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Both life insurance and accidental death insurance can cover accidental drug overdose in some scenarios. While life insurance covers most causes of death, accidental death coverage pays only for accidents. People buying accidental death coverage often think that this type of insurance covers any accident as long as the person did not die of natural causes. But this is not always the case. Almost all ADD policies have several exclusions in them. Exclusions are provisions in a contract that work to exclude certain deaths from coverage and, if applied, will result in an ADD claim denial.

One of such exclusions is drug exclusion.

A drug exclusion usually says that the policy does not cover any loss resulting from an injury sustained while voluntarily taking drugs which federal law prohibits dispensing without a prescription unless the drug is taken as prescribed or administered by a licensed physician. Often this exclusion is interpreted to mean that if a deceased insured had drugs in the system at the time of death, the death would be excluded from coverage. Such interpretation does not always work in the beneficiaries’ favor and results in many ADD claims being denied due to drug exclusions. However, not every death that involves drugs should be excluded. There are many other factors that should be considered before deciding whether the death falls under the accidental death exclusion.

This article will help you understand if and when a life insurance policy covers drug overdose and what to do if your claim was denied due to drug abuse.

Drug Overdose and Life Insurance Exclusions

First, there is a distinction between life insurance and accidental death coverage. Life insurance normally covers all deaths unless there are provisions for non-payment due to suicide or there are material misrepresentations on the life insurance application and the death occurred within the first two years of the policy issue date. Accidental death policies, on the other hand, do not have such broad coverage and usually pay only if the death is due to an accident and none of the exclusions apply. Accidental death policies can provide coverage for drug overdose only in certain scenarios. One of the most important factors to consider is the wording/language of the exclusion itself. Other important factors in deciding whether the exclusion applies are:

Was the overdose intentional or accidental?

What type of drug was used by the insured?

Was the drug prescribed? If yes, was it taken according to the prescription?

Could the insured foresee that death would result after taking the drug?

What are the laws of the state where the death occurred?

Life insurance companies can deny coverage if they can prove that the drug overdose was deliberate (suicide) or the insured used illegal drugs or abused prescription medications. Insurers can also deny ADD claims where exclusions are written to exclude from coverage any death where a drug is a contributing factor (for example, an insured died in a car crash but the toxicology revealed illegal drugs in his/her system that impacted driving). If your life insurance claim is denied due to any of these scenarios, it is still prudent to consult with a life insurance lawyer experienced in drug-related cases.

Accidental Drug Overdose

Both life insurance policies and state laws have different definitions for “accidental death”. According to the National Institute on Drug Abuse, a death is accidental when:

the drug was taken accidentally

too much of a drug was taken accidentally

the wrong drug was taken or given in error

an accident occurred in the use of a drug in medical or surgical procedures.

Otherwise, drug overdose is considered a suicide by overdose and not an accidental death. Frequently, overdoses result from improperly prescribed drugs, an accidental double dose of narcotic painkiller or other sedative-type of medications, or interactions of various drugs taken together. In such cases, the death is likely to be ruled as accidental, especially if the insured was under medical supervision at the time of the overdose.

Overdose on Illegal vs. Prescription Drugs

Another factor that helps determine whether the drug overdose was accidental, is the type of drug the insured used.

If the overdose occurred as a result of using illicit drugs such as meth, cocaine, or heroin, the insurer may argue that the insured knew or should have known the risks of using such drugs, and deem the overdose as intentional, thus refusing to pay the claim. On the other hand, if prescription drugs prescribed by licensed physicians are involved, the death is likely to be considered accidental if the medications were taken according to the doctor’s advice and not abused. An overdose on prescription drugs is not straightforward. In some cases, life insurance companies may still refuse to pay using the drug exclusion as a reason to deny paying the death benefits.

When a beneficiary files an ADD claim, the insurance company will request a toxicology report. The toxicology report usually shows the substances that were found in the insured’s body at the time of death.

Let us suppose the insured was taking Oxycodone and it was reflected in the toxicology report. The insurance company will analyze the toxicology report to see whether the level of Oxycodone in the insured’s system was within a therapeutic range.

The insurance company will hire a medical expert to analyze the report. In some cases, the insurance company will send the report to a registered nurse or a physician who will review it and render an opinion as to whether Oxycodone was taken according to a physician’s advice.

The problem with this is that medical experts rarely agree on what constitutes a therapeutic range for a drug without considering other factors. For example:

How old was the insured?

What was the insured’s tolerance to the drug?

How long after death was the postmortem exam done?

Did the insured have a liver failure? What are the liver function test results? What other medications was the insured taking?

Did he have any other illness at the time of death that could have slowed his metabolism?

Was the medication administered to the insured while he was unconscious?

When insurance companies’ consultants evaluate toxicology reports, they do not take into consideration all these factors and wrongfully deny many ADD claims. In many cases, they simply put the drug concentration number in Dr. Winek’s Scale or another drug concentration table to see in which range it falls and will deny a claim if the drug concentration is not within a therapeutic range.

Life Insurance Claims and Marijuana Use

At the time this article is written, medical cannabis is legal in about half the states of the country and some states allow recreational use. Even so, many life insurance policies have explicit regulations and exclusions when it comes to marijuana use and it is not uncommon for them to deny claims due to drug exclusion if the insured used marijuana before death. Accidental death policies may not cover deaths where cannabis use contributed to the death.

Contestable life insurance claims may be problematic if the deceased did not disclose using marijuana for medical reasons or recreationally. Non-disclosure of marijuana use on a life insurance application could be considered misrepresentation and lead to a denied life insurance claim if the insured died within the first two years of the policy issue date.

If your claim has been denied due to marijuana use, call us for a free consultation. Our lawyers have extensive experience with marijuana-related cases and can help file an appeal for you. See how they helped recover ADD benefits for a claim denied due to the use of cannabis.

If you want to read more about cannabis laws, check our guide where we explain how they work and how denied claims based on marijuana use are handled.

What to Do if Your Claim Was Denied Due to Drug Use

Accidental death claim denials based on a drug exclusion can be complex and very confusing. They require medical experts and experienced life insurance attorneys.

A life insurance attorney who has handled many ADD claim denials in the past will know exactly what to do to get your ADD claim paid. Our law firm has successfully handled many denied accidental death claims. We have worked with reputable medical experts who provide reliable service. Our ADD attorneys know how to deal with claim denials to get claims paid fast.

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Credits: Tatiana Kadetskaya

Published: January 18, 2021

Life insurance is tricky. There are scenarios in which it’s vital to your family, but there are also instances when it may no longer be needed. If you have term life insurance, there may be a time when having it no longer makes sense.

Cash-value policies, on the other hand, accumulate value and provide the coverage you won’t outlive, as long as you keep up the premiums. Whole life, variable life, and universal life are three of the flavors you can choose. Even cash value insurance shouldn’t just sit there, however.

Not everyone needs life insurance. Those who’ve accumulated enough wealth and assets to care for their own and their loved one’s needs independently in the event of their death can forgo paying for life insurance, especially if it’s a term policy. On the other hand, there are people whom experts say should never be without life insurance; these groups of people are listed below.

KEY TAKEAWAYS

Life insurance is not for everyone, but some individuals and circumstances make having life insurance a smart idea.

If an individual has accumulated enough wealth to take care of their family upon their passing, then life insurance may not be necessary.

Couples that have built a life together should have life insurance in case one of them passes away so that the other can maintain the same quality of life.

Homeowners should take out life insurance so that the proceeds of the policy can go towards paying the mortgage.

People with children are strongly recommended to have life insurance so that the needs of the child and remaining living spouse can be taken care of.

Business owners and those who want to pass down a financial legacy are also advised to purchase life insurance.

Couples

Whether you’re just married, domestic partners, or celebrating your 20th anniversary, you and your significant other have planned a life based on a certain income level. Unless each of you is able to maintain that income level on your own, it’s important to have life insurance to prevent a drastic change of lifestyle when one of you dies.

This is true even when you’re both still employed if both partners hold jobs. Some spouses or partners may want or need to take an extended break from work following the death of their loved one.

Life insurance affords that chance to grieve or readjust to new life circumstances, says Jason Tate, ChFC, CLU, CASL, owner of Jason Tate Financial Consulting in Murfreesboro, Tenn.

Mortgage Holders

A home mortgage is one of the largest assets and liabilities on a person’s personal balance sheet. If a homeowner dies before the mortgage is paid off, beneficiaries and the lender can be protected by the proceeds of a life insurance policy, says Tate. “The lender wants to know that the mortgage payment can be covered and the beneficiaries need the ability to keep the house payment paid and prevent the second tragedy of being forced out of their home while grieving.”

New Parents and Parents of Minors

A new baby is a source of pride and excitement. It’s also a tiny person who, for the next 18 years or more is financially dependent on you.

“At the core of that is the responsibility for both parents to provide for a surviving spouse and child or children,” says Tate. “Life insurance provides tax-free money to surviving spouses or guardians and children for income replacement or debt payoff, which allows the family to maintain their current lifestyle.”

Life insurance planning should look beyond a child’s first 18 years, Tate emphasizes. Parents wanting to provide for their children’s college education in the event of their passing should consider that expense when determining the amount of life insurance to purchase.

Minor Children

The loss of a child could be very devastating for a family and have parents wanting, or needing to take time off of work. On top of that emotional toll, there are funeral and burial costs to deal with. “It’s uncomfortable for parents to imagine, but families should be protected with life insurance in the event of the tragic premature passing of a child,” says Tate.

Many times a minor child can be added to an adult’s policy via a child rider endorsement at a low cost. “That rider can typically remain in effect until the child reaches age 18,” says Tate.

Other policy alternatives include purchasing a whole life policy that a child can have for the rest of their life. “That provides insurability guarantees regardless of health,” says Tate.

Parties to a Divorce

A trip down the aisle rarely includes plans to uncouple. But should it happen, don’t be surprised if the judge or mediator suggests both spouses purchase life insurance on themselves for the benefit of the other spouse if minor children or financial responsibilities exist post-divorce.

“The policy coverage might extend for a certain period, making term insurance an appropriate fit for the situation,” says Tate.

Business Owners and Partners

A new business comes with inventory, investment, and, many times, debt. “In order to provide solvency, business owners must protect their personal and business interests with life insurance in the case of a premature passing of an owner,” says Tate. Insurance on the owner could help the surviving spouse weather the transition until the business can be continued or sold.

If you have a business partner, that person is the equivalent of your professional spouse. Just like your domestic partner, business partners need to be protected with life insurance in the event of the other’s demise, Tate explains. Insurance should cover each partner and establish how a transition will occur if one of them dies.

“When a business partner passes away, money helps purchase the remaining stock or business interest from the deceased’s estate or family. This assures business continuity for business customers, and creates an estate that immediately establishes value on the asset for the deceased’s estate,” says Tate.

Those Wanting to Leave a Financial Legacy

Generous relatives who want to pass on money to their beneficiaries for legacy purposes should purchase life insurance. Whether grandparents want to provide for their grandchildren’s education or an individual wants to fund medical equipment for a local hospital, life insurance can provide money to beneficiaries, usually tax-free, according to Tate.

Which Type of Life Insurance Is the Most Affordable?

Term life insurance is the least expensive option for getting a death benefit. However, the policy will expire when its term runs out and does not accumulate any additional cash value.

Who Would Not Likely Need Life Insurance?

Single individuals or those without dependents, and who are themselves financially independent may not benefit much from life insurance. Although, such individuals may still wish to purchase coverage in order to leave a legacy upon their death.

At What Age Should You Buy Life Insurance?

In general, life insurance is cheaper when you are younger and healthier. Therefore, you should buy it as young as possible if you think that you will need it presently, or in the future. For instance, a young couple may buy life insurance when they become engaged or when they have a child.

What Happens If You Have No Life Insurance?

Those without life insurance may pass away with financial obligations such as debts and unpaid bills that become the responsibility of their heirs.

What Age Should You Stop Life Insurance?

If you have a term policy, the term should end once all obligations that the death benefit would be meant to cover have passed. For instance, after a child has finished college and can support themself financially. A permanent policy lasts your whole lifetime, so as long as it is paid up, it should be kept indefinitely. For permanent policies that are no longer needed, you can surrender the policy and receive back the cash value it contains.

The Bottom Line

There are many good reasons to carry life insurance though it’s not a must for everyone. It’s important to take stock of your financial and life situation and determine what is in the best interest for you and your family.

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Credits : Gina Roberts - Grey

Date : May 24, 2022

How about you? Do you need life insurance? In this article, we’ll explore the questions you should ask yourself before you decide to go without it.

Only about 52% of Americans have life insurance. That leaves a lot people who either haven’t gotten around to getting coverage or decided they don’t need it.

Who will pay for my funeral and final arrangements?

Final expenses are a fact of life. And of death. Funerals, burials, and cremations all cost money. Today, the average cost of a burial ceremony with a vault is $9,420 Depending on your final wishes, it could come to much more, especially if you would like your resting place to be in a different state or country.

If you haven’t saved money for that purpose, your loved ones may have to foot the bill. That can be a challenge these days when statistics show 36% of Americans don’t have $400 available for an emergency. Loved ones might have to take out a loan or arrange a payment plan with the funeral home, or even launch a crowdfunding campaign. If no one steps forward to pay, it’s possible the coroner’s office will bury or cremate you without a family service.

One of the main reasons people buy life insurance is to help spare already grieving loved ones the stress of coming up with the money they might not have. A life policy could help cover the expenses for funerals, burials, and/or cremation.

Will out-of-town loved ones be able to afford the trip to my service?

Are you counting on having loved ones travel to your service? Many families are spread throughout the country or the world. Often people want to be there, but the cost of travel and accommodations makes it a challenge. If you have money set aside for their travel expenses, great. If not, a life insurance policy could help reimburse the people dearest to you for those costs. 

Who will pay for my end-of-life care? 

Often families are left with big medical bills after a loved one dies. If you haven’t left the money to cover the costs of your care, they may inherit that debt. A life insurance policy can help provide some or all the money needed to cover these expenses.

Will someone be hurt financially by my loss?

In this era of two-income families, the loss of your income could put a strain on a spouse or partner. It could cause even greater financial hardship for those financially dependent on you. In addition to children, those persons could include dependent parents. Your loss could seriously affect their quality of life. Helping to protect the financial future of loved ones is another key reason why people take out life insurance policies.

Will I have estate taxes?

If you have a large estate, and that estate is taxable, your survivors might be responsible for paying estate taxes.

So, does everyone need life insurance?

Making our loved ones struggle to pay for our final arrangements and obligations is not the legacy most of us want to leave. There are people who have saved up enough money to cover all the potential needs discussed above. Many either have no children or children who are financially self-sufficient. With few or no debts, no dependents, and a healthy nest egg saved up, life insurance might not be necessary. But don’t decide to go that route until you take a close look at what your passing would mean financially to your family. If you don’t have money saved up for after you’re gone, you may want to consider a life policy big enough to cover your needs. If you can’t afford a whole life insurance policy, you may want to consider term life insurance, which is generally more affordable.

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Credits : Trustage

Date : July 8, 2020

Shopping for life insurance requires time and research to ensure you’re getting the best policy to fit your needs. But as a transgender individual, the process can be a bit more complex.

Do transgender people have to get special life insurance? And what is the best life insurance for transgender people? Below, we examine these questions and everything else you need to know about transgender life insurance.

Does Being Transgender Affect Your Ability to Get Life Insurance?

Being transgender in and of itself has no impact on life insurance underwriting, according to  Ryan Pinney, president of Pinney Insurance Cente. You shouldn’t be denied a policy or charged a different rate simply because you are transgender. However, some insurance companies still use sex assigned at birth to determine the policy’s rate rather than the person’s gender.

The reason is that they base their risk assessment or underwriting on mortality, Pinney says, which is strongly tied to sex.

“For example, an individual assigned male at birth transitioning to female still has a prostate, which poses an increased risk for prostate cancer later in life, and individuals assigned females at birth still have an increased risk for osteoporosis,” he explains. Further, men generally have a lower life expectancy than women and usually pay higher life insurance rates.

Today, however, many life insurance companies will accept the gender the applicant identifies with, according to Jeremy Hallett, founder and CEO of Quotacy. The exact underwriting requirements vary by insurer. For instance, a few life insurance companies surveyed by Quotacy will use birth gender unless it’s been a minimum of three years since completing gender reassignment surgery, in which case it will consider the applicant’s current gender. Other companies surveyed said they would simply recognize the gender the applicant identifies with.

Life Insurance for Transgender People Who Have Already Transitioned

Pinney says that being transgender generally has no additional risk from a life insurance perspective, “but insurance companies will use your personal medical history to make any additional decisions.”

Hallet adds that care is taken when evaluating mental health and the effects of hormone therapies, which can affect insurance pricing. For example, transgender individuals are at a higher risk for depression, anxiety disorders and suicide than cisgender people. So insurance companies will want to review your medical history in detail to determine how any diagnoses and treatment history could impact your life insurance cost.

It’s important to note that a gender dysmorphia diagnosis is not considered a mental illness and shouldn’t impact life insurance rates. That said, each insurance company will evaluate this information on a case-by-case basis and may request a more thorough assessment by medical professionals.

Life Insurance for Transgender People Who Are Transitioning

Acquiring life insurance can be a bit more complicated if you’re in the process of transitioning.

“Most, if not all, insurance companies will postpone offering coverage if any gender-affirming surgeries are pending until after the completion of the surgery and recovery,” Hallet says.

That’s because there’s an inherent risk associated with surgery of any kind. Since life insurance companies are tasked with evaluating mortality risk, they will want to wait until after you’ve recovered from surgery before issuing a policy to ensure there aren’t any complications. So if you have a gender-affirming surgery scheduled for the future, you probably won’t be approved for a policy until surgery is completed.

In some cases, you may be required to provide an attending physician’s statement (APS). This is a letter from a doctor that provides a professional assessment of your health and additional context or details about a medical condition. It’s often needed for life insurance applicants undergoing specialized medical treatments.

If you’re worried about a delay in getting covered, the good news is that you may be able to get temporary life insurance to fill the gap. This covers you during the period between applying for a policy and getting approved. In other cases, the insurance company may backdate your policy.

Dealing With Discrimination When Applying for Life Insurance

Though life insurance companies are supposed to evaluate all applicants equally, discrimination can happen.

There are federal laws that specifically protect transgender individuals from discrimination relative to health insurance, Hallet says. Life insurance, on the other hand, is less clear. And the protections in place vary by state. Some have clear anti-discrimination laws in place, while others institute protections that may or may not include life insurance. Fortunately, more laws are being introduced to ensure transgender life insurance applicants are treated fairly.

For example, Hallet says the state of Delaware has current penalties to protect against unfair discrimination in the value of insurance policies and premiums based on race, color, religion, sexual orientation, gender identity or national origin. “Gender identity” is defined as “a gender-related identity, appearance, expression or behavior of a person, regardless of the person’s assigned sex at birth.”

New Jersey has a bill prepared for the 2022 session to prohibit unfair discrimination in issuing or rating life insurance policies based on transgender status or certain gender identity information.

That means choosing the right insurance company is key.

In a 2022 survey of more than 500 members of the LGBTQ+ community conducted by Bestow, it is clear that the LGBTQ+ community prioritizes end-of-life planning, with 63% of respondents having life insurance, a will or long-term care insurance.

“If you’re transgender, it’s important to work with an agent or broker who has access to many companies and can help transgender individuals navigate the underwriting process most effectively and efficiently,” Pinney says. “The best advisors and brokers will understand the transgender community, be able to provide rates from multiple companies, and advise which companies and products individuals should select.”

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Credits : Casey Bond

Published : Aug 10, 2022

Life insurance can be an important part of your financial strategy. That’s because a life insurance policy can help you ensure that your loved ones have a secure financial future after you pass away.

Not only can life insurance help cover your final expenses — it can also provide your family with a financial safety net by helping to replace your income or serving as an inheritance for a loved one. Read on to learn about some of the ways life insurance benefits may be used:

Here are some common uses of life insurance benefits:

Paying final costs

Life insurance policy benefits can be used to help pay for final expenses after you pass away. This may include funeral or cremation costs, medical bills not covered by health insurance, estate settlement costs and other unpaid obligations.

Paying off debt or replacing income

Life insurance benefits can help replace your income if you pass away. This means your beneficiaries could use the money to help cover essential expenses, such as paying a mortgage or college tuition for your children. It can also be used to pay off debt, such as credit card bills or an outstanding car loan.

Inheritance

Some people purchase life insurance with the intention of leaving the death benefit as an inheritance to their loved ones. If you’d like to have a specific person receive your benefits as an inheritance, the Insurance Information Institute (III) suggests naming your chosen heir as the beneficiary on your policy. This will ensure that your life insurance benefits fall into the hands of the person you intended to receive it.

Paying federal or state estate taxes

Depending on state laws, your heirs may need to pay an estate tax upon receiving an inheritance. The III says that life insurance benefits may be used to partially or completely offset this cost. It’d be a good idea to consult with your insurance provider or a financial professional to understand how estate taxes may affect your beneficiaries.

Charitable contributions

Life insurance policies can also be created with your favorite charity as a named beneficiary, the III says. This can help ensure your philanthropic goals are met after you pass away, and that benefits are provided to your charity of choice.

Life insurance can be a sensitive topic, but it can help provide a more secure financial future for your family if the unexpected happens. Contacting an insurance agent can help you better understand the types of life insurance and determine what kind of policy fits you and your family’s needs.

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Credits : Allstate

Published : August 2021

Purchasing life insurance is an important step toward securing your family’s financial future. It can help provide for your loved ones when you’re gone and pay for your final expenses. You can take your policy a step further by adding supplemental benefits using amendments known as riders.

Riders can help modify your life insurance to better suit your needs and allow you to opt into extra benefits not typically included in basic policies, says FinancialWeb.com. Consider the following popular riders, available on some life insurance policies:

Waiver of premium: This rider stipulates that your policy will be kept in place should you become totally disabled prior to a specified age (usually 60 or 65) and unable to continue paying your premiums, according to the New York Department of Financial Services. The waiver of premium rider can pay up to a certain dollar amount, allowing the policy’s benefits, including cash values and/or dividends, to be maintained. Total disability is defined by the terms of the rider.

Accidental death benefit: This rider, also known as “double indemnity,” secures an extra payment amount for the policy’s beneficiary should the insured die in an accident, according to InsuranceInDepth.com. Pay close attention to your insurer’s definition of “accidental” death, however. Only accidents that meet the definition can be covered by this benefit.

Accelerated death benefit: This type of rider can pay a portion of your benefits prior to death and is triggered by certain events, such as a terminal illness says the Missouri Department of Insurance. This can help you cover expenses such as long-term care, but be aware that it may reduce death benefits.

Guaranteed insurability rider: According to the New York Department of Financial Services, this rider enables you to purchase additional coverage at specified intervals of time, up to a certain age (usually 40) without providing evidence of your insurability. That means you have the opportunity to secure extra coverage based solely on your age — and regardless of your health or other factors typically considered by insurers. These riders may also include specific life event triggers — such as marriages or the birth of a child — which allow policyholders to buy additional coverage.

Term rider: Need extra coverage for a limited period of time? Term riders can be attached to existing policies to adjust the level of coverage for a specified period of time, according to the New York Department of Financial Services. Term riders may be useful as a means to acquire additional protection during your working career.

Spouse & children’s riders: These riders will provide term (not permanent) coverage on the life of your spouse or children. A conversion provision in the rider allows the spouse or children to convert to a permanent policy without demonstrating proof of insurability, says the New York Department of Financial Services.

Automatic premium loan provision rider: Oops! Did you forget to pay your premium this month? This rider will automatically pay your premium by taking a loan from the cash value of your policy, should you fail to make your payment by the end of the monthly grace period. The New York Department of Financial Services suggests this rider for those who feel they may inadvertently miss payments. This rider can be cancelled at any time by the policyholder.

These popular riders provide a good starting point if you’re considering amendments to your life insurance policy. . Keep in mind that some riders must be added when a policy is issued, and others can be added anytime. A Life insurance agent can provide more detail and help determine which riders might work best for you.

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Credits : Allstate

Published : January 2022

Have a baby on the way? Then you’ve likely spent the past several months preparing to welcome your bundle of joy into the world. In addition to decorating the nursery, stocking up on diapers and planning your parental leave, you may want to add “buy life insurance” to your pre-baby to-do list.

A life insurance policy can help ensure a secure financial future for your growing family. If you or your partner were to pass away, the benefits could be used to help replace income, pay off debt, cover living expenses or pay for your child’s future college expenses.

But, what type of life insurance policy may be a good fit for your family? Here are some questions you may want to ask yourself.

Every family’s insurance needs are unique, so it may help to start by using a life insurance calculator to determine how much coverage you may need.

You may want to consider your family’s immediate and future financial needs when choosing life insurance coverage. Here are some things you may want to keep in mind:

If you have a mortgage, how much do you owe?

What other debts (such as car loans, lines of credit, etc.) does your family have?

Do you want to help pay for your child’s college tuition one day?

Would a surviving spouse be able to work after you pass away to help cover expenses?

Ultimately, you may want to work with a life insurance agent to determine how much coverage may be enough. An agent can help you choose a coverage limit based on your current assets, future needs, financial priorities and more.

Ultimately, you may want to work with a life insurance agent to determine how much coverage may be enough. An agent can help you choose a coverage limit based on your current assets, future needs, financial priorities and more.

There are two main types of life insurance to choose from: term life insurance and permanent life insurance. Your family’s financial situation can help determine both the type of policy you need and the optimal length of your policy.

Term life insurance

If you want your policy to be in place for a set period of time — for example, until your child finishes college or a 30-year mortgage is paid off — you may want to consider term life insurance. A term life policy provides coverage for a specific amount of time (typically between one to 30 years).

Term Iife insurance may also be a good choice if you’re young and concerned about whether you can afford life insurance both now and down the road. Life insurance premiums (the amount you pay to keep a policy in force) are based in part on your age and health at the time you purchase the policy, says the Insurance Information Institute (III). And, depending on the policy’s terms, the premium may remain the same during the entire policy term period.

Permanent life insurance

If you want life insurance coverage that lasts a lifetime, permanent life insurance may be an option. You’ll typically pay higher monthly premiums because this type of insurance offers protection for your entire life, as long as premiums are paid. This means the policy’s benefit would be paid out to your beneficiaries no matter when you pass away.

Permanent life insurance policies also typically include a savings component, called “cash value,” which may contribute to the higher premium, says III. But, in addition to the death benefit, this means your policy will accumulate cash savings that you may be able to access while you are alive.

Your employer may already offer life insurance to you as a benefit. However, it may be a good idea to purchase additional insurance on your own for a few reasons.

First, your work-provided life insurance may not offer sufficient coverage for your family’s financial situation, Investopedia says. If you have a spouse or kids, Investopedia recommends having coverage worth five to eight times your annual salary. It’s a good idea to check the coverage limits on an employer-provided policy and see if you can increase the death benefit.

Additionally, when you purchase your own life policy, coverage isn’t dependent on your employment situation. In other words, you can take the policy with you if you change jobs.

As you plan for your growing family’s immediate needs, take time to plan for their future needs, too. Life insurance is a way to help make sure your loved ones are taken care of even if you pass away. If you have any questions or need help determining what kind of policy is right for you, talk to a local agent.

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Credits : Allstate

Published : February 2022

Variable universal life is a type of permanent life insurance policy. With features that include cash value, investment variety, flexible premiums and a flexible death benefit.

Like most permanent policies, variable universal life insurance (VUL) offers life-long protection — it’s designed to stay in place as long as you live and, sufficient premiums are paid.

The main features of a variable universal life policy are a mix of those typically found in variable life and universal life policies:

Your premiums are adjustable.

You have the ability to skip a payment or even stop paying your premium if the cash value of your policy can cover the costs, says the nonprofit group Life Happens. This is a feature borrowed from universal life insurance, and it may be helpful if an emergency leaves you short of cash.

You have investment variety and risk.

As with a variable life policy, variable universal life lets you invest in underlying sub-accounts offering a variety of investment options. These investments are tied to financial markets, and the value of your policy may fluctuate as the value of your chosen investments go up or down. While the reward can be great, you’re also taking on risk that can reduce your cash value and, if by policy provisions the policy lapses, your death benefit could be lost as well, says the Insurance Information Institute (III). The upside? Transferring funds between investments is tax-free, so you’re not constrained by the potential tax implications, says Life Happens.

With VUL policies, you choose from a number of investment options for your policy’s sub-accounts. Life Happens states that you can typically invest in stocks, bonds or a combination of the two. You can also opt to invest in a fixed account, which provides a guaranteed minimum interest. The value of your policy’s sub-accounts fluctuate based on how these investments perform. If they do well, your policy’s value increases. If the investments decrease, though, your cash value will decrease as well.

You can increase the death benefit.

If your insurance needs change over time, you can increase or decrease your coverage, says Life Happens. For instance, you may be able to request a death benefit increase or make a lump-sum payment to boost the policy's cash value (though the IRS has limitations on how big that one-time payment can be), the group says.

You can withdraw or borrow from it.

Like some other permanent life insurance options, a variable universal life policy allows you to withdraw funds or take out a loan against the cash value. The downside is that a withdrawal or a loan can reduce your death benefit, or result in a tax liability if you don’t follow guidelines on repayment.

One main difference between variable universal life and universal life insurance policies is that VULs offer more investment options. You can select a number of different funds to essentially create a portfolio. Universal life policies do not offer this investment option, but you can select a policy with features that suit your needs, such as a fixed interest rate or one that fluctuates with the stock market.

Wondering if variable universal life insurance is right for you? Life Happens says it’s a good option for people “seeking maximum flexibility,” which also means you’ll want to be sure you can monitor investment performance and make decisions about where to allocate funds over time. It’s important to understand that investing involves risks that have the potential to reduce the policy’s cash value.

Of course, any decision about life insurance takes a bit of thought. That’s why it can be helpful to review your current circumstances and goals with your insurance provider, who can help you find the policy to suit your needs.

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Credits : Allstate

Published : January 2022