JMF Insurance Agency's Blog

We have all heard about the rising cost of college tuition.  In response many have turned to funding 529 plans to begin saving for their children’s college under the direction of their financial advisor.  If you are one who has followed this path, or if you are considering following this path, here is an alternative approach than under the current economic climate is a safer choice, and will give you greater flexibility.

The alternative is the use of a form of permanent life insurance, called an Index Universal Life Insurance plan to fund your children’s college education.  The use of permanent life insurance to fund your child’s college education has some outstanding benefits that you should not overlook.  For many years people have used whole life insurance to fund college.  With the creation of the Index Universal Life Insurance policy, this strategy has greater merit.  The advantages of using the Index Universal Insurance policy are listed below.

• Tax Advantage – The policy is funded with after tax dollars, and grows tax deferred with tax-free policy loans available to access the money needed.   It provides an income tax-free death benefit which also bypasses probate.
• No Investment Risk – The policy is not a form of investment, nor does it use any investment vehicles.  The policy will guarantee a minimum level of interest that will be credited to generate cash value.  It then maximizes the cash value growth potential by crediting higher amounts to interest based on the results a selected index.   There is no risk of the loss of cash value or death benefit.
• Not Counted in Financial Aid Formula – Not included in the federal methodology for calculating financial aid.  There is no penalty for saving for college, unlike with some other college savings strategies, such as 529 plans.
• No Penalty for Other Use – Greater flexibility in the use Cialis Online of the funds, should your child obtain a scholarship you are not restricted in the use of cash value.  There are no penalties such as the case with a 529 plan.
• Coverage for death or disability – Unlike a 529 plan, by using life insurance your child’s college future will be covered in the event of your pre-mature death or disability.  With a disability, the policy can continue to be funded to allow for the accumulation of cash value.
• Freedom to Choose the College – There are not restrictions as to type of higher education that your child elects to pursue.

Leveraging an Index Universal Life Insurance policy alone or coupled with a 529 plan is a great option, and should be considered.  You should consider an Index Universal Life Insurance policy whether you have begun your savings for college or not.

The health Reform bill, known as the Patient Protection and Affordable Care Act (PPACA), has some components that go into effect today, September 23, 2010 on new plans or renewals effective October 1, 2010.

The provisions that go into effect today are:

• Dependent coverage up to age 26
• No lifetime benefit limits – based on dollar amounts
• No cost-sharing obligations for preventive services (in-network)
• Eliminate Buy Cialis Online pre-existing condition exclusions for dependent children (under 19 years of age)

Guardian Life Insurance Company and The Berkshire Life Insurance Company have recently been added to the list of JMF Insurance Agency’s carriers.   The Berkshire Life Insurance Company is the wholly owned subsidiary of Guardian Life Insurance Company.

Guardian is one of the largest and highest rated mutual life insurance companies.  It has been in existence for 150 years.   It’s financial strength is outstanding.

With Guardian Buy Viagra Online as a partner JMF Insurance Agency will be able to offer to our clients a premier individual disability policy with true “Own Occupation” definitions, along with strong group and voluntary benefits.

There are two categories of life insurance policies, temporary and permanent.  There are three types of life insurance policies that fit into one of the two categories.  They are Term insurance, Universal Life, and Whole Life.  Each of these three types of policies is categorized as follows:

Temporary

• Term Life

Permanent

• Universal Life
• Whole Life

Term insurance is a temporary type of insurance.  It is, in effect for a certain amount of time, for example, a 10 year term policy means that the policy is, in effect of 10 years, and after that it can be renewed annually.  Term policies when they are renewed are priced based on the cost of the insurance at the age in which they are renewed so the price is much higher.  If you are thirty years old, and purchase a 30 year Term policy, the annual premium may be approximately $153 for $100,000 premium.  When it’s time to renew that policy the annual premium at age 51 will be approximately $1,350, and increase every year.   The challenge with temporary insurance is that if that is the only type of policy that you have, you could end up in a situation where you are too old to obtain any insurance.  Or you end up paying $40-$100 per month for $10-$15,000 in Whole Life insurance for the remainder of your life.

Permanent insurance, on the other hand is designed to cover a person for their entire life.   So when a person purchases $50,000 in Universal or Whole Life when they die at age 96 or after the insurance policy still is, in effect and pay out the $50,000 or more in the case of some Universal Life policies.  For permanent insurance you pay more, but you are covered for life.

Many people have insurance through their employers, which is typically a Group Term policy.  Once a person leaves the company, if they do not convert the policy to permanent insurance, the policy will lapse.  Because retirement is typically between 60- 65 years of age, these individuals can face the possibility of having to spend a lot more money for insurance, or not being able to get insurance once they reach 85.

To prevent a person from being placed in a position of having to pay a large premium for insurance or not be able to obtain insurance when they reach their 80’s, it is important to diversify your insurance portfolio.   Every portfolio should contain at least a single permanent insurance policy, for the amount of insurance that under any circumstance you want paid out.  Your agent can assist you in determining the correct amount based on your situation.

By Buy Viagra the time, you are 62 that same $100,000 policy will cost approximately $4,964.00 annually.  Let’s say at age 51 you purchase another 30 year Term the cost will be $860 per year, once you hit 80 and its time to renew the policy will cost approximately $25,570 to renew and increase annually.  Now at age 80 you only choice is to renew or purchase a Final Expense policy of $10,000 to $15,000.

The worst case situation can happen to be if you purchase a 30 year term at age 56.  In this situation most carriers will not issue even a Final Expense Whole Life policy after 85.  So you end up either paying the renewal rate of over $25,000 or you go without any insurance.

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When an insurance carrier has “Rated” you, it means the underwriter has determined that they feel that you represent a risk that is higher than their standard risk.   Because of this the underwriter will then assign a rated premium that is associated with a Table.  The Tables are represented by either numbers or letters.  A Table 1 or A rating means that they feel you represent a slightly higher than standard risk.  Likewise, Table 16 means that the carrier feels you present a very high risk.

The rating that you were given can vary by a carrier.  One carrier may view you as a Table B (2) risk, while another may view you as a Table E (Table 5), while another may not rate you at all.  Ratings are not always standard, so do not assume that just because you were rated by one carrier, that every carrier will give you the same rating.  However, if you receive a high rating Table 8, for example, from one carrier, chances are pretty good that you will be rated, the question is. What will the rating be?

What could cause me to be Rated?

You could be rated based on negative information that is discovered by the underwriter contained in your medical records, MIB, or lab results.   When the underwriter reviewed the medical records from the doctor, there may have been something that was noted in the doctor’s notes about your family medical history, lifestyle, or an overlooked diagnosis that raised a concern.

Lab results are a very common reason for someone being rated.  The lab results may uncover a medical condition that has not yet been discovered by the doctor.  The lab results may point to high blood pressure, high cholesterol, or elevated blood sugar as examples.  This information coupled with your family history could mean that you are a high risk for something the underwriter may view as a higher than standard risk.

What are my options?

The course of action will depend heavily on whether the rating was a surprise, and if the agent you are working with represents a single carrier, such as State Farm or Allstate, for example.  If the Rating was a surprise, you should find out from your agent what Table rating you were assigned, and why?  You should then contact an agent that works with people who have medical conditions, and provide them with that information before you accept the offer from the first carrier.   An agent Buy Cialis Online Without Prescription who works with people who have medical conditions will properly pre-qualify you, and be able give you an idea if you will be rated, and if so a possible rating.  Remember, only the underwriter can determine what a rating will be.

If the agent represents a single carrier you have two choices, to accept the offer by the carrier, and have the policy issued, or shop to find a carrier that will issue a policy without a rating or at a better rating.   The chances of not being rated, or obtaining a better rating are higher if you are working with an agent who represents insurance carriers that specialize in providing Life insurance related products, and not Property and Casualty (Auto, Home, Business, etc.).

When Open Enrollment takes place this year, employees are going to need to consider their FSA (Flexible Spending Accounts) contribution amounts more carefully.   The Health Reform Bill eliminates the reimbursement of over-the-counter drugs beginning in 2011.

For many years, the largest concern employees had with participating in FSA plans, was the “use it or lose it” rule.   The participation for many companies was low as a result.  Participation began to increase once over-the-counter drugs became eligible for reimbursement.  The main reason was that participants would go to the store and stock-up on the over-the-counter drugs so that they could burn through their account, and not had anything left over at the end of the year.  Now that those days are coming to an end, FSA participation may take a hit this year or next.

If you are an employee who participates in an FSA, when Open Enrollment comes around this year, you will need to make sure that you estimate your medical expenses correctly.  Otherwise, at the end of the year Generic Cialis Online you may find yourself with a balance in your account that you will lose.

We still recommend participation in FSA’s.  The financial benefits continue to out-weigh the negative of the “use it or lose it” rule.  The passing of the bill will just mean that a participant will have to be more diligent in their election for this year.

The insurance industry is celebrating Disability Insurance Awareness Month for the entire month of May.  The purpose of this event is to bring awareness to a very important insurance product that a large portion of working Americans does not have, Disability Generic Viagra Online Insurance.

Disability insurance provides replacement income to the policyholder, in the event that they are unable to work for an extended period of time due to illness or injury (not covered by worker’s compensation).

Obtaining the best rates for life insurance when you have health conditions is not difficult, if you follow the tips that we give.   This article will give you practical tips to help a person who has health conditions obtain the best rates for life insurance policies.    If you are on medication for a health condition, or have family (mother, father, siblings) history of a major health issue (Heart, cancer, etc.), you should follow these tips.

First, you have to understand that all insurance carriers are NOT the same.  Just because a carrier sells a specific insurance product, in this case, Buy Generic Levitra Online Life insurance, does not make it their specialty.  If an insurance carrier does not specialize in life insurance, you can rest assured that the probability of that carrier having the best rates, is not very good.

If you are on a medication, are considered overweight medically, and/or have family history of major health aliments, you should:

1. Focus on insurance carriers who specialize in Life insurance.  You will need to work with an insurance agency that is contracted with Life carriers.  For the most part, Life insurance carriers distribute their products via independent agents or financial advisors.   State Farm, Allstate, Country Financial, and American Family specialize in Property & Casualty products (Auto, Home, Business, etc.), not Life insurance.
2. Do not apply for a policy with a carrier who does not specialize in Life insurance.  Being “Rated or Table Rated”, receiving a “Reduced” benefit offer, or being “Declined”, can cause a carrier who you would have been a great fit for, to decline you, or to rate you.
3. Interview the Insurance Agent.  You will want to look for an insurance agent who works with individuals with impaired risks.  These agents will know the carriers that give the best rates for the health aliments that you may suffer from.
4. Have the agent quote you rates at a best case “Preferred” scenario, “Standard”, and worst-case scenario based on your specific situation.  A carrier will give you a higher or better rating if you qualify.   This will give you an idea as to how carrier rates compare when a person’s health is less than perfect.
5. Consult with your agent to see if a policy that requires a medical exam, “Medically” underwritten policy would be to your advantage.  In some cases, it may be in your best interest to undergo an exam, you may qualify for a “Preferred” rating which would give you a better rate.  This could also be a double edge sword, so be careful.

The most important tip to remember is to shop Life Insurance carriers.  These carriers overall, will give you the best rates.