Improve Your Life Insurance-Stop Paying Too Much For Too Little

Most people who own Life Insurance are overpaying for it. If your insurance policy is two or more years old, and/or you are paying more than $10,000 per year in insurance premiums, you are at risk of utilizing an "underperforming" product. Why? Improvements in insurance products and pricing, underwriting technology and mortality assumptions, and changes in the insurance marketplace, have created large discrepancies among the performance of various policies. Unfortunately, a lack of information, along with hurdles to "comparison shopping", often results in higher premium payments coupled with lower death benefits.
A simple solution to this problem is a thorough, independent, third-party audit of existing insurance. For reasons that will become clear, an individual insurance provider or financial advisor is quite simply technologically incapable of adequately performing an audit (as opposed to a "policy review"). You are little better off if you use a Trustee. According to a study in the May 2003 issue of Trusts & Estates, only 16.5% had a formal process for reviewing their trusts' life insurance policies. The GOOD news? According to one auditor, over 60% of the cases examined resulted in a significant -- greater than 30% -- improvement recommendation. In other words, you are likely to lower your premiums or increase your death benefits by more than 30%, by simply "scheduling a consult". The remainder of this article will be devoted to a description of the type of information you should demand of your auditor, along with a brief case study.
A true policy audit should consist of, at a minimum, the following six components:
An Underwriting Analysis. Mortality costs are, obviously or not, the single most expensive portion of a life insurance policy. Medical technology has driven rapid advancements in underwriting. Tests for liver function, kidney function, illegal drugs, nicotine, PSA, HDL/LDL, and glucose levels are readily available. Selective use of non-invasive procedures such as EBCT, when warranted, aids in further risk stratification. Use of updated mortality tables can also result in significant premium reduction. The expertise to skillfully negotiate mortality risk is a primary differentiating factor among auditors.
A Product and Carrier review. An auditor must have access to, and the technological expertise to review and compare, hundreds of insurance carriers and the literally thousands of products they make available.
A thorough Carrier Assessment. "Acceptable" S&P, Comdex, or Weiss financial ratings don't tell a complete story. Consolidations, Merger & Acquisitions activity, or Wall Street imperatives have changed the way many companies manage blocks of business.
An In-Force Ledger Examination. Verification of current policy projections, funding levels, and guarantees ensures policies will remain in force for as long as necessary.
A Case Design Review. Current financial planning objectives considering updated policyholder circumstances and current tax law changes should be reassessed. Often underemphasized and consequently overlooked, this is a vital aspect of a true audit. The most expensive life insurance policy is the one for which you are paying, but no longer need.
Fair Market Value Determination. A policy may have a fair market value that is significantly higher in the secondary market than its cash surrender value indicates. In coordination with step 5, this part of the process can yield hundreds of thousands of dollars to the participant. The following case study is representative of the type of improvements to be made:
Current Policy Facts -- Universal Life Policy issued in 1990, $1,000,000 level Death Benefit, with a policy and cash surrender value of $317,309 Current annual premium, $30,000 (Standard, non-smoker) Policy guaranteed to age 83, projected to remain in-force to age 92
Post-audit recommendations -- Policyholder can obtain Preferred non-smoker status with a different, comparable (A++) carrier, $1,000,000 level Death Benefit, Annual premium of $10,400 (65% reduction in premiums) Policy guaranteed for life. Alternatively, the policyholder was willing to maintain premium payments in return for enhanced death benefits. The same highly rated carrier offered$1,538,750 level Death Benefit (54% and $500,000+ improvement!) Annual premium, $30,000 (Preferred, non-smoker)Policy guaranteed for life.
Bottom Line: A thorough appraisal of in-force life insurance requires a simultaneous process to evaluate performance and negotiate risk. Not a static or academic comparison, but an actual underwriting process, resulting in a negotiated offer. A true second opinion. Is it worth going through the process? Judge the results for yourself.
Mark Boehm, MBA, CWPP™ is a Texas Medical Association Insurance Trust (TMAIT) Advisor. For more information on the topic discussed in this article please contact him at 972-395-8464, or alphawealth@verizon.net .

Choosing The Most Affordable Life Insurance

Are you trying to determine which are the most affordable life insurance for you and your family? Yes, it can be a daunting task, but it is a necessary one. In order for you to make a decision, let’s take a look at term life insurance as opposed to whole life insurance.
While term life insurance is a temporary insurance which covers a person against death for a limited time, whole life insurance is permanent and does not expire. Term insurance might be utilized until your children are grown, or college is paid for, or for your retirement. Payment is made for the policy period and at the end of the term the policy expires. Further, if no claims are made against the policy during the term, you do not receive any benefits after the policy expires. Whole life insurance provides the same type of coverage, except that it is also considered an investment. For example, a portion of the premium is paid toward life insurance while the rest is invested in an account.
When choosing the most affordable life insurance, a term life insurance quote online via research would be advantageous to you to obtain rates from the many different companies offering term life insurance. In this way, you can determine the cost effectiveness of this either type of policy.
There are a few considerations to be made in choosing the most affordable life insurance. For example, young families who have excessive financial obligations may lean toward term life insurance. Having lower premiums will allow you to buy enough coverage to protect against income loss. On the other hand, whole life insurance is purchased for investment purposes as well. Having a financial advisor who you trust can alleviate any stress associated with choosing the correct insurance. Selecting the appropriate term life insurance is based upon the ability to cover any loss which is non-replaceable; such as your income.
A term life insurance quote online is the best way for you to ascertain the type of rates available in line with the type of insurance you require. Surely, you may need affordable life insurance depending upon your circumstances. In addition, you will undoubtedly have many questions. In order to determine the amount of life insurance needed, you need to assess the living expenses of your dependents so that the insurance will cover any contingency. Once you have researched the multitude of companies and rates, select one based on trust, experience, and ensure you will be able to fully access their wide selection of products. Ultimately, life insurance is important and you should carefully and thoughtfully find a company who can assist you in creating a plan that is the best possible life insurance for your family and your own specific needs.
Craig Thornburrow is an acknowledged expert in his field. You can get more free advice on life insurance and affordable life insurance at http://www.bestdeallifeinsurance.com

How About Selling Annuities Using Life Insurance?

This is a natural because you can transfer (1035 exchange) from a life insurance policy to an annuity without tax issues. The original basis on the life insurance policy now becomes the basis of the annuity which means that there are situations where an annuity could grow without occurring tax liability. Here are some situation and general information about life insurance.
Types of Life Insurance
Term Life Insurance, insurance for a specific time period or term. 10 years as an example Whole Life, insurance for your whole life. Guaranteed premium, death benefit and cash value. Whole life is guaranteed
Universal Life, Limited guarantees and the premium presented to the prospect is usually set by the agent. Funds accumulate in contract based on insurance companies declared rate. Very few UL policies have guarantees other than the good name of the company. Most UL I have seen are under funded.
Variable Universal Life, same as universal life except the funds are invested in separate accounts (like a variable annuity). Once again limited guarantees.
Single premium products. It is possible to buy single premium whole life, universal life and variable universal life. The value to this concept is with the correct policy you can give your prospects a fully guaranteed contract that will never require funding in the future. There are some variations that will not fully guarantee future results so always do the correct due diligence.
Life Insurance Sales Opportunities
1. Exchange: Life insurance cash value will transfer to an annuity without any tax liability. 1035 exchange
2. Remix: Sometimes you can use the cash value in an old policy to purchase a new life insurance contract. The purpose would be to have a paid up policy (no more premiums), remove any loans (forgiven) or to increase the ultimate death benefit to the beneficiary.
3. Policy loans: If you are lucky to find a policy loan on a life insurance policy, it is free money. Here is how that works, you can tell the client that you will get the loan forgiven. Most larger life policies are there for a long gone reason and the need for life insurance at this stage is less. Have the insurance company readjust the cost basis and forgive the loan. This changes the amount of non-taxable dollars but if it is paid out as a death claim it is tax free. If the need for life insurance no longer exists, have the life insurance company forgive the loan and 1035 the new basis to the annuity company. You sell this concept on two levels, loans go away and you use the exclusion ratio for their illustrated payout when the need arises for income. Easy sale and the loan going away will make the client love you and hate their insurance agent.
4. Annuity Change: If you find an annuity whose current purpose is to transfer the proceeds to a beneficiary, consider this. The tax deferred portion of an annuity is taxable as ordinary income to the beneficiary. So determine the taxable portion of the annuity, cash it in (withhold the tax liability for client) send the funds to a paid up policy with the cash value still available. When these proceeds are paid to the beneficiary they will be paid tax free. Just compare the future value of the life insurance with the after tax benefit of the annuity.
Bill Broich is a 30 year annuity salesman who helps agents increase their annuity sales. Visit his website to learn more. Annuity.com.
Article Source: http://EzineArticles.com/?expert=Bill_Broich

Life Insurance Settlements - Sale of a Life Insurance Policy

Life Settlements! Sale of a life insurance policy!!
A Life Settlement is the sale of a life insurance policy to a third party in exchange for a cash settlement in excess of the policy’s cash surrender value—even if none exists! This is also called as Life Insurance settlement, Insurance settlement or Senior settlement.
This innovative wealth and estate planning tool removes the burden of expensive insurance premium payments in addition to providing the lump sum cash settlement. This allows policy holders to get cash out of their life insurance policy, in an amount in excess of the policy’s cash value (if any), while they are still alive. To get the highest life settlements is to improve the quality of life during your retirement years.
Life settlement: When an individual who does not have a terminal or chronic illness sells a policy for other reasons, including changed needs of dependents, wanting to reduce premiums, and cash for meeting expenses, that is known as a Life settlement.
Viatical settlement: When an individual with a terminal or chronic illness sells his or her life insurance policy that is known as a viatical settlement.
Hitherto, elderly seniors with life insurance policies they do not need or cannot afford to keep up have had little option. They will let the policies lapse or sell them back to their insurers. Now lots of them are glad to have an alternative buyer. Clients may now be able to sell their policy for far more than the cash surrender value the insurance carrier would offer.
The life insurance policy owner sells his or her contractual rights under the policy at its present market value in exchange for a lump sum cash payment, which payment exceeds the cash surrender value of the policy. The purchaser of the policy will then become the new owner and the new beneficiary of the policy and is then responsible for making all of the future premium payments. The new owner now collects the full amount of the death benefit when the insured dies.
Life Insurance settlement or Life settlement present a unique opportunity to the policy holder to extract the maximum possible value from an existing life insurance policy and utilise those funds for whatever financial needs may exist.
Clients will often ask if there are any restrictions on what the cash payment can be used for. The answer is that there are no restrictions whatsoever on what the cash payment can be used for. They can use the money to purchase new insurance, travel the world, start a business, buy a property or fulfill their dreams. The money is theirs to simply enjoy and use it for any reason they can think of. In fact, seniors can use the cash settlement for medical expenses, living expenses, or anything they desire—with no restrictions.
There are various reasons why individuals sell their life insurance policy.
Why sell a life insurance policy?
1. If you are chronically ill, selling your current life insurance policy provides needed funds to cover financial burdens caused by your illness. A viatical settlement gives you the ability to regain needed financial security.
2. If you are over the age of sixty-five, a life settlement maximizes your current assets by eliminating premiums and getting funds that can be used today.
3. Pay off debts
4. Make funds available for other investments
5. Turn a lapse insurance policy into cash
6. Pay your medical care bills
7. Finance your retirement
8. If you are a corporation, selling corporate owned life insurance lets you regain back premiums paid on no longer needed policies.
9. If you are a non-profit organization, selling a gifted life insurance policy provides funds that can be used now and also eliminates premiums.
10. If you managing an estate, selling your current life insurance policy will help manage changes in estate size, eliminate premiums, and liquidate policies that no longer are needed.
11. If You are over 21 with a life-threatening illness?
How much money will the clients get when they sell their life insurance policy?
The value of a life insurance policy is determined by a number of factors, including, but not limited to,
1. Face value of the policy
2. The age and medical condition of the insured
3. Estimated mortality of the insured
4. Loans against the policy
5. Rating of the insurance carrier
6. Cash value of the policy
7. Type of policy and prevailing interest rates
8. The net death benefit
9. Premium payments required to keep the policy in force
Typically, a life settlement is about three to five times the cash surrender value of the policy. What Life Insurance Policies Qualify?
To find out whether you qualify, here are some of the requirements.
(A) Must be at least 65 years of age
(B) The face value of the policy is at least $50,000
(C) The insured has experienced deterioration in health since the insurance policy was issued; life expectancy is under 15 years
(D) The insurance policy is in effect beyond the two year contestable period
But any policy owner, including individuals, corporations, charities or trusts, may sell any life insurance policy, including group and term policies.
What types of polices are purchased?
1. Government issued policies
2. Term Life
3. Universal Life
4. Survivorship policies
5. Many Group types of policies
6. Corporate Owned Life Insurance
7. Whole Life
8. Basically All Types of Life Insurance Policies
Experts at http://Financial-Ease.com assist in achieving the highest value for their client's life insurance policies. Their goal is to get you the highest price for your life insurance policy. Their mission is to serve clients with highest offers with honesty, integrity and confidentiality and get fast closings and payments
The life settlement value could be potentially much higher than the cash settlement of your life insurance policy. Do not continue to pay expensive premiums for coverage you no longer need, and do not surrender the policy or let it lapse. The Life insurance settlement solution is typically the Win-Win scenario that you have been looking for.
About the Author:
Paul Sherman is a Cash Flow Consultant. He offers free, professional and independent advice to Individuals, Business owners and Seniors. To secure a Life Insurance Settlement or Structured Settlement funding please visit http://www.Financial-ease.com

A Guide To Life Insurance Settlements

Individuals often allow payment towards policies to lapse and lose amounts due to them even after money has been paid to insurance companies over the years. One of the choices that a customer has, is to cash in the policy and get cash surrender value, that is the amount which has been previously been paid over and above the interest. Second choice may be to sell the policy to a bank or some other financial institution. These buyers provide cash settlements that exceed cash surrender value of policy. This cash payment is termed as a life settlement.
Generally amounts earned through life insurance settlement are much higher than the surrender value of the policy. More people are becoming aware about life insurance settlements. Brokers who bid and deal for various life insurance settlements are popularizing such a trend. Companies that are into buying life insurance settlements basically look for a policy that belongs to senior citizens above the age of 65. Such policies fetch a good value in the market, but this is valid only for individuals who may be keeping good health.
Treatment for illness could be expensive and a financial drain to a person. Viatical settlements provide financial support to families and provide comfort at an emotional level too in case of serious diseases. Such settlements allow individuals to use present day values of their policies and cash them to reduce financial pressure. These settlements are legally recognized and value obtained for such claims are equal to their face values. There are various limitations involved with Viaticals sales as method of settlement depends on the state involved. Therefore, anyone considering a Viatical settlement should consult legal professionals.
Also before finalizing a Viatical settlement, policyholders can reconfirm various deals offered by insurance companies to check who offers the best deal. Some policies offer cash value apart from death benefit and accelerated death benefits that can offer access to cash. If no feasible options are available, Viatical settlements may be an ideal option for terminally ill individuals and their families.
Life Insurance Settlements provides detailed information on Cash Life Insurance Settlements, Corporate Life Insurance Settlements, Life Insurance Settlement Loans, Life Insurance Settlement Options and more. Life Insurance Settlements is affiliated with Insurance Settlement Loans.

Life Insurance Settlement 101

The life insurance settlement industry, derived from ordinary life insurance policies, is relatively new. When a policy holder's life situation changed to such a degree that his policy was outdated, he could take the cash value offered by a third party, instead of the insurance provider that sold him the policy. The concept of life settlements began in Canada a few years back, and rapidly spread to the United States, and then on to most of the world. Now, most of the major insurance firms, and a few major financial investment agencies have begun programs geared toward life insurance settlements.
Life settlement is a secondary market in life insurance policies. In the case of insurance companies before the advent of life settlements, if a person was interested in cashing out his policy, he had no other options other than settling with the insurance company. There are many ways that a policy holder's life situation could change. Loans are repaid, or some of his assets that contribute to his high net worth are sold off. The change of life situation changes the requirement for the life insurance policy. In many cases, the policy holder is over insured. In comparison to mortgage refinancing, life settlement is like refinancing your life insurance policy with a third part financial institute. You don’t pay property insurance when your equity is 20% or more of house value. For life insurance, the policy holders have option to sell the unwanted or over-insured part to a third party company and invest the extra cash value of that policy to other investment opportunities more in line with his financial plan. It is now possible to basically sell the policy to the highest bidder, and take the cash settlement, called the life settlement, and reinvest it in a more appropriate policy.
Life insurance purchased on a term basis only cover a specific period of time, usually ranging from 5 to 25 years. If the insurer opts for a permanent life insurance, then the period of coverage lasts until the death of the individual at any age. If you have a life insurance, your family will have a protection to continue paying common expenses, long-term debt and eventual relocation if needed. You must be aware of the terms of the policy to make sure the amount to be paid will be enough to pay expenses and preceding costs.
Your life insurance can replace lost income and help you to pay off or eliminate your debts, if you take life insurance, and later sell the policy to a third-party buyer willing to pay the premium on the insurance. The drawback here is that such buyer will become the beneficiary of the life insurance settlement after you die.
Natalie Aranda writes on home and family. The life insurance settlement industry, derived from ordinary life insurance policies, is relatively new. When a policy holder's life situation changed to such a degree that his policy was outdated, he could take the cash value offered by a third party, instead of the insurance provider that sold him the policy. The concept of life settlements began in Canada a few years back, and rapidly spread to the United States, and then on to most of the world. Now, most of the major insurance firms, and a few major financial investment agencies have begun programs geared toward life insurance settlements.