How To Buy Life Insurance You’ll Want To Keep

Not everything in life works out, including, sometimes, life insurance policies. If you stop paying premiums, your life insurance policy lapses � meaning coverage ends. If you stop paying for a term life insurance policy and exceed the insurer’s grace period (possibly 30 days), your policy lapses. Make sure that’s a consequence you intend: You’re not insured after the grace period and can’t “reactivate” the same life insurance policy.

If you stop paying on a whole life insurance policy, you may have more leeway. If you have accumulated cash value within the policy, your insurer will likely draw down the cash value account to cover premiums.

According to the 2007 “U.S. Individual Life Insurance Persistency Update” by LIMRA International and the Society of Actuaries (SOA), the overall annual lapse rate is 3.5 percent for whole life insurance, 7 percent for term life insurance, 4.6 percent for universal life insurance (UL) and 5.7 percent for variable universal life insurance (VUL).

Some folks pay for decades and decades on their life insurance policies and then throw in the towel and lapse their policies. What happened?

There are countless reasons someone might decide to lapse a life insurance policy. Most have to do with no longer having the discretionary income to continue paying premiums. John Dressner, Senior Vice President of LIFE Foundation, a nonprofit consumer-education organization, says, “Lapses are usually not for lack of desire for coverage but because of financial conflicts.”

Life insurance experts have seen people lapse life insurance policies when a job loss, divorce, large medical expense or business loss means budgets must tighten. Or they buy a new television rather than pay their life insurance premiums. (True story.)
Other times, policyholders are replacing their current policy with a new one.

Sometimes the decision to lapse is more emotional: The benefits seem too far off in the future.
And sometimes policyholders lose contact with the agent who originally sold them the life insurance policy, so they feel nobody is available to address their questions about lapsing it.

Dressner points out that “someone bought it for a reason, because they wanted the protection.” If you’re thinking of lapsing a current life insurance policy, think carefully about whether you’d want coverage in the future, when buying a new policy may result in higher life insurance rate due to your age and possible health problems.

While there are no studies on the exact reasons people have lapsed their policies, we can learn from past life insurance buyers who jumped ship. Here are some tips for life insurance shopping based on lapses by other buyers.

Choose a guaranteed level premium for the entire period you need coverage.

If you’re looking at term life insurance, consider buying a policy with guaranteed level premiums for the entire period you want to be insured, rather than face an increase after your guaranteed-premium period ends. The LIMRA/SOA study shows that lapse rates spike after the guaranteed-level premium periods. Perhaps policyholders were satisfied paying the level premiums but weren’t willing to continue at a higher life insurance rate.

Consider this: Among buyers of 10-year level term, 40 percent dropped their policies when the guaranteed-premium period ended, and 30 percent of holders of 15-year level term stopped paying when the premiums went up.

Further, those who pay “substandard” rates (issued due to ill health) abandon their policies in larger numbers after initial rate-guarantee periods, according to LIMRA and SOA.

Buy enough life insurance coverage for your needs.
Are you buying a life insurance policy with a small face amount? Think carefully about whether that policy is sufficient coverage for you, because history shows that almost half of people with whole life insurance policies of $5,000 or under abandon them within the first year (over 45 percent do, according to the LIMRA/SOA study). People with larger whole life insurance policies are far more likely to hold on to them.

This trend extends to other policy types. For example, buyers of annual renewable term policies under $200,000 lapse them more in the first five years than buyers of larger policies. (After year five the gap closes.)

The difference in life insurance policy size is quite noticeable with UL, where about 33 percent of those with policies under $15,000 lapse their policies in each of the first three years, as opposed to about 5 to 10 percent of those with larger face amounts.
If you’re buying whole life insurance, commit long-term.

The highest lapse rates for whole life policies are in the first five years. After that, lapse rates settle down at between 3 to 5 percent for whole life policies, according to LIMRA and SOA. Don’t throw away your money by paying into a whole life policy for one to five years, only to abandon it.
Make sure you understand what you are buying.
This is true especially if you are looking at universal life and variable universal life, which can have many “moving parts” that affect your premiums due and death benefit.

Match your coverage to your life stage.
If you’re under age 30 and buying a life insurance policy, consider carefully whether you’re committed to paying that premium bill. Others like you, age 20 to 29, abandon their policies in higher numbers than older buyers, according to LIMRA and SOA.
Find the easiest way to pay.

Consider paying your premium bill through electronic funds transfer from your bank account. Policyholders who pay that way are more likely to keep their policies, perhaps because they never have to sit down and write a check.

Add a “disability waiver of premium” rider to your life insurance policy.

Life insurance experts see many policies lapse due to a disability that puts the policyholder out of work. A disability waiver of premium rider will cover your premium payments in this case.

Shop for a good life insurance rate from the start.
If you will be issued a policy with a smoking or “substandard” rate, make sure you can keep up with premium payments. People in those rate classes lapse their policies more often in the first five years. For example, about 18 percent of smokers with whole life policies lapse them in the first year as opposed to 11 percent of nonsmokers, according to LIMRA and SOA.

No matter what rate class you fall into, knowing that you secured a competitive life insurance price will make paying your premium bill easier.

Cheap Car Insurance Uk – Discovering The Most Appropriate Online Car Insurance Rates

You must also realize that there will be requirements you have got to persist with if you secure a policy.
Car insurance providers verify the amount you might pay for your rates through attempting to analyse the amount of a risk you might be. For example, males below the age of twenty five will usually pay much more to their coverage than females of any age or guys more than the age of 25. The main reason for this is because figures demonstrate that males in that age group get into more accidents and accidents cost insurance firms money. Regrettably, there is not a lot you could do to alter your age or gender although there are other solutions to obtain reduced policies.

If you’re able to make yourself look as less of a danger you may be eligible for reductions. There are lots of reductions available for any amount of different things. Students that maintain a very good grade point average, anybody that can maintain a good driving license, driving a vehicle utilising various safety features, taking an advanced driving course, any one of those things that make you entitled for a reduction on your insurance policy coverage. You may have the ability to come across alternative reductions your insurance provider offers by simply calling your insurer and posing some questions. A couple of minutes spent over the telephone may uncover a number of reductions that you never would’ve considered in case you had not taken any time to inquire.

The best way to get a lower rate is to simply perform some comparison shopping. Individuals do comparison shopping on a regular basis whether or not it is to save fifty pence in the grocery store or trying to decide on a large ticket item that may save them a lot more money. People equate prices on almost everything as they buy in a store although the majority do not take some time to go looking for the best policy rate on their vehicle insurance. The main reason may be simply because individuals don’t know where to look. The one tool you need to obtain the best price is your laptop as well as the Internet.

Now, you’ll be able to drive around your neighborhood area and try from one insurance company to another to locate low price car insurance. Unfortunately, you have to compile all the data from each, bring it home, and try to check each one so you’ll be able to obtain the very best policy. If you don’t want to deal with all these problems then you should look on the internet for your cheap car insurance. You’ll see that lots of the web sites these days provide you with a means to compare every one of the companies in one place. As a result once you input your coverage information, as much as eighty providers will show up with quotes.

Then again, before you leap in it’s important to compile all the best information that offers you a better possible opportunity to obtain savings. Consider it like the way you complete tax returns. You search for everything that will add money right? Well in this case you’re looking for places which can help you obtain cheap car insurance. Among the many ways to try and do this is through increasing the excess amount. If you are presently using a ?250 excess, raise it to ?500. This alone will be able to bring down your estimates or month to month costs if you make payments. However, in the meantime we recommend setting to one side some cash just in case an unfortunate situation occurs.

There are lots of other solutions to finding discounts, but you only have to read over the whole thing. If you’re in the military, you do not need to overlook that cheap car insurance reduction. What about the fact that you might have multiple policies? Are you married? Twenty-five years old or older?

In the end you simply need to stay one move ahead of your car insurance providers if you want really cheap car insurance. In the meantime, you should also follow the easiest course to finding the very best deal. We are pretty certain in the event you make use of a comparable quotes website, you won’t experience any difficulty getting cheap car insurance for you and your family.

The truth is everything is really in front of you. Attaining cheap car insurance is not about simply having very cheap rates. Instead you will have to find the best coverage and price at the exact same point in time. If you’ll be able to do this then you will be well on your way to receiving the very best auto insurance plan.