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A lot of individuals have considered getting life insurance policies. However, what has always confused individuals is the types of life insurance they should get. We have briefly outlined the types of life insurance policies available on the market. Below listed are some of the more common insurance policies.

Types of Life Insurance Policies To Choose From

1. Term Life: This type of life insurance policy usually ranges from about 1 to 30 years. If during the term of the life insurance policy you, the policyholder should die, the beneficiaries nominated by the policyholder get the entire amount of the policy. If however the policyholder should live beyond the term of the insurance policy, the beneficiaries do not get anything. With these types of life insurance policies you so have the option of renewing the term of your life insurance policy but it is usually at a higher rate.
2. Whole Life: This type of life insurance policy is unlike a term life policy. Under this policy you are covered for the entirety of your life. In addition to this what you might also be interested in knowing is that the premiums on the policy, is a bit more that than the actual premiums required to cover the policy. The extra amount goes towards a cash holding account, the amount of which you can decide on how to invest. Usually these accounts out grow their limits owing to the dividends being received by the investments made. If you live past the insurance term the amount equal to the death benefit of your policy is paid upon maturity.
3. Universal Life Openness: With this type of life insurance policy you do not get to choose where the cash account is invested.  However this policy gives you a lot of flexibility as far as your premium payments are concerned.  The policy will stipulate the maximum and minimum amounts that need to be paid, however when and how much is going to be paid is left up to the discretion of the insured. It must also be remembered that while this extremely similar to a whole life policy.  The investment decision does not vest with the insured. In addition to this, should you wish to make any amendments to your insurance policy, like increasing the level of cover etc. you will be required to go through the insurance underwriting process again. This may also include an additional medical examination.
4. Variable Universal Life: This is a truly hybrid account. This type of life insurance combines all the benefits of a universal life and flexible account. The consumer has the option to decide where and into which investment subaccount the funds will be deposited. The customer also has the discretion of determining the amount of premiums to be paid and when they are going to be paid, as long as they remain within the guidelines of the policy. In addition to this consumers can also get themselves a guaranteed death benefit and also make taxable withdrawals from their cash accounts. It may of interest to know that most of these policies offer a guaranteed benefit irrespective of how your investments have performed.

These are some of the life insurance policies available on the market today. Consumers should consider their personal circumstances and needs and their risk tolerance prior to making a selection with regard to their life insurance policy or provider.

References:

1. Types of Life Insurance Policies – 360 Degrees of Financial Literacy

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Everyone knows about it and everyone knows it’s benefits but what most consumers do not know are the simple facts about their life insurance policies and how with the power of knowledge they can save themselves not only a lot of money but also heartache should the need to make a claim ever arise. Here are some things to know about life insurance policies.

Life Insurance Policy Information

1. Evaluate Your Options: In a complex business environment such as we have today, the age-old principle of “one size fits all” is long gone. Make sure that you look around and consider a few insurers before settling on one provider for your life insurance policy. This will allow to you find the insurer best suited to your needs. In addition you will also be able to make sure that no one provider is over-charging you.
2. Level Of Cover: When reviewing life insurance policies, often people make the mistake of under insuring just to save on the level of premium they have to pay. By doing this you put your loved ones in a whole lot of strife. In the event of an untimely death of a contributing family member the funds from the insurance pay-out are some times insufficient to pay the existing liabilities. The best way to calculate your required level of life insurance cover is to take your existing liabilities on a monthly basis and calculate them by the number of months of life expectancy you feel you may have. For instance if you feel that your monthly liabilities are $1,000 per month,  and you feel that you are going to live for another 30 years, multiple $1,000 by 360 months (12 months X 30 years), and the resultant figure is $360,000 worth of life insurance cover required.
3. Rates And Health Go Hand In Hand:  This basically means that the healthier you are the better the life insurance rates you will get. The simple reason for this is that your health determines how much of a risk you are to the insurance company. The healthier a person the lesser the risk of a claim due to a premature death etc.  Hence it is important that you do not have ay major health issues when applying for comprehensive life insurance.
4. Do Not Delay Buying Life Insurance:  A lot of clients wait till their twilight years prior to considering getting life insurance. In a lot of cases if you wait too long to get a life insurance policy, your application is either rejected owing to factors like age and ailment or your premiums are through the roof. It is always advisable to get life insurance policies early as not only are you healthier, but you are also a lesser liability from the insurance company’s point of view.
5. Review Your Cover: One common mistake people make is that they do not review their life insurance cover and often make the mistake of keeping whatever cover they had started out with. This could be an issue in the future. If your liabilities have increased or beneficiaries of your policy have changed, these factors may need to be taken in to consideration, when increasing your level of cover or modifying your existing cover.

These are certain facts about life insurance policies that consumers should keep in mind when considering their life insurance options. It must be remembered that life insurance is one of the most important insurance policies that a individual can take out. Hence it is important that you consider all your options prior to settling.

References:

1. Top 10 Things to Know About Life Insurance – Insurance.com
2. Ten things you should know about life insurance – Yahoo Finance

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If you thought that your credit score only affected your borrowing capacity and future credit contracts, then it might be time to rethink that misconception. In today’s fast changing financial market structure, insurance companies too are keeping an eye on your credit score as highlighted when we discussed auto insurance. Simply put, the home insurance premiums that you pay could be directly related to your credit score or credit report.

Consumer Ratings For Home Owners Insurance

Although it is extremely controversial, but an increasing number of home insurance companies are taking individual credit scores into consideration before deciding on whether or not to issue a home insurance policy contract in the first place. In addition, your home owners insurance premiums are indirectly proportional to your credit score. Stated plainly, the lower your FICO score the higher the homeowner’s insurance premiums and vice versa. In addition to this, factors such as age of the property, prior losses and type of construction are also taken into account.

In order to create and factor in credit score to suit the home insurance ratings, one of the following is used

• Fair, Isaacs & Co, Three digit credit score   OR
• A home insurance score is ordered via FICO.  OR
• Homeowner’s Insurance companies infuse their own underwriting criteria into the evaluation and take into account the FICO credit or insurance score.

It might be noteworthy that unlike your regular FICO score which is concerned with how much of new credit you can take on, home insurance policy scores on the other hand are concerned with your debt management capacity. Hence it is concerned with the time factor of how long you have been successfully managing your debt.

Home Insure Options : What Can Consumers Do

It should be mentioned that once your home insure application is declined, it does not mean that it is the end of the road. There are home insurance options available to consumers in these circumstances.  A few possible alternatives are listed below:

• Obtain Your Credit Report: Get your credit report and check for any credit report errors that might have crept in. If you find these take them up with the appropriate credit bureau and re-approach your home insurance company.
• Ask for Full Disclosure: Speak to your home insurance policy agent and ask them to advise you as to which tier you fall under. This will give you a fair idea of the kind of premium you might have to pay. An agent is required to give you full disclosure if asked these questions.
• Shop Around: Not all homeowner’s insurance companies out there use the credit report scoring system. There are companies which do not pay attention to your credit report when deciding your home insurance premiums. It is about finding the right home insurance policy company to suit your needs.
• Pay Down Short Term Credit: If you find yourself in a situation where you have no option then it might be a good idea to start paying off your credit card debt and small and short term loans to boost your credit score. Once you have done this reapproach your home insurance company and request them to reassess your home insurance application.

Homeowner’s insurance is extremely important in this day and age. Hence it is extremely essential that consumers make the right choice with their home insurance policy. Bear in mind that not all home insurance companies consider credit scores while deciding on premiums or applications. It is all about finding the right insurer to fit your needs.

References:

1. Guess Who’s Looking at Your Credit Report – Smart Money, The Wall Street Journal
2. How credit scores affect insurance rates – Bankrate

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Certain consumers are unaware of the fact but there exists an inverse relation between your auto insurance premiums and your credit score. Simply put, the better your credit report the lower your vehicle auto insurance premiums and the worse your credit report the higher your premiums on automobile insurance. This might come as a surprise to you but nowadays motor vehicle insurance companies are paying more attention to an individual’s credit score than his/her driving record or type of car owned or where the car ranks on the list of most stolen cars. Auto insurance companies have adopted the practice of penalizing individuals with poor credit reports by, in certain cases, charging them up to 3 times as much the personal vehicle insurance premiums as their counterparts with better credit reports would pay.

Relationship Between Auto Car Insurance Premiums And Credit Report

Primarily it needs to be stated that not all auto car insurance companies determine the auto insurance premiums of an individual in conjunction with their credit reports. Big names in the insurance field like GEICO and Allstate in addition o others have adopted this practice. It is not known to the public as to what calculations or formulas are incorporated by automobile insurance companies while calculating the vehicle auto insurance premiums applicable to individuals. While motor vehicle insurance companies are extremely secretive about this, it might be interesting to know the rationale behind linking auto insurance premiums to an individual’s credit report. Vehicle auto insurance companies which have adopted the fore mentioned practice are of the opinion that an individual with a good credit report is under less stress and hence is a lesser threat on the road and a more unlikely candidate to meet with an accident. However individuals with poor credit reports seem to be under pressure and are not only a greater threat to themselves but are also a threat on the road. In addition to this they also pose the threat of not meeting their regular auto insurance premium commitments.

Vehicle Insurance Policy Options

In the event that you find yourself in a situation where the vehicle insurance policy quotes for your automobile are much higher than expected, do not panic, you do have a few options.

• Firstly, speak to your auto insurance agent and inquire as to which Tier you are on. It is mandatory for your agent to disclose this information to you if asked.

• If you find that your credit report is affecting your vehicle auto insurance quotes by and large, try and pay down short term credit like credit cards, personal loans or even vehicle loans to improve your credit score and thereby obtain a lower automobile insurance quote. It might also be a good idea to get your credit report to see if there are any more credit report errors that might have crept in.

• Please note that not all motor vehicle insurers charge you premiums based on your credit score. Shop around to gauge which is the better option. You just have to find the right insurer who does not pay as much attention to your credit report as some of the others.

Considering the fact that auto Insurance is necessary in this day and age, consumers should try and evaluate their options before settling in on an automobile insurance quote. Be careful that your vehicle auto insurance premiums are not inflated owing to your credit report. If this is the case, look for insurers (and there are insurers out there) who do not focus as much on credit reports as their larger counterparts. This might be the difference between you paying an acceptable motor vehicle insurance premium and you being grossly overcharged and penalized for your credit report.

References:

1. Can Your Credit Score Affect Your Automobile Insurance Rates? – Credit Report Advice
2. What is Insurance Credit Scoring? – Insurance Scored

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