These days life insurance for the elderly can be an expensive proposition. Finding good coverage at a price you can afford is tough for the elderly these days. There are so many different types of insurance it can be a bit overwhelming for the elderly. We have some quick tips to help the elderly get the best deals on life insurance.

This kind of life insurance can take many different forms from whole life to term, but what is best? Life insurance for the elderly usually runs to the age of 85, but some companies may extend that age depending on a variety of factors. The first thing you want to do is avoid term insurance, as whole life would be a better option. You can get a whole life insurance policy to cover everything you need at a good price and many times, you get coverage from day one.

Now if you have health problems and opt for whole life the full benefits may not start from day one. This depends on the insurance company and the type of policy that you are purchasing. Some policies will have a two or three-year grace period before full benefits will be paid. If you happen to die before that is lifted the beneficiary will only get a percentage of the death benefit. Premiums for the elderly for the most part will never go up so this is why whole life insurance is probably the best option.

Get plenty of online quotes on whole life insurance. The one thing that the insurance industry has is a lot of competition and they want your business. By filling out a few online price quotes you could save yourself some money on your premiums. Life insurance for elderly can be found with a little work on your part. Getting the best cheap insurance at a price you can afford will take a little work, but worth it.

Short term car insurance is generally short term that covers a wide period of time from one day to 28 days. This would be particularly useful if you want to rent a car from a rental shop car or borrow a car from a friend for a day or two. Since the laws require that insurance coverage should be there for all vehicles traveling on the roads, the need to obtain short term insurance coverage has increased in importance in recent times. Short term insurance is more popular among those who like driving a car for the weekend and interstate travel. This is a time to relax which is very popular among Americans. In particular, if the weather is nice and there are no forecasts of bad weather over the next few days, journeys taken at the weekend are preferable to any other form of relaxation. Visiting relatives or friends living in another state is one of the most common reasons for people wishing to travel long distances over the weekend.

Because it involves travel on the highways and express ways, insurance providers also offer some short term cover to business drivers with add-ons at the same price. In case of failure of your vehicle, you can simply call the insurance agent of your insurance company and a towing service can be arranged. You can also use a replacement vehicle to take you back to your country or city, while on the road. Insurance cover in the short term, however, is more expensive than normal car insurance. Given the short duration of the policy and risk management, insurance companies provide this type of insurance at a higher premium to cover the extra costs in the unfortunate event of an accident.

Steps To Buying An Annuity

1. What is the annuity for? First, you need to consider what you need the annuity for.  Most annuities are set up to help protect someone of the financial issues of living to long.  However, there may be other reasons such as rolling over a 401k or setting one up for a grandchild’s college education.
2. How are you going setup the annuity? When first setting up your annuity you have a couple of ways to do this.  You could set it up as an IRA, Roth IRA, or even just as a traditional annuity.  I personally like the Roth IRA because it gives you the best tax benefits.
3. What riders are you going to add? The great thing about annuities is that you can add riders to them to do everything from guaranteeing a particular cash value to helping you earn extra interest on your account.
4. What are the fees? How much does it cost to own an annuity.  The fees can range on everything from the annual cost of the policy, the cost of the riders you add on, to sales fees.  Fixed annuities tend to have higher fees than variable policies.
5. What are the surrender policies? All annuities have surrender fees; they can range from as little as 4 years to 15 years.  The fees typically start out high and lower as years pass.  For example if you have a 4 year annuity the surrender fees might start at 8% in year one, and in year two drop to 6% and in year three drop to 4% and in your four drop to 2% and in year 5 it drops to 0%.

Things You Should Watch Out For

Now that you know what kind of options are available there are some things you should watch out for.  First off, when your surrender fees drop off on your annuity the sales agent may ask you to sign a new contract.  The reason they do this is because they will get paid a big commission for signing you back on.  Whatever they tell you don’t do it.

Finally, if you’ve owned your annuity for some time and have started taking payments on it some companies may approach you about selling your annuity payments.  This is where a company will buy your annuity payments from you and pay you a lump sum.  However the downside to this is that when you sell annuity payment you will have to take a discount and what you get back is nothing what you originally paid into it.

In Closing…

Follow the steps I’ve laid out for you, you should have no problem buying your next annuity.  Also you may want to consider talking to your local insurance agent to learn more about annuities and what would be best suited for your situation.

What Is Life Insurance, Really?

Life insurance is really pretty simple when you take away all of the marketing and advertising and boil it all down to the core. Life insurance is meant to be primarily one thing: a contract that will pay your family (or another beneficiary that you choose) a certain amount of money in the event that you die during the length of the contract. With all of the ads out there and all of the bells and whistles that life insurance can come with, you can get snookered into thinking that life insurance should be more than that. If you have been tricked into thinking that, it’s OK. Now you know the truth and we can move on.

Who Needs Life Insurance

Since life insurance is a simple contract that will pay your family in the event of your death, it’s not too hard to figure out who needs to get some life insurance. If your family would be significantly impacted financially by your death, then you need to get some.

The most common scenario for life insurance needs is a family with at least one wage earner and one or more dependents. Let’s take the Smiths for example. Mr. Smith is an attorney and is the sole wage earner for his family. His wife stays at home with their two children. In this scenario, Mrs. Smith and the children are financially dependent on Mr. Smith. If he were to die unexpectedly, his wife and children would be very negatively impacted financially in that their entire source of income had just stopped. So, not surprisingly, Mr. Smith needs some life insurance.

What may surprise you is that in this scenario, Mrs. Smith also needs some life insurance. Even though she’s not bringing in an income, the work that she does (housework, cooking, cleaning, staying at home with the kids) would have to be done by someone in the event of her death. Mr. Smith could either try and do all of that work himself (which would be difficult given that he already has a full time job) or he can hire someone to help him out. In either case, getting that work done is going to cost him (either time or money). So we see that Mrs. Smith also needs some life insurance.

Other common life insurance needs are for estate planning purposes, business partners, and mortgages. You may not have ever thought about this, but families are not the only ones impacted financially by an untimely death. If two people are in business together and each one is important to the success of the company, one of the partners dying could cause the company to go under. This would be a definite financial impact to the other partner. In this situation, business partners take out insurance on each other to protect themselves and their business.

How Much Life Insurance Do I Need?

Everyone’s insurance needs are going to be a bit different, so there’s no one formula that will work for everyone. The old standby is to multiply your salary by 10 (so if you make $75,000 then you would need to get $750,000), but I think that’s probably a bit low for most people.

The way that I prefer to look at it is to think about what exactly you would want your life insurance to do for your family if you died. Here are four categories to help your thinking:

Mortgage

Do you want to pay off your house if you die? Put your mortgage balance here.

Education

If you have children, do you want to provide for their education? Typical college costs are currently $10,000 to $15,000 per year, so $40,000 to $60,000 for four years per child.

Income Replacement

This is definitely the most important category to figure out. Regardless of whether you are bringing home a salary or not, your family will have ongoing expenses in the event of your death. The amount of money you need for this category has to be enough to provide a sufficient monthly income for your family to be able to pay their bills. The easiest way to come up with this number is to take the monthly income your family would need to live comfortably and multiply it by 200. (I’ll cover how we got that number in just a second.)

So if your family would need $5,000 of monthly income in the even of your death, then you would need ($5,000 x 200) $1,000,000 for this category.

***Math Alert***

The following paragraphs contain graphic descriptions of mathematics in action. Read at your own risk.

Allow me to explain how I came up with the numbers in the preceding paragraph. If you died, your family is going to receive a lump sum payment from the insurance company. Part of that money will be used right away, but most of it will be left alone. The smartest thing to do with the money that is not needed immediately is to invest it so that it produces interest, and then only withdraw the interest, leaving the principle alone. Using this strategy allows one lump sum payment of money to produce a monthly income for your family for years and years.

You can expect to get about a 6% return on the money invested after taxes. So this means that $1,000,000 invested would produce an annual income of $60,000, or $5,000 each month. You can work your way to the lump sum amount you need by multiplying out the percentages, or you can just multiply your desired monthly income by 200.

Final Expenses and Misc.

This category covers everything from funeral costs to medical bills to lawyer fees, or any other bill that arises as a consequence of your dying. $50,000 is usually sufficient for this category.

So, using what we learned in the categories above, let’s plug in some example numbers to find out how much life insurance we would need:

Mortgage = $200,000
Education – 2 children x $50,000 each = $100,000
Income Replacement – $5,000 monthly income x 200 = $1,000,000
Final Expenses – $50,000
Total: $1,350,000

Term vs Permanent Life Insurance

The last thing you need to factor in when considering life insurance is whether to go with term or permanent insurance. We’re not going to go too deeply into the difference between the two in this article, but to put things simply, term life insurance is straight life insurance – you pay a fee for the life insurance (called the premium), and the company pays your family if you die during the length of the contract. Permanent insurance, also known as whole life insurance, has a savings/equity option that builds value over the length of the contract.

What it comes down to is this: if all you want is low cost life insurance, then term is for you. If you are looking to save some money for long term financial goals as well as get life insurance, then whole life can be a good deal.

Term Life Insurance Cost

The cost of life insurance varies greatly by age, gender, health, height, weight, nicotine use, medical history, and the length of the contract. It can be difficult getting an accurate life insurance quote without talking to an agent because insurance companies generally want to know just about everything about you before they’ll agree to insure you. While it’s impossible to accurately guess the cost of a particular company’s life insurance, here are some general guidelines:

Male, age 30, non-smoker: $1,000,000 of 20 year term coverage goes for $40 to $60 per month.
Male, age 30, non-smoker: $1,000,000 of 30 year term coverage goes for $60 to $80 per month.

Female, age 30, non-smoker: $1,000,000 of 20 year term coverage goes for $30 to $45 per month.
Female, age 30, non-smoker: $1,000,000 of 30 year term coverage goes for $50 to $65 per month.

Low cost term life insurance companies include Transamerica, Genworth Financial, ING/Reliastar, Prudential and Lincoln Financial.