Leliaert Insurance Agency

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Can I get life insurance without a medical exam?

Most insurance companies require applicants of conventional life insurance policies to fill out a health questionnaire and undergo a medical examination. However, if you are in poor health or simply don’t want to go through the hassle of a medical exam, you can still purchase life insurance. 

There are a few life insurance policies that do not require a medical exam. This can be a great option for someone who is in poor health and may not qualify for life insurance through traditional means. There are three main types of life insurance policies that do not require a medical exam: final expense insurance, guaranteed issue life policy and convertible term life policy. 

Each of these policies has its own perks and drawbacks, so it’s important to do your research before deciding which one is right for you.

CONVERTIBLE TERM LIFE INSURANCE

Convertible term life insurance is a type of life insurance that can be converted into a whole or universal insurance policy without an additional health screen, before the term is finished. 

This may be an appropriate policy for someone who is starting out with life insurance and wants the flexibility to convert their policy in the future, especially in the event of poor health. 

When convertible life insurance policyholders convert to a permanent policy, the benefit will remain the same and the premium usually increases. Prior to the conversion, convertible term life insurance policies typically have higher premiums than other types of term life insurance, as there is a built-in cost for the potential change.

FINAL EXPENSE INSURANCE

Final expense insurance is a type of whole life insurance policy that is specifically designed to cover end-of-life expenses, such as funeral costs and outstanding medical bills, though beneficiaries can choose to spend the money as they please. One of the benefits of final expense insurance is that it includes a cash value growth component, which means that the policy will build up cash value over time that can be used to cover other expenses.

Final expense insurance is also referred to as funeral insurance, burial insurance, simplified issue whole life insurance or modified whole life insurance, with a death benefit averaging anywhere between $2,000 and $50,000. 

GUARANTEED ISSUE LIFE INSURANCE

Guaranteed issue life insurance is a type of coverage that is guaranteed to be approved, regardless of your health status. This can be a good option for someone who has been denied life insurance in the past due to their health.

However, guaranteed issue life insurance policies typically have much higher premiums than other types of life insurance, so it’s important to weigh the costs and benefits before deciding if this is the right fit for you. Death benefits typically cap at $25,000 for a guaranteed life insurance policy. 

Guaranteed issue life insurance does not require a medical exam, health questionnaire or allow insurance companies to review medical records.

Contact a Leliaert Insurance agent today to learn more about life insurance policy options.

What is Variable Life Insurance? Total Guide to Cash Value Policies – 2021

Variable life insurance is a type of permanent life insurance that offers policyholders a cash value portion of the account. Unlike other permanent life policies, a variable life policy comes with significantly more risk, while presenting the opportunity for more reward. These policies give you the most control over how aggressively you invest the cash value portion of your account, and where you decide to invest.

Learn about the risks and rewards that come with a variable life policy as opposed to other permanent life policies with a cash value feature. Find out how variable life compares in terms of premiums and ongoing costs associated with keeping the policy current. See the pros and cons of a variable life policy, and get help determining the best life insurance solution for your situation. 

Everything You Need to Know About Variable Life insurance in 2021

Variable life insurance is the riskiest of the 4 different types of permanent life insurance that offer a cash value account included in the policy. Variable life insurance, like all permanent life insurance policies, is designed to remain in place for the life of the individual being insured. And, also like other permanent life insurance policies, variable life policies feature a death benefit, a cash value, and the premium.  

What is the Death Benefit for Variable Life Policies?

The death benefit is the most standard element of any life insurance and is the main purpose of the policy. Every month, you pay a premium to keep your life insurance active, part of which goes to the death benefit. When the policyholder dies, the death benefit is bequeathed to a beneficiary. Apart from the administrative fees and that which goes towards the death benefit, the rest of the premium payment goes towards the cash value component of the policy. 

What is the Cash Value Portion of a Variable Life Policy?

The cash value portion of permanent life insurance functions in the same manner as a standard investment brokerage account. The difference with a variable life insurance policy is the amount of investment control and mobility of funds afforded to the policyholder. As the investments appreciate, the policies cash value increases.

If you decide to close your variable life policy at any time, the cash value is the amount you expect to receive back. While the policy is active, the cash value principle is invested in securities that are similar to mutual funds or index ETFs. Most variable life insurance policies include a fixed-interest option that guarantees a steady rate of return to your cash value.   

Why Choose a Variable Life Policy? 

The benefits of choosing a variable life insurance policy include the potential for a higher rate of return on your investment. Variable life policies offer more investment options and flexibility than that afforded by a whole life policy. But, with greater reward potential comes greater risks, and variable policies are so named for that exact reason. 

The cash value portion of a variable life policy most resembles a standard investment account. When the market is good the cash value swells, and when the market ebbs the cash value drains. But, unlike other policies, a variable life policy is built to afford easy access to the cash value. 

Variable policies often include the highest amount of ongoing and additional fees to keep the account open. And, if you are worried about the ability to maintain premium payments, there are more frugal options for getting life insurance. If you want to learn more about variable life insurance, talk to an insurance associate for a free consultation.

What is Cash Value Life Insurance? The 4 Types of Policies – 2021

Cash value life insurance provides investment opportunities to earn interest over the policy’s lifetime. This type of life insurance policy features a separate partition that acts as a savings account, called the cash value. And, these life insurance policies let the holder access the interest on the cash value. 

Learn everything you need to know about the 4 types of cash value life policies available and how they differ. Find out how a cash value policy works, what benefits they offer in the short vs long-term, and the responsibilities associated with them. And, see how these 4 types of cash value policies rank next to each other on the risk/reward scale. 

What are the 4 Types of Cash Value Life Insurance and How Do They Work?

A cash value life insurance policy is one of 4 different types of permanent life insurance that earns interest over time. In general, the types of permanent life insurance with a cash value feature include whole life insurance, universal life insurance, variable universal life insurance, and indexed universal life insurance. And, the investment activity widely varies on a risk and reward scale, depending on which type of permanent life insurance policy you choose. 

The biggest difference between this type of life insurance policy and a term policy is the assurance of interest in a separate cash-value account. The cash value portion of your account is accessible to borrow money against, or as liquid funds. So, like a savings account, a cash value account takes a portion of your monthly premium to use in an investment account that grows over time. 

How Does the Cash Value Portion of Permanent Life Policies Work?

Every life insurance company is slightly different when it comes to the details of creating a policy. But, in general, there are two main elements at play in how permanent life insurance works. A permanent life insurance policy usually features a death benefit and a cash value. 

The death benefit works similarly to that of any other type of life insurance. The value of the death benefit is bequeathed to a beneficiary at the time of the insured’s death. The amount of death benefit a policy pays depends on the face value of the policy – just like term life insurance. 

The other element of permanent life insurance is the cash value. The cash value is in addition to the death benefit and acts as an investment account. The principle for the cash value portion comes directly out of the monthly premium, which makes these types of policies more expensive than those without a cash value feature. 

Unlike the death benefit, you can access the cash value portion of your account at any time during your life. Over the life of the policy, the interest accrued in cash value is tax-deferred. Some policies offer a more stable return, whereas others offer an aggressive approach, and how much return the cash value portion yields is contingent on the type of policy you choose. 

How Does Accessing the Cash Value Work?

The cash value portion of your permanent life insurance policy is accessible by several means, contingent on the stipulations of your policy. In general, the cash value is accessible by withdrawal, loan, surrendering the policy, or payment of policy premiums. Depending on the type of policy, there may be consequences or penalties for accessing the cash value. 

Make a Cash Value Withdrawal

Withdrawing the cash value from your account is the most convenient and common way of accessing the cash value. As long as the amount being withdrawn is less than the premium paid thus far into your cash value account, withdrawals are tax-free. If, however, the amount you withdraw exceeds that which you have paid into the cash value, it is taxed by the IRS as standard earned income. 

Borrow Money Against the Cash Value

Another option is to take out a loan on the cash value of your policy. You can borrow against the premium payments already made and the interest accrued by the cash value principle. And, loans taken against the cash value of your permanent life insurance policy are tax-free, as well. 

But, if you die with outstanding debt from a loan against the cash value, the remainder is taken out of the insured’s death benefit value.

Close the Policy and Get the Cash Value

If you decide to surrender your permanent policy you can access the cash value, but not before paying a few fees. Most insurance companies require the policyholder to pay a surrendering fee when closing the policy. And, you also run the risk of being charged income tax on the value of your policy after it is dispersed back to you. 

Use the Cash Value to Pay Monthly Policy Premiums

The other common way of utilizing the cash value is to help with premium payments for your permanent policy. Most insurance providers allow the policyholder to use their cash value to pay monthly premiums, as long as it doesn’t reduce the principle and cause the policy to lapse. And, if you are having trouble paying your monthly premiums, this type of life insurance might not be the right fit for your finances. 

If you’re interested in a life insurance policy that features an investment aspect, a cash value policy might be the right choice. But, how do you know if it is the best option for your future? Talk to an insurance associate for a free consultation on whether a cash value life insurance policy serves your current and long-term needs.

Is Life Insurance for Children Available and Why Do You Need It? 2021

In the face of recent world events surrounding the COVID-19 pandemic, there is a new interest in life insurance for children. Generally, children have little need for a life insurance policy, except for in special circumstances. So when does it make sense to get life insurance coverage for your child, and are there alternatives?  

Learn everything you need to know about child life coverage and shopping policies in 2021. Find out how it works, what you need to know when buying, and the rough-average monthly-premium. And, discover alternative solutions to children’s life insurance that make sense for your family.  

Life Insurance for Children in 2021: How it Works and What Its For

Just like standard life insurance – life insurance for children is primarily a form of income protection. So, since a child doesn’t make income, you don’t need life insurance to cover the loss. This logic, however, ignores the financial obligations that accompany anyone’s untimely death, like funeral costs, as well as the potential benefits of investing in a permanent life insurance policy for your child. 

In general, there are two umbrella reasons you might want to take out a life insurance policy on your child. The first is if your child has a chronic illness or other medical condition that poses a risk to their lives. The other reason you might take out a life policy on your child is as a form of long-term investment and savings for their future. 

These two routes are quite different in the needs that they serve, as well as the general cost of monthly premiums. Breaking down children’s life insurance into these two categories helps you see the benefits, drawbacks, and practicality of both. The biggest difference between life insurance policies for kids is that one is term life and the other is permanent life. 

How Does Life Insurance for Kids Work?

The biggest benefit of buying a life insurance policy for your child is if a critical illness of some sort will make it difficult for them to get insurance in their adulthood. When thinking about these policies, they are often whole life insurance and carry significantly higher premiums than that of a term life policy. Whole life insurance policies usually have monthly premiums that cost about 15-times more than the cost of term life insurance premiums. 

But, the extra money you spend on a child’s whole life insurance policy is not wasted. They usually carry a cash value in the form of a policy rider, which is accessible by your child in their lifetime. So, in a way, the policy includes a savings account with dividends.

What You Need to Know When Shopping Insurance Companies

That being said – this type of investment is criticized by some economists for having a low rate-of-return, high-rates, and fees that can make these policies untenable. For those able to afford the high-premiums for their lifetime, the benefits remain intact for the life of your child, without any changes based on the state of your health. But, if you are unable to sustain the policy premiums for the duration of the policy – or you transfer the policy to your adult child and they are unable to continue payments – the cash benefit can be significantly impacted.

Most children’s whole life insurance policies max-out at age-18. So, with most insurers, you can still create a policy for a child who is 17 years old. Gerber Life, however, will not create a policy for children over the age of 14, and the policy automatically transfers to the underwritten child when they turn 21. 

Is Life Insurance a Cost-Effective Way to Save for My Child’s Future?

If you are looking at a way to save for your child’s future, a whole life insurance policy is certainly a valid route. It provides a death benefit, as well as a savings account that allows you to borrow money against the balance later in your life. So, opening a new policy for a young child can provide a means to pay for expenses in their adulthood, like college. 

The main benefit of using a whole life insurance policy to help pay for college is that it is not recognized as a financial asset when calculating your financial aid. Some economists advise against the whole life policy, instead recommending you open a 529 plan to save for your children’s college. The 529 plan, however, does count as an asset in terms of calculating your child’s eligible financial aid. 

Whether for future savings or because of an illness, a child life insurance policy is only one way to plan for expenses. And, navigating the options available can be overwhelming without help. Get a free consultation with an insurance associate to learn more about whether you should look into getting life insurance for children in your family.

What is Supplemental Life Insurance? Everything You Need to Know

Supplemental life insurance is additional coverage that usually is purchased atop an existing policy. If your employer provides your basic life insurance policy, supplemental can be used to cover a spouse or dependent. Whether through your employer or a private insurer, it is important to understand what this type of insurance is, and whether or not it serves your needs to add it to your policy. 

Learn everything you need to know about supplemental life policies through your employer or a private insurance company. Find out how supplemental policies work and what they cover. And, see whether it makes sense to add a supplemental policy to your existing life insurance.

What is Supplemental Life Insurance and Do I Need it? 

The purpose of supplemental life insurance is to increase the amount of insurance your term life policy covers. Normally, your employer-offered term life insurance policy is between $15,000 to around $25,000. Adding an extra term life insurance policy can increase it to around $80,000 to $100,000.

One of the reasons you might look into purchasing a supplemental policy for your term life insurance is if pre-existing conditions make it difficult for you to get adequate coverage in your base policy. Or, maybe your base life insurance doesn’t cover your spouse or children, whereas a supplemental policy will. In other cases, a supplemental policy might be able to carry to a new place of work, whereas your base life insurance only exists through your current employer. 

Determine How Much Extra Life Insurance You Need

The amount of extra life insurance you need is determined, by estimating the level of the financial burden your death will incur, compared to the amount of coverage provided through your current life insurance policy. Is it enough to cover the costs? In general, you should look for coverage of at least 5-times your annual income. 

If your life insurance amounts to more than 20-times your annual income, you probably are over-insured. That being said – everyone’s financial situation and personal circumstances vary. So, there is rarely a one-size-fits-all solution when it comes to how much life insurance you should have.

A good place to start is to think about how many individuals rely on your income. If you have children you are likely to have more fiscal responsibilities on your shoulders, for which supplemental insurance can account. Or, if the nature of your occupation is particularly hazardous to your health or life, it might be responsible to purchase additional insurance.  

What Does a Supplemental Life Policy Cover?

In general, it works to increase your policy payout for two main reasons. It can be used to fill in the gaps where a term life policy falls short. Or, it can work to increase the overall value and extend the coverage provided under a whole or permanent life insurance policy. 

Most of the time, access to supplemental life coverage is contingent on the group term life policy provided by an employer. Many policies are conditional on your employment status from where the policy is provided, and supplemental insurance only exists within an employer’s group policy. Some insurers, however, offer portable policies, which you can convert from the group to a personal policy – in which case, you may be able to retain the base and supplemental policy.

4 Main Types of Supplemental Term Insurance

Through an employer, there are four primary forms that supplemental insurance takes. First, it can supplement the coverage amount on your current life insurance. The second and third types of supplemental insurance work to cover the life of the primary policy holder’s spouse or domestic partner, and to cover the life of a child or dependent. 

Most insurers require the primary policyholder to purchase supplemental for themselves before adding supplemental for a spouse or child. The fourth type of coverage is supplemental accidental death and dismemberment (AD&A) insurance. AD&A coverage pays out if you are critically injured or killed. 

At the end of the day, the amount of term life insurance offered might be enough to cover your family’s financial need in the event of your untimely death. But, for many families, it is not enough without additional coverage from a supplemental policy. Talk to an insurance associate for a free consultation and professional advice on whether supplemental life insurance is worth it for you.

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Leliaert Insurance Agency
410 Lincolnway W
Osceola, Indiana 46561

Phone: (574)-674-0015
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