GF¢ 031: Is Universal Life Insurance a Ripoff?


Sell them what you want, not what they need.

Unfortunately, this happens A LOT in our industry.

Shady financial advisors will sell mutual funds, annuities, REIT’s, cash value life insurance — basically anything that might make more sense for them (in the form of making a commission) instead of the client.

Universal life insurance pros and cons

This seems to be the case in almost every universal life insurance situation I’ve ever come across.

It’s often touted as a “great investment,” offering things like tax-free money just like a Roth IRA, guarantee of principal, on and on and on.

If you’ve been a reader of the blog, you’ll know I’m a firm believer that in the right situation, a financial product could work, but just like I see annuities being used inappropriately, the same applies to universal life insurance.
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Top 5 Non-Medical Factors That Affect Your Life Insurance Rates

The Super Man complex most healthy people have has a kryptonite when it comes to life insurance: the non-medical factors that affect your life insurance rates.

It’s a huge shock to many people who get a free life insurance quote who are in the best shape of their lives when they can’t qualify for the best life insurance rates because of non-medical factors. It usually goes something like this:

“I Crossfit 3 times/week and compete in Iron Man triathalons and you’re telling me that I can’t qualify for the best rates because I’m a rock climber?”

Yes. That’s what we’re saying.

In our 8 years of helping consumers find the lowest life insurance rates available, here are the top 5 “non-medical” factors that affect your life
insurance rates (in no particular order).

non-medical factors that affect your life insurance rates

1. Hazardous Occupations

Have you seen “Deadliest Catch” ? Those 700 lb steel traps on a boat being swung around by 25 foot waves isn’t really the ideal risk for life insurance companies. Expect to pay more… a lot more.

We’re also talking about occupations like oil rig workers, ironworkers (think high rise structural construction) and bomb diffusers. Yes, I’ve actually insured a police bomb diffuser. One of the sharpest clients I can remember – but he pays A LOT more for his life insurance than if he didn’t have this hazardous occupation.

Again, most of these people are in great shape because of the nature of their occupation – but their non-medical factors come into play when underwriting their applications. [Read more…]

What is an Umbrella Insurance Policy?

what is umbrella insuranceHave you ever wondered whether you had sufficient insurance coverage to cover the wide possibilities of loss?

An umbrella insurance policy acts to provide extra coverage on top of your existing policies.

An umbrella insurance policy acts sort of like a safety net that picks up loss not covered by existing insurance policies.

While in previous times, it was mostly the very rich who took out umbrella policies, these days many more people see the need for such protection.

One of the reasons that umbrella coverage is more important in modern times is the litigious nature of our society. In comparison to earlier days, people are much more likely to sue someone of average means for a wide variety of reasons.

For example, if someone should suffer an injury while walking up to your front door, you could be liable for damages if you have been negligent in some way.
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Risky Business: What You Need to Know About High Risk Life Insurance

Life Insurance Agent:  Do you participate in any high risk activities?

Person seeking life insurance:  I’m getting ready to base jump of a 10,000 foot mountain this weekend.  Does that count?

Life Insurance Agent:  <Silence>

high risk life insurance - base jumping
When you’re trying to get cheap life insurance, participating in “high risk” activities is not going to do any favors to your checking account.

High risk, as viewed by a life insurance company, doesn’t just look at base jumpers, sky divers, or deep water scuba divers.   Being high risk can also mean you have high blood pressure, diabetes, sleep apnea, and a host of other medical conditions.

Being a high risk candidate basically guarantees your premiums will be much higher, but when you have beneficiaries or a spouse that needs to be taken care of no matter what happens to you, buying a life insurance policy is critical.

If you are not an ideal candidate for life insurance, it may be difficult to get approved for a policy. In some cases, you can still get approved for high risk life insurance, depending on your situation.

Working in a risky profession or if your health isn’t that great, you fall into a category known as impaired risk. If you find yourself in a situation, there are steps that you can take to increase your chances of getting approved for a life insurance policy.

Here are a few factors to consider about high risk life insurance.

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How Much More is Life Insurance for Smokers?

life insurance for smokersWhen I tell people that I used to smoke, they are completely shocked. Being a health nut and Crossfitter, that’s the last thing that people would expect that I would do.

To my defense, it was during a stressful time in my life. While I was deployed to Iraq I smoked a cigarette at least every day. It even got to the point to where I was buying cartons of cigarettes.

My wife wasn’t keen on the idea, but I promised her when I returned I would quit for good. Since I got back home in 2006, I’ve smoked (I think) 3 cigarettes total.

How’s that for going cold turkey?

If you smoke, it’s going to hurt your life insurance rates. Since this habit carries so many health risks, smokers generally need to pay more for their coverage and also could have a more complicated application process.

If you handle your application properly though, you can minimize the extra costs you’ll need to pay. Here is a complete guide to life insurance for smokers to help you get prepared.
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How to Get Life Insurance Without a Physical

No Physical Life InsuranceTo take out a traditional life insurance policy, you need to undergo some sort of physical medical exam.

Depending on your age and the type of policy you want, you might need to meet with a nurse, have a full physical with a doctor, or go through several types of tests.

This process not only takes up your precious time, it also delays the approval of your insurance policy.

Fortunately, there is a way around this hassle. There are no physical life insurance policies that don’t require any sort of medical exam. These are great options if you are in a hurry to get insured. They also work well if your records show you are in good health, but are worried a medical exam might uncover some sort of problem.

We have put together a list of the best no physical life insurance companies on the market today. By using one of these options, you’ll be able to get the coverage you need without the stress of a medical exam.
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Life Insurance So Fast You’ll Freak!

instant life insurance quotesIf you’re familiar with the sandwich chain Jimmy John’s then you know how fast they deliver their subs.

Hence their classic tagline, “Subs, so fast you’ll freak!”.

I swear there have been times that I’ve had them delivered where not two minutes after placing my order they’re in my office waiting area ready to make the delivery. Amazing.

Wouldn’t it be sweet if you could get life insurance that fast?

Getting a rate quote for traditional life insurance can seemingly take forever. First, you need to meet with an agent and fill out paperwork or complete the application online.

Then you might need to meet with a nurse or doctor and go through a number of health exams.

Finally, the life insurance underwriters will need a few weeks to review all your information before they can give you a price.
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Should You Buy No Exam Life Insurance?

The last time I went to get blood work done, I nearly fainted.

No Exam Life Insurance

Those words came from a prospective client that was looking to buy life insurance from me.

Just hearing the word needle made her feel faint.

The thought of seeing blood would literally make her pass out.

This is just one example of an individual who should consider buying no exam life insurance.

The web is currently plastered with promises of getting cheap life insurance with no medical exam.

If you’ve wondered if it’s really possible to get cheap life insurance without having to go through a physical, let’s see if we can dispel some of the myths.

First, let’s look at the types of no medical exam life insurance: [Read more…]

Protect Your Business with Key Man Life Insurance

key man life insuranceA company may be run by a large group of people with the responsibilities spread out evenly between different departments.

Other companies rely heavily on one or two people.

If one of these highly important people were to pass away, these companies would have difficulties keeping the company in business.

Otherwise stated: They would be screwed!

You would think that most businesses are prepared if something happened to one of it’s key personnel.

A survey by AMA (America Management Association says otherwise finding the following:

Only 14% of those surveyed said that their companies were well-prepared for the loss of a key person.

It’s these type of businesses that would benefit from key man life insurance.
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7 Ways to Get Dirt Cheap Term Life Insurance

The biggest excuse that people have have for not buying life insurance is they say it costs too much.

Really?  Too much?

A recent survey found that those that had life insurance 2/3 of them paid less than $100/month for coverage.  Of those, almost half paid less than $50/month.

Did you catch that?  $50/month for cheap term life insurance.

Let’s get things straight: Life Insurance is NOT expensive.IMG - 7 Ways to get term life insurance dirt cheap

In fact, term life insurance is super cheap. Stop making excuses and buy some.

Here are seven tips in helping you get the cheapest term life rate possible.

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#LifeAWARE Recap from the Financial Blogger Conference

Life Insurance Movement #lifeawareLife Insurance Awareness month is still live and kicking!

Amazingly the Life Insurance Movement which took place on August 22nd is still making it’s presence.

The movements Twitter hashtag #LifeAWARE can still be found to this day.

Great stuff!

The Life Foundation and FINCON

The Life Foundation was a key partner in getting the awareness that I felt the Life Insurance Movement deserved.  Their passion of educating families on the importance of life insurance equals that of my own.

When they got wind that I was heading to the Financial Bloggers conference in Denver earlier this month, they were quick  on tasking me with the assignment of interviewing some of the top personal finance bloggers on why they took part in the movement and why life insurance is important to them.

See what they had to say….

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#LifeAWARE Recap: A Tragic Lesson Reminds Us The Importance of the Movement

There’s no doubt that the Life Insurance Movement was a huge success.

We had close to 160 blogs taking part and you can still see the #LifeAWARE hashtag still active on Twitter. Amazing stuff!

But as I stated before, the movement is for nothing if people don’t take action and get the life insurance they need.

Plain and simple.

Yes, I love dancing to Usher but my main goal is to make sure that your family gets right amount of life insurance.

Jason Larkins from the blog messaged me a few days after the movement to share a horrific story of someone close to him. A mom and her young baby were both lost due to complications in the pregnancy.

Having 3 sons, this story saddens me to no end. I couldn’t even fathom the thought of losing my wife and my child at the same time. How horrible.

To compound the problem, the 29 year-old soon to be mom of two did not have any life insurance. Now the husband is left emotionally and financially broken. Jason and others have come to his side to try and raise money to help out.

The sad lesson to be learned is that the financial strain could have been avoided. I don’t want to beat it into the ground, but life insurance is cheap and simple. Don’t let any more time get in the way of taking care of your family.

You can read more about the sad story here: Tragedy Strikes Close to Home: Why You Need to Have Life Insurance.

At the bottom of the post, you will see a PayPal button if you decide you want to help out the family.

Stop procrastinating. Go out and get life insurance.