The checkbox on new hire paperwork about life insurance, may start to seem a little more important during the days of COVID-19. For many it was an obvious choice when the employer was giving something for “free.” Professionals have a safety net policy to help their family members for a short time. For consultants, self-employed and business owners, life insurance was a security blanket. A new stress has emerged as the media has suggested that the coronavirus cause of death would not be covered – this is not a true statement.
The most common causes of death – heart disease, cancer, and accidents, are still present and affecting all age groups. 74% of deaths in America stemmed from 10 causes, and the coronavirus may make it on the top-10 list. The CDC reports that about 647,000 Americans die from heart disease each year, while nearly 600,000 people die annually from cancer. Currently the increasing numbers of people affected by the virus are resulting in changes in all kinds of data. Insurance companies will be a valuable additional source of data as they collect this information. The Yale School of Public Health recorded an estimated 15,400 excess deaths in the United States from March through early April, twice as many as were publicly attributed to COVID-19. Life insurance companies are receiving higher numbers of applications as end-of-life conversations and preparedness are emerging as necessary, not taboo topics.
Reviewing your Life Insurance coverages
This is a good time to review the safety net or security blanket policies that you may have. You will come across many different types of life insurance policies when you start shopping––and not all of them are available from every company.
When you narrow down a policy, reviewing the type of insurance you have against your current lifestyle and needs may be advantageous. New applications are being accepted, and many companies have extended the time needed to complete the medical exam to 120 days, or 4 months. News9, an Oklahoma based news outlet, reported that individuals shopping for new policies may notice that e-signatures are now acceptable.
According to Glen Mulready, Oklahoma Insurance Commissioner, older individuals may have more trouble finding coverage.Insurance companies view older applicants as high risk and with the current economy, some have decided to limit exposures. Fortunately, there are a variety of life insurance companies, so there is a policy type for all. Finding an agent that is affiliated with multiple providers may be advantageous and save time when reviewing rates.
Accessing your Life Insurance
Upon your death, your next of kin will need to make a claim to access the life insurance policy or policies that have been created for you. These people may or may not be your beneficiary. There are three steps that need to take place before any money is released.
- Locating the policy. This involves finding the name of the company or companies that you purchased life insurance from. The NAIC, has an online life insurance policy locator service – https://eapps.naic.org/life-policy-locator/#/acknowledgment
- Connecting with the agent. The agent from the company will assist with the timeline process, provide the policy number, and necessary forms to be completed.
- Completing the Paperwork. Fill out the forms, order the death certificate and mail the forms to the company without delay. Often there is a choice to pick a lump sum or installment payouts.
Typically, the insurance money is released within a few weeks––but there are exceptions. According to Marketwatch, an insurer might deny a claim for a coronavirus death if the policyholder submitted an inaccurate or incomplete application. With this in mind, it may be worth spending a few minutes reviewing your paperwork for gaps.
As you work through the process of applying for your life insurance, reviewing your coverages or submitting a claim for a loved one, document all your findings and notes on InsureYouKnow.org – an online information storage site that allows you to access documents, and files remotely relating to your affairs. There are various levels of access to allow your family members, caregivers or business associates insight into the documents, as needed. There is even a reminder feature to help you update or revisit the policy from time to time.
Our days are full. Our lives are full. We continue in our daily routine. But then something happens – the car doesn’t start, there’s a storm which makes the fence fall, the washer stops working mid-cycle. After the initial panic and stress, we utilize our resources and find a way to prioritize that and get it fixed. Perhaps a neighbor or our partner lends a hand, or we contact a handyman or the warranty company. However the larger “somethings” take a while to fix – the car needing new parts, the fence damaging the water line, or the appliances that need replacing – which alters the way that our days and lives function. Multiple resources are required to help continue our daily routine. In some cases there is no way to fix the something and we need to stop our lives and re-evaluate what life will be like now. The resources cannot fix or support us – but Insurance can help.
There are so many types of insurance – car and home insurance are the most commonly marketed along with health. Every year – the National Association of Insurance and Financial Advisors dedicates September to Life Insurance Awareness Month. They launch a site and full spread of marketing materials on www.lifehappenspro.org to educate the public about the importance of planning ahead for the “life happens” moments. Life insurance has been misconstrued as a product that is only available for individuals with excess or resources but there are several options for all types of people.
When you search “insurance” in google – 4,960,000,000 results – pop up. How do we find the time, the right advisor, and the right type of insurance for your personalized needs?
Go to the well-known companies – the ones that show up in the top 10 search or the ones that are advertised in your life (television, billboards, newspapers, flyers in the mail). They often have resources that inform about product types before even interacting with the sales area.
Go to someone based on referral – the ones that your friends or neighbors recommend. Family members alwayss have an opinion on something and even a negative story can steer you in the right direction. If you don’t have a community of people in your life to ask, putting an “ask” out on social media will provide comments that could be useful.
Go to a website that provides prices – the ones that can give you information without interacting with people. It’s tough to know what is a good price without knowing a ballpark range. An example of this is insureyouknow.org which provides a quote directly to your inbox after answering a few simple questions.
Insureyouknow.org can support you with your life insurance needs by providing you quotes directly on their website. There are also other InsureYouKnow.org product offerings to help you reference those important records when the “life happens” moments occur. It’s a safe place to store all the information in case you need to access it remotely – or from the comforts of your own home. An annual plan is available to support your budget needs.
Investing in insurance is a major factor of consideration for most individuals and there multiple varieties of insurance policies to choose from. The variable life insurance is a permanent type of insurance that is supposed to take care of your loved ones in the event of your death, and it is quite different from other insurance products as part of your financial goals.
As opposed to the plan in other insurance products including term life vs whole life, the cash value in the case of variable life insurance is invested in several sub-accounts, which are viewed as mutual funds. The other difference in this case is that for variable life insurance, growth rate is not guaranteed and there is a possibility that your cash value may decrease.
This policy is divided into three parts just like any other insurance policy and these are;
- The death benefit – this is composed of the huge sum of money paid as benefits to your beneficiaries when you die and there are no taxes attached. As a type of permanent life insurance policy, variable life insurance also has two components, which are the cash value and the regular term life insurance policy.
- A beneficiary – this refers to those who will receive the death benefit and the scope goes beyond your spouse and children to cover a trust, organization, or any other beneficiary with whom you have legal relationship.
- Premiums – this refers to how you usually pay for this policy and you choose to pay monthly or annually.
You can get a quote for variable life insurance from insurance companies that offer this product but it is advisable to talk to an independent agent or broker who can advise you based on your financial goals. The reason is because they are in a better position to help you compare life insurance products from various insurance companies and as such, you are in a better position to decide, which policy you need to purchase. Ensure that the agent you approach for advice is licensed, and knows about family budget, emergency funds, retirement planning and so on.
Some of the benefits of investing in variable life insurance include the fact that the policy lasts your entire lifetime and so as you pay your premiums the policy remains active and when you die, benefits are paid to beneficiaries. Also, there are no taxes attached to benefits paid and the rate of growth in this case is much higher than what whole life insurance offers.
There are mixed feelings whether this is a good investment for your financial goals or emergency fund or not and even as you try to consider this, the fact is that there are better investment options, which are cheaper. Many may value this policy because of the fact that there are no taxes attached to benefits but there are alternatives with better solutions as well. The important thing in this case is to separate insurance from investment and savings.