Nearly everyone who fills out a form to get an online insurance quote instantly regrets their decision. Online insurance quotes are a never ending stick and carrot game for consumers. The first step in the process involves consumers sacrificing all of their personal contact information for the privilege of a quote. Sometimes that information is sent to a lead vendor that shares it with 4 or more insurance agencies. The 4 or more insurance agencies immediately tear into the lead like rabid dogs, blasting the consumer with phone calls. The consumer, meanwhile, sees an unknown phone number and proceeds to ignore what appears to be an unwanted call, all the while annoyed with the constant ringing. The other extreme is also possible, where an agent is very delayed in responding or doesn’t respond at all to the quote request. Why should consumers tolerate this silly game? There has to be a better way.
Fortunately I have a solution. You can get instant life insurance quotes to fund a cremation or burial. No strings attached. No personal contact information required. No waiting for an agent to get back with you. Nobody will be blasting your phone or spamming your email. If you like the quote and you feel the need to move further along in the sales process, you can always go to our contact us page to request an appointment.
The daily grind of life can sometimes mask the reality that our family members love us and depend on us. The holidays provide a brief respite from the daily grind, and thus an unmasking of our familial bond. When the holidays reaffirm that family members depend on us, this sometimes spurs people to buy life insurance. There is nothing wrong with emotion influencing the purchase of life insurance. Some people would put off buying life insurance indefinitely without an emotional push. Many agents stop looking for business during the holiday season (Thanksgiving through Christmas). However, this shouldn’t discourage you. We have Houston life insurance agents that make themselves available all year long.
Ideally you pick a life insurance policy that you keep forever. However, there are times when you need to cancel. There are a couple ways to cancel. The first way is over the phone. If you cancel over the phone, the customer service rep will stop automatic payments and mail you a cancellation form. Here is the problem: customer service reps are trained in retention. For instance, they might bring up the contestability period, which is a common scare tactic.
You can bypass the customer service rep by faxing a written cancellation request (don’t forget to sign your name). You might need to call the insurance company for the correct fax number, but they will freely give that information without pushback. In your written request, you should mention the effective date of cancellation and the policy number. You should also include a statement that says your decision is final and you don’t wish to discuss it with an agent. That last part is necessary because insurance companies will sometimes call your agent so he or she can talk you out of it. If you are cancelling a policy with cash value, make sure you read my article on nonforfeiture options before you cancel.
Life insurance companies must give back the cash value of whole life policies when consumers decide to cancel. The cash value is given back in the form of payment or coverage. Insurance companies refer to this as nonforfeiture options. The three options are: cash surrender, reduced paid up, and extended term. Consumers don’t know about reduced paid up or extended term, and the insurance companies don’t mention these two options when people call in to cancel their policy. Cash surrender is usually not the best option, but people select it from a lack of knowing other options.
Cash surrender sends you a check for the cash value. Extended term provides the original amount of coverage in the form of term insurance. The duration of term coverage depends on the cash value. Reduced paid up, my favorite option, provides a reduced amount of coverage that is paid up forever. The amount of coverage depends on the cash value.
Here is the problem with cash surrenders: if you decide to buy life insurance again after doing a surrender, you are essentially starting over from scratch. However, if you buy life insurance again after doing a reduced paid up, you are starting with the coverage provided by the reduced paid up. This can be a significant cost savings. One note of caution: if you are only contemplating cancellation because of a temporary financial hardship, then you are better off taking a premium loan instead. For more life insurance topics visit our life insurance blog.
The above image is a sample of nonforfeiture values that you might see in a whole life policy. The column on the far left is the policy year. The next column to the right is the cash value, which also represents the maximum loan amount. The next column is the amount of reduced paid up insurance available. Reduced paid up values continually increase until the policy matures (usually age 121 in modern policies). The last column is extended term. You’ll notice that extended term values start to decrease after a certain policy age; the cost of term insurance starts to outpace the accumulation of cash value. You’ll also notice that no cash value accumulates during the first two years of a policy. Agent commissions are the main reason for no cash value in the first two years.
I often say that no amount of Houston life insurance is too much because it never goes to waste. However, there is an exception to the rule that I’ll discuss.
Many people buy life insurance when a doctor or funeral reminds them of their own mortality. People sometimes spend more than they can afford when the decision to buy is spurred by emotion. If you think emotion is influencing your decision, take a step back and ask yourself, “What amount of money can I comfortably afford to spend on life insurance?” The key word here is “comfortably.” Buying more life insurance than you can comfortably afford doesn’t help anyone, as the policy will soon cancel from nonpayment.