cost of life insurance Archives - Spencer Insurance Agency, Inc

Factors That Impact Life Insurance

Life insurance is a simple concept to understand. You pay the premium; your loved ones get the benefit when you die. Like all types of insurance, life insurance premiums are calculated based on the risk that you will die prematurely. This is why young people pay less than someone in their 30s or 40s. The risk is small and their premium reflects that. But besides age, what else affects your premiums? That question is bit more complicated to answer.

At the most basic level, there are two types of risk factors that will determine your premium (Note: this is for term life insurance rates only). The two are “personal risk factors” and “size, term, & type of policy.” Personal risk factors tend to be things like age and gender. The other is self-explanatory – it depends on the size and term of the policy.

Let’s focus on personal risk factors. Personal risk factors usually break down into nine categories, all of which can affect the price you pay for insurance. Those nine factors are age, gender, smoker/non-smoker, personal health conditions, personal health history, family health history, occupation, hobbies & travel, and lifestyle. Some of these may affect you, most of them may not. Some states don’t use gender to determine rates, some do. It’s important to know which ones affect you before worrying about whether or not they will. Let’s break these down in groups of three.

First three up are age, gender, and smoker/non-smoker. The younger you are, the longer your potential life will be. The biggest difference between a 20-year-old and a 50-year-old is that one of those people is going make it another 40 years and it’s probably going to be the former. This is the reason that people urge young people to buy life insurance plans: you will save tons of money in the long run. The second factor, gender, plays a significant role in premium calculations and, in many cases, works in tandem with age. Women tend to live longer than men. That’s a fact. This matters because so long as you are alive, you are paying premiums. More premiums are a good thing for the insurance company. Women live longer and can pay premiums for a longer period of time. This means they get charged less. This makes a difference when you recognize that most men live to around 75, while most women live to around 80. That means a 25-year-old man and a 30-year-old woman will have about 50 years in them before they die. That’s a big deal when it comes to insurance rates. Finally, smoking status. This is, by far, one of the biggest risk factors and the one that is most in your control. A smoker will pay two to three times more than a non-smoker when it comes to premiums.  Also, quitting does not automatically put you into the non-smoker category. You have to be tobacco-free for a couple of years to be considered a lower risk factor.

The next group is health conditions, personal health history, and family health history. Health conditions refer to current health problems you are dealing with. Examples include high cholesterol, diabetes, obesity, or hypertension. Getting yourself into good health can help you avoid the costs that are incurred. Personal health history refers to problems you have had, but no longer deal with. This could be cancer, stroke, heart disease, or depression. These conditions tend to resurface, so the chance that they may return puts you at greater risk of dying sooner. The last one is family history. If one of your parents died of a health condition before the age of 60, you can expect to see your rate increase because of the chance that you may also develop the same condition.

The final group is occupation, hobbies & travel, and lifestyle. Occupation usually will not be a concern for most people. However, the occupational hazard difference between a logger and a blogger is significant. If you work a particularly dangerous job, your premiums will be higher. Up next is hobbies & travel. In most case, your hobbies will not affect you. If your hobbies include things that tend to result in accidental death, then you’re asking for someone to see you as a risk. The same goes for travel. Traveling to Italy to indulge in fine food and drink is a lot different than going to the Middle East to be a translator for the Army.

When it comes to the size and term of the policy, the larger or longer it is, the more you will pay. That’s pretty simple. The longer the policy is around, the greater chance the company will have to pay you out. That could cost them a lot of money depending on how long the policy lasts. In any case, all these factors should be taken into consideration when shopping for a policy. If you’re looking for an affordable policy from someone who can guide you through the process, look no further than Spencer Insurance Agency for all your life insurance needs.  You can give us a call at (215) 885-2200 or visit us online at https://spencerinsurance.com/ and we will be happy to assist you. Go here to get an immediate term insurance quote.

 

Getting Your Life in Order

Many people believe that estate planning is only for the wealthy. Wealthy people have a lot of money, lots of land, and lots to divvy up to their heirs, so it makes sense that they need to plan out how and where their things will end up. However, everyone with any net worth needs to do basic estate planning to make sure that their possessions, no matter how large or small, are distributed according to their wishes. If you need a resolution for 2020, make it working on your estate to-do list.

The first (and arguably most important) document to put in order is your will. Wills ensure that your possessions are distributed in accordance with your wishes; therefore, the wording is of utmost importance. When looking over the wording of your will, be sure that all items are consistent with named beneficiaries. For example, if you’ve named your child as a beneficiary on a retirement account, you don’t want that same account on the will named to someone other than your child. This could result in a bitter will contest that will result in a lengthy legal battle.

The second document to draft is a durable power of attorney (POA). A POA is someone who acts on your behalf if you are incapable of doing so. A common example is someone who handles the distribution of assets upon your death. In many cases, spouses set up reciprocal POA’s, but POA can be given to anyone the person chooses.

When it comes to healthcare there is power of attorney for healthcare decisions as well. You can assign someone you trust to make healthcare decisions for you in case you’re incapacitated.

One other document to get started is a life insurance policy. The life insurance policy should be the first item on your to-do list and the one you need to start as soon as possible. Life insurance premiums only go up as you get older, so the sooner you start, the more money you can save. Life insurance policies are bought in an amount and when you die, the money on the policy will pass to your beneficiaries. There are multiple types of policies and different amounts to buy when it comes to life insurance. Use a professional agent to help you decide which amount and type makes sense for you.

There are many other financial documents to go over when estate planning, but hopefully this list gives you a good base to start from. When it comes to estate planning you may also need long-term care insurance, annuities, and many other items. When it comes to life insurance, Spencer Insurance Agency is just the place to get expert advice regarding life insurance policies, amount sot purchase, and what makes sense for you.

Be sure to give us a call at 215-885-2200 if you have any questions about life insurance. Your protection and peace of mind is our only business!

It may be too late. . .

     

 

September was Life Insurance Awareness month, but I still want you to be aware. . .

Now is a great time to review your employer’s group benefits.

In October I get a lot of calls from my clients asking me to review their group supplemental life insurance.  They have received the packet of employee benefits for the following year and they need to make choices.  Typicaly you can add or remove benefits at this time. However, it may be too late.  Applying for life insurance may take up to 6 to 8 weeks.  By the time you apply for and are approved for life insurance your deadline for your open enrollment may have passed you by.  You are stuck for another year.  So get a review today.

Here is a summary of the pros and cons of purchasing Supplemental Life Insurance through your employer:

Here are the pros:

  • Very convenient as the premium is deducted from your paycheck
  • Few medical questions are asked so it is easier to apply
  • No blood tests or other lab work is required
  • Many times the rates are blended with non-smoker rates making them lower for smokers.
  • Many times the rates are unisex which will make male rates less expensive

Here are the cons:

  • Group life rates are banded based on rates and typically increase every 5 years.
  • Group life rates are blended so if you are a healthy non-smoker you could get the same rate as a chain smoking unhealthy person.
  • The amount of life insurance you can purchase is limited and may not be sufficient for your needs.
  • May lose the coverage if you leave the employer
  • Rates can increase immediately if the employer chooses a new life insurance company.

What should I do?

Contact us today at 215-885-2200 to review your life insurance needs and the cost of your employer’s life insurance coverage before your next open enrollment.  Most open enrollments happen in the fall so this is a great time to review that coverage.

Consider purchasing life insurance on your own for the following reasons:

  • You can lock into a rate for up to 30 years.  The cost of your employer group coverage changes based on age bands every 5 years. Your coverage may look inexpensive now but what will you be paying in 10 years?
  • Check out the rate for yourself on our website.
  • You won’t lose your life insurance coverage if you get laid off or change jobs.
  • If you are a healthy non-smoker you may find less expensive rates.
  • You will be able to purchase the amount you need.

Go to our website and click on the Life Insurance Tab for more information and a free report “What you need to know about Life Insurance and How to Make sure the People You Intended to get your Life Insurance Benefits Actually Get the Benefits!”

We have been very successful helping our clients save a lot of money on their life insurance coverage.  Contact us today so we have plenty of time to review your choices and see which way is the best for you.

The Devil is in the details Part 2

Life insurance can be purchased online.  Is that a good idea?

  • What happens when your 20 year term rate guarantee is up and you still need coverage?
  • What happens if you become disabled and can’t afford the life insurance premium?
  • How do you change beneficiaries?
  • Did you know naming minor children as contingent beneficiaries is a bad idea?
  • What should you do with your life insurance if you get separated or divorced?

Yes, the devil is in the details.  Contact Spencer Insurance Agency  for a life insurance quote or review.  Charlie and Steve has over 30 years of experience in life insurance.  Charlie has earned his CLU (Certified Life Underwriter) designation.

September is life insurance awareness month.

LIfe Insurance and Disability Insurance. Get protected    

Have you purchased life insurance to protect your family from the loss of your income?  If not, what are you waiting for?  Check out Rachel’s story.  She provides a real life example of why you should not wait.

Most people overestimate the cost of life insurance.  Spencer Insurance has many companies that offer low term life insurance rates.  These low term insurance rates are only available while you are still healthy.  The younger you start the less expensive the cost.  A young person age 26 can lock into a 30 year term.  The cost would stay the same all the way to age 56.

According to studies, many people didn’t buy life insurance because no one ever asked them to buy it.

Well, I am asking you.  Contact us today for a life insurance quote.  Our website has a section that discusses life insurance.  Check it out today.

Don’t procrastinate!  When a parent dies the family is devastated emotionally.  Don’t let your family be devastated financially too.  Contact us today to buy life insurance. We are glad to assist you.

   

Spencer Insurance was voted “Best Insurance Agency” in the Best of Montco 2015 – 2016 – 2017!!

 

September is Life Insurance Awareness month!

We live for life’s wondrous moments whether it’s a baby’s first step, graduation, or retirement.  Life Insurance helps to ensure the life you’ve built for your loved ones won’t come to a halt if something were to happen to you.  It’s never too early or too late to consider all the things life insurance can do for your family.

Spencer Insurance Agency has many resources to help educate you on solutions to your life insurance needs.  Our agency wants to make sure you coordinate your life insurance planning with a financial planner, estate attorney, and us.

Part of our review of your life insurance needs is to make sure you have a will and that the will has been updated recently.  We want to make sure the people you want to receive your life insurance proceeds when you die actually get them.  I wrote a report on this subject called “What you need to know about Life Insurance. . . How to make sure the People You Intended to get your Life Insurance Benefits Actually Get the Benefits.

Many people ask “How Much Life Insurance do I need?  I will help have a discussion with you that includes four factors that will give you an answer to that question.

Another frequent question I hear is “Should I purchase supplemental Life Insurance offered by my employer?  There are pros and cons to purchasing your life insurance in a group plan.  Check out this article for the pros and cons.

Lastly, DO NOT PROCRASTINATE!  A friend of mine, Rachel, told me her story.  Read Rachel Story to see how waiting for the right time to buy life insurance can be devastating.  If you wait too long you may not be able to buy life insurance.

Call us today for a review of your life insurance needs.  Even if you have some life insurance call us at 215-885-2200 to make sure it is still performing the way it was set up to perform.

The 7 Wonders of Life Insurance

life-family

We live for life’s wondrous moments whether it’s a baby’s first step, graduation or retirement.  Life Insurance helps to ensure the life you’ve built for your loved ones won’t come to a halt if something were to happen to you.

It’s never too early or too late to consider all the things life insurance and do for your family.

Life Insurance:

  1.  Buys Time – Loved ones can focus on their grief instead of worrying about how to pay for the funeral and other final expenses.
  2. Provides a fresh start – By helping to pay off credit card bills, outstanding loans and even the mortgage, life insurance starts your family members off with a clean slate.
  3. Generate Income – Surviving family members can continue to pay for life’s necessities for years to come
  4. Offers flexibility – Family members may take time off from work or transition to a more adaptable work schedule.
  5. Creates opportunities – Funds may be used to start a business or pay for schooling to train for a new career
  6. Funds for the Future – Loner-range goals, college education for the children or a comfortable retirement for a surviving spouse may be obtained with the insurance proceeds.
  7. Helps leave a legacy – Parents have the chance to leave future generations a legacy of long-term financial security.

Life insurance can be life changing.

Call us today at 215-885-2200 for a life review

Or check out our website

Share with us how life insurance has helped your family or someone you know. . .