Group Life Insurance - It’s Real Value

One of the more ordinary benefits that companies provide staff is group term life insurance. But unlike other fringe benefits whose taxable worth is based on the cost to the company, group term life insurance is treated in a different way.

The universal rule for taxing fringe benefits is that all fringe benefits are taxable to the recipient based on the fair market cost, and the provider of the benefit is accountable for withholding federal income taxes, FICA taxes (social security and Medicare), and paying FUTA taxes. The taxes may be withheld from the recipient’s cash payment. The fair market cost of the fringe benefit may be condensed, however, by the following amounts:

1.    Any quantity that the law excludes from payment; and

2.    Any quantity that the recipient pays for the protection.

 

Even though the fair market worth of group term life insurance (also knows as GTL) is subject to federal income tax, it is not subject to federal income tax withholding. But its cost is subject to withholding for social security and Medicare taxes (commonly referred to as FICA taxes). The rate of GTL, however, is not subject to FUTA tax.

 

So how should companys compute the fair market worth (FMV) of an employee’s GTL? Rather than being based on the cost of the premiums for the GTL, the FMV is based on the IRS Uniform Premium Table I and the employee’s age as of December 31 of the year in which the benefit is given. (Table I is located on page 11 of IRS Publication 15-B and is reproduced to the left.) Using the table the company estimates the monthly FMV based on the face worth benefit of the plan.

Federal law does allow a fraction of the GTL’s fair market worth to be expelled from an employee’s income. The first $50,000 of GTL on the employee can be excluded from the employee’s chargeable payment. GTL on an employee’s dependents can be treated as a de minimums border benefit if the exposure on any dependent sheltered by the policy is $2,000 or less. If the dependent coverage on any dependent is greater than $2,000, then the FMV of the entire benefit must be included in the employee’s income based on the highest face worth.

Since the FMV of GTL is based on an individual’s age, the question arises concerning whose age to use for dependent coverage. If the company provides one-person policies on each of an employee’s dependents, then the spouse’s age or the dependent’s age as of December 31 can be used. If, however, all of an employee’s dependents are covered under a solitary policy that is part of the employee’s GTL, then the company must use the employee’s age as of December 31.

To demonstrate, presume an company has a policy of providing GTL coverage on the employee equal to twice the employee’s yearly salary, and the dependent coverage provides $5,000 in spousal coverage and $1,500 on each infant. If the employee were salaried $35,000 per year, then he would collect $70,000 in coverage. Since the first $50,000 in coverage on the employee can be disqualified, only $20,000 of coverage on the employee is taxable. On the other hand, since the spousal coverage is superior to $2,000, the whole $5,000 in coverage on the partner is also taxable. So the employee’s taxable coverage would be based on $25,000. Please note the fact that even if the coverage on offspring were greater than $2,000 as well, the worth of the dependent coverage would still be based on the worth of the highest coverage as long as all of the employee’s dependents are incorporated in a sole policy as part of the employee’s GTL rather than on individual policies.

Suppose an employee is able to purchase supplementary coverage through his company, and his company merely has the employee pay the additional premiums through a payroll withdrawal. The taxable worth of the assistance still has to be considered using the IRS table rather than what is salaried in premiums. No matter which that is salaried by the employee can be deducted from the FMV of the benefit.

The employee is always accountable for paying the FICA taxes on the worth of the GTL. In nearly all cases, the worth can be added to a salary before the end of the year and the FICA taxes withheld from the employee’s regular income. This must be done at least once for each year, but companies have the choice of totaling the worth of the GTL to the employee’s pay and maintenance the taxes more frequently. The worth is not subject to income tax withholding. If, however, the company is not capable to collect the FICA taxes before the last part of the year, or the employee is fired before the tax can be withheld, the employee is still accountable for paying the employee portion of the FICA tax. The company must pay the employee’s share of the FICA taxes, but the worth of the tax salaried must be added to the employee’s wages using the gross-up method. (Company describes the gross-up method in IRS Publication 15-A.”)

In addition to calculating the worth of the benefit, a company must be able to correctly report the worth of the benefit. The worth of the benefit must be included in Box 1 of the employee’s Form W-2 and in Box 12 with Code C. In addition, the worth must be included in Boxes 3 and 5 for social security and Medicare wages, and the taxes withheld should be reported in Boxes 4 and 6.

Although the FMV of GTL is not taxable for FUTA purposes, it must still be reported on Form 940 at the end of the year. The worth should be included on Line 1 of Part I of Form 940, and it should be reported as excludable wages on Line 2.

Pennsylvania is the only state that does not tax the worth of the GTL, so companies must also include the worth of GTL in the employee’s income for state purposes on the Form W-2.

So let’s consider a practical example based on the following assumptions:

·      Insurance worth is $100,000

·      Employee pays $5.25/month for excess insurance

·      Employee is 52 years old on August 1, 2003

·      Employee is hired on March 1, 2003 and coverage begins April 1

Calculate the Fair Market Worth of the employee’s coverage as follows:

·      Calculate the worth of excess insurance. ($100,000 - $50,000 = $50,000)

·      Divide the excess worth by $1,000. ($50,000 / $1,000 = 50)

·      Find employee’s age as of December 31 in Table I. ($0.23 per $1,000 per month)

·      Multiply the cost by the factor from the second step. ($0.23 x 50 = $11.50)

·      Subtract any premiums salaried by the employee. ($11.50 - $5.25 = $6.25)

·      To calculate the annual amount, multiply by the number of months covered. ($6.25 x 9 months = $56.25)

If we presume that the employee did not reach the social security limit for the year, calculate the FICA taxes as follows:

·      Social security tax. ($56.25 x 6.2% = $3.49)

·      Medicare tax. ($56.25 x 1.45%) = $0.82)

The fringe benefit should be reported on the employee’s Form W-2 as follows:

·      Add $56.25 to the totals in Boxes 1, 3 and 5.

·      Add $3.49 to the total in Box 4.

·      Add $0.82 to the total in Box 6.

·      Enter $56.25 in Box 12 with Code C.

Now let’s modify our scenario slightly. Suppose that the employee is covered from January to September and is terminated in September 2003. The company estimates the GTL only once per year and withholds the tax from the last paycheck each year, so the taxes have not been withheld from the terminated employee’s pay. Since the employee is still accountable for paying the FICA taxes, the company must gross up the worth of the benefit so the taxes are included in the employee’s income.

Calculate the gross-up amount and the taxes as follows:

·      Calculate the tax factor by subtracting the tax rates from 1. (1 - .062 - .0145 = .9235)

·      Divide the benefit by the tax factor. ($56.25 / .9235 = $60.91)

·      Calculate the social security tax. ($60.91 x 6.2% = $3.78)

·      Calculate the Medicare tax. ($60.91 x 1.45% = $0.88)

·      Now the benefit would be reported on the employee’s form W-2 as follows:

·      Add $60.91 to the totals in Boxes 1, 3 and 5.

·      Add $3.78 to the total in Box 4.

·      Add $0.88 to the total in Box 6.

·      Enter $56.25 in Box 12 with Code C. (Note that the gross-up is not included in this Box.)

In some cases an company may continue to provide GTL to former employees (including retirees). If that is the case, the former employee is still accountable  for paying the FICA taxes, but since the individual is no longer actively employed, the company cannot withhold the tax. However, the former employee must pay the tax on his annual Form 1040. Even though the individual is no longer an employee, he should still be provided with a Form W-2 reporting the benefit.

Suppose the former employee is 62 at the end of the year and is covered under a policy for $120,000 for the entire year. Calculate the benefit as follows:

·      Calculate the worth of excess insurance. ($120,000 - $50,000 = $70,000)

·      Divide the excess worth by $1,000. ($70,000 / $1,000 = 70)

·      Find former employee’s age as of December 31 in Table I. ($0.66 per $1,000)

·      Multiply the cost by the factor from the second step. ($0.66 x 70 = $46.20)

·      Multiply by the number of months covered. ($46.20 x 12 months = $554.40)

·      Social security tax. ($554.40 x 6.2% = $34.37)

·      Medicare tax. ($554.40 x 1.45% = $8.04)

So the former employee would receive a Form W-2 containing the following amounts:

·      Report $554.40 in Box 1, 3 and 5

·      Report $554.40 in Box 12 with Code C.

·      Report $34.37 in Box 12 with Code M. (Uncollected tax)

·      Report $8.04 in Box 12 with Code N. (Uncollected tax)

The above covers the basic situation for most companys who provide GTL to their employees, but there are some exceptions and restrictions that I have not discussed. Two primary exceptions have to be noted:

·      2% shareholders of an S corporation are not considered to be employees of the corporation. Therefore, the entire worth of the insurance coverage is taxable income. The $50,000 exclusion does not apply.

·      The $50,000 exclusion applies only if the insurance that is provided by the company fits the definition of group term life insurance. IRS Publication 15-B, Company’s Tax Guide to Fringe Benefits contains guidelines regarding what is and what is not GTL. If the insurance does not qualify as GTL, then the cost of the insurance (what the company pays in premiums) must be included in the employee’s taxable compensation.

So if companys follow the guidelines provided above, they should be able to provide employees with group term life insurance and be able to calculate and report the worth of the benefit properly.

Life Insurance For The Elderly

Purchasing life insurance for the elderly is a practice that can be weighed down with complexity. At approximately age 65, many employee-sponsored life assurance plans decrease the coverage they are willing to provide to their workers. The basic belief in this course is that life insurance is meant to look after your kids if you die without warning; once you reach a certain age, it is supposed that you will no longer have dependents. Due to today’s social arrangement, where grandparents often raise their grandchildren and the public having offspring much later in their lives, this assumption can be catastrophic to some families.

Term life insurance is one option that you can decide. In term life insurance, the policy is set for a restricted duration of years, usually among 1 and 30. Though normally term life assurance is reasonably priced, be prepared to see higher costs in the case of elder citizens, and with a shorter term, as well.

In considering term life insurance for seniors, one thing you should be alert of is whether or not the policy will allow for renewal after the life of the policy lapses, a new policy will need to be purchased. In looking up life insurance online that will suit your needs, keep in mind that an automatic renewal clause can make things much easier for you. Normally, in case of seniors, an automatic renewal clause comes with the need for a medical exam and a brief lifestyle survey.

Another item to consider when bearing in mind life insurance for the elderly is the cost or premiums. The two options to consider here, much like in buying a house, are fixed and adjustable. While a fixed premium is often a much more eye-catching option, many insurance policies that cover the elderly have costs that are adjusted every few years. It is imperative to keep this in mind and plan appropriately, as the amount that the premium changes can be very considerable.

Even though premiums are certainly a significant thing to consider, they are by no means the only things. One item that you can think about is the acquisition of an eternal insurance policy. Just like the name suggests, permanent life insurance policies are much more stable, and can build up private equity. In light of this, depending on your state of affairs, it might be best to think about a permanent policy, although you can definitely expect it to be more expensive than a simple term life insurance policy in the short term.

If you have the means, a whole life insurance policy, with its added benefit of savings, might be the best fit for your circumstances. There are several benefits to this type of plan, not in the least of which is that it has a wide accessibility for senior citizens.

The imperative thing to do in researching life insurance for the aged is to always look in advance. Think about how the choices you make today will affect you and your treasured ones in the future and plan appropriately!

Tips for Cheap Whole Life Insurance Quote

While availing a whole life insurance quote is a simple process in which just a basic details are solicited, most customers often miss out on the fine points of a life insurance plan and end up paying far more than they should. While an insurance coverage is an absolute must in today’s world, one should also keep budget considerations in mind before coming up with an appropriate plan for the financial security of his/her near and dear ones.

 

The best time to pick up a whole life insurance plan is in the mid 20’s as the premiums will be generally be much lower and you can also be certain that the insurance plan will build up cash value as you age. Some of the major aspects of a whole life insurance plan to be kept in mind are liability values offered, expenses and commissions, dividend value and the guaranteed cash value. Your yearly premiums will almost always depend on these factors along with general health and well-being. A good healthy body will always aid you in getting cheap insurance plans. Insurance plans take into account certain factors of your general well being such as your smoking and dietary habits and even a simple task such as quitting smoking can cut down your insurance premiums by a large amount.

 

While availing an insurance quote online, one should always keep past medical history records in hand as you would most likely be asked about your age, working conditions and your smoking and drinking habits. In general, life insurance premiums are costlier for those living in cities as compared to rural habitations. Additionally, your insurance premiums will also depend on certain other aspects such as the fringe benefits you desire, your past history in paying up to date and the loans taken on the insurance plan.

 

One of the best ways to avail a cheap whole life insurance plan is to hit up the Internet. There are many insurance agencies online that give you the luxury of comparing whole life insurance plans of almost all major insurance bigwigs.  This enables to you check on salient features of most plans so that you can choose a whole life insurance plan tailor made to your needs. Besides, most insurance companies offer a small discount to the tune of 5-10% on buying a plan online as it helps them cut down on agent fees.

 

Moreover, leading a healthy lifestyle and cutting down on smoking and obesity can help you cut down on your insurance costs by nearly 50%. That in addition with buying an insurance coverage early on in your life can help you get the very best out of your whole life insurance plan without comprising on the various securities and benefits offered by it.

Tips To Land a Good Yet Affordable Life Insurance Quote

Life insurance companies are growing in numbers in the United States and everywhere else, for that matter.  One can credit it to the flourishing life insurance industry in the country.  It can also be attributed to the rise of the Internet, as many individuals can get vital information on life insurance policies from websites of different life insurance companies. Any individual, for one, can get a life insurance quote online.  This accessibility has helped the life insurance business experience record breaking growth in the past years.

 

Another advantage of the Internet is that it allows accurate computation of life insurance quotes on the part of the life insurance companies.  Now life insurance companies no longer need to hire a lot of agents just to give quotes to potential life insurance policy holders. A person just has to go to a certain website and can get a life insurance quote in a few minutes. 

 

On the part of a person, it is also easier to get reasonable life insurance quotes.  With the Internet they can shop for websites and compare the life insurance quotes offered or provided to them. 

 

For those who want to get affordable life insurance quotes, it is recommended that they get at least four quotes provided by different life insurance firms.   The life insurance firms that they consult through the internet should also be reputable and reliable.  Having a financially stable firm can give added security to potential life insurance policy holders. They can also get quotes at discounted rates from particular firms.

 

Those wanting to get a cheap life insurance policy have to consider certain things in order to save a good amount.  Life insurance cost is dependent on various factors like the health, lifestyle, and age of the policy holder. 

 

There are also types of life insurance from which individuals can choose from. There’s term life insurance which is an economical solution, since it offers insurance without requiring any hard cash value.  ON the other hand whole life insurance offers security with hard cash value.  Then there’s universal life which mixes the insurance component of whole life insurance with the flexible premium amount. 

 

But whatever the type of life insurance one is interested in, it is recommended to determine too the financial strength of the life insurance firm offering life insurance quotes.

 

These are just some of the factors that one has to consider in getting an affordable life insurance quote.

How to Get the Best Life Insurance Policy for You

Life insurance can be a tricky subject to approach. Many people think it’s too morbid to talk about death. Losing someone can cause considerable pain and grief, and no one wants to talk about it while if it hasn’t happened yet. While this is true, it would not help at all to deny that death is a fact of life. It’s happening everyday, sometimes in record numbers. It makes no sense to deny that everyone will die at one point or another. It is better to be fully prepared for that time than procrastinating until it is too late. Here are some things to consider when getting a life insurance.

 

With or Without Spouse. The circumstances of a person who lives alone is of course very different from a person who has a spouse and/or children to support. For single people, you would only have to spend for funeral expenses or settlement of taxes, and not much more. However, funeral expenses nowadays can range from 7,000 dollars to 10,000 dollars because of the price of the casket. You can also choose to just purchase a burial policy if you don’t have to pay for other expenses. Now, for those with families, you have to take into consideration not only your funeral expenses, but also how much money your family would need to survive for a period of time while they are coping with their grief and loss. Pretty soon, they will learn to be self-sufficient if they were dependent on your income all this time, but during the transition period, it helps to make the loss easier for them.

 

Other Debts. You will also have to figure into your calculation any outstanding personal debts that you have incurred during your lifetime. Enough coverage to pay for personal debts is important, especially if you had someone sign with you to get a loan. It’s not fair to make him or her responsible for paying for your debts in the event of premature death.

 

Let us take the example of a hypothetical family, in which only one spouse is working and the other stays at home. This family has two children, both young. The family also has pending car payments, a small credit card debt and furniture for the home that are to be paid on an installment basis. The insurance for the breadwinner of this hypothetical family should provide enough coverage to support the whole family until the children are of legal age. This includes household expenses such as groceries, electricity and water bills, gasoline, clothing, and school expenses, to name a few. The coverage should also include plans for repaying the debts of the breadwinner.

 

If you still don’t have life insurance until now, think again. Death is almost always unexpected, and you would want to leave enough to see your family through the hardest times.

Knowing What is Right For You: Term and Life Insurance

Because of the wide range of insurance policies available today for choosing, you can be a bit overwhelmed by the choices you have. But with adequate knowledge with regards to the policies and a good life insurance agent, you will be able to discern what type of insurance policy will provide the best protection for you and your loved ones.

 

First, we’ll look at term life insurance. This type of insurance has a central characteristic of providing coverage only for a limited period of time as specified in the contract. For example, the death benefits can only be availed if you die during the period specified in the policy. Because of this, this type of insurance policy is usually more inexpensive than permanent life insurance. This is ideal for families who don’t have much money to spend for life insurance.

 

After the policy expires, many companies would give you the option of renewing it, but they might require you to pass a medical exam. Additionally, they may require an increased premium. Based on the reports of the Insurance Information Institute, insurers after 80 years of age are not likely to renew a policy.

 

Permanent life insurance, on the other hand, does not have a stipulated period of time that may expire. You would still get the death benefit even if you die the week after the policy is signed or 30 years later. Some people prefer permanent life insurance policies because they are increasingly tax-deferred over time, which can mean more money to be paid in death benefits. The cash you can get from the tax cut can be beneficial to your family as well.

 

However, permanent life insurance policies can be pricier than term policies. For families with limited income or for young adults, this type of insurance policy may not work to serve your best interests. Some companies may also offer the conversion of term life policies into permanent life policies. Ask you insurance agent if a company offers this so that you can get the benefits of permanent life insurance policies while initially paying lower premium for term life policies.

 

The general types of life insurance policies are listed in this article, but there are sub-categories that you should know as well. Speak to your insurance agent so that he or she can address your questions and concerns. It pays to be well-informed so that you can make the best decision as to what policy to get for you and your loved ones.

Getting the Best Life Insurance Quotes

Using a term life insurance policy can be pretty useful in your life when you need certain forms of protections the government cannot give you. Besides, using a term life insurance policy is pretty hard-up for money.

Although a term life insurance policy is much more affordable than regular life policies, you will need to save much more because you don’t really want to compromise the worth of the life policy coverage you are entitled to receive. This is the reason why you need to ask for term life insurance quotes.

Many people bring down lower their rates drastically with the hope of getting quotes from an established insurance quotes site. What these people don’t know is actually to get the best price possible! In actual fact, getting the best price to value the ratio only involves two simple steps. Getting the best quotes from these insurance quotes sites and then be sure about what you pick. Many people often misunderstand about their choices and would rather pick the best offer. My advice is for you to choose a company who has better reputation in the insurance perspective and you are sure that you can trust your life with that certain insurance company.

Getting the best term life insurance quotes may seem daunting to many people. But, the trick to getting some of the best term life insurance quotes is to visit more than three insurance quotes sites. If you have massive exposure to such quote sites, it will be easier for you to achieve better and more attractive offers that certain quote sites are not able to give you.

How do you ensure that you achieved the best value insurance quotes?

Firstly, I would recommend that you check an insurer’s rating before you decide you achieved the best value insurance quotes. Think about it, even if the offer is really low-priced, it is just foolish to invest if the quote does not have the backings by an established insurance company. Don’t be penny wise, pound foolish in the matters of life.

I think it is so important that I have to reiterate this. Please get quotes that by reputable insurance quote site which are affiliated to large insurance companies!

It’s ideal if you use independent rating agencies. Examples include Duff Phelps, Standard & Poor’s, AM Best and Moody’s. Besides, using independent rating agencies, you can use your state’s department to find out that your assurances are doubly confirmed.

There are many reliable sources of cheap term life insurance quotes. Traditionally, term life insurance quotes are advertised in several media sources such as television broadcast or radio broadcasts. Most people who are not tech-savvy will watch the commercial and simply pick up the phone hurriedly, call the toll free numbers which is on the commercial and make enquiries about the term life insurance quotes that being offered as shown on the commercial. Isn’t this a complicated process? Won’t it be easier for you to browse for insurance quotes online at your free leisure?

Shopping online is very convenient and easy manner to get these insurance quotes because online quote providers offer 24-hours support. So, this is an advantage to people who don’t have sufficient time to go to a life insurance agency. They can get quotes at any time of the day!

To obtain these insurance quotes, you need to visit an online insurance quote provider. They will usually have a quote system that requires you to fill in certain information. This required information needs you to fill in your age, date of birth, gender and your place of residence. Although it is not compulsory, it is better if you can provide your email address and telephone number for them to update you with the best insurance quotes.

After you have submitted all the necessary information, you will then be able to see the quotes. Not only that, you are also allowed to view all the details regarding each respective life insurance company. Please remember to choose a reputable insurance quote company. After all, decision making becomes easier since you are able to compare many different insurance quotes all at once. 

Affordable term life insurance quotes are not only reasonably priced. Affordable term life insurance quotes are not only affordable and practical; they become your best friends when you want to select the most appropriate term life insurance coverage that is really suited to your individualistic needs. Currently, with the ridiculously high expenses that complement life insurance coverage, it does make perfect economical sense to go for these insurance quotes to enjoy better savings!

To conclude, it is better to browse the web as you are able to make such important decisions slowly. Don’t forget that you might succumb to sales pressure when you are want to know more about insurance quotes when you call them!

Importance Of Life Insurance

Needless to say, life insurance is very important for people of all ages and everyone should consider getting one now. But why is it so important? Let’s take a look at a few reasons why you should start looking for one now.

It’s the best time for young adults to buy life insurance because some types of life insurance policies allow them to pay a fixed premium rate that would never increase. The premiums would probably not increase as long as you continue to renew the policy when it comes due. Generally, young adults are healthier and heath is a critical factor in the cost of premium.

Additionally, young adults could build a golden egg nest by the accumulation of the cash value of some life insurance policies. When you make a payment on the policy, also known as the “premium”, a portion of the money goes toward buying your insurance, while the other portion goes into an account that will continue to grow and earn on itself, as long as you continue to make the payments. What the life insurance companies actually does is that they would use the accumulated premium to invest in low risk financial instruments such as bonds and call/put option. Partial of the profits returned from the investments would go to your insurance account and the rest to the insurer. Some life insurance companies would even go the extra mile to guarantee that you will not lose your benefits even if the investments have gone wrong.

If you have a family, it’s also very important to have yourself covered so that you would not become a financial burden to your family members. If you happen to have outstanding loans on your car, house, furniture and more, your surviving spouse have to repay them all. Funeral costs tens of thousands dollars because of the rising costs in burial plot, headstone and funeral home. Of course, it’s cheaper to use cremation but your family would definitely spend the money on an expensive funeral because they think you deserve a grand burial which costs a lot.

Let me tell you a true life story and let you decide whether life insurance is important.

In July of 1988, my family took a short vacation. We went to visit my uncle who at that time was living in Texas. My mum is a strong believer in sufficient life insurance protection. My parents were obviously underinsured because my dad wanted a policy that has low premium and it’s inappropriate for our needs, should something happen to one or the other.

Now, my dad was a machinery engineer working up in Greenland, and he would be gone for around four months at a time. Therefore, my mum literally nagged my dad about getting a life insurance policy that was more suitable before we went on vacation, because almost as soon as we returned from this vacation, he would be returning to work.

I could remember vividly it like it was yesterday. My dad was an unbelievable procrastinator, and was quite happy to put it off for as long as he could. But my tenacious mother wouldn’t have it. She dragged him to the office of their insurance agent, and they got much better coverage.

It was around 4 weeks after we returned from our sweet vacation; my father went back to work. Three weeks after my father returned to work, we received a phone call at 3:20am (I wouldn’t forget this minute forever) on the morning of September 21st 1988. It was my father’s place of work and he had gone missing as if he varnished in thin air. It was below freezing temperatures in Greenland, and the his boss had noticed that my dad did not return from clearing a runway near a mountain area in a crane machine that he had been operating to clear snow.

Unfortunately, his colleagues found my dad’s body buried under a huge lump of snow caused by the deadly snow avalanches.

To be exact, it was around six weeks after my mum made him take out a more appropriate life insurance policy. If it weren’t for my mother’s “Get it right now” attitude, who knows what would have become of us? Because she strongly insisted on my father to get a more appropriate insurance policy, we were financially taken care of when he died. We didn’t sleep on the streets or go hungry for lack for money.

I’m thankful every day for my mum’s intuition. I just brought a new house, and needed more insurance coverage for the additional value of this new home. As my mum is living with my children and she insisted that I get better insurance coverage in case something should happen to me. At least my children won’t have a roof above their heads and have to stop schooling. So I called my insurance agent, and took good care of the insurance situation. I sleep much better now. And so does my mum.

You should see the importance of having your a life insurance policy now? If something unfortunate were to happen to you then you could leave your loved one financially devastated. Life insurance is not a thing for the rich. Even if you are struggling from paycheck to paycheck, you can still begin by buying a lower cost life insurance policy.

Life Insurance For Smokers

Usually insurance companies would decide how much to charge for a life insurance by calculating the amount of risk in insuring them. Don’t think that you are able to hide any of your medical problems from them because they will analyse your medical histories and collect information about your lifestyles, physical health and many other critical factors. Looking after your health and maintaining a good body condition are the best ways of reducing the cost of life insurance and the smoking habit is one of the single biggest lifestyle factors that drive the cost of insurance up.

Unfair as it may seems, an average smoker would have to pay at least 40-50% more for life insurance than their non-smoker counterpart regardless of whether you are chain or occasional smoker. Some insurance companies are more flexible than others and would charge for 20-30% more for your life insurance. Being a smoker adversely affects all forms of life and health based insurance, including critical illness cover and income protection.

Quit smoking can amount to big savings on your life insurance premiums. Let’s do some calculation here and find out how much you can save. For example, a 37 year old male smoker with a policy benefit of $100,000 might pay $20 per month for the cover, whereas a non-smoker might pay only $9. Over twenty years, the non-smoker pays $2,160 for their life cover, while the smoker pays $4800 - that’s an extra $2640 over twenty years. Can you imagine what you can do with $2640? You can probably use that money to sign up another insurance policy! Besides that, an average American spends an amazing amount of around $1,500 a year on cigarettes so quitting smoking for any reason adds up to sizable savings and much lower insurance premiums.

If you’re currently a smoker paying these sky rocketing prices for life insurance, you can still reduce your premiums to a more affordable rate. Most life insurance companies require that a smoker who has quit smoking not very long ago to remain as a non-smoker for at least one full year before requesting an evaluation of their premium to take their new non-smoking status into account. This is to prevent people from cheating the system and get advantage of the low premium.

Ex-smokers who want to switch to a non-smoking premium rate will have to go through the fuss of filling out a new application form, go through another medical exam, and even relate their recent medical history again as well. Sometimes, your insurer may request that you take a cocaine examination to prove that you are not smoking.

I’m strongly believed that honesty is the best policy. Many insurers have received a lot of applications from ex-smokers and found out that they cheat – they didn’t quit smoking. In the end, the insurers charge them even a higher premium rate to penalize them. So I suggest you to apply truthfully and your honesty will be appreciated by your insurers.

If you do not want to quit smoking because it’s your lifeblood and you would rather kill yourself than to quit smoking, don’t worry. There are some term life insurances that distinguish between the types of tobacco use as well as the frequency of usage. Try to do some research on the insurances companies that cater their policies to smokers and use the on-site calculators to find out the quotes. These life insurance premiums are based on whether you use cigarettes, cigars, smokeless tobacco, nicotine gum, nicotine patch or any form of tobacco. They would also distinguish between how frequent you used the tobacco products. You may be quoted a lower premium rate for smoking occasionally compared to someone who smokes 2-3 packs of cigarettes per day.

The best thing is to look around and research out insurance companies and their policies for smokers and tobacco users. Many insurance companies have most of their information and quotes in their website. These life insurance companies will give you an individualize quote almost instantly after you filled up your personal details in the web form that is available in their website and whatever information you fill in are anonymous with no obligation.

I would strongly recommend you to stop smoking and start exercising regularly. Besides the advantage of low premium, you can live a fit and healthy lifestyle which also means you can spend more years with your family. If you can live longer, you will be able to contribute more to the family and you might not need to get a life insurance policy that pays out high death benefits in the first place.

However, the choice is yours. You can choose to continue smoking and pay the high premium or you can choose to quit smoking and enjoy a low premium by your insurers. Whatever path you choose, buying life insurance could give you a peace of mind knowing that your loved ones are financially protected and free from financial burden if you pass away unexpectedly

Comparing Life Insurance Quotes Online

When people compare life insurance quotes, they usually prefer the traditional method of calling the particular life insurance company to enquire for a quote. What they forget, is that they can actually take advantage of the internet. The internet has a huge database of information regarding life insurance quotes request and the various comparisons of life insurance quotes. This makes it easier to compare life insurance quotes especially when you can find certain websites that tally all the available data of all the life insurance quotes already.

Search engines make your job even easier by locating all these websites for your perusal and it seems possible to navigate through hundreds or maybe thousands of insurance providers with just a few clicks. The internet technology is therefore, a powerful tool in assisting you to achieving the desired life insurance quotes.

Besides, many affiliated websites tend to negotiate for the best deals with these large insurance companies in order to entice the general population to buy from them.  Many of such websites need to get the essential particulars from a browser, carry out illustration about the quotes that are given by multiple insurance companies and give you the correct help in choosing the correct policy. It is of great importance that the websites who have a superficial relationship with such life insurance quotes to give an unbiased review and opinion about the various insurance quotes. The most important about these websites is that you have to make sure that they promise to protect the user’s privacy, which means, your privacy.

Most of these affiliated websites prefer to ask their users a series of questions and give information about the products which they feel has the best worth amongst the rest of the competitive products. Such information is only given after the user has chosen his ideal insurance quote.

When you are shopping online and comparing all available online life insurance quotes, it is quite vital that you do take special not that the quotes which are paid for life insurance are not tax deductible. Of course, there are rare exceptions. But, I would like you to know that the reason for this life insurances being not tax deductible because these premiums are considered personal expenses incurred by the browser. Dividends are considered to be an excess amount of premium paid by the policyholder. For this reason, these dividends are not included as extra revenue for tax purposes. But, the amount of interest earned based of the dividends is definitely legally taxable within the year that the interest was received.

It is highly recommended that these people who are looking for insurance quotes do comprehend the nature of such complex policies. Such features of these complex insurance polices include the ownerships rights, any possible conversion options that are available, the difficult reinstatement clauses and tricky. Such identifications of such complex features allow one person to know whether they are protected under what special circumstances. Another one point is to have the knowledge about the grace periods. Although it is not entirely necessary, if you do hire an insurance agent to give you a quote, they will assess each detail and aspect of your coverage and the possible limitations which you might be at a risk to.

I know this person who was very dedicated to his job and he had no time to visit the insurance company to obtain a quote in the day. By the time he had some spare time, it was in the evening. Therefore, he kept on putting on getting an insurance quote. I advised him to search online as there is versatility of these insurance companies providing 24-hours support. Fortunately, he took my advice because he is currently lying in a hospital due to a major collision between his vehicle and a cement truck.

Procrastination is bad when it comes to choosing insurance quotes. However, it is best that you be educated about the compound details, insurance terms and coverage first. It is advisable to carry out a background check on the various companies before you need to make any final decision.

Here are a couple of tips to help you before you go online to choose an insurance quote.

Identifying Your Coverage Needs

Firstly, you need to identify how much coverage you will need. Do you fall sick regularly? Do you have many ailments that need heavy medical attention? You have to consider your future medical expenses to be incurred over the next few years in order to have a correct substantial gauge of coverage.

Check The Coverage

Secondly, do make sure that you conduct a check on the coverage which is being offered by the insurance quote. If you have more coverage, you will have more premiums! However, this could help you save a humongous amount of money in the long-term. 

Next Page »