Hybrid policies redfine life insurnce. Image: alancleaver_2000//Flickr/CC BY-SA

The nature of long-term care and life insurance policies has changed rapidly in these uncertain financial times.  Many consumers are reluctant to put up large amounts of money for future benefits, especially when those  benefits may never become necessary.  The insurance industry has countered this trend by offering combination products that blend long-term-care with traditional life insurance.

Long-term care option

Generally blended life insurance policies utilize universal life, in which a portion of the death benefit may be used early to help pay for long-term care should it become necessary.  These hybrid policies have been available for a while but have recently been gaining popularity.  A hybrid product, combining two products into one, sounds attractive to many consumers. If the long-term care never becomes necessary, the policy holder may still benefit from the life insurance.

Traditional policies in decline

Sales of the hybrid policies more than doubled in 2010, according to Gebworth Financial Inc.  By contrast, the sales of traditional long-term-care insurance has plummeted by nearly 25 percent over the last five years.

“Most people who buy hybrid insurance are not buying it because they want life insurance,” said John Ryan, a Colorado-based broker.  “They’re buying it because they need long-term-care insurance, and the sales pitch that you can get your money back no matter what is pretty compelling,”

Retired class growing rapidly

LeadingAge, a Washington-based lobbying group for retirement homes, claims that almost 69 percent of Americans turning 65 today will need long-term care at some point and that their numbers will likely double by 2040.

How hybrid policies work

There are many versions of hybrid insurance policies available, and the details vary greatly.  Generally, however, hybrid life insurance policies offer the consumer a cash-value life insurance policy and the option to use a portion of that policy for long-term care benefits. If the long-term care benefits are used, however, the value of the death benefits will be reduced.

Disadvantages

While a two-for-one product sounds attractive, there are many variables to consider.  Generally there is less wiggle room with a combined product. Hybrid products often don’t cover home care or adjustments for inflation. Often they are too specialized in what types of long-term care they will or will not cover.  It is impossible to predict future care needs, and often that is exactly what the insurance companies expect you to do.  While purchasing a hybrid product is cheaper than purchasing two different policies, it is also typically more expensive than buying a dedicated long-term care policy.

Be cautious and informed

As with any large investment, the consumer needs to be cautious and well-informed when shopping for these products.  Advice from an impartial financial adviser is always a good idea.

Sources

Daily Finance

ElderLawAnswers

Bloomberg

Ensure her education today with free term life insurance. (Photo Credit: CC BY/Vicci/Moon, Stars and Paper)

Life insurance can provide loved ones with financial security in the event of the policyholder’s death. For most people, term life insurance (aka term assurance) is among the most affordable packages, as low as a few hundred dollars per year for $250,000 worth of coverage. For customers of MassMutual Financial Group of Massachusetts, however, the price is even better. According to Bankrate.com, MassMutual is currently offering free term life insurance.

Get free term life insurance while you’re healthy

Life insurance experts advise potential customers that if they’re interested in a policy, the time to buy is when you’re young and healthy, as rates are significantly lower. If a person has dependents, life insurance is almost always a good idea.

In general, term life insurance provides coverage at a fixed rate for a limited period of time – the term period. At the end of the term, coverage expires unless additional coverage is obtained. If the insured dies mid-term, death benefits are paid to the beneficiary.

Take the MassMutual LifeBridge to free term life insurance

MassMutual Financial Group is willing to set aside $50,000 in free term life insurance that can be applied toward the education of the policyholder’s children in the event of the policyholder’s untimely death. This may seem too good to be true, but Bankrate.com says MassMutual is the real deal. Provided a person meets the qualifications for the free term life insurance policy through MassMutual’s LifeBridge program, the money can be there for the future.

The $50,000 is placed in a 10-year trust. If the policyholder dies during the life insurance term, benefits are paid directly toward children’s tuition, fees, books and on-campus room and board, whether the children are in pre-school, private school, trade school or college. After the policyholder’s death, the children have either 10 years or until age 35 to use the trust money, whichever is later.

Free term life insurance requirements

Those interested in MassMutual’s LifeBridge life insurance program must meet the following qualifications:

• Be at least 19 but not older than 42
• Be the parent or legal guardian of one or more dependent children younger than 18
• Be a permanent legal resident of the U.S.
• Be employed full or part time and have a family income between $10,000 and $40,000
• Be the only parent or guardian in your household to apply
• Be in good health in the view of MassMutual underwriters
• Have not been diagnosed with heart disease, cancer, HIV or Type 1 diabetes
• Have not abused drugs or alcohol at any time within the past 10 years
• Are not currently on probation

Blood and urine tests are required before free term life insurance approval. Suicide within two years of the policy’s effective date voids the policy. Additional information is available at MassMutual Financial Group’s website.

Source

Bankrate.com

MassMutual Financial Group

MassMutual LifeBridge brochure

MassMutual LifeBridge FAQ

Wikipedia

MassMutual LifeBridge program testimonial

Will that umbrella still be there if he has a heart attack? (Photo Credit: CC BY-ND/Affordable Life Insurance Policy)

Which health conditions are most likely to send your life insurance premiums skyrocketing? Bankrate.com asked New York Life’s chief underwriter Stephen Bloom and chief medical officer Dr. Jacki Goldstein for some of the top health hazards as they would apply to life insurance for a 40-year-old man. Here is their tale of the unhealthy red tape.

High blood pressure

High blood pressure can lead to a host of organ diseases, said Goldstein. Coronary artery disease, stroke and kidney damage are just a few. While life insurance industry underwriters show the most favor to those who control their blood pressure, people with high blood pressure may still qualify for a preferred policy, as long as they’re taking steps to manage it.

“Different carriers have different categories of preferred, but yes, high blood pressure that is well-managed, most carriers would have that qualified for preferred,” said Goldstein.

Type 2 diabetes

Adult onset diabetes (Type 2) takes a toll on the body’s vascular system, with coronary artery disease, renal failure and blindness being some of the potential risks. If a Type 2 diabetes sufferer is younger, the potential for higher life insurance premiums increases because the condition generally does not improve with time.

“If I get diabetes at age 70, I might already have coronary artery disease or a stroke anyway, so the impact of the diabetes might not affect my life expectancy in the way it might a 40-year-old. A 40-year-old is unlikely to qualify for preferred in my experience,” Goldstein told Bankrate.

Heart disease

A massive heart attack relates to a host of heart conditions that can be difficult to document, which makes a life insurance underwriter’s job more difficult. If the situation is indeed severe, the person may not be insurable, says Bloom.

“We do consider family history in our underwriting assessments,” Bloom said. “Generally, this is associated with immediate family members — father, mother, sister, brother — who may have developed heart disease or had a stroke.

Asthma

The chronic respiratory condition asthma can, while rare, lead to death if not carefully controlled. If it is carefully controlled, a preferred life insurance rate class is not out of the question.

“For the most part, asthma will be extremely favorably underwritten,” said Goldstein.

Cancer

Depending upon the type and severity of the cancer involved, life insurance premiums can be affected to a negligible degree or quite severely. According to Bloom, if New York Life were to underwrite a policy for a cancer patient, the company would want to monitor the patient for six months to a year before making a policy decision.

“Cancer conditions may require a longer period of time depending on the location of the cancer, the staging and type of treatment involved,” he said.

More of the top health risks for life insurance are cataloged at Bankrate.com.

Source

Bankrate.com

Billy Mays on health insurance

Many thrifty people are searching for investment options for cash now that they’ve made the maximum allowed retirement-fund contributions. Financial experts have been saying it for years — “invest your money for retirement” — and a new survey shows that a growing number of people are listening. These people are now in the enviable position of having made the maximum allowable contributions to their retirement funds and not knowing what to do with their additional savings.

An example of good saving

Scott and Amber Rowson of Columbia, Missouri, have contributed the maximums allowed to their tax-deferred retirement accounts. They budgeted strictly enough to contribute the maximum from Scott’s state-job salary and Amber’s self-employment SEP IRA. Their two children’s 529 college education accounts are fully funded, too. Amber said, “Now that our children’s savings are taken care of and our retirement funds are maxed, we want to know where our money should go . . . over the years we’ve gotten good at squaring away a portion of our earnings and it seems illogical to just stop now.”

Ways to save after retirement accounts are funded

After retirement funds are maxed out, one option is to contribute directly to a Roth IRA. Of course the benefit is that withdrawals in retirement will be tax-free and it’s a great place to sock away more cash. There is a new change in the rules for a Roth IRA for 2010. This year everyone regardless of income can convert a traditional IRA to a Roth IRA. There is a cost, however, because taxpayers must pay ordinary income tax on the entire amount converted. Still, the strategy can pay off for taxpayers like the Rowsons. They can make the conversion and split the tax liability between 2011 and 2012.

Another option for savings

When it comes to managing cash now that retirement accounts are funded, people also can start investing in taxable accounts. Despite their taxable nature, there’s no penalty for making withdrawals from them. The benefit for the Rowsons is that Amber is self-employed and if her business suffers from market fluctuations, she can tap into any her savings whenever she needs to, without additional taxes or penalties.

Don’t forget about life insurance

Another option for the Rowsons, and anyone else wise and thrifty enough to max out their retirement contributions, is to look into alternative investments. The Rowsons’ retirement portfolios are packed with standard stock and bond options so any extra money can go into alternative savings like cash-value life insurance. This would provide another way to enjoy tax-deferred earnings as well as liquidity. Amber said, “I like this option because it gives me another safety net if my business slows down or if I decide that I want to do something different in a few years and get stuck in a learning curve.” For someone like Amber, who wants to move into real-estate investing, this could be the most viable option for the family’s future savings.

It’s an enviable thing to have maximized retirement savings

For anyone in the enviable position of having maximized retirement contributions, the question of what to do with cash now is an important one. Depending on the investor’s individual circumstances, some options may make more sense than others. Experts advise that the best thing for avid savers to do is simply to to continue saving, one or or another. There are always wise options when it comes to saving for the future.

If you need Cash Now, apply HERE!

Many people fail to get life insurance when it is too late. Unfortunately, we are still in tough economic times; the last thing on an average American’s mind is a life insurance policy. You could walk to Starbucks on your lunch break for a cup of coffee and a drunk driver could blindside you and kill you instantly. You are dead and your family has to pay the tab. Your family has to pay your funeral costs and other expenses you might have just because you did not have any type of life insurance. Your loved ones are left with hefty bills instead of financial support; you were not serious about your life and you left them with nothing but your memory. What if you were perfectly healthy and you are in your retirement age; how long are you going to wait? The longer you wait to get life insurance, the higher the premiums are going to be.

What types of life insurance is available to you currently?

If your employer provides life insurance, you are already one step ahead of the pack. Your employer’s life insurance will be offered to you for an extremely generous subsidized rate. However, you should also consider getting private life insurance as a back-up plan. Peculiar circumstances may occur and you might not be an employee at your current employer anymore. You always have to have a safety net and plan events ahead of time. An important factor about life insurance rates is to keep yourself as healthy as humanly possible. Staying healthy will ensure that your rates are low and you can afford them. Many insurance companies will not insure you if you have poor health or pre-existing conditions, such as cancer, high blood pressure, and other life-threatening ailments. The healthier you are, the easier the life insurance process will be for you.

Should you pay your life insurance monthly or annually?

If you are capable of paying your life insurance policy annually, take that option if it is offered to you. If you are paying your rates annually, you could save as much as 20% on your premiums. You should also consider getting a higher life insurance policy that an insurance company offers; you will most likely get the lowest value offered to you. By paying a couple extra dollars, the lump sum in the event of your untimely demise will be thousands of dollars higher and your family will be financially set for many years to come.

It is time to shop around for life insurance quotes.

When you want a brand spanking new Toyota Camry and you want the best deal possible, what do you usually do? You compare prices with each dealership to secure the best deal that is available. The same logic can be used to search for life insurance quotes. You should research at least five life insurance companies and get quotes from each one and evaluate them thoroughly. Do not only research their annual or monthly prices, but find out the terms of the circumstances of when the insurance policy will be paid out and the amount of the lump sum that is awarded to your loved ones when you pass on. You can easily search for insurance quotes online and compare various life insurance providers and their policies. There are websites that provide each life insurance companies quotes on an entire page; this will be a life saver when you are ready to research for your life insurance policy.

Are you comfortable enough to talk to a life insurance agent?

Once you have gathered enough details about the life insurance policy that best suits your needs, you should contact an insurance agent. Contacting and speaking to an agent will help you with the life insurance policy process much faster, and if you have other inquiries, they will provide you with all the essential information that you need. Always put your family first; you should never settle for the second or third best life insurance policy. Choose the policy that is right for you and your family. You are the best and your family deserves the best.

Hope they took out the life insurance instead of the accidental death insurance. Talk about debt relief… (Photo: flickr.com)

Debt relief is something many consumers are longing for in this difficult economy. The recession has brought many people’s finances into turmoil and they are left trying to make ends meet every month. Market research shows that some commonly purchased items are necessities, but research is showing that other items aren’t. Here are some items consumers can reasonably cut out of their budgets to save money without jeopardizing their future.

Oil Changes

There is the old saying, “Change your car’s oil every 3,000 miles.” Although this is a commonly accepted theory, there is no substantial evidence to prove it to be true for every car. The owner’s manual of every vehicle will detail the exact time when to change oil. Manufacturers state that oil changes every 5,000 to 7,000 miles is totally acceptable. Decreasing the two extra oil changes yearly can save anywhere from $50 to $90.

Extended Warranties

Many dealers push customers to buy extended warranties for their vehicles. This is an expense that easily can be cut out of a budget because it normally isn’t worth the cost. Car buyers can add an extended warranty to their vehicle when the existing warranty is just about to expire, saving a lot of money. The other good tip is when a consumer reaches the end of the standard warranty, they will have a good idea of how the car runs or if there are any potential problems. They will be better suited to understand type of coverage they need for the extended warranty.

Accidental Death Insurance

Another expense that can easily be stripped from a budget is accidental death insurance. Statistically, only five percent of deaths are classified as “accidental” and actually receive a payout. Consumers would be wiser to invest in a life insurance policy because these pay out regardless of cause.

Brand Name Medications vs. Generic

Purchasing brand-name prescriptions rather than generic can also be used to save extra money for debt relief. In general there is no difference between the quality and effectiveness of the two, yet the generic drugs cost considerably less. Dr. Theoman, a physician in Montgomery, Alabama agreed: “I always tell my patients to substitute… there are rare cases where options aren’t available or suggested, but for 90 percent of medications I give out, they can save a lot of money with generics.”

Buying Premium Gasoline

If the owner’s manual doesn’t specifically instruct owners to use premium gas, then there is no need to pay extra. Save the extra cash and use regular unleaded. In the end, using a higher quality gas may even hurt a car’s performance, because it’s harder to ignite and the higher-octane can make a car’s performance less smooth. Save the extra money and use it for savings or bills.

Ways to Save

These are just a few ways for consumers to save their money. As analyst Gary Brentman of The Economist stated, “There are many misconceptions out there that have been passed down over the years. Because of the difficult economy, many of them are quickly being debunked.” Consumers need to be wise and do research on small ways to save. Just because the media advocates a product or service, that doesn’t mean it is truly beneficial. Saving a few dollars here and there can do wonders for consumer debt relief.