Life Insurance: Why Do I Need a Medical Exam?

 

When applying for a Greensboro life insurance policy, part of the underwriting process may be for you to submit to a medical exam.  Not all life insurance providers require applicants to undergo a medical exam as part of their underwriting prerequisites and some insurers even offer "no-exam" life insurance issuance.

For a "no-exam" policy, however, you'll be required to pay a greater premium amount than those charged for a standard life insurance policy.  Sometimes the cost can be as much as double.  The reason for the additional cost is because an insurer is taking on additional risk when they write you a policy without knowledge of your health history or your current state of health.  These policies may also have limited coverage options and include a waiting period of up to two years before payment benefits are available.

Getting Greensboro Life Insurance Without Getting a Medical Exam

In line with all types of insurance, the cost of a life insurance policy is proportional to the amount of perceived risk being taken on by the insurer.  The underwriting process your insurer goes through to determine whether a policy should be written and, if so, the amount of premium to charge for a particular policy involves figuring the relative amount of risk being insured.  With life insurance, the purpose of a medical exam is to provide your insurer with an in-depth snapshot of your health status.  

The results of the exam combined with the answers you provide on your insurance policy application should allow your insurer to determine which risk class you fall into.  These classes include:

• Preferred Plus
• Preferred
• Standard
• Substandard

The better your risk class, the healthier you are presumed to be, with a greater life expectancy, translating to lower premiums for your policy.

There are several ways of obtaining a life insurance policy without taking a medical exam and without going the more-expensive "no-exam" route:

Simplified Issue Life Insurance - this includes a health questionnaire that provides a general sense of your health.  The standard upper limit for death benefits on this policy is $500,000.

Guaranteed Acceptance Life Insurance - also known as guaranteed issue or final expense insurance, this policy is often used to pay burial and other end-of-life costs and is typically available limited to $50,000 or less.

Group Life Insurance - typically offered by your employer as part of a benefits package.  Benefits are generally low.

Can You Ever Have Too Much Insurance?

 

Some insurance is essential, but it's important to buy the right types of coverage and the proper amounts.  Some insurance is required by law like vehicle liability coverage, while some protection is required by a lender such as the mortgage lender for your home loan.

Life insurance, which isn't usually required by anybody but highly recommended for everybody who has others depending on their income has two ways of costing too much:

1. Buying a policy with a death benefit that's too large.  The purpose of most life insurance policies is to make sure that, if you suffer a premature death, your family will have enough money to maintain their previous standard of living after covering funeral costs, college tuition for the kids and outstanding loans like those for cars and your home mortgage.  The aim isn't to suddenly make your family wealthy upon your passing, but to maintain their lifestyle.
2. Buying insurance for longer than needed.  Once the kids are out on their own, your home loan is paid off and you've retired, living on retirement income, your life insurance needs will be much different than when you were young with a growing family.

At this point, keeping the same amount of coverage could constitute over insuring yourself.  Contact your Greensboro insurance agent to go over your current life insurance needs.

 Too Much Car Insurance

If you drive a car, you're required by state law to have at least a minimum amount of liability insurance.  When you look at the numbers, 30K/60K/25K, you'll see that these minimum amounts are significantly lower than what you'd need after having a serious "real-world" accident for which you're held legally responsible.  If you have only minimum required amount of liability car insurance, you're likely well underinsured.

If you continue to carry full comprehensive coverage on an older, low-value car, you could be wasting your money.  If you could easily replace the vehicle if it were to be stolen or wrecked, the amount of premium you pay compared to the amount of a settlement may not be that much different.  In that case, you're likely over insured.

Homeowners Coverage

Your Greensboro insurance agent is happy to review your coverages to ensure you're properly covered.  Review your homeowners policy every couple of years to ensure adequate protection.  Protection for your home's structure should cover the cost of rebuilding, not its market value.

Life Insurance: Should I Quit Smoking?

To your Greensboro life insurance provider, the most important concern when underwriting a life insurance policy is if you, the policyholder, are at risk of suffering a premature death.  Risk level is what determines the cost of any insurance policy and, where life insurance is concerned, whatever behaviors you exhibit may play into the formula used to determine whether you qualify for coverage from a particular insurer and at what price.

Following are some of the major factors that figure in to determining life insurance rates.  Some of these are criteria over which you have no control, such as age and gender, while others are lifestyle choices over which you have complete control:

• Age - you have no control over this main factor determining premium rates.  Older people are more at risk of dying sooner.  Young people are more likely to live longer and to pay premiums for a longer period of time.  
• Gender - statistically, females live longer than males and therefore have less risk to insurers of premature death.
• Smoking - any tobacco use, whether cigarettes, cigars, pipes or chew, has been shown to foster numerous health problems.  Smokers can sometimes pay twice as much for their coverage as nonsmokers.  This includes vaping and using nicotine gum, patches and even marijuana.  Quitting smoking not only saves on the cost of life insurance but also on the costs of buying all the smoking materials.
• Health - during most life insurance underwriting, a medical exam is required where certain vital information is recorded such as height, weight, cholesterol level, blood pressure, etc. While "no exam" policies may be available, coverage costs may be higher.
• Lifestyle - any risky pastimes such as motorcycle racing or mountain climbing will likely make a life insurance policy more expensive.  Dangerous occupations such as mining, fishing, or logging may also be considered risky by your Greensboro life insurance policy provider and will add to your cost.
• Family Medical History - if you have a family history (parents/siblings) of serious medical conditions which may have contributed to a premature death, this may factor into higher premium rates.
• Driving Record - insurers may look at your driving record to see if you exhibit any risky driving behavior.

Change What You Can

Not much you can do about several of the above factors, but smoking is something you can stop.  You should.  Save on insurance and prolong your life.

Do You Need Small Business Life Insurance?

 

Anyone with a family, who has people depending on his or her income for their living expenses, needs life insurance to help meet those needs in the event of an untimely death.  Proceeds from a life insurance payoff can be used to replace the income lost when the breadwinner passes away.

If you're a small business owner, business life insurance also has an important place in your financial security plan.  While life insurance needs are unique to everyone, if you own a small business and have a desire to protect both your family members and your business interests should you experience a premature death, you need coverage that protects your concerns from every angle.

An unexpected death can upset the stability of both your family and your business from a financial standpoint.  Preparing beforehand with the right type and amount of life insurance can provide assurance that, should you die prematurely, you'll be able to adequately meet your current financial obligations.

One Policy or More?

If your small business is a sole proprietorship, a personal life insurance policy of adequate amount may be enough to cover your family's needs and your business liabilities after your death.  This may be especially true if the plan is for someone in your family to take over your business.

In most cases, however, it would be prudent to have two separate life insurance policies: one for your family and one for your business.  A business life insurance policy can serve a number of purposes:, such as: 

• Paying back loans that were taken out to get the business started or for later expansion.  Repaying these loans is especially important if personal property such as your house was used as collateral.
• Covering the cost of replacing a key employee, including you, the owner.
• Severance pay for staff in the event the business closes.
• Paying off buy-sell agreements.

Key Man (or Key Woman) Insurance

Key person insurance was specially designed for when the owner or very valuable employee of a business dies and financial support is needed to keep things running until the business can get back on its feet.  The number one salesperson, for example, may be responsible for the majority of business and, if he or she unexpectedly dies, it could take some time to replace that person and business profits may decline significantly during this time.  Insurance money can offer stability during this time.

Using Risk Analysis to Understand Coverage Needs

 

Risk analysis, which is the process of assessing the probability of an adverse event occurring, can be invaluable in helping determine your specific insurance coverage needs.  The entire insurance industry revolves around the reality that risk is an unavoidable factor in everyone's life.  By buying insurance coverage, whether it's life insurance, auto insurance, home insurance, liability insurance or any other insurance coverage, you're sharing the risk of accidental financial loss in your life with your insurer.

Risk analysis involves the study of the uncertainty that risk plays in your life.  If you drive a car, you run the risk of being involved in a collision, of injuring a third party or causing property damage, of having your car stolen or vandalized or of having a tree fall on it and crushing it.  There is insurance to help protect you from the financial loss that any of these risk factors may cause you if realized.  If you drink before driving, regularly break the speed limit or use your cell phone while driving, your risk of suffering an accidental loss skyrockets.  Conducting a comprehensive risk assessment will uncover the dangers you face.

The Risk Assessment Process...Also Known as Underwriting

When you apply for an insurance policy, whether for your car, your home, your life, or anything else, the insurance company goes through the process of underwriting, also called risk analysis or risk assessment.  They do this to determine the likelihood of whether offering you insurance coverage appears to be a good investment on their part.  If a policy is offered, risk assessment also helps determine the amount of premium you should be charged for your coverage. 

The process of risk assessment begins with identifying any hazards that could potentially cause harm.  For home insurance, a home inspection is typically conducted to uncover any risks or hazards that could lead to the homeowner later submitting a claim.  For car insurance, a check is made of your driving history to uncover any factors such as speeding tickets or DUIs that could indicate behavior that could lead to future accidents.  For life insurance, your family health history is looked at, as well as unhealthy habits such as cigarette smoking.

You can use the information uncovered by these assessments to do your own personal risk analysis to determine changes you need to make to help alleviate or reduce these risks.  Lower risks mean increased security.

Converting from Term to Permanent Life Insurance

 

People buy life insurance for lots of good reasons and, if you're like most, your reason for carrying life insurance falls into one or more of about half a dozen categories, including:

1. The number one reason for your buying life insurance is to provide financial protection for your loved ones in the event you die prematurely.  
2. You want to meet your financial responsibilities even after your passing.
3. Life insurance benefits provide cash that can make up for your family's loss of your income.
4. Benefits can be used to pay off debts left behind such as a home mortgage.
5. Your children may have the tuition needed to attend college from your life insurance proceeds.
6. Insurance benefits may be used to pay for your burial/funeral expenses.

Kinds of Life Insurance

There are several types of life insurance that fall into two broad categories:

Term Insurance, which is the simplest, most basic form of life insurance.  It pays benefits to your beneficiary if you die during the term of the policy, which is normally from anywhere between one and thirty years.  Most term policies provide no other benefits besides the death benefit.

Permanent Life Insurance, also called Whole Life Insurance, provides a death benefit for your whole life.  In addition, these policies accumulate a cash value that you can access after a certain period of time.  Traditional whole life insurance policies usually have a level death benefit amount and level premium cost throughout the life of the policy.

Converting Your Term Life Coverage to a Greensboro Permanent Life Insurance Policy

Term life insurance is typically sold as being the most affordable way of providing financial safety to your loved ones in the event of your unexpected death.  Because term insurance is "pure protection," unlike whole life with its cash value provision, you can get a higher death benefit for a significantly lower premium.  This is most important when families are young, with limited resources but a large need for a family financial safety net.

When your resources have increased and the need for the safety net becomes less, you may be considering converting your term policy to a Greensboro permanent life insurance policy.  Term policies typically have a provision allowing for this conversion, as long as it's done within their accepted time frame.  Simply contact your insurance agent and request a conversion.  A medical exam and going through underwriting should not be needed.

Can You Ever Have Too Much Insurance?

 

If you've ever caught yourself thinking "I'm insurance poor," it's likely because you've been adding up all those policies you've managed to collect and all those premiums you continue to pay.  If you're like most people, you have life insurance, car insurance, health insurance, homeowners or renters insurance and maybe more.  The question is, can you ever have too much insurance?

Vehicle Insurance

In the state of North Carolina, anyone driving a vehicle on public roads is required by law to have at least a minimum amount of liability insurance.  This is third-party liability coverage to help pay for financial losses suffered by others in an accident you cause.  Losses may be the result of property damage, bodily injury or death.  In NC, the minimum liability coverage required is:

• $30,000 per person per accident bodily injury
• $60,000 per accident bodily injury coverage for all persons
• $25,000 per accident property damage

How Much is Enough

Many experts recommend you increase your liability limits three to five times the minimums (or more).  The amount you carry should depend upon the number of assets you stand to lose if sued for liability.  Even more protection is available through the purchase of a high-value umbrella policy.  This is a relatively inexpensive way to significantly increase your asset protection.

Other car insurance options should depend on the value/condition of the insured vehicle.  If you're driving an older, beater car that you could easily replace, carrying collision and comprehensive coverage on it probably doesn't make sense.  The money you're spending on these coverages might be better applied to medical payments or uninsured driver's coverage.

Life Insurance

You buy life insurance to keep your dependents financially secure in case you die unexpectedly.  The death benefit should cover: 

• Your income
• Major debts
• Funeral expenses
• Future obligations such as your children's education

As you age, however, you likely don't need the coverage you once needed.  Your home mortgage may be paid off, the kids are grown and off on their own and your debts are what they once were.  In this case, you can lower your coverage to a more appropriate amount. 

Homeowners Insurance 

Your homeowners coverage should be enough to rebuild your home and replace your property should the home be totally destroyed.  This doesn't mean covering the market value of the home or the value of the land.  Umbrella coverage can extend your homeowners liability limit.

How To Choose an Insurance Company

 

Buying insurance can be a potentially overwhelming experience due to the vast number of confusing definitions, conditions, exclusions and coverages involved.  On top of this, you want to choose an insurance company that's well-regarded in the industry, financially strong, with a good claims history and top reviews from clients with whom they've done business.  Here's a breakdown of several factors to consider when you're trying to choose an insurance company:

• Understand the difference between an independent insurance agent or broker and an insurance company agent.  An independent agent likely has access to policies from numerous different insurance providers.  While an insurance company agent can only write policies from his or her own company, the independent agent can write whatever policy is best suited to your particular insurance needs.  To make matters even simpler, an independent will do the research and legwork to find the best choices and then provide you with multiple options to consider.
• When considering a particular insurer, research their history and look into their reputation.  How long have they been in business?  What products do they offer and in what states are they sold?  What can be said about their company leadership and community involvement?  What are their professed vision and values?
• Assess the financial strength of a company you're considering and don't accept any insurance offer from a firm with less than an "A" (excellent) rating.  A.M. Best is the #1 independent insurance company rating-company in the U.S., but you can find several others here.
• Choose an insurance company that sells the type of insurance coverage you need.  Many companies give discounts for customers who carry multiple policies (e.g., homeowners, life, vehicle) with them, so check into this.  Check for all other discounts.
• While price is an important consideration for most people when they choose an insurance company, it shouldn't be the only consideration.  A lower price may mean a lower level of coverage, so always compare apples to apples.  Keep in mind the old axiom that you get what you pay for.  There may be a number of reasons for the price differences between different companies.  One may be because the lower priced is new to the market, which may mean it's lacking in experience.

Get with a trusted broker and explore the companies and coverages available.  Seek professional guidance and utilize their ability to uncover the best protection at the fairest price available.

Life Insurance: What Happens If There Are Co-Beneficiaries?

 

The purchase of life insurance is a common financial planning tactic for North Carolina families, providing financial protection for survivors when the family breadwinner has passed.  Your Greensboro life insurance coverage is something that can mean a world of difference to as husband or wife left behind as well as to children who may require financial support until they're able to support themselves.

A primary purpose of life insurance, whether it's whole life, term life or universal life, is to allow the beneficiary or beneficiaries to have continued financial support after they have lost the person who was previously providing that financial stability.  

The benefit received from a life insurance payout may be used wherever it's needed, whether that means paying off outstanding loans such as a home mortgage or taking care of funeral expenses.  As a father of small children, you may be taking out a Greensboro life insurance policy to ensure that, should you pass away unexpectedly, your family may continue living in a fashion to which they've become accustomed and have the funds needed to send the kids to college.

Beneficiaries

Part of taking out a life insurance policy is choosing and naming a beneficiary or beneficiaries.  This could be: 

• A person or persons
• Your estate 
• A charity
• A trust
• A business (as in key person life insurance)

The beneficiary is the person, persons or entity that will receive the proceeds of your life insurance policy when you pass.

There are two types of beneficiary designations:

Primary beneficiary - the person, persons or entity that will receive the proceeds of your life insurance policy at the death of the policyholder

Contingent (or secondary) beneficiary - only entitled to receive proceeds from the policy if the primary beneficiary dies before the policyholder

Multiple Beneficiaries

You may name more than one primary beneficiary if desired, in which case they will receive either equal portions or a stated specific percentage of the death benefit when you pass.  There are two ways to select multiple beneficiaries:

Per Stirpes - beneficiaries are designated by lineage, with policy proceeds being equally divided among beneficiaries and/or their surviving children

Per Capita - policy proceeds are equally divided among all beneficiary survivors.  Click here for a more detailed explanation of Per Stirpes and Per Capita designations.

If a beneficiary dies before the policyholder, he or she must be renamed as soon as possible.

Waiting Too Long to Buy Life Insurance: The Pitfalls

There are numerous reasons that may be prompting you to buy life insurance. These may include:

• Recently getting married
• Having a new baby
• Taking on significant debt, such as buying a house that your loved ones wouldn't be able to afford if something were to happen to you
• You've personally seen the negative financial impact a death has had on the surviving family

Waiting to Buy Life Insurance

While there are many reasons to buy life insurance, there are just as many reasons that may be holding you back from taking the action needed. Perhaps you think you're too young and healthy to need life insurance or, at the other end, you think you're too old to need it. Maybe you think it's too expensive to get coverage or you think you don't need it because you don't have children.

These are all common excuses people find for not buying life insurance. And there are more – I smoke, my health isn't good, I don't work outside the home, I don't know what kind of or how much coverage I need. There are convincing counter-arguments to each of the excuses mentioned, but that's information for another blog. The purpose of this piece is to discuss the pitfalls of waiting too long to buy life insurance, whatever your reasons may be.

Waiting Too Long

The best time to buy life insurance will vary from one person to another, dependent upon your family and financial situations. Generally speaking, you need life insurance if there are people who depend on your income to maintain their current standard of living or if you have debts that your survivors will have to pay off. Add to that the cost of burial, which your loved ones will also have to deal with.

When buying life insurance, younger is better. At a younger age, you'll be subject to lower premiums. As you get older, premiums will rise in cost and there's also a chance that you could develop health problems that will either make your insurance more expensive, more difficult to obtain or disqualify you from getting coverage altogether.

Unfortunately, younger people who are faced with mortgages, student loan debt, credit card debt and car payments will often put off buying life insurance. This can have a huge financial impact, similar to putting off saving for retirement. Sooner is better!

4 Insurance Planning Tips for Difficult Times

Auto insurance companies have recently come under pressure to refund policyholder premiums charged based on out-of-date estimated miles driven data. Since many drivers have significantly curtailed their normal driving habits during the coronavirus crisis by not traveling, miles driven have gone way down. The good news is two fold.  1. Vehicle accidents have also gone way down.  2. Many companies are now refunding some premium dollars to consumers. 

Stay Home, Stay Safe and Stay Productive

With approximately 90% of the U.S. population under some form of lockdown order due to the novel coronavirus pandemic, “flattening the curve” has been shown to be possible through diligent limitation of social interactions and staying at home except when needing to leave to procure essential materials such as food or medicine.

With plenty of hours available during your days at home, we recommend you take some time revisiting your insurance portfolio to ensure your coverage is still what you need. Here at Tom Needham Insurance Agency we're open for business, working from home and at the office by appointment. We're happy to offer some insurance planning tips to help square away your portfolio and maybe even save a little money at the same time.

Insurance Planning Tips

1. It's recommended you re-shop for your car insurance every so often. Car insurance companies change their rates all the time and you should regularly check for lower prices.
2. Reexamine your life insurance needs – that 30-year term policy you bought 20 years ago may no longer be appropriate to your current needs. You may choose to lower your policy amount and save some money on your monthly premiums.
3. Ask about homeowner's discounts – just like good drivers can qualify for auto insurance discounts, good homeowners can sometimes qualify for good homeowner's discounts. These may be available for deadbolts, burglar alarms, sprinkler systems and more.
4. Bundle Your Policies – Tom Needham Insurance has access to numerous companies, some of the best in the business, and we'll work to find you the best deals available. Bringing your various policies such as homeowner's, auto and life under the umbrella of a high quality single insurance provider can save you as much as 15% or more on your premium costs.

Is There a Right and Wrong Time to Buy Insurance?

Insurance is a funny thing. It's something you buy but hope you'll never have to use. It's often been said that insurance is better to have and not need than to need and not have, but if you wait to buy insurance until you absolutely need it, you've likely waited too long!

The Best Time to Buy Insurance

Depending on what type of insurance you're considering, there are different times that are optimal for buying it. Following pure logic, the best time to buy life insurance is immediately after birth since, as you age, life insurance premiums continue to increase in cost. The sooner a policy is bought, the lower the price. While many companies sell life insurance for children and some even specialize in it, like those you may have seen advertised on TV, child insurance isn't typically recommended by the experts.

The primary purpose of life insurance is financial protection for any dependents relying on your income for their current standard of living. Since kids generally don't earn an income, they have no dependents relying on them for their financial security.

The best time for buying life insurance is actually when you get married and start a family. The family becomes dependent upon your income and a life insurance policy protects them from losing their financial support should you suddenly die. Life insurance proceeds can also go toward paying off debts and taking care of burial expenses. Many experts recommend you carry life insurance coverage equal to 15 to 20 times your annual income while your family is still young. Later in life, as the kids leave the nest and the house gets paid off, you can drop this down to 10 to 15 times your annual income.

Car Insurance 

                                                 

Car insurance is one type of coverage that you're required by law to carry. That is, if you operate a motorized vehicle on public roads. You need to have your insurance in place before you take your vehicle out on the road and maintain coverage continuously as long as you're driving.

Car insurance policies typically come up for renewal every 6 or 12 months and it's a good idea to do some comparison shopping each time your renewal comes due. Auto insurance companies change their rates frequently and sometimes add additional discounts. Look at your coverage every year and compare competitive policies. Seek the best coverage and the best prices.

Decoding Life Insurance Quotes: 4 Tips

Life insurance is (or should be) an important part of nearly every household's financial plan. If it's not part of your family's financial base, it may be that you find life insurance too confusing or complex or maybe you're just adverse to the idea of considering the topic of your own or your spouse's demise. These are not uncommon reasons for avoiding the subject of life insurance.

Who Needs Life Insurance?

Simply stated, life insurance is an obligation for anyone on whom someone else is dependent for financial support. Whether this dependent is a spouse, a child, a parent, a sibling or a partner, if your death would mean a significant financial loss for another person, you need to have life insurance. If you're retired with a secure income or independent financially and no one would suffer financially at your sudden death, then you probably don't really need life insurance.

Two Types From Which To Choose

Life insurance is divided into two types – whole-life (permanent) and term-life. Term life is the least expensive and simplest form. With term life, the insurer sets the cost of the policy according their perceived risk of your dying within the term, which is typically 10, 20 or 30 years. If you die within the term of the policy the stated death benefit is paid to your named beneficiary.

Permanent insurance uses the same “risk of death” assessment for helping determine premium cost but also features a savings component, referred to as the cash value. You'll find three types of permanent life insurance – whole life, universal life and variable life. What differentiates these from one another is the way the cash value funds are handled.

Decoding Life Insurance Quotes

Here are four tips for decoding life insurance quotes:

1.     Use an independent broker with access to multiple life insurance companies to get multiple quotes side-by-side.

2.     Life insurance costs are determined by your age and health. This is a competitive business and most life insurance companies offer about the same policy costs.

3.     Insurance costs are the same whether you buy online, from an independent agent or straight from an insurer. There may be differences, however, in service quality. An independent broker can help you find the best companies.

4.     If you have a particular health issue, your broker can steer you toward an insurer that may be more lenient to individuals with your condition.

Life Insurance Medical Exam: What to Expect

A life insurance medical exam is a way for your proposed life insurance provider to confirm the information you supplied to them on your life insurance application and to delve a little further into your medical history. A life insurance medical exam is typically conducted by a qualified medical professional such as a nurse, and need not be done at a hospital or clinic. In many cases, the exam will take place at your home.

Two Stages

There are usually two parts to a life insurance medical exam:

1. A verbal question and answer period with the examiner.
2. Standard measurements such as height, weight, blood pressure and heart rate (pulse). You will also likely be asked to give a blood and urine sample. The blood sample is to check things such as cholesterol, blood sugar, protein and HIV. The urine sample is to check for protein, glucose, HIV, creatinine and drug use.

The information derived from this two-stage medical examination will be compiled with the information from your insurance application and the statistical longevity information used by the insurer. All this will then be used to determine whether or not the insurer feels that you're qualified to be accepted as one of their insureds and, if so, your annual policy premium rate.

What's the Time Factor for the Test?

The examiner who comes to your location to perform your life insurance medical exam will bring everything they need to complete the session. The verbal medical history portion should take about twenty minutes, give or take, and obtaining the urine and blood samples should take just a few minutes more.

Why a Medical Exam is Required

There are several reasons insurers often require medical exams be undertaken by their prospective insureds. They include:

• As a verification for the information originally submitted on your application
• To get a full medical history. The exam questions go deeper into not only your personal medical history but also into your family medical history. If, from the information gathered, it's determined that you may statistically die earlier in life, higher premiums will have to be collected during the early years of the policy. Conversely, if it's estimated you'll live longer, early year premium payments will likely be lower.
• The exam may help uncover any underlying medical conditions of which you're not aware or that you may have not declared. It may also uncover any drug or nicotine use.

4 Types of Insurance You Probably Don't Need

Some types of insurance you should have, such as life insurance, if you have a family depending on your income for their day to day living expenses. Some types of insurance you must have, by law, such as car liability coverage if you drive a vehicle on public roads in almost all of our United States. But some types of insurance are unnecessary and, although they may appear appealing when being described by an insurance salesman, you not only don't need them but they are likely to just be a waste of your money. Here's a list of a few insurance policies you're probably just better off without.

1. Child Life Insurance – child life insurance may look appealing at first because of its low cost and promised accumulating cash value, but that same money put into your child's education fund, savings account or even into your own additional life insurance coverage may be considerably more valuable. Life insurance is designed to provide financial protection to those depending on your income, and children typically have no income upon which dependents rely.
2. Flight Insurance – if you already have a life insurance policy in place, taking out extra coverage before flying in an airplane is redundant. Deaths in airplane crashes are relatively rare, but if you are unfortunate enough to suffer such an event, your standard life insurance policy already has you covered.
3. Rental Car Insurance - `buying extra insurance from a rental car company when renting a car may also be redundant, since your personal car insurance policy likely already covers you in a rental car. Double check your car coverage to make sure, and if you're not covered by your personal policy then the small fee charged by the rental car company may be worth the cost.
4. Auto Collision Coverage – if you're driving an old model car that's not worth a whole lot of money, you're likely better off forgoing the inclusion of collision coverage on your policy. This may also be said of the comprehensive portion of your policy. Instead, put the money you save on premiums in a car repair/car replacement fund to be used in the event your vehicle gets damaged or is stolen. For newer, more expensive cars, however, full coverage is probably your best bet.

These are just a few of the many types of insurance you can do without. Check here for more.

5 Things to Know About Third-Party Life Insurance

Third-party insurance is nothing new, and though you may not be aware of it, you probably already carry some third-party coverage. Nearly every state in the country requires its drivers to maintain liability protection in case they cause bodily injury or property damage to a “third party” with their vehicle. Specific minimum amounts of that coverage are set and required by each state jurisdiction.

Third-party life insurance, however, is totally different than third-party vehicle liability (or any liability) coverage. Third-party life insurance is not something a policyholder buys for him or herself, but for a third party.

Third-Party Insurance Defined

In a third-party life insurance policy situation, there are three parties who are part of the agreement. The first is the policy owner, which is the entity (usually a person but not necessarily) that purchases the policy and is responsible for payment of the premiums. The second is the insurance company, and the third is the individual named in the policy, whose death would trigger payment of the death benefit to the named beneficiary or beneficiaries. Here are some other things to know about this type of policy:

1. As with almost all other insurance coverage, third-party life insurance requires that the policy owner have an insurable interest in the third party. Insurable interest regarding a life insurance policy means that the death of the third person (named in the policy) would cause material loss or financial hardship to the policy owner. An example of this would be an individual taking out a policy on his wife or child.
2. While the first party in the 3-party life insurance policy is often a person, it may also be an entity such as a company for whom the insured is a key employee or officer.
3. The person being insured in a third-party life insurance policy must be aware of and consent to this arrangement. An exception to this rule exists when a parent buys a policy to cover his or her newborn child, who is too young to provide consent. Buying coverage for a child may seem unusual, however, if the child becomes ill and passes away, the medical bills left behind would cause financial hardship to the parents.
4. The first and third parties to a third-party life insurance policy cannot be the same.
5. The beneficiary need not be a person but could be a company, a trust, charity or some other entity.

3 Answers to Uncommon Insurance Questions

The subject of insurance can be a confusing one, and for someone with little or no experience in this area, there may be countless questions to be answered. If you've ever heard the term “insurance poor” used by someone, it likely came from someone facing premium payments for:

• Homeowner's (or renter's) insurance
• Vehicle insurance
• Life insurance
• Health insurance
• Dental insurance
• Disability insurance
• Travel insurance
• Umbrella insurance
• Insurance on a car loan

For someone owning a business, you can add to this:

• Professional liability insurance
• Property insurance
• Workers' compensation insurance
• Product liability insurance
• Vehicle insurance
• Business interruption insurance
• Home-based business insurance if involved in a home business

Who Should You Ask For Info?

When faced with deciding what kinds of insurance you need and how much you should consider for each type, it's best to obtain the advice of a professional. Better than going to an agent representing a singular insurer, you would likely be better served by consulting with an independent insurance agent able to tap into coverage offered by multiple companies in order to get an unbiased idea regarding what's available and the ins and outs of each type of coverage. In asking questions, here are some uncommon questions to consider that don't often come up:

1. Q – If I allow someone else to drive my vehicle and they're involved in an accident, are they covered by my vehicle insurance?
   A – In most cases, anyone else driving your vehicle will be covered by your insurance if involved in an accident, provided they are determined to be at fault.

2. Q – The water pipes in my home burst and ruined many of my personal possessions. Will my homeowner's policy cover replacement?
   A – Such water damage is covered by most standard homeowner's policies with a few caveats. Valuable items such as expensive artwork, furs, collectibles (such as a baseball card or stamp collection), jewelry, etc., will have limits, often conservative amounts, on how much will be paid on a claim.

If you're away from home for seven days or longer during cold weather and the pipes freeze and rupture because you didn't make provisions to prevent this, you likely won't be covered.

3. Q – If a family of rodents gains entry to my attic space and causes significant damage, will my insurance pay for repairs?
   A – Unfortunately, critter damage caused to your home is not covered.