What are your options if you had cancer in the past and you want life insurance? The type of cancer matters. Insurance companies are okay with basal cell skin cancer. They are also okay when the affected organ is removed. For instance, if you have a radical mastectomy after having breast cancer, the insurance company will act as if the cancer never occurred. The length of your remission plays a big role. If you’ve been in remission for two or more years, you should be able to get simplified-issue-whole-life. Keep in mind that medications may impact your approval. Some companies are friendly toward cancer maintenance drugs. Other companies seem to imply that you still have cancer if you are using cancer drugs (even if you’ve been in remission for a long time).
Many people who had cancer in the past head straight for guaranteed issue products without considering alternatives. It’s easy to understand why. Guaranteed issue products don’t ask medical questions, which many people like. People with a history of cancer fear being rejected by insurance companies. Emotions are not the only thing at stake with rejection; some companies specifically ask if a denial of coverage occurred in the past (insurance companies may deny coverage if another company denied coverage). Therefore, if you are not going with a guaranteed issue product, make sure your agent is trying to place you in a policy that has a high probability of approval. That way you won’t have a denial on your record (insurance companies can track denials in a database called MIB). Despite the positives of guaranteed issue, it shouldn’t be your first choice. Guaranteed issue comes with a two year waiting period for full coverage. Immediate full coverage should always be your goal. If you have any questions, don’t hesitate to contact us.
I recently ran across a blog article from a certified financial planner. In the article he described a situation where a 28 year old man with $5,000 in credit card debt and no heirs was sold a $200,000 whole life policy. The financial planner mentions term life as the best solution in this situation. However, his analysis relies on too many assumptions, including an assumption that disability will not occur. According to the US Centers for Disease Control and Prevention (CDC), 1 in 4 adult Americans will suffer from disability. The financial planner picked the cheapest term policy he could find when doing his analysis. The cheapest term policies typically don’t include living benefits. A living benefit provides an income stream to insureds if they become disabled. Cheap term policies may also lack valuable riders like the waiver of premium for disability rider, where the insurance company pays premiums for a disabled insured. People who become disabled are often unable to pay premiums, so living benefits are critically important. Don’t automatically go with the cheapest option.
I will agree with the financial planner that whole life wasn’t the best solution, but term life wasn’t either. A better solution would have been indexed universal life. With this type of policy, the insured could have paid the minimum premiums for a short time while he was paying down credit card debt. After the credit card debt is paid off, the insured can increase his premium payments (universal life offers flexible payments).
Another problem I have with the analysis is the assumption that sufficient funds will be available after a term policy expires, therefore a new life insurance policy won’t be needed. Even with careful financial planning, there’s still a chance of not having enough money. At the very least, people should fund their final expenses with a permanent life insurance policy. I’m not talking about a large policy; just something large enough to cover end of life expenses. If you don’t like the idea of paying premiums for the rest of your life, there is a special type of policy called limited pay whole life that allows you to pay off a policy in 10 years. After 10 years there are no more payments to make, and the policy stays in force forever.
Life insurance ads often take a one-size-fits-all approach, emphasizing the use of one type of life insurance over any other. Since certain age groups typically only see ads for one type of life insurance, those products become more popular within their respective age groups. For instance, people under 50 will never see ads for whole life unless they see an ad intended for an older age group.
Life insurance solutions are often more complicated than the one-size-fits-all strategy shown in advertisements. I use a two policy approach for people under 50. For final expenses I recommend whole life, and for all other expenses I recommend term life (affluent consumers should look at universal life). The problem with term life is that it terminates at a designated point in time, and some expenses, such as the cost of a burial or cremation, never go away during a person’s lifetime. Therefore, it’s inappropriate to use term life for everything.
Here is the takeaway: popular is not always better. Insurance products are only popular because ads make them that way, and ads make them that way because they only have enough time to discuss one product. Insurance agents, on the other hand, have plenty of time to discuss multiple products, and how those products compliment each other.
Get life insurance quotes Houston! What do you have to lose but a minute of your time? In the old days you had to wait around for an agent to show up at your door, and they wouldn’t always be on time. Then you endured the pleasantries and small talk with the agent before getting down to business. This is a new world of instant gratification, so immerse yourself in instant life insurance quotes. One word of caution: don’t rely on instant quotes alone. Getting quotes online is just one step in the information gathering process. Talking to an agent will help you flesh out how much coverage you need and what policies you qualify for. Also try to keep an open mind when talking to an agent. Agents are trained to know the suitability of products in different situations. You might have your heart set on term life insurance, but your agent may strongly recommend a permanent product, and for good reason.
If you can, try to avoid quoting websites that make you give away your personal contact information. Giving up your contact information is no guarantee that you’ll receive a quote. Even worse, your information may be shared with multiple agencies that feverishly ring your phone. Houstonlifeinsuranceplans.com will never ask for your contact information in order to get a quote.
Everyone wants the most coverage for the lowest price. However, you have to be careful with term life for seniors. The appeal of these plans is their initial price. They are often the cheapest option when first purchased. However, the premium rates are not locked in like whole life. Instead, consumers will experience a premium increase every five years. If the consumer can somehow afford all the price hikes, the policy automatically cancels at age 80, 90, or 95 (depending on the company). Whole life may be more expensive at first, but you will eventually save money with having a locked in rate. Meanwhile, your neighbor who has a term life product looks disappointed because a premium increase just showed up in the mailbox.
Be careful of slick advertising that spends most of its focus on price. That should be a red flag. A focus on price is a way to divert attention from the product’s disadvantages. Check out quotes for simplified issue whole life where you will see policies that don’t go up in price or cancel at a certain age.