Provide Your Child With the Ultimate Protection: Life Insurance

The longest 9 months of anyone’s life is waiting for the day when their child is finally brought into the world. It is absolutely love at first sight when that little one arrives, and all that most parents can think of at that moment is all the steps they will take to protect that child, no matter what comes their way throughout the course of their life. It’s a noble thought and one that is backed up by the annual International Day for the Protection of Children that comes each June 1st.

That day brings light to some of the troubles children experience around the world, which most of us don’t think about, since we are so caught up in looking after our own. Oddly enough, though, most parents think of protection as being in the here and now, but what about the future? What would happen to your child if you were to pass tomorrow? Would they be properly looked after, and do you have a life insurance policy that would help make sure they were?

Life insurance is not a major strain on the budget, especially if you buy a policy in your younger years. Not having a policy of any kind can actually end up being a lot more costly to those left behind. They may find themselves placed in a financial position that is hard to dig out of, and which stays with them long after your passing. When you think of it in terms of your children, just imagine what being left financially secure could do for them in the future:

* They can have the funds available to continue their education. Many kids are forced to give up their dreams of college when a parent passes with no life insurance policy in place. They often take on the role of breadwinner in the home in order to dig out of the financial burden left behind.

* They will be able to see you off in a fitting manner. Losing a parent is hard enough for a child, but if you combine that with the expense of a funeral, it can be devastating. A good life insurance policy will mean that there is more than enough money to give you a funeral that everyone can feel good about in some small way.

* They will get to maintain their lifestyle. Parents work hard to put a roof over the head of their family, but that can all go away when a parent passes. The money that is paid out on a life insurance policy is usually more than enough to ensure that the family can stay where they are and cover all costs.

When June 1st arrives and you hear about International Day for the Protection of Children, think about the steps you take to protect your own. If life insurance is not part of that protection, it might be time for you to get the ball rolling on that.

Independent Life Insurance Brokers Wage War on Life & Health Insurance Providers Reign

For well over a century life and health insurance providers held golden handcuffs on their agents and brokers. Independent life insurance brokers became fighting mad at these insurance providers trapping them inside giant Jell-O molds. This provided independent brokers little flexibility in prospecting, selling skills, choice of clients, and pressed inside a tight income range.

FINALLY, independent life insurance brokers are electing to challenge the insurance companies, seeking independence, and running their personal sales like their own business instead of like a textbook copy of what the company wants. A talented insurance agent quickly learns that the insurance provider needs them, and must offer more to hang on to the producer. An observant health or life insurance broker has over 600 independent insurance company choices to work out a winning combination with.

Sure insurance companies have cast heavy thunderstorm hurdles for the agents to overcome. A very high percentage of agent manpower gets lost along the way. However, each year, a larger group of agents is seeing the rainbow that lies ahead if they manage their own future. These are the independents, heroes to other agents that have not yet mastered the selling skills, or self-determination to join them. Here is some factual data on how the selling field has changed.

ANNUITIES

If you read insurance publications subsidized by major insurance company ads, you would think this is an easy money field. Obtaining the realms of information you need to learn, plus constantly changing sales regulations, disclosures, and mandated features you quickly become a walking encyclopedia. For two reasons insurance companies dominate. First, they write OVER 60% of the premiums themselves (internally), as appointed agents and independent brokers bring in the remainder. A newer agent convinces his client to put his $4,000 in savings into an annuity. The agent is compensated at 5%, $200 for the annuity sale. Instead, had this broker written a $50.00 monthly life insurance policy the provider would have paid out about $400.00.

Before a policy is written, a broker is going to write coverage that is profitable to himself and the the company. Listening to the training of life and health insurance providers, can cost a producer half their income.

The major shift in power from company appointed agents to independent life insurance brokers starting in the year 2000. The individual life market share revealed the following distribution percentages. 48% by Career Company appointed agents. Likewise, independent life insurance agents wrote 48%. The remaining small balance was picked up others, mainly stockbrokers.

Insurance Companies attempted driving most agents out of the business, especially the independent ones who commanded higher commissions. The home office wanted to receive 100% of the profits. With internet ads, phone telemarketing, direct mail bypassing agents, emails, and television ads, they thought they could prevail. After millions and millions of dollars spent on trying to sell insurance without using large numbers of agents, the whip came down. The got back lashed with a severe beating reminder that read, “insurance is a product, filling emotion needs that needs to be sold by human people.” A robot, cut out the middleman approach was a burning backfire.

INSURANCE COMPANY REALIZATION – ONE WAY OR ANOTHER

Health and life insurance company providers learned the hard way that business could be obtained by used television, internet, and direct mail advertising to attempt to get consumers to buy from them. Sure they saved a little on commissions, but their high overhead was bombarded by less healthy applicants, poorer claims communication, and less loyal clients. Career agents are enraged when they see their company want to sell insurance without their services. Life insurance broker agents are not in-housed, so they are paid higher commissions to sell the same coverage.

The word became clearer. Cater heavier to independent agents or lose market share. Since 2007 the big shift drifted in. Not only were there sideline marketing efforts not creating new marketing trends, but career insurance companies saw less sales from their own agents. Life insurance sales by captive, exclusive, and multi-line agents combined dropped from 48% in 1999 to 35%. Greatly gaining were the higher skilled and higher paid independent agents, now writing near 58%. Stockbrokers and banks maintain an 8% share, further eroding career agent sales.

Without the direct sales efforts of insurance selling agents, look at this fact. Home offices write less than 30% of life, health, retirement, group, and medical policies. This is why a two step ladder emerged. First the captive career life insurance providers started offering similar products to outside independent brokers at higher commissions. This was quickly trumped by independent insurance companies specializing in smaller product niches. Why not pay everyone the same? Let the career agency start training them, and then take over and show the producer how to really sell and at respectable income levels?

TONS OF INSURANCE BUYERS

If life and health insurance companies could exchange the word “greed” for “need” they would be in a better position. It is a well known fact that 2/3 of Americans do not carry enough life insurance. However most companies twist their agents’ necks to focus on the wealthy. Liberty National, a company, you might not know of, is worthy of recognition. Of well over 600 life and health insurance companies, they have written by a wide margin, the largest client base of whole life insurance policyholders.

The top eight term policy writers are NOT known big life insurers Nor do they constantly bombard television commercials with a term life insurance quote opportunity. They know that excessive insurance television advertising to get a quote, or trying to bypass their own agents is unethical. One super-large insurer that got caught trying to entice customers with the lowest rates and enabling phone purchases is in a financial mess. This well-known company is costing the American government and taxpayers, billions of dollars in bailout provisions.

ANALYZE

Most states have around 300 active annuity, health, and life insurers. Here’s a few thoughts to toss around. Are you satisfied with your currently earnings? Do agents with the major branded companies really sell more insurance? Could you survive a career switch? Does a term insurance sale provide you with 50%, 70%, or 90+% commissions? How long do you want to wait before becoming a career professional. Could you run a business, yours, or is the guidance you are receiving far too valuable?

It is what your insurance provider can do for you? What you can do for your insurance company? Alternatively, it should be what you can do for yourself and your clients.

Things To Consider When Choosing An International Health Insurance Plan – Part 1

Most will agree that Insurance Contract can be a pretty complex document to comprehend and when it comes to Health Insurance things can get even more confusing with terms like Deductible, Coinsurance, Pre-existing Conditions Limitations, Exclusions, Waiting Period, Limits Per Claim, Limits Per Year, Limits Per Lifetime, etc.

The following are, in our opinion, some of the key features to be considered when choosing an International Health Insurance plan.

Insurer’s Financial Strength

There is no point having an insurance policy that covers “everything under the sun” but when it comes to paying claim the insurer can not meet her obligation. So, the first thing you should look for when choosing an International Health Insurance plan is the financial strength of the insurance company underwriting the risk.

You want to look for an insurer that has a credit rating of at least A or A- assigned by AM Best Rating Agency which means the insurer has “Excellent” financial strength.

Administrator’s Track Record

Unlike traditional health insurance plan that provides you coverage within your home country, International Health Insurance needs to cater you with worldwide protection wherever you are and whenever you need it. Hence, you want to make sure your plan administrator has the experience in covering worldwide travelers and able to provide worldwide assistance on 24/7/365 (24 hours a day, 7 days a week and 365 days a year) basis.

Here are some of the indicators for you to gauge your Plan Administrator:

  • The number of Members covered,
  • The number of Countries covered,
  • Foreign language capability of their Customer Service Team,
  • Availability of medical professional and
  • Last but not least, testimonials from satisfied customers.


Worldwide Assistance

When you are in a foreign land, you are facing the risks of:

  • Not knowing where to go or who to turn to when you have a medical situation in a foreign country;
  • Exposing yourself or your loved ones to sub-standard medical care that may further exacerbate your pain and suffering and putting your life at risk;
  • Emergency medical situations that may require you to be evacuated to save your life;
  • Emergency situations that develop due to act of war, terrorism or natural disaster

So, being able to speak to someone that speaks your language when you are in any of the above situations can be reassuring and in the case of emergency it can mean live or dead.

Ideally, your plan administrator should also provide a worldwide toll-free number for you to call for assistance from anywhere around the world.

Geographical Coverage

Due to the high medical costs in the North America, typical International Health Insurance will have 2 separate plans; one covers USA & Canada and the other excludes. Obviously, plans that cover USA & Canada cost more than those that don’t. So, choose a plan that has the geographical coverage that matches your overseas itinerary.

It is important to point out that if you are a US citizen living abroad, traditional sources of US private health insurance will not meet your needs. Geographical exclusions and provider limitations common to these policies will restrict or even eliminate the coverage available to you while you are outside the US.

If you are a non-US citizen, you may need an international medical insurance policy to supplement the coverage available to you through a plan sponsored by your government or to provide coverage while you are outside your home country. Or you may wish to have access to health care in other countries, including the US, in the event you become seriously ill.

In essence, if your lifestyle knows no geographic limits, you need an international health insurance that knows no boundaries.

Think of Life Insurance This International Day of Families

The family is one of our most important social structures, a fact recognised by the United Nations General Assembly who proclaimed May 15th International Day of Families in 1993. One of the key roles of the family is to nurture and support its children until they are old enough to look after themselves. Sadly many parents do not realise that they cannot ensure that their children are always provided for, no matter what happens, without the protection of a life insurance company

Most of us look back on our childhood with a fond smile. Memories of Christmas day spent with friends and families, wrapping up warmly to go to school on winter mornings, weekend treats and favourites meals. For children the family is our shelter, our support and our protection. It is the safety net we need as we develop and grow and learn the skills we need to grow into mature adults.

As a parent most of your time is dedicated to ensuring that your children have the safety net they need. The good schools and teachers, the healthy food, the exercise, the safe house, the warm jersey in winter and the holiday they deserve after a long year at school. You spend time teaching them right from wrong, the importance of self-discipline, kindness and honesty. Your children are your life.

But what of your death? Who would provide that safety net for your children if you passed away before your time, before you were able to teach them all they needed to know to grow into the adults you want them to be? Would your partner, on his or her salary alone, be able to provide for your family?

If you are asking these questions about your family’s future then you need the protection of a life insurance company. In the event of your death your family will be able to claim against your life insurance policy. Should their claim be successful, they will receive your benefit amount as a lump sum pay out, funds that can be used by your spouse or partner to replace the income you earned and look after your family, as you would have wanted them to be cared for.

This Family Day make sure that you spend some time discussing your family’s financial future with your partner or spouse. Make sure that the ones that you love are protected against the very worst that can happen: the death of a family breadwinner.

Return of Premium Life Insurance – Worth the Extra Cost?

Something I frequently discover working in the insurance world is other insurance brokers trying to convince all of their term life insurance clients to add on the return of premium rider. However, while the prospect of getting every penny of your cash back seems wonderful, is adding the return of premium rider suitable for you? This rider, or additional policy benefit, raises the policy holder’s price, although at the completion of the term, if the insured has not died, the policy owner receives back every dime he has paid in premiums. This extra benefit can elevate the premium anywhere from 30% to 200% of the level term with no rider added. There are two schools of thought here: Some figure, “Why should I mind paying double the premium, since it will all end up in my pocket one day?” Other folks, however, want to pencil out the details and tally whether or not adding the extra benefit is a wise financial decision for them. The answer, of course, is that it depends on some variables, which we’ll discuss.

But first, let’s address life insurance with the ROP benefit acting like an investment. Specifically, it’s not, to be exact, but here’s how some investment-savvy folks see it. To appraise what sort of dollar benefit, or return on investment, you’ll derive from return of premium, begin by taking note of what the cost of the rider is. Now, if I were to invest that amount in a traditional investment, how much would I have to gain to end up being equivalent to the total premium I’ll have returned to me at the termination of my policy?

For example, if your return of premium policy costs $500 more per year than your regular term policy, and 20 years down the line, your return of premium policy will pay you back $25,000, then you can do some quick math on a financial calculator and find that if you were to take that $500 and invest it elsewhere, you’d have to earn about 9% in that investment for it to grow to $25,000. Well that’s a slam dunk in my book. I’ll settle for 8 or 9 percent any day of the week, especially knowing it’s guaranteed money.

It won’t be so clear-cut for everyone, though. Health and age are the primary factors that will affect how attractive your internal rate of return is, with the length of term and amount of face value being factors as well. If you’re between the age of eighteen and thirty-five, in super condition, you’ll most likely get an internal rate of return approaching double-digits. You might only get a 5-7% internal rate of return, however, if you’re in your 40’s or 50’s. Again, health plays a factor too. Next, you’ll want to go with a twenty or thirty year term, as those have the best return on investment.

One excellent feature of Return of Premium Life Insurance is that currently, the taxes you’ll pay on your return of premium are 0! Uncle Sam can’t tax it because you don’t get back a dime more than you put in, meaning you didn’t actually “earn” any interest. So even if your internal rate of return is just 6%, that’s still a terrific net rate.

One more thing before we wrap this up: Don’t buy ROP unless you’re committed for the long haul. Let your policy lapse half way through the term, and you might get back 20% of your premiums in surrender value. Hold it until the end of the term, and get back 100%. Be smart and plan to hold on to this policy. Last, even if you’re not the perfect candidate to purchase term life insurance with return of premium, I’m not condemning its purchase. No matter how expensive it is, it actually costs nothing more than the time value of money, since you it’s all reimbursed, and that’s one insurance payment we can all feel comfortable paying.