Life Insurance |
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Scroll Down For Full Information About Life Insurance |
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LIFE INSURANCE FOR WEST PALM BEACH, FLORIDA |
| The main purpose of a life insurance policy is to provide survivor benefits for designated beneficiaries. A life insurance policy allows you to provide financial security for your family upon your death. Life insurance can help your family meet the financial needs previously covered by your income. |
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| We have access to hundreds of life insurance companies. We will shop your life insurance quote with all carriers to find you the best insurance rate available. |
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| Does my life insurance quote really vary that much from one company to another? YES! For example, some insurance companies will consider a person who smokes cigars a non-smoker; while other life insurance companies classify that same person as a smoker. This could amount to a 30-40% savings. Other life insurance companies will not raise your premium for certain medications, while other insurance agencies will charge more for the same medical history. It takes years of experience and know how to find the best insurance quote for you. At Insurance Awaits You we have that experience and know how. |
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| At Insurance Awaits You we have insurance offices in West Palm Beach, Fl and Stuart, Fl. to service all of your insurance needs from Auto Insurance and Homeowners Insurance to Worker's Compensation Insurance and Life Insurance. We do not work for any particular insurance company. This allows us to shop all of your policies with different insurance carriers to find the best company to fit all of your insurance needs. Some of our clients are interested in the best price while others have a particular insurance company that they prefer to do business with. We can offer you insurance quotes from several companies and will break down the pros and cons of each insurance carrier. No matter what your insurance needs are, we are here to help you. Contact us today to receive an insurance quote from several top rated insurance carriers. |
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What are the most common types of life insurance? |
| The three most common types of life insurance are whole life insurance, term life insurance, and universal life insurance. However, there are many different options with each type of life insurance |
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Whole life insurance is designed to provide coverage for the entire life of the insured. The policy provides a fixed amount of life insurance coverage while building cash value (a savings feature). The premium remains the same until the maturity date (usually age 100). Benefits are payable upon the death of the |
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The cash value accumulates from premiums paid and increases over the years. Life insurance policies with cash values include provisions that allow you to take out loans on your policy for up to the amount of the cash value. The loans accumulate with interest but repayment is not required prior to death. If you die and the loan has not been repaid, the loan amount with interest is deducted from the amount paid to your beneficiary. |
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Term life insurance is purchased for a specific time period and pays a death benefit only if the insured dies during the specified time period and premiums are paid. Term life insurance does not build cash value. Term life insurance is usually purchased for large amounts of coverage for specific time periods (i.e., one, five, 10 or 20 years, etc.) or to age 60 or 65. |
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With term life insurance, coverage ends after the specified term in the policy is reached, unless it includes a provision allowing you to renew the policy without providing evidence of insurability, such as passing a physical exam. However, the premium will increase with age. |
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A term life insurance policy may be convertible. This means you can exchange the term life insurance policy for a whole life insurance policy without providing evidence of good health. Although the premium for the whole life insurance policy will be higher initially, it will remain the same for the rest of your life. |
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Universal life insurance* is a combination of a term life insurance policy and the ability to accumulate cash value. It gives the insurance policyholder more control over premiums, provides protection for beneficiaries and is more flexible than a whole life insurance policy. The universal life insurance policy provides flexibility by allowing the policyholder to change the death benefit at certain times or to vary the amount or timing of premium payments. Both the universal life insurance and whole life insurance policy allows withdrawals or loans against the cash value of the policy. |
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*Buyer Beware: A combination of low interest rates and the rising cost of insurance could result in the future elimination of your policy's death benefit and cash value. Make sure you ask us about this possibility. Also, be sure you understand which cash values are guaranteed and which are not. As you get older, the cost of insurance rises. Therefore, if returns do not meet projections, your premium payments may need to increase to keep the policy in force. See the guaranteed section of your policy. It is important that we review any life insurance policies that you have purchased from other agents in the past to ensure the insurance policy has premium guarantees that will allow you to keep the policy at current premium rates going forward. |
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AT INSURANCE AWAITS YOU, WE DO NOT SELL UNIVERSAL LIFE INSURANCE POLICIES THAT ARE NOT GUARANTEED! |
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Types of Life Insurance: |
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Do you need Life Insurance? |
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| To determine your need for life insurance, answer the following questions: |
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Are there people who depend on you financially? |
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If you provide services such as child care, cooking, shopping, and cleaning for your family, who will provide these services if you die? |
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Are there Estate Planning concerns? |
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| If so, life insurance can provide for their needs if you should die. The proceeds from a life insurance policy can also help pay off debts such as your mortgage or other financial obligations you may leave behind. |
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| For most people, the need for life insurance is greatest after starting a family or buying a home. The need decreases as the children grow up and become independent and mortgages are paid. |
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Do I need life insurance for my children or my parents? |
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| There are three (3) common reasons to purchase life insurance. The first is to replace income or services provided should the insured person die. The second is to assist with burial expenses and the third is to pay off debts left behind by the insured. |
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| Children and people who are older or retired, or who have no dependents, may not need large amounts of life insurance. Insurance on children is sometimes purchased to assist with burial expenses, or to build cash value, which can be transferred when the child turns 21. |
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Should stay at home spouses have life insurance? |
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| If the stay-at-home spouse dies and provided services such as childcare, laundry, shopping, cooking, and cleaning, the survivor may have to pay someone for those services. Add up the expense of replacing these services to determine the financial impact when deciding if there is a need to insure a stay-at-home spouse. |
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Traditional Types of Life Insurance (the difference between term life insurance and whole life insurance) |
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| You have a choice of two traditional types of
life insurance: Term or Whole Life. |
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Term Insurance |
| A "term policy" involves coverage purchased
for a specific time period and pays a death
benefit only if the policyholder dies during
the time for which the policy is written and
premiums are paid. |
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A term policy: |
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Provides more life insurance coverage for
your premium dollar in the early years |
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Pays benefits only if the insured dies during the coverage period. |
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Does not usually accumulate cash value. |
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Is suitable for large amounts of coverage for specific periods (i.e., one, five, 10 or 20 years, etc.) or to age 60 or 65. |
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| Useful for: |
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Parents of young children |
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People with large financial obligations and
home buyers
With term insurance, coverage ends after
the specified term in your policy is reached,
unless it includes a provision allowing you to
renew your policy without providing evidence
of insurability, such as passing a physical
exam. However, your premiums will increase
as you age. A term insurance policy may be convertible.
This means you can exchange the policy for
a whole life policy without providing evidence
of good health. Although the premium for the
whole life policy will be higher initially, it will
remain the same for the rest of your life. |
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Whole Life Insurance |
| Whole life insurance, a "whole life policy," or
"permanent insurance" involves coverage
effective for the entire life of the policyholder.
A whole life policy pays a death benefit when
the policyholder dies, regardless of his or
her age. |
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| Key Characteristics: |
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Provides a fixed amount of life insurance coverage and a fixed premium amount. |
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Benefits are payable upon the death of the insured or on the maturity date-often the policyholder's 100th birthday. |
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Coverage can increase only with the purchase of an additional policy, or, if available, through additional riders or dividends. |
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Policy coverage is provided for life. |
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Premiums are paid at a fixed rate throughout your lifetime, if the policy remains active. |
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The earnings (for tax purposes) include
only the amount accumulated in excess of
the premiums paid. You may owe taxes on
such earnings if you surrender the policy.
In most cases, you will not owe taxes on
the earnings if you do not surrender the
policy. Check with your tax professional |
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Policies with cash values include
provisions that allow you to take out
loans on your policy for up to the amount
of the cash value. The loans accumulate
with interest, but repayment is not
required prior to death. If you die and the
loan has not been repaid, the insurance
company deducts the owed amount, plus
interest, from the death proceeds paid to
your beneficiary. |
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| Useful for: |
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Death or burial expenses-Be wary of
policies sold specifically as burial expense
policies, as you may end up paying more
in premiums than the policy is worth. |
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Estate or probate taxes. |
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Other Common Characteristics (check with
your company or agent): |
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If you miss a premium payment, the
company can draw from the cash value to
keep the policy in force, but only if such
a provision is included in the policy or the
insured has given prior authorization. |
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You may elect to stop paying premiums and
use the cash value to continue the policy
at a reduced level of protection, or the
contract may let you continue the policy as
extended term insurance for a
specified time. |
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You can use the cash value to buy an
annuity that provides a guaranteed monthly
income for a specified time.
(For more information, refer to our web page on annuities.) |
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You may use the policy as collateral
to borrow from the insurance company
or bank. |
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You may assign the accumulated cash value to the lender.
Some whole life policies are called
"participating" or "par" policies, which means
they earn dividends. Policy dividends can be
taken in cash, used to pay premiums or used
to buy more insurance. They are refunds of
excess premiums, so they are usually
not taxable.
Each whole life policy contains a table
that shows you how much cash value it
accumulates. These policies provide larger
values the longer you keep them. If you cancel
your policy, you can receive its cash value in
a lump sum. If you surrender or cash in your
policy, you pay taxes only when the sum of
the cash value and the policy dividends, if any,
exceed the total of the premiums you have paid.
Note: Due to surrender charges, if you
surrender your policy during its early years
(for example, during its first or second year),
you might receive much less than, or none
of, what you paid into the policy, so read your
policy thoroughly. |
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Variations of Traditional Life Insurance |
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| Other kinds of life insurance are simply
variations of term and whole life policies.
These include... |
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Universal Life Insurance |
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| Key Characteristics: |
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You can increase or decrease the "face
amount" of your insurance, within limits
stated in the policy, to meet your changing
needs. You may have to provide evidence of
insurability, such as a physical exam. |
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You can decide, within policy guidelines, on
the amount of premiums and the schedule
of payments. There may be limits on
premiums because of tax laws. Check with
your tax professional. |
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You may select a policy that is interest sensitive
or one that has a guaranteed rate. |
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| Useful for: |
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Meeting various financial obligations that
may occur during the course of a lifetime,
such as those that involve marriage or
raising a family |
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Providing guaranteed death benefits
for people who need them but want the
opportunity to earn more interest on the
policy's cash value. With an interest sensitive
policy, you accept at least part of
the investment risk.
Note: A combination of low interest rates and
the rising cost of insurance could result in the
future elimination of your policy's death benefit
and cash value. Make sure you ask
your agent about this possibility. Also, be
sure you understand which cash values are
guaranteed and which are not.
As you get older, the cost of insurance rises.
Therefore, if returns do not meet projections,
your premium payments may need to increase
to keep the policy in force. See the guaranteed
section of your policy. |
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Excess Interest Whole Life Insurance: |
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| Key Characteristics: |
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Any interest that exceeds the amount
guaranteed is credited to the policy. |
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The premiums and death benefits are fixed
and the rate of increase on cash value
depends on interest credits. |
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These policies are interest and/or
market sensitive, depending upon
investment of premiums. |
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| Useful for: |
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People who need guaranteed death benefits
but want the opportunity to gain more
interest on a policy's cash value. With most
universal life and excess interest whole life
policies, you will receive annual statements
showing the insurance protection accrued,
the cash values and the interest rates paid,
with interest rates varying annually or more
frequently. The statement also shows how
much of your premium money goes
toward buying the insurance and how
much goes toward paying the company's
administrative fees |
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Variable Life Insurance: |
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| Key Characteristics: |
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These policies allow for limited control
over the investment of the policy's cash
value through allocation of premiums
to and transfers between the policy's
"subaccounts" with variable rates
of return. |
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Depending on the policy chosen,
premiums can be either fixed or flexible. |
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Policies can be interest- and/or market sensitive,
depending on how premiums
are invested. |
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| Useful for: |
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People comfortable with making
investment decisions who want to choose
from the limited investment options
available through their policies. Under this
plan, benefits and cash values fluctuate
according to the performance of the
investment subaccounts.
Note: As a policyholder, you assume both the
benefits of high-paying investments and the
risks of negative investment performance.
Since there are no guarantees, you could lose
your investment. Some policies have optional
guarantees available for an additional charge.
Check your policy for any guarantees that
may be available. |
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| There are two kinds of variable life policies: |
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Scheduled premium variable life
insurance policies have premiums with set
payment times and amounts. |
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Flexible premium variable life insurance
policies have premiums that allow
changes in payment time and amount.
In addition to a Florida insurance agent's
license, an agent who sells variable life
policies must also be registered as a
representative of a broker-dealer licensed by
the National Association of Securities Dealers,
and be registered with the U.S. Securities and
Exchange Commission. Be sure to request a
prospectus that contains extensive information
about the company's investments and
investment policies. |
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Limited-Payment Whole Life Insurance |
| You pay premiums over a shorter period, such
as 20 years, but the policy provides protection
for life. Due to the shorter payment period,
you pay higher premiums than you would for a
traditional whole life policy with the same
face amount. |
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Single-Premium Whole Life Insurance |
| You pay the total premium in one lump sum
when you submit your application. This
normally provides you protection for life. |
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Combination Plans |
| These policies combine whole life with term
insurance in one contract. For example, you
may buy a permanent whole life policy and
later decide to increase your coverage for a
specified time to meet a specific need (such
as a mortgage, business debt, etc.). You could
do this by adding a term "rider" to your whole
life policy for an additional premium. A rider
adds specific coverage and benefits to an
existing policy for a specified period of time,
usually for a charge. |
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Endowment Insurance Policies |
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These policies offer insurance protection for a
specified period of time, with emphasis placed
on the rapid accumulation of money. The
policy "endows" if the insured lives to the end
of the policy period. When the policy endows,
the owner will receive a payment equal to the
policy's face amount.
In the past, insurers sold these policies with
endowment dates, such as the 10th or 20th
anniversary, or with a stated age, such as 65.
This made them attractive for use as savings
plans for college or retirement. Federal tax
changes now require such policies to endow
at age 95 or later to qualify as insurance for
tax purposes. There will most likely be tax
consequences when the policy endows.
Therefore, these policies are not often sold. See
your tax professional for more information. |
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Modified Premium Life |
| You pay a lower premium initially, which
increases in the later years of the policy.
Such policies may be suitable for people
who want whole life insurance but need
lower initial premiums. |
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Modified Death Benefit Life |
You pay a premium that usually remains the
same during your lifetime, but the death benefit
or face amount changes at a set time. Such
policies may be suitable for people whose
insurance coverage needs will decrease
after retirement.
When buying either a modified premium life
or a modified death benefit life policy, either
the premiums or the amount of life insurance
will change. Make sure you have a clear
understanding of these changes before
completing an application. |
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Graded Death Benefit |
| You pay a level premium that pays the full
amount of your death benefit for accidental
death, but a much smaller amount for other
causes of death in the first few years. After the
first few years, this type of policy will behave like
a standard whole life policy. The graded death
benefit policy is often sold as a guaranteed issue
policy through the mail or other media. Make
sure you ask your agent or financial adviser
about the potential tax consequences of buying
any insurance product. |
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Compare for Yourself |
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Kinds of Life Insurance |
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| Term Life Insurance |
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Low initial premium |
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May be renewable and convertible to whole life insurance |
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Protection for a specified period |
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Premium increase with each new term |
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Typically no cash value |
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| Traditional Whole Life |
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Permanent protection |
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Fixed premium |
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Fixed table of cash values |
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Fixed death benefit |
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Policy loan availability is usually free
of current taxation. Such loans may
become retroactively taxable if the
contract terminates. |
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| Universal Life |
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Flexible premium |
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Cash value reflects premiums paid
and current interest after deducting
any "mortality charge" (the cost of life
insurance based on a mortality table
used by the insurer), surrender charge,
investment fee, etc. |
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Deferment of taxes on the earnings
generated by the policy unless you
withdraw cash value or interest |
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Policy loans usually are not subject to
current taxation. The excess value of such
loans may become taxable, however, if
the contract terminates. |
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| Excess Interest Whole Life |
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Permanent protection |
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Fixed premium |
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Fixed death benefit |
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Cash value growth depends on
current interest credited to the cash
value account |
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Additional funds can be "dumped" into
the policy. The company credits excess
interest to these funds, making them
grow faster. |
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You can defer taxes on the earnings
generated by the policy until you withdraw
cash value or interest |
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You can usually take out policy loans
without being subject to current taxation. |
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Such loans may become
retroactively taxable, however, if the
contract terminates |
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| Variable Life |
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Long-term protection. |
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Fixed or flexible premiums. |
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Investment control of cash value,
stock, bond, money market or other
accounts. The policyholder bears the
investment risk. |
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Varying death benefits and cash values
in relation to the performance of funds in
separate accounts. |
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Deferred taxes on earnings generated by
the policy until cash value or dividends are
withdrawn. |
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Will Your Life Insurance Premiums Change? |
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Insurance companies sell many modern term
life policies and some whole life policies with
indeterminate or nonguaranteed premiums.
In the first few years, these policies typically
feature a lower premium than a policy having
similar benefits with guaranteed or fixed
premiums. The company can, and usually will,
raise the premiums.
Check your policy for a table of guaranteed
maximum premiums. Be sure to find out if the
policy you are considering has guaranteed
fixed premiums or premium rates that can rise.
Make sure you can afford the premiums for as
long as you want to keep the policy. |
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Disappearing Premiums |
| Life insurance policies with accumulated
cash values frequently offer the policyholder
the option of using the policy's cash value or
dividends to cover premium payments at a
future date. Although the premiums seem to
"disappear" or "vanish," charges are still being
made, which reduce the policy's cash value.
If you choose this option, you should carefully
monitor your policy's cash value. Changes
in interest rates, cost of insurance, policy
expenses and loans can quickly eliminate your
policy's ability to pay for itself. Such changes
could force you to resume premium payments
to keep your policy. |
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How Life Insurance Cost Is Determined |
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| The cost of life insurance can vary from
company to company. More than 700 licensed
insurance companies sell life insurance in
Florida, and comparing costs can be very
difficult. For example, a company might offer a
policy that is competitively priced for 25-yearolds,
but not for 40-year-olds. Several factors
determine the cost of a policy.
They include: |
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Type and amount of coverage |
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Age, health and habits (such as smoking) |
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Mortality tables, which identify statistical
death probabilities by age |
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Administrative expenses (such as
policy fees) |
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Current interest rates |
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Surrender charges (what you pay if you
cash in your policy) |
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The Cost Index |
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| The insurance industry developed a system
called the Cost Index to aid in comparison
shopping. It is worth your time to understand
this system because it can help you find
the best buy for your insurance needs.
This system compares costs of similar life
insurance plans. A policy with a smaller
index number is usually a better buy than
a comparable policy with a larger index
number. Insurance agents and companies
must provide you with the Cost Index and a
"Buyers' Guide to Life Insurance." These fully
explain the use of cost and payment indexes. |
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Accelerated Death Benefits and Viatical Settlements |
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Accelerated Death Benefits (also called "living" benefits) |
| Some life insurance companies offer to pay a
portion of the death benefit for a policy before
death occurs if the policyholder is diagnosed
with a life threatening illness or is confined in a
nursing home. Upon the death of the insured,
the designated beneficiary receives the
remainder of the death benefits. |
| The insurer may charge a small service fee
for the accelerated payment. Contact your
company or agent to learn more about the
living benefit before selling your policy. |
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Viatical Settlements |
A viatical settlement, sometimes called a "life
settlement" or "senior settlement," can provide
cash benefits before death when an individual
sells his or her life insurance policy. Viatical
settlements may involve healthy insured or
insured who have a terminal illness.
The policyholder, or viator, receives a
payment represented as a percentage of the
face amount of the policy. By entering into a
viatical settlement contract, the owner of a
life insurance policy sells the death benefits
of that policy to a licensed viatical settlement
provider in return for payment. The payment
amount will be substantially lower than the
death benefit of the policy.
Under Florida law, viatical settlements are
defined as "securities." The Office of Financial
Regulation exercises regulatory authority
over settlement providers. Florida securities
law requires the seller to provide full and fair
disclosure to the investor after considering the
investor's financial and tax status, age and
investment objectives.
Brokers selling viatical investments must be
licensed by the Florida Office of Financial
Regulation. Also, individuals who estimate the
life expectancies on policies purchased by
investors must be registered with the Office of
Insurance Regulation. The law also requires
viatical settlement companies to provide
regulators with names of the life expectancy
providers it has used.
Before considering a viatical settlement, a
policyholder should check with his or her
insurance company or agent to find out if
the policy qualifies for an accelerated death
benefit. An accelerated death benefit pays
part of the policy's death benefit, minus any
outstanding policy loans, before the death of
the insured. This option provides a portion of
the death benefit prior to death and leaves the
remainder of the money to the beneficiaries.
A viatical settlement contract requires close
scrutiny by the policy owner (viator), since the
agreement will result in a complicated financial
and legal transaction. In this transaction,
the policyholder loses his or her ownership
rights. It will also subject the insured to being
"tracked" to ensure the investors get timely
notice of his or her death. The purchaser
of your policy, as a result of becoming the
beneficiary, will have a financial interest in the
insured's death.
All viatical settlement contracts entered into
in Florida must contain an unconditional
rescission provision that allows the viator
to rescind the contract within 15 days after
receiving the proceeds. The viator will be
required to return the proceeds and the
policy will be restored to the viator as the
policy owner.
If you are considering selling a policy, you
should consult with your accountant or
investment professional, an attorney and any
government agency from which you receive
benefits or entitlements. The proceeds a viator
receives from the viatical settlement may
affect Medicaid and other program eligibility.
Be sure you're dealing with viatical settlement
providers and life insurance agents who
are licensed and regulated by the Florida
Department of Financial Services (DFS). |
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Tips and Tricks for Life Insurance |
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Let us shop around and compare plans from
more than one company. Don't feel
pressured to make a quick decision.
Life insurance is a long-term contract. |
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Ask questions. Your life insurance
policy represents a considerable
investment in your family's future. |
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Read and understand your contract.
Make sure your premium dollars are
doing what you want them to do. Be
aware of the limitations and conditions
of your policy. Most companies must
offer a 10-day free look period that
starts once the policy is in your hands. |
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Know what you have purchased.
The main purpose of a life insurance
policy is to provide coverage for your
family upon your death. If you prefer a
retirement plan, you should consider
other options, such as buying an
annuity. Make sure it specifies the
premiums, guaranteed interest rate,
investment period, payout period and
surrender fees. |
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Be aware that a life insurance policy will
have the words "life insurance policy"
somewhere in the contract. |
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Understand the cash value. With
many policies, the cash value that
accumulates is generally very low in
the first years the policy is in force.
This cash value may be exposed to
surrender fees. |
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Know the difference between the
"guaranteed" rate and the "projected" rate.
The guaranteed rate is the minimum rate
at which your cash value will accumulate. |
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In making a sale, an agent may highlight
a much higher projected rate based
on current and/or anticipated interest
rates. The company does not guarantee,
however, that the policy will achieve the
higher rate of return. |
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Ask your agent and tax professional about
any potential tax consequences. |
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Be sure your agent provides you with a
"Cost Index" and a "Buyer's Guide to Life
Insurance" with any contract issued. This
information will fully explain the use of
cost and payment indexes. |
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Beware of high initial interest rates.
Although initial interest rates may be
high, some companies lower the interest
rates on a policy after the first year. Many
companies also charge high surrender
fees for early withdrawal of funds |
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Ask your agent for the company's history
on crediting its interest rates and check
to see how credited interest rates vary
between new issues and renewal years. |
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Make sure you compare the rates and
charges. These include guaranteed
interest rates for all years, the surrender
charges for the length of years applicable
and the severity of the surrender charges. |
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