Why You Should Not Borrow from Your Whole Life Insurance Policy

Whole life insurance offers a unique feature. It not only provides regular life insurance, but also builds cash value over the years. Many people choose whole life insurance thinking that they can easily borrow money from such a policy if the need for cash arises. And while this is one of the strongest selling points of a whole life, or permanent life insurance, you need to evaluate whether borrowing cash against your policy is truly in your interests. Before purchasing a whole life policy you may later regret, check out the reasons why you should not borrow against your whole insurance policy.

The disadvantages of borrowing against the cash value of your whole life insurance policy

• The process of getting a loan may not be as quick as you thought. Before investing in whole life, ask the company how long it will take for them to process a loan? Your life insurance company may be able to complete an authorization for a loan by telephone or over the Internet. You need to know how quickly a loan request can be expedited and whether there are any stipulations.
• Although the money accrued over years is indeed, your money, this is not like withdrawing money from your bank. Any money that you borrow must be paid back in time with interest. Interest is charged at the rate specified or described in the policy.
  
  
  However, there are a few advantages to borrowing against a whole life policy. Cash borrowed from a whole life insurance policy can be used for just about anything-going on a vacation, paying off your credit card bills, etc. Your life insurance company cannot decline your loan request because of a bad credit report.
• Whole life insurance agents may forget to mention that you can borrow money from your whole life insurance only if there are sufficient funds in the cash value to secure the loan. Most whole life insurance policies do not accrue cash value until several years (3 to 5 years) after a policy has been issued. You may have to wait a stipulated time period, sometimes up to three years, before a loan is available.
• Avoid borrowing an amount that is more than the amount of premiums you've paid. The surplus amount you borrow is taxable.
• Whole life insurance agents will also tell you that you do not need to return the loan. But if you do not return the money you borrow, the amount you borrowed with interest will be deducted from the death benefits. Your beneficiaries will not receive the amount you intended.

Why Whole Life Doesn't Make a Whole Lot of Sense

Whole life insurance is a more expensive option than term life insurance because part of the premium you pay goes towards investments and administrative fees. The life insurance company has control over the kind of investments it makes with your money. There is little scope for optimizing the performance of your investments. There are administrative fees, commission and other charges that will be deducted from your cash value. In fact, in the initial years, these fees can run high and eat into your policy. Your policy may accrue significant interest only after five years.

The returns that are projected by whole life agents are at the most, an educated guess. Many quote on the higher side to attract more buyers. In reality, the rate of return on a whole life insurance policy is very low compared to other investments. The savings are tax-deferred but there are other investment vehicles that offer this benefit which are likely to give you more returns on your investment. Equities and mutual funds are historically known to give better returns, even if you invest just the surplus between a term life and whole life insurance policy. The money you receive when such investments mature is yours to keep. In contrast to whole life insurance, you don't have to return the money with interest.

If you die before the age of 100, when a whole life policy matures, your beneficiaries will receive only the face value of the policy. The interest that has accumulated is kept by the company. The only way you can utilize your cash value is if you borrow against your policy. But then again, you must return the borrowed amount with interest, or it will be deducted from the face value of your policy when a claim is made.

Conclusion

For all others, term life insurance usually works out to be the more affordable option. For instance, a whole life insurance policy for $125,000 will cost you $100.00. But the same amount of coverage may cost you just $7.00 for a 10-year period in term life insurance. Online life insurance quote providers also offer great discounts on term life insurance quotes.

However, a whole life policy has several benefits. You may want to consider whole life insurance policies if you have a large estate that is taxable. A whole life policy could be used to offset your estate taxes. You could also use a whole life policy to leave an inheritance for your children or grandchildren.

About AccuQuote:

AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

Life Insurance Medical Exams

Buying life insurance is easy, especially with online life insurance quotes providers making the job more convenient, quicker, and a lot less expensive! The part that most people dread, however, is undergoing a medical exam.

A medical exam and the ensuing underwriting process will determine the rate of premium you pay for your policy. If you haven't undergone any kind of medical tests for years, then you may be in for a surprise. Many people discover for the first time that they are not in such a great shape as they thought. It is advisable to get your own health check up done, address the health issues and then apply for life insurance. Remember, underwriters look at the results of a medical exam very seriously but they may overlook certain health conditions if they see that you are faithful in taking care of your health and taking medication regularly for your condition.

Underwriters will use the results of a medical exam, lifestyle habits, family health history along with longevity charts to determine the risk of your death. Longevity charts are based on statistics of deaths, the cause of death, age, gender, etc. For example, longevity charts show that a 30-year old woman will live longer than a 30-year old man and therefore life insurance rates are higher for men, than women.

What to Expect in Your Medical Exam

The medical exam involves two parts. The first is a series of questions related to:

• Personal health
• Family health history
• Smoking and drinking habits, lifestyle choices, drug use, etc
• Your doctor's contact information

Underwriters may also factor in your credit card report and driving history amongst other personal information, depending on the underwriting process. What do these have to do with your health? According to statistics, how you handle your finances and how you drive, give underwriters an indication of how well you manage your health.

A life insurance company's underwriting criteria may differ from company to company. Some life insurance companies overlook slightly high cholesterol levels if you are otherwise, in good health. Other carriers may put everyone who has high cholesterol in one bracket and charge you higher premiums irrespective of whether your cholesterol levels are high or low. This is why it is important to shop around and do a comparative study of life insurance quotes in order to get the most competitive life insurance rates.

The second part of the medical exam is a medical form to be filled out by a doctor or a paramedical appointed by the insurance company. The doctor will

• Take your physical measurements (height and weight)
• Take your blood pressure and pulse
• Take a blood sample to check cholesterol, glucose, protein, HIV, traces of nicotine and alcohol
• Take a urine sample to check things such as protein, glucose, creatinine and drugs

If the underwriters feel that they need to conduct additional tests in order to accurately surmise the risk of insuring you, you may have to undergo more tests. The number of tests you need to undergo may also depend on how high an insurance coverage you require. The higher the coverage, the more scrutiny you will face.

How to achieve the best results from a medical exam

While you cannot improve your results, there are things you can do to achieve the best results to minimize mistakes.

• Eat healthy at least one week before the medical exam. Reduce your salt and sugar intake and avoid fatty foods.
• Don't drink any kind of alcoholic beverage 3 days before the exam.
• Don't drink any caffeinated beverages one day before the exam. In some people, caffeine elevates blood pressure.
• Get a good night's sleep the night prior to the exam.

What to do if you fail the medical exam

If you fail a medical exam, you should ask the life insurance company to give reasons. The results of the tests are usually sent straight to the underwriter, but you can retrieve a copy of the medical exam on written request. Some of the health issues that arise may be resolved by your doctor. For instance, if you have cardiovascular health problems, and you have adhered to the diet prescribed by your doctor, lost weight and are undergoing a regular exercise regime, a supporting statement from your doctor may help with some life insurance companies. If you find out that you have a serious disease you can look for carriers that specialize in high-risk health conditions or look at options for a guarantee issue life insurance policy.

The results of your medical exam remain in a centralized database called the Medical Information Bureau (MIB), which is a clearinghouse of medical information that insurers share. This means your medical dossier is accessible to all life insurance companies and can be retrieved by other life insurance companies.

Conclusion

To get the best life insurance rates, answer your initial life insurance application form as honestly as possible. Look for online questionnaire that require detailed information. The more detailed the information, the more accurate your initial estimated quote will be. Shop around for life insurance through reliable online life insurance quote providers, accredited by the Better Business Bureau (BBB).

Term life insurance with no medical exam

Life insurance is not something people like to think about. But for anyone with family, loved ones, dependents and any type of debts, a life insurance policy can make things a whole lot smoother after you pass on. It is therefore important to learn as much as you can about the different types of life insurance available and the pros and cons of each kind. One such kind of insurance that you might see advertised everywhere is No Exam Life Insurance. Also referred to as Simplified or Guaranteed Life Insurance, this kind of policy does not require any medical exam. At a glance, the advantages of a term life insurance policy with no exam are:

• No medical exam or investigation of medical history is required.
• Easy to qualify for with no waiting period or follow up required.
• The application process is fast and simple and the underwriting process is instant.
• Coverage is available immediately and there is normally a 30-day money back guarantee.
• Rates are guaranteed and flexible payments are available.
• Terms are possible for periods of 10 to 30 years. Policy can also be renewed at the end of the term.

A term life insurance policy with no medical exam offers the same benefits as a policy that requires a medical exam does. However, if you are suffering from any serious health problems such as cancer, diabetes, heart disease, stroke, liver disease, mental or nervous disorders, you may not qualify for this type of insurance.

If you are planning to take out a no exam life insurance policy, be aware that the laws that govern life insurance companies vary from state to state, so check with your agent or insurance provider about any restrictions applicable to such policies in relation to various health conditions in your state / locality.

In short, companies issuing such policies have decided to offer the option of no exam insurance to those people who prefer not to have a medical exam but still opt for a term lifepolicy. The company will in this case slightly lower the coverage of the holder as compared to what he or she would have been normally covered for, if a medical exam had been conducted. The amount that your family will finally receive after your death will be thus significantly less than the death benefits from a normal policy. Since no medical exam is required, the insurance company is also taking a greater risk, so the premiums of such policies are higher as well.

In the event that you have withheld a medical condition or lied about any information in order to qualify for a no exam policy, any claim with be considered immediately invalid. The company is then fully within its rights to not payout and change the terms without your approval or knowledge. Be wary of this type of policy being offered by financial institutions whose primary business is not the provision of insurance services. Finally, always make sure that the insurance company has been accredited by the Better Business Bureau to ensure quality and reliability.

Why buy life insurance when you're over 60?

Current trends show that more people over 60 are interested in life insurance now more than ever. There have been rapid changes in our society and economy within the past decade leading to more uncertainty regarding the future, and more people wanting to remain insured beyond their income-earning years. Technological advances have also introduced a paperless transaction system with e-policies being issued online. It's faster and easier than ever for retirees to find the best life insurance rates and apply for life insurance. 

Experts say that the post recession life insurance market is starting to show gains. Monthly life insurance application activity recorded a 1.1 percent increase from the previous year for the first time in seven years, according to MIB Life Index. The highest growth was seen in the age group of 60 and above with an 8.4 percent increase over the last year. The age group of 45 to 59 was up 1 percent. 

Why are more people over 60 considering life insurance?

In uncertain economic times, life insurance creates a tremendous sense of financial security knowing that loved ones will be financially taken care of if one spouse dies before the other.

With markets crashing, many people over 60 lost a major portion or their entire life savings. In order to supplement their dwindling assets, senior citizens are finding life insurance an option worth considering. A life insurance policy will provide a surviving spouse with much needed supplemental source of income.

People over 60 may still have debts to pay off. Ideally, as you reach the age of retirement, your financial security grows, but this is not always the case. There are many who are still struggling to pay off their loans or build enough savings to make a solid retirement fund.

Focusing on balanced diets and exercise, people are healthier and are able to lead more active lifestyles in their senior years. Many choose to venture into a new business adventure after retiring, and may still need life insurance to cover their business debts.

Some may still need life insurance after 60 because they married late in life, and still have kids at home to put through college. With college tuitions soaring and scholarships becoming scarce, having a life insurance policy in place would ensure your children get a good college education even if you were to die unexpectedly.

Life spans are increasing and money is losing value. The retirement fund that was once thought to suffice a life of retirement may not be enough. A life insurance policy would ensure that a surviving spouse still has enough money to live a comfortable lifestyle.

With currenteconomic conditions, any amount of money left to a loved one would be greatly appreciated. If by making regular premium payments you can provide your loved ones a substantial amount of money to increase their financial security, it's certainly worth it.

How to get the best life insurance rates even after 60

There is a plethora of life insurance products specifically tailored for senior citizens. Living on a limited budget, retirees may find term life insurance coverage with a 30-year term period the most affordable.

If health concerns are a major issue, no-medical life insurance can provide coverage without a medical exam, although the premiums may be more expensive than a traditional term life insurance policy. However, only people who are suffering from significant health issues will benefit from a no-medical life insurance plan. 

If you are in good health, you should not have any trouble finding affordable term life insurance. Even if you do suffer from minor heart ailments, diabetes, blood pressure, etc., you can still get the best rates by shopping around for term life insurance policies. The best way to find policies in spite of poor health is to search online. Not only will you find a wealth of information on life insurance that would be helpful to you, but you can also get free term life insurance quotes from top-rated life insurance companies. You'll get a chance to shop around for life insurance, compare products and companies just by sitting at your computer and pushing a few keys. Many of these websites have virtual life insurance professionals who can give you unbiased advice on the type of product that would suit your specific needs.

Conclusion

For many, life at 60 has just begun. Blessed with good health and agility, they are living the dream they could not when they were younger and strapped with more responsibilities! Life insurance is a great way to provide financial security to loved ones, particularly in an environment of economic instability. 

About AccuQuote:

AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

Is a Little Lie a Big Deal when Applying for Life Insurance?

Life insurance companies draw a very clear line when it comes to dividing the healthy from the non-healthy. Younger Individuals who have health on their side enjoy the best life insurance rates, while others struggle to qualify for the next best premium class. Then, there is the 5 percent of all applicants for life insurance who think they can qualify for a higher class by a little misrepresentation of facts. Fear of having to pay exorbitant rates for minor health concerns may drive a person to lay on an application form, but this is not a good idea for many reasons. 

Your application for life insurance may be rejected lying to your life insurance company is called Material Misrepresentation. This means that you have misrepresented facts that are crucial to the issuance of your life insurance policy. Underwriters of a life insurance company look at the details filled out in your application form. They also conduct an independent medical examination of your health through a company-appointed medical officer. 

These include routine tests such as a blood test, urine test, blood pressure reading, liver test, an electrocardiogram (ECG) or any other medical test may be considered crucial to their underwriting process. They also consult with your doctor and have access to your medical records and prescriptions. They check whether they information you have provided on your application form is accurate. If they have any reason to believe that you have misrepresented information, they can deny coverage.

Providing false information goes on your permanent record If you have been found to lie or falsify facts on your insurance application, this information will go on your records. Other life insurance companies also have access to these records. It will be difficult for you to get any kind of life insurance when the records show that you have misrepresented information and denied coverage by another insurance company. This may apply to all type of insurance, not just life insurance. When you lie on your application, you are putting your integrity at stake, not to mention your chances of getting life insurance coverage to protect your family.

Your family may not receive death benefits If they don't catch your misrepresentation of facts during the underwriting process, and you die of a medical condition that they suspect you already knew of when you applied for life insurance, your life insurance company will re-check your medical records. If they have found that you actually misrepresented the facts in order to qualify for life insurance or in order to get better life insurance rates, then they will not pay out any death benefits to your beneficiary.

Life insurance fraud, a serious crime an insurance company issues a policy under certain stipulations. If these stipulations are met, the life insurance company will honor its contract. Life insurance companies have anti-fraud systems in place to detect fraud, which means that it's highly likely that a lie on your insurance application can be easily discovered. If a life insurance company can prove that you have not met these stipulations, they can deny your family coverage. Depending on the terms and conditions of the policy, the insurance company may also file a prosecution case against you for attempted insurance fraud.

Honesty brings peace of mind Before you think its okay to lie-think about what you are doing very carefully. Is it really worth it? One little lie could cause you endless anxiety not knowing whether your lie will be discovered after death, and your family denied coverage. You'll never have the security and peace of mind that comes from honesty-that gives you the assurance that your family will be paid death benefits at a time when your loved ones need it to come through for them.

Better Ways to Lower Your Premiums than Lying! If you can't get a better premium rate class, you may want to consider lowering your coverage. Lower your coverage so that your premium payments are affordable. It may not fully cover your needs for life insurance, but something is better than nothing. You can assess your life insurance needs at a later stage in life and increase your coverage accordingly.

Have you shopped around for life insurance? Just because one life insurance company denied you coverage doesn't mean that all will do the same. 

Life insurance is competitive business. There are some life insurance companies that show more favor to people with certain health conditions than others. They assess your health risks in greater detail and if you are in otherwise good health, they may offer you more affordable premium rates. If you want to easily locate these companies all you have to do is fill out an online questionnaire on a life insurance aggregate website like AccuQuote.com. 

They have hundreds of life insurance companies on their database. Within minutes they can retrieve the best life insurance quotes for your specific situation. You can compare premiums, company ratings, and the terms and conditions of each policy. If you need personal guidance, you can call their customer service to speak to a professional adviser who'll give you unbiased recommendations.

If you really want life insurance to work for you, be honest on your life insurance application.

About AccuQuote:

AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

Drinking Too Much Alcohol Affects Your Life Insurance Rate

Does the amount of alcohol you drink affect your life insurance rates? While life insurance companies may not be primarily concerned with how much alcohol you drink, they are definitely concerned about any adverse effects your drinking may have on your health. Heavy drinking as a lifestyle may lead to chronic health concerns such as heart disease, stroke, depression, dementia, liver and gastrointestinal problems.

Because the amount of alcohol you consume may have bearing on your health and longevity, life insurance companies are interested in this aspect of your life. Most companies would not hesitate to increase your life insurance rates if you are a heavy drinker. In fact, according to the underwriting practices of some life insurance companies, drinking two drinks a day may disqualify you from the "preferred" category. Drinking four or more drinks a day may disqualify you from "standard" life insurance rates.

If you already have a history of alcohol abuse, and you have attended Alcoholic Anonymous meetings or have had a DUI on your driving record, this could lead to much higher life insurance rates. Depending on how severe your alcohol condition is, some life insurance underwriters may decline your application for life insurance or put you in a class which is very expensive.

Most life insurance companies require you to undergo a life insurance medical exam. Your blood and urine tests will reveal whether you are a heavy drinker or a moderate drinker. Carbohydrate Deficient Transferrin (CDT) is a test that checks liver functions. Elevated liver enzymes can indicate that you are a heavy drinker even if alcohol use is not noted on your medical history or on your application. Abnormal liver functions are normally assumed by life insurance companies to be related to excessive alcohol consumption. If doubts exist, a life insurance company may ask you to do an "alcohol marker" test to verify your liver abnormalities are alcohol-related. But even if it is not alcohol-related, you may still be put into an expensive life insurance rate category because abnormal liver functions are considered a health risk.

If you have ever received a DUI, you can expect a heavy life insurance rate if you apply within the first three years after you have been charged. After that, depending on your medical history and current health condition, you may be charged standard rates. If you have complied with drug rehabilitation programs ordered by the court, your chances for better insurance rates may start looking good only after you've completed the drug program. Multiple alcohol or drug-related traffic violations could put you under the "non-insurable" category.

The bottom line? If you have any history of a drinking problem, mention this on your application. Any kind of misinformation on your application is considered to be fraud and may render your policy null and void.

There are several life insurance companies whose underwriters look upon alcohol-related conditions in a much better light. Screening hundreds of life insurance companies to find one that suits your needs would take time, effort and a lot of comparative study. Using online life insurance providers who have access to hundreds of reliable life insurance companies may be your best option for finding the best life insurance rates, whether you do or do not have a drinking problem.

About AccuQuote:

AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

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