Smoking

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Most people know that certain lifestyle choices, such as smoking, can have a negative effect on your eligibility for life insurance. Tobacco use is one of the main dividing factors that life insurance companies use to determine whether or not you will qualify for premium rates. Some insurance companies will even deny coverage to a potential customer if they use tobacco products. While the best solution here is to quit using tobacco altogether, there are a few alternatives if you’re not ready to give it up completely. Did you know that some insurance companies will charge you less if you only smoke the occasional cigar, rather than actual cigarettes? Most insurance companies do not differentiate between smoking and using smokeless tobacco, but for those who dip or chew, there are a few companies out there that will be able to give you a better rate since chewing tobacco is known to cause less cancers than smoking.

Smoking may be one of the most obvious elements that can affect your premiums, but it is definitely not the only lifestyle choice that insurance companies consider when providing quotes. Did you know that your occupation, hobbies, weight, and medical history can all be used to determine your rate?

High Risk Occupations and Hobbies

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If your job is considered high risk, you may end up paying more for both life and health insurance. You may qualify for premium rates if you work in an office, but a firefighter or welder may have to shop around to get a good quote or even to find a company willing to offer them coverage. If you have a dangerous hobby, such as horseback riding or scuba diving, you will probably end up paying more for coverage than if you have a hobby that is considered safe by the insurance company, such as painting.

Obesity and Medical History

photo credit: Mason Masteka

Obesity is a risk factor for many health issues, such as diabetes, high cholesterol, heart disease, stroke, and other ailments. Because of these risk factors, an otherwise healthy person who is obese will not receive premium insurance quotes. In order to qualify for a premium quote, you should be within the normal range on the Body Mass Index (BMI). If you are in the overweight or obese range, you may still qualify for a reasonable quote if you agree to take certain tests to prove that your overall fitness level is at acceptable levels. Your previous medical history may also have an effect on your quote. If you have a history of heart disease, or have taken antidepressants in the past year or 2, you may not get premium prices on your quote.

Life Settlement by seniors

The practice of ‘life settlement’ is carried out mostly by seniors, who perhaps decide that they would rather live in the ‘here and now’ or need cash to improve their standard of living. Alternatively perhaps they have decided that the policy is no longer required since they have made alternative financial arrangements for the future.

But before thinking of selling a life policy seniors should consider the following:

• Do they have adequate coverage for funeral expenses etc. in the event of their death?
• Do any members of their family have special needs which require extra financial provision?
• Life Insurance payouts are exempt from income tax – this is extra money which could help a charity or family member – giving up the policy means they would miss out
• Depending on government policy the beneficiaries might be able to pay estate taxes with the proceeds of life insurance payouts
• The process of selling a policy is quite complicated since all the premiums made from when the policy was originally taken out have to be calculated and the tax on the sale has to be carefully calculated by professionals

There certainly are situations when selling a life policy on to a third party makes sense – emergency cash may be urgently required or the policy holder may have made other suitable provisions for those left behind. Before taking this big decision however policy holders must seek advice from a qualified financial advisor.

Source: John Bullis, founder of Bullis and Company CPAs in ‘The Nevada Appeal’

The recent recession has apparently caused many of this newer generation to become far more worried than their predecessors about their financial stability in later life. A recent study called ‘Reclaiming the Futures’ by Allianz Life Insurance Company of North America studied the attitudes of Americans aged 44-74, and found that, though a small majority (54%) felt that they were unprepared for retirement ,many showed an increased awareness about the necessity of having to plan for their financial futures.

New Baby Boomers more likely to buy Life Insurance Products to Fund Retirement

47% of the younger generation surveyed – compared with just 35% of the older people questioned, stated that they wished to attain greater security and financial stability, and 41% as opposed to just 30% of their older counterparts said they wished to reduce financial ‘vulnerability’.

84% of respondents said that financial planning was more important than it had been pre recession.”The economic downturn has woke up many Americans to the challenges of retirement income but this younger boomer segment seems to have taken the lesson even more seriously” according to Gary G Bhojwani, president of Allianz Life. He also stated that “security and guarantees with retirement income are now very important to Americans.” Also, the younger boomer generation is also more comfortable with the idea of working with financial professionals – at 47%, 20% higher than the total overall of the group studied.

Agreed Annuities and Mutual Funds most Popular

Income products such as those with agreed annuities figured high in the opinions of the young baby boomers – and of those that own annuities around 80% considered themselves happy with them, with mutual funds the next highest at 63%.

Allianz Life Insurance Company has been in operation since 1896 and the company specializes in life insurance and mutual funds .

Source: InsuranceNews.net

photo credit: Will Merydith

In the recent court case – Kramer v. Phoenix Life Insurance Company, the New York Court of Appeals sided with the purchaser of a life insurance policy, rather than the life insurer. Phoenix Life Insurance had tried to invalidate a life insurance policy which they asserted had been taken out with intent to sell at a later date.

Highest Court in the US rejects New York Insurable Interest Law as a reason to invalidate policy

The highest US Court’s decision in this case, effectively meant saying “no” as to whether the New York insurable interest law “prohibits an insured from procuring a policy on his own life and immediately transferring the policy …if the insured did not ever intend to provide insurance protection for a person with an insurable interest in the insured’s life”.

The court decided that life insurance products should be bought and sold like any other product on the open market and that insurers cannot second-guess consumer’s choices.

Alan Buerger, CEO of Coventry, stated that he hoped that “this decision will spell the end of carriers’ cynical actions to undermine the well-regulated secondary market.” According to Buerger “the high court’s statement of intent is a win for life insurance consumers because it should prevent insurers from attempting to invalidate policies based on an insurer’s assertion that a policy was taken out to resell at some time in the future.”

Regulation is Important in the Secondary Life Insurance Market – but so is Consumer Choice

Making a settlement on a life policy has become far more common over the recent years, due to the fact that policy owners whose policies would otherwise lapse or have to be surrendered can get far greater cash value via the option of life settlement. In fact, according to a recent report issued in July by the United States Government Accountability Office, life policy owners who sold their life insurance policies between the years 2006-2009 made a staggering $5.6 billion more than if they had simply surrendered them.

The New York settlement law prohibits the immediate sale of a life insurance policy and states that the policy owner must wait two years before making any decision to sell. In fact 40 US states have introduced their own laws regarding settlements. The new laws have been brought in to protect consumers and have been highly effective.

Following the High Court’s decision the National Conference of Insurance Regulators is expected to look at introducing general legislation to cover the 16% of states currently without formal laws on life insurance settlements.

Source: Coventry, Medicalnewstoday.com

photo credit: taberandrew

Only the Top Four Life Insurance Companies in the UK offer Life Insurance to Aids Sufferers

Just Zurich, Scottish Provident, Prudential and Fortis currently give life coverage to HIV sufferers and that out of these four just the Prudential could be said to offer competitive life insurance cover premiums. The researchers offered the big four insurers the opportunity to provide cover for a ‘test case’ HIV sufferer, and found that only two companies – Zurich and Prudential were prepared to take the presented individual on. Zurich quoted life cover of £10 per £1000, and Prudential £5 for every British £1000.

Life Insurers not clear about how much Premiums should be

According to Chris Morgan, the Marketing Director at Unusual Risks “What you have got is companies coming to the market on a pot shot, trying to take a bit of the market and get some claim experience at the expense of the client.”

When asked for a response to the these research findings a spokesperson for Fortis asserted that it was not Fortis’ policy to routinely turn down people with existing medical conditions and that they always took every case on merit.

Phil Brown, Head of Underwriting and Claims at Zurich UK Life stated “the insurability of HIV-positive customers is still in its infancy and as such our position is to continue to assess each applicant on their own merits, considering the many aspects of risk involved.”

Source: Life Insurance.co.uk posted 26 Nov
photo credit: Sully Pixel

Cost One Factor for Remaining Unprotected

The cost of life insurance also appeared to have prevented some people from taking out life cover – although the life insurance produces were theoretically well within their capability.

Life Insurance Gap Leaves Individuals Unprotected

According to Swiss Re “there is a sizeable untapped potential for life insurance to protect people’s financial needs effectively and affordably”.

The report included a somewhat startling ‘Mortality Protection Gap’ amounting to more than ten thousand billion euros when looking at the European countries collectively. This figure looks at the money which would be available to the bereaved should a loved one suddenly die – compared with the amount which would actually be required to meet their financial needs.

Life Insurers need to find ways to Access this Shortfall

To life insurers this could mean an extra 25 billion euros per year, and according to Swiss Re – a life insurance company would only need to access just one per cent of this to boost its life insurance premiums by a sizeable 250 million euros a year.

Source: Insurance Daily.com 29 Sept

photo credit: BlatantWorld.com

Why the Decline in Take up of Life Insurance?

Procrastination is the thief of time when it comes to Life Insurance. Life insurance is not compulsory – unlike mortgage and car insurance. This is what causes “people to put off buying it”, according to Butch Britton, chief executive of ING’s US Life Insurance division. But putting off buying life insurance until a later date can have serious repercussions – as Amy Danise, Editor of Insure.com, puts it “young, healthy people can usually get the least expensive premiums”. Overlooking life insurance in the shorter term can mean waiting until health deteriorates with the result that “life insurance prices are out of reach for them”.

Life Insurance not viewed as a ‘necessity’

With many families struggling to pay back debts, due to the recent recession life insurance is being placed on the ‘back-burner’. And this is even more surprising given the fact that 40% of families with dependents said they would find themselves in a precarious financial position should one or the main wage earners die.

Sharp drop in the number of Life Insurance Agents

The number of ‘affiliated agents’ – those who sell on behalf of one insurance company – has declined from 246,000 20 years ago, to 184,873 in 2010, according to figures revealed by LIMRA. This is because premiums are cheaper than they used to be, which makes it more difficult for agents to make a profit from selling the policies. Less door-to-door salespeople has contributed to fewer sales of life policies.

The Life Insurance Industry is Fighting Back

MetLife has been targeting employers as a way to win back business. Todd Katz, Vice President of insurance products says that “employees can typically buy the policies through payroll deduction, sometimes at a lower cost than an individual policy.” Life Insurers have also increasingly turned to the internet – and although there has been an increase in online sales – the majority of life insurance is still bought “face to face from a live person at the kitchen table” according to Byron Udell, Chief Executive at AccuQuote, an online insurance comparison website.

Source: USA Today, December 2^nd 2010

Why Insects Don’t Drink Coffee

The same chemical that gives humans the extra boost of energy in the morning is actually a pesticide produced by the coffee plant to kill off insects that try to eat it. Insects have a different ideal breakfast than humans that does not consist of coffee, orange juice, and a muffin. The caffeine is too strong for the insects and causes an increase in heart rate that results in death. Humans are much larger and have the ability to consume larger amounts of caffeine. One proven effect of consuming caffeine for humans is adrenal depletion which results in an increase in stress throughout one’s life.

Stress can cause hair loss, heart attacks, premature aging, and a shorter lifespan. One way to deal with stress is to exercise which releases endorphins into the body from the pituitary gland which creates a feeling of euphoria after a strenuous workout. Instead of drinking that coffee every morning, maybe it would be a better idea to go to the gym and workout. The heart rate increases naturally from the workout and the endorphins will release after strenuous exercise. The addictive properties of caffeine make it difficult to give up and look for an alternative, but it is never too late to try decreasing the amount of coffee and increasing the amount of exercise in the morning.

photo credit: Jack Zalium

The owners of the stores have been asked to put up signs outside the shops which show images of how smoking tobacco can harm the body. They include pictures of a lung damaged by cancer, a decaying tooth and a brain, which has suffered a stroke. The graphic posters are accompanied by information for the residents of New York on how to get help in quitting smoking, and a call to join New York City’s quit program.

Tobacco Companies Maintain their Market – while Smokers Continue to Die from their Habit

Surely, you may think, any attempt to reduce the amount of deaths by smoking has to be a good thing? Not only will there be a reduction in the numbers of deaths due to smoking but non smokers will have added financial benefits such as more money in their pockets and access to far cheaper life insurance.

The three big tobacco companies, Philip Morris, RJ Reynolds Tobacco and Lorillard, however have joined together in an attempt to block the campaign and have the signs taken down. In an attempt to keep their customers they are taking legal action against what they perceive to be a so far successful campaign to cut the number of smokers in New York City.

Tobacco Manufacturers Talk of ‘Rights’ in Attempt to Win Against Health Campaign

Unfortunately if past history is anything to go by, they may well succeed in their attempt. Back in 2003 Reynolds and Lorillard were successful in suing the California Department of Health Services and managed to wipe out their effective anti-smoking advertisements. The tobacco giants usually call on the services of the First Amendment in these types of cases arguing that store owners should not be forced to put up any material they do not wish to.

The Residents of New York City however surely have rights which outweigh the spurious rights cited by the big tobacco companies – for instance – the right to be educated as much as possible against the dangers of smoking and the right to live a long healthy life – with the added benefit of good medical and life insurance.

photo credit: manu_zoli

A recent survey by LIMRA which questioned 70 life insurance industry leaders on how they view sales of insurance products over the coming year showed that the majority felt overall life insurance sales will remain unchanged. 68% of executives believed that sales of group life insurance will not rise during 2011.

According to Robert Baranoff, the Senior Vice President of LIMRA, “Generally speaking, significant growth in life insurance sales is driven by new products in the market” and that “While overall sales may not substantially grow in 2011, LIMRA predicts that certain products will stand out in this low-interest environment.”

Indexed Life Insurance Products have the best Potential for Growth

Around a third of the life insurers said they believed that the insurance products with the best potential for growth were those which are indexed, with low interest rates making them a better investment for producers.  The next best life insurance products were predicted to be whole life policies – 27% of execs felt these would show some growth in 2011.

Life Insurers target the ‘Middle Market’

One area which life insurance companies are currently attempting to target is the so-called middle market. The amount of American households without any life insurance is at an all time high – in fact, the highest for 50 years, which is why insurers are pulling out the stops to increase sales of life policies in this market.

Use of Agents on the Decline

The use of agents was not seen by the majority of life insurers as a cost-effective way of targeting consumers. The number of sales agents is predicted to fall even further in 2011 – the number of agents recruited in 2009 was down from the previous two years. LIMRA has carried out research which shows that out of the 220 companies who were recruiting 20 years ago, only 73 are still actively recruiting, with just five companies being behind 65% of the new hiring.

Bank Assurance Predicted to Grow

Bank assurance – the distribution of life insurance products by banks is, however predicted to grow during the coming year, with seven out of ten of the insurance executives questioned of this opinion.

Bank assurance grew by 30% in the last quarter of 2010, and the research indicates that interest rates will be a big feature in greater growth this year.

LIMRA is a research organization which also supplies professional consultancy services to insurance and financial services companies worldwide.

Source: www.limra.com
Insurancenews.net January 2011
photo credit: quinn.a nyar