Life Insurance
Questions – Index Universal Life
What is the cap rate and what is the guaranteed cap rate? The cap rate is the maximum performance you will get from the index you selected. The guaranteed cap rate is the minimum rate the insurer can pay to the policyholder. It is usually around 3%. Are historical cap rates important? Yes, it is…
Read MoreQuestions – Life Insurance General
Can I pay for an insurance policy monthly or annually? Some plans may offer discounts if you pay the premium on an annual basis. Is there a waiting period before coverage goes into effect? Life insurance policies do not have a waiting period. They have contestability periods.These typically apply for fraud.Policies also require an exclusionary…
Read MoreQuestions – Term Life Insurance
Q: Can I convert a term policy to a permanent policy? If so, when can I do this? Most term policies allow for conversion to permanent insurance without a medical exam. And some policies offer a conversion premium credit that reduces your first year’s premium on the permanent policy. This will make it easier to…
Read MoreQuestions – Universal Life
Q. Do I need to determine how the policy will perform based on the guaranteed interest rates and mortality costs? Unless you are acquiring a fully guaranteed universal life policy, you need to determine how the policy will perform based on the insurance company paying you the lowest return they are required to pay and…
Read MoreQuestions – Variable life
Q. What are the current investment options and their performance and fees? The investment options you choose will be the key to the performance of the policy. Make sure you get a prospectus and carefully review the investment options and the management fees charged. Q. Is it important to run illustrations based on the investment…
Read MoreQuestions – Whole Life
Q. Is it important to determine how the policy will perform if the dividend rate paid on the policy decreases? Yes, this is very important. It is quite possible based on the low-interest-rate environment we have had the last 10 years. Even if interest rates go up, many bonds that mature will still be invested…
Read MoreReplacing an Existing Life Insurance Policy
Replacing a life insurance policy can be costly and complex. It is a decision that policyholders should carefully evaluate to identify the costs and pros and cons of replacing a policy. Once the decision to replace is made, the policyholder can anticipate paperwork concerning the act of replacing. This article will identify who wants…
Read MoreSmall Business Uses for Life Insurance
Succession Planning and Buy-Sell Agreements Succession planning is critical for business owners preparing to transfer their ownership interest in the business to partners or heirs should they die, become disabled or choose to leave the business for any reason. A buy-sell agreement is a legal document detailing how a business owner’s shares will be distributed…
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