease, you can purchase gap coverage part way through your lease term, although many dealerships require both comprehensive and collision coverage and strongly recommend gap coverage.

What Gap Insurance Doesn’t Cover

Gap insurance is designed to be complementary, which means that it does not cover everything. Gap insurance does not cover:

  • Repairs. If a car needs repairs, gap insurance will not cover them.
  • Carry-over balance. If a person had a balance on a previous car loan rolled into a new car loan, gap insurance would not cover the rolled-over portion.
  • Rental cars. If a totaled car is in the shop, gap insurance will not cover a rental car’s cost.
  • Extended warranties. If a person chose to add an extended warranty to an auto loan, gap insurance would not cover any extended warranty payments.
  • Deductibles. If someone leases a car, their insurance deductibles are not usually covered by gap insurance. Some policies have a deductible option, so it is wise to check with a provider before signing a gap insurance policy.

Reasons to Consider Gap Insurance

There are several situations you should consider gap insurance. The first is if you made less than a 20% down payment on a vehicle. If you make less than a 20% down payment, it is likely that you do not have cash reserves to cover them in case of an emergency and that they will be “upside down” on the car payments.

Additionally, if an auto loan term is 60 months or longer, a person should consider gap insurance to ensure that he or she is not stuck with car payments if the vehicle is totaled.

Finally, if you’re leasing a car, you should consider gap insurance. Although many contracts require it, the vehicle costs more than it’s worth in almost every situation when you lease.

Is a Gap Insurance Worth It?

Gap insurance keeps the amount that a person owes after buying a car from increasing in case of an emergency. Therefore, if someone does not have debt on his car, there’s no need for gap insurance. Additionally, if a person owes less on his car than it is worth, there’s also no need for gap insurance. Finally, if a person does owe more on a vehicle than it is worth, he may still choose to put the money that would be spent on gap insurance every month toward the principal of his auto loan.

If a person owes more on his car than it is worth and would be financially debilitated by having to pay the remainder of his car payments if his vehicle was totaled or stolen, then gap insurance might be a saving grace.

If the extra cost of gap insurance strains your budget then consider ways to keep your vehicle insurance costs down without skipping gap insurance.

The Takeaway

"ARE YOU COVERED" written on a highway

Gap insurance covers the amount that a person would still owe on a vehicle after it is stolen or totaled, and after comprehensive insurance pays out. It prevents people from continuing to owe on a car that no longer exists. While it doesn’t make sense for everyone to purchase gap insurance, it is often smart for people who have expensive vehicles that are worth far more than a person owes. It is also something to consider when you are leasing a vehicle.

Tips for Reducing Insurance Costs

  • If you need a little additional help weighing your insurance options, you might want to consider working with an expert. Finding the right financial advisor that fits your needs can be simple. SmartAsset’s free tool will match you with financial advisors in your area in five minutes. If you’re ready to learn about local advisors to help you achieve your financial goals, get started now.
  • You may want to consider all the insurance options available that are suitable for your unique situation. By doing so, you save money. A free comprehensive budget calculator can help you understand which option is best.

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The post What Is Gap Insurance, and What Does It Cover? appeared first on SmartAsset Blog.

Source: smartasset.com

Health Insurance Myths Debunked

A health insurance policy is essential for anyone seeking to safeguard their future and avoid the catastrophic consequences of high medical bills. Whether you’re buying coverage for yourself or a health plan for your family, it’s important to get complete coverage. But despite this fact, millions of Americans remain uninsured, often because they believe one of the following health insurance myths.

Myth 1: I’m Young and Healthy; I Don’t Need Health Insurance

You’re never too young to start shopping for health insurance plans because you don’t know what’s around the corner. Medical expenses can be astronomical at any age and anyone can have an accident, fall ill or be diagnosed with a serious disease. 

It’s not pleasant to think about and many people prefer to bury their heads in the sand and live as if they are invincible, but they’re not. No one is.

Health care is very expensive in the United States, there’s no escaping that fact. This is one of the few developed nations in the world where being the victim of an accident or attack could lead to insurmountable medical expenses and essentially ruin your life. You can’t rely on luck and you can’t assume you’ll be safe just because you’re young, fit, and healthy.

In fact, buying at this young age has many benefits, including the fact that you’ll likely clear all exclusion periods by the time you actually need to start claiming.

Myth 2: The Benefits are Lost if I Don’t Renew by the Due Date

You should always try to pay your monthly premium on time, thus avoiding any issues and ensuring you are covered at all times. However, your health insurance coverage does not end the minute you miss a payment.

Insurance companies have a grace period, during which time your policy will remain active. This period allows you to gather the funds needed and to pay your monthly premium, thus keeping your policy active. 

Typically, this grace period lasts for between 7 and 15 days, but it differs from provider to provider. Check your policy for more details but try to avoid playing fast and loose with your payments as they could be the only thing protecting you.

Myth 3: It’s All About the Deductible

The deductible is the amount of money you pay before the health insurance policy takes over and to many consumers, it is the single most important part of any health insurance policy. However, while it is important to consider the deductible, you should not choose your policies based solely on which one has the lowest deductible.

Look for the sort of cover that they provide and whether this will suit your needs or not, and then focus on the deductible. 

It’s also important to find the right balance between a deductible that is cheap enough for you to afford when the time comes, but is not so cheap that it sends the premiums through the roof. To do this, avoid focusing on how much your first monthly payment will cost and ask yourself what you would do if you had to pay for a medical expense today.

Would you have an issue paying the deductible? Would it require you to borrow money from friends or family? If so, it’s too high and it’s time to go back to the drawing board.

Myth 4: I Have Insurance from My Employer so I Don’t Need any Additional Cover

If your employer offers any kind of group health insurance cover, take it, but don’t assume that it will cover you for everything you need. Read the small print, look for gaps, and seek to fill those gaps with your own cover.

With your own policy, you’ll also be protected if you lose your life. If anything happens in the time it takes you to find a new job, you could be left to foot the bill, making this an even scarier and more stressful time. But if you’re covered, you can take your time as you search for a suitable role.

Myth 5: It’s Not a Pre-Existing Condition if I Didn’t Know About it

If you have any pre-existing medical conditions you will be subject to an exclusion period, one that may last for up to 48 months. During this time, your insurance company will not pay out for any issues related to this condition and contrary to popular belief, not knowing about the condition is not enough to avoid this exclusion period.

If, somehow, it is proven that you had a medical condition that was simply not discovered at the time you applied, it will still be subject to an exclusion period. The good news, however, is that you can no longer be refused because of pre-existing medical conditions, which means that everyone can benefit from health insurance.

Myth 6: I Don’t Need Health Insurance If I Have a Life Insurance Plan

A life insurance policy can cover you for critical illness, which could be used to cover health care costs. You can also purchase accident and dismemberment insurance to cover you in the event you lose a limb. However, life insurance is designed to pay out a death benefit when you die. It goes to your loved ones, not you, and is therefore not a viable replacement for health insurance.

For complete cover, you should look into getting both life insurance and health insurance. You can find low-cost options for both.

Summary: Common Myths Debunked

If you don’t have any health insurance coverage, it’s time to change that and start looking for coverage today. Take a look at our guide to choosing a health plan to get started. We also have guides on everything from life insurance (term life insurance, whole life insurance, and other life insurance coverage) car insurance and pretty much all other insurance products.

By purchasing all of these together you could even save some money while getting essential coverage! Just remember to do your research, plan ahead, and never settle for less than you need as you may live to regret it in the future.

Health Insurance Myths Debunked is a post from Pocket Your Dollars.

Source: pocketyourdollars.com