Life Insurance & Finance

A relative has just died. He had a life insurance policy with you listed as the beneficiary. There’s just one problem: the life insurance policy is missing. You have no idea which insurance company wrote it.If you find the missing life insurance policy in the future, are you still eligible to receive the death benefit?

Hope they paid their insurance bills.
If you’re a beneficiary and you find the lost life insurance policy shortly after the insured dies (within six months to a year, for example), claiming the death benefit should be trouble-free.

First, determine if the insured had term or permanent life insurance. If the insured held a term policy, you’ll receive the death benefit if he died before the end of the policy term. If he died after the policy expiration date, you would get nothing.

If the insured had a permanent life policy, you’ll receive the money if the death occurred while the policy was “in force,” meaning all premium payments were made up until the time of death. If the death was a while ago, you’ll receive the benefit with interest from the date of death.

If the life insurance policy lapsed — meaning the insured stopped making premium payments before he died — there’s a chance you might get nothing. When a permanent life insurance policy lapses, most insurance companies switch its status from permanent insurance to one of two options:

“Extended term” — The insurance company uses the cash value of the policy to buy a term life insurance policy for the same death benefit using the cash value of the policy. The death benefit will continue for the longest period the cash value will purchase.

“Reduced paid up” — The insurance company will keep the policy in force permanently, but will reduce the death benefit.

Gerry Brogla, an actuary for State Farm, says in the majority of the cases at his company, the permanent policy continues as extended term if it lapses. At State Farm, extended term is the default option for most permanent policies.

If the policy lapses, and the extended-term period expires before the insured dies, the policy is worthless and the life insurance beneficiary will get nothing. If the insured dies before the extended-term period is up, the beneficiary will receive the death benefit. If the policy lapsed because the insured died (thus ending premium payments and causing the insurance to be placed in extended-term status), the beneficiary will still collect the full death benefit, regardless of when the extended term was up. The beneficiary always needs to supply the insurance company with a death certificate to verify the date of death.

There is no time limit during which a life insurance beneficiary must step forward to collect the money, according to Jack Dolan, spokesman for the American Council of Life Insurers. “If a person shows up 30 years after [the insured's] death, the company still makes good on it,” Dolan assures.

What happens if no one ever reports the death?

If the insured dies and the insurance company does not learn of the death, the policy lapses. Insurance companies will take steps to find out why a policyholder stopped making payments.

When an insurance company stops getting payments, it sends letters to the insured informing him the policy may lapse as a result of unpaid premiums. If the letters go unanswered, the company might initiate a search to find the insured. If that comes up empty, the company will then lapse the policy.

If a beneficiary to a policy never steps forward, it unfortunately means the insured paid money to a policy throughout his life and his beneficiaries never see a penny. This is why its a good idea to make sure beneficiaries are aware of any life insurance policies you have.

If you’re lucky, the state may have your money

In some cases when a beneficiary fails to claim a death benefit for several years, the money is transferred to the state where the insurance policy was purchased under the escheat laws.

If a company knows an insured died and it cannot find the beneficiary, it must turn the full death benefit over to the state comptroller’s department within three to five years of the insured’s death. The money is transferred to the state where the insured bought the policy. The money is considered “unclaimed property” and gets lumped in with dormant bank accounts and uncollected rent deposits. The controller’s department maintains a database that lists the names and addresses of lost life insurance beneficiaries.

Many states will try to contact life insurance beneficiaries in an effort to pay the death benefits. In Texas, for example, the names and addresses of the beneficiaries are published annually in each county in the state. In New York, the Web site of the New York State Comptroller’s Office of Unclaimed Funds has an online search to find any unclaimed death benefits owed to you. You can find out the procedures in your state by contacting the office of your state comptroller or treasurer.

Keep in mind your chances of finding the policy with the state are slim. The insurance company has no obligation to hand the money over to the state if it’s unaware the insured died. In most cases, it’s the beneficiary who contacts the insurance company.

Also, the insurer only transfers the money to the state three to five years after it cannot find the beneficiary but knows the insured died. If the state doesn’t have the death benefit, it’s likely the insurer is still looking for the beneficiary or doesn’t know the policyholder has died.

Unclaimed death benefits are rarely transferred to the state. Dave Potter, a spokesman for Hartford Life, says less than 1 percent of his company’s death benefits go unclaimed.

Del Chance, a life insurance claims manager at State Farm, says, “Turning over life policy benefits to an individual state after the death of an insured is extremely rare. State Farm utilizes their own search techniques as well as outside vendors to locate lost beneficiaries in the event of the death of one of our insureds. By and large these procedures have always located the beneficiary.

Tips for making sure your life insurance beneficiaries get your death benefit:

1. Give your beneficiaries your policy information. It can be a difficult and awkward conversation, but an important one.
2. Keep all your financial records (especially your life insurance policies) in one place. Don’t force your beneficiaries to search your house from top to bottom after you die.

Tips for looking for lost life insurance policies:

1. Go through canceled checks or contact your relative’s bank for copies of old checks. Look for checks made out to insurance companies.
2. Ask those who may have known about your relative’s finances. Speak with the relative’s lawyer, banker or accountant. Also contact the relative’s insurance agent.
3. Contact your relative’s past employers. They might know of possible group life insurance. The insured might have also purchased supplemental life insurance through work.
4. Check the mail for a year. Premium bills and policy-status notices are usually sent annually.
5. Look at income tax returns for the past two years. Check for interest income from policies or expenses paid to life insurance companies.
6. Contact the Medical Information Bureau. If your relative bought life insurance fairly recently, there might be a trail of the companies to which he applied. The Medical Information Bureau (MIB) maintains a database that might show if insurers requested your relative’s medical information within the past seven years. Record searches can be requested through the MIB’s Policy Locator Service and cost $75. The MIB says that nearly 30 percent of searches turn up leads.

Are you enjoying the unforgettable moments of life “pregnancy”? Is the due date of delivery getting near? Pregnancy is the earlier step towards motherhood. No doubt, the news of the coming baby spreads happiness on every face. Everyone get excited and anticipated for the arrival of new born baby. But, this fact is also very much clear that a hefty amount is required for the maternity costs. Acquiring insurance policy for pregnant woman on time shows your intelligence and wisdom. Insurance policy helps to secure the mother with new unborn baby from many usual and unusual calamities like miscarriage or loss of the baby. It helps to cover all the expenses related with maternity. You can avail the best insurance policy from a large number of branded financial institutions. They provide you health as well as travel insurance.

When the due date of pregnancy comes closer, many health advisors and physicians suggest the women to sit at home and she is prohibited to move. In some exceptional cases, pregnant women have to travel from one place to another. At that time, obtaining suitable travel insurance provides you safety and protection. Like this, by acquiring travel insurance policy, you can enjoy your traveling or holidaying without any fear or tension.
Continue reading “Insurance for pregnancy” »

Your insurance excess forms part of your policy terms and is designed to give you some control over your premiums by sharing some of the insurance risk with the policy holder. All standard insurance policies include an excess figure for each type of cover and, if a claim is made, this excess is deducted from the amount paid out by the insurance provider.

So, for example, if a home contents policyholder makes a claim for £1,000 following a burglary but has a £500 excess, the insurer may only pay out £500. The actual excess amount may depend upon the type of cover and it’s terms and conditions and be applied to a particular claim or be an annual cap.

From the insurers point of view, the policy excess achieves two things. It allows them to offer customers the option to reduce their premiums in return for agreeing to a larger excess figure. In addition, the excess also limits the number of claims because, if a claim is relatively small, the customer may find they either wouldn’t get any payout once the excess was deducted, or that the payout would be so small that it would leave them worse off once they took into account the loss of future no-claims discounts.

The most important thing to remember about an excess is that it is usually a flat rate rather than a proportion of the cover. Also, regardless of the size of a claim, the excess will be deducted from the final payout received by the policy holder which can reduce the benefit of submitting a smaller claim.

What level of excess applies depends on the insurer and the type of insurance. With motor insurance, many firms have a compulsory excess for younger drivers. The logic is that these drivers are most likely to have a high number of small value claims, such as those resulting from minor prangs.

With medical or Critical illness insurance, whether for a human or a pet, it is worth watching out for annual excess limits. Where these apply, the claimant may have to pay an excess every year for an ongoing claim. For example, where a health condition requires treatment lasting two or more years, the claimant would still be required to pay the policy excess even though only one claim is made.

How much impact an excess has in the event of a claim depends on the type of insurance. An example would be when making a claim on a contents insurance policy for various stolen items. The policyholder would have to weigh up the short term need to replace the lost items with the longer term cost of losing any no-claims discount accrued. Things differ with a motor insurance claim where the policyholder may have to find the excess amount from their own pocket to get their car repaired or replaced.

Though this isn’t widely known, it is possible to take out a separate policy against having to pay the excess on cover from another insurer. This has to be done through a different insurer but works on a simple basis: by paying a flat fee each year, the second insurer will pay out a sum matching the excess if you make a valid claim. Prices vary, but the annual fee is usually in the region of 10% of the excess amount insured.

Like any type of insurance, it is vital to check the terms of excess insurance very carefully as cover options, limits and conditions can vary greatly. The excess insurer may simply pay out whenever your main insurer judges a claim to be valid, but they may instead have their own rules about exactly what is covered and what would invalidate a claim. You may also discover that there are rules restricting you to a certain number of claims per annum.

Health surveys in the UK states that almost 20-25% of all people suffer from serious diseases like cancer and heart attack before they reach the age of retirement. Thus, in the case if you are working buddy, and are caught by any serious disease, you have to quit continuing your work. Thus, you have to discontinue your regular job, and will have to look for some options which give you enough financial freedom to avail medical treatment. Here, having a critical illness insurance gives you appropriate protection against the any critical illness or financial scarcity.

The compensation amount you are paid under this insurance is used in both, availing the medical treatment and putting your entire family at financial ease for the days you are not regular on your work. The compensation amount paid under critical illness insurance comes to great help for member of a family who are depended upon the insurer.

The type of diseases covered by this medical insurance includes many of critical illnesses like cancer, stroke, heart attack, bypass surgery, kidney failure, paralysis, blindness, deafness, speech loss, coma, Parkinson’s disease and major organ transplantation. If you want to make claim for the compensation, you (the insurance holder) has to live through 30 days of survival period. The another benefit of availing critical illness insurance is that the compensation amount you are going to have can be utilised in the way you wish.

With the presence of number of insurance companies in the market, it becomes a confusing task for insurance buyers to pick the best deal. Online method of looking for some insurance companies is one of the easiest ways to get a best deal. There are several of websites of insurance companies such as www.uklifeinsurancesolutions.co.uk  which will offer you free quotes. Comparing those quotes give you an opportunity to buy a critical illness insurance at cheap rate. Taking some of these considerations in mind can give you better deal while availing this medical insurance.

One of the biggest fears for many people is not being able to pay the mortgage
 - or meet other financial commitments – if they are made redundant or unable to work due to illness or accident.

This is particularly worrying in the current uncertain climate, but one of the simplest ways to cover loss of earnings is by taking out income protection.

What is income protection?

Income protection pays out a regular tax-free replacement income if you are unable to work because of ill health or an accident; it enables you to pay the mortgage, as well as the daily costs of living.

How does it work?

Income protection policies pay out a set amount of income after a specified period of time, and you can elect a waiting period of between one and 12 months; the longer you defer, the cheaper the policy.
It usually then pays out until you either return to work, retire, the policy expires – or death.

How much does it cost?

Premiums are based on age, health, amount covered, term of the policy, waiting period, and whether you smoke.

For a 25-year old male with cover until the age of 60, the average premiums range from £23 per month for a four-week deferral period, to £11 per month for a 52-week deferral period (*).

The rates for women are slightly higher, and the average cost of for a 25-year old female with cover to age 60 range from £34 per month for a four-week deferral period, to £15 per month for a 52-week deferral period (*).

Should I take it out?

While life insurance might be the first protection policy that springs to mind when you have children, and mortgage payment protection insurance (MPPI) the first policy when you buy a new home, income protection insurance could actually be the better option.
This is because it’s a lot more likely that one or both parents will not be able to work through long-term sickness than through dying, and because MPPI offers limited cover, and policies can be relatively difficult to claim on as they often include a number of exclusions.

What about PPI?

Payment protection insurance (PPI), a similar policy to MPPI, but which covers other debts, such as repayments on loans or credit cards, is also notoriously unreliable when it comes to paying out in the event of a claim, and can often be over-priced and mis-sold.

Nonetheless, if you do qualify for a payment, the short-term lifeline it offers can help you to survive a financial crisis, so it should not be dismissed out of hand – but a cheaper alternative may be to buy PPI from a standalone provider.

When should you take out income protection?

Before taking out income protection, check what cover you already have through your job, as many companies offer life assurance and sickness benefits.

The level of cover required from income protection varies from person to person, so after finding out what is offered by your employer, calculate your current expenditure and take out cover to meet the shortfall – but bear in mind that your outgoings may be cheaper if you’re not at work.

If you do decide to take out life insurance, it’s a case of the sooner the better, as younger and healthier individuals will be offered cheaper premiums, plus it’s beneficial to take out a policy before there’s any sign of trouble – to ensure you have the necessary cover in place should anything go wrong.

Term life insurance is becoming more and more popular as a way to protect loved ones you may leave behind. The premiums are much less costly than ones for whole or universal life insurance, which is one of its big selling points. 

What is “Term Life”?

Term life insurance is a policy you buy for a specific period of time. You could choose to have your policy expire in ten years or as many as thirty. If you die within that time frame, the policy pays the death benefit to your beneficiaries.
Continue reading “Term Life Insurance – a safe bet?” »

When considering life insurance, being well informed is the first step to finding a policy that will best meet your needs. Life insurance in its simplest form refers to a policy than an individual takes out with the express intention of being compensated in the happenstance of misfortune, in particular death. The insured is to pay an agreed upon amount to the insurance company at the end of each stipulated month. The amount payable would constitute as an insurance premium. Upon the death of the insured, the agreed upon amount will be paid out to the named beneficiary of the insured. At the time of purchasing the life insurance policy, the insured is able to nominate a beneficiary, in most cases being a close family member, to receive the payout at the time of death.
Continue reading “Life Insurance made simple” »

With the continuous advance in the medical field, critical illnesses such as cancer, stroke, heart disease, multiple sclerosis, etc are being discovered prematurely. Therefore, the chance of pulling through the critical illness could be much higher. Recent statistics state that there has been a minor increase in critical illness among people. Consequently, this has resulted in much more people seeking a critical illness cover.

Going through a critical illness could be quite a harsh time. As financial breakdowns occur, money is needed for your treatment. Critical illness insurance could be the right answer for you at this tough moment in your life. Though advances in the medical industry now make it possible for more survival cases, disability may still occur. As a result, the use of a wheelchair may require different attention. Your lifestyle could be changed. You could even resume work after a long time of rehabilitation.

Here are some statistics about the growing need of a critical illness cover in the UK:

According to Munich Re (2002), 1 in every 3 men between the ages of 40 to 70 are likely to develop a critical illness. More precisely speaking, 32 in every 100 men may suffer from a critical illness. Out of these 32 men, 15 can develop cancer, 10 are likely to have a heart attack, 5 may suffer a stroke and 2 can undergo a coronary artery bypass surgery.

As for women, 1 in every 4 women between the ages of 40 to 70 may also develop a critical illness, which is 25 in 100 women. Out of these 25 women, 17 are likely to develop cancer, 3 can have a heart attack, 3 may perhaps suffer from a stroke, 1 may be capable to undergo coronary artery bypass surgery and 1 is likely develop multiple sclerosis.

Let’s see some statistics about three of the most life threatening diseases in the UK: cancer, heart disease and stroke.

Cancer
According to Cancer Research 2002, 1 of every 3 people may be diagnosed by a critical illness such as cancer. On the other hand, 1 of every 4 people is likely to pass away due to this critical illness. Moreover, four types of critical illnesses dominate the painful world of critical illness. These are: lung, breast, colorectal and prostate. Furthermore, according to Munich Re 2002, a quarter of the population in the UK could probably suffer from this critical illness in the future. Also, more than half of the people who suffer from cancer such as breast, cervix, testis, etc. may survive for a minimum of 5 years.

Heart disease
According to the British Heart Foundation 2002, each year about 280,000 new cases of coronary heart disease in the UK are most likely to occur. As seen, the level of this critical illness is quite elevated. Also, less than half of those suffering from a heart disease may die within 28 days, which means that care may be probably given on time. Moreover, about 28,000 coronary artery bypass surgeries are carried out each year, perhaps a 5 times increase since 1980. It is therefore unfortunate to see that a critical illness such as coronary heart disease can be the most common cause of premature death in the UK.

Stroke
According to the stroke association 2002, about 100,000 people may suffer from stroke each year in the UK. Around 10 percent of victims of this critical illness may be of retirement age. Stroke can be considered as a severe critical illness as its impact could be big on someone’s life. About 33.3 percent of people who suffer from this critical illness are likely to become disabled. The similar percentages of people may die within a year while the remaining can make a good recovery. Stroke is probably one of the largest causes of disability in the UK, with over 300,000 people being affected at any time.

As seen, these statistics show that we should be concerned about critical illness. Many people are left with no other choice than taking a critical illness cover. Although critical illness is a preventive measure, as it should, the cover can be useful by sometimes awarding you a payment at the right time, to save your life.

Smokers and the overweight are seeing increased life insurance prices. The insurance industry is penalising these people with higher costs of cover.

The way insurance companies calculate premiums is to work out the risk to them of the customer dying while the policy is active. When looked at from this point of view, smoking and obesity are obviously very important factors in this consideration.

Some pro-smoking groups assert the point that according to statistics smokers under 40 are as likely to die as non-smokers of the same age group. However, as Sainbury’s life insurance manager, David Pickett said: “Health risks associated with smoking can have a big effect on life cover costs. It is vital for those who have kicked the habit to review their policies”.
A recent study conducted found that the average smoker paid 56% more than a non-smoker for a life insurance policy. This study was based on nine top UK insurance companies, based on quotes for two men aged 20 asking for £100,000 cover over a 25 year period. The only difference stated on the applications was that one smoked and one didn’t.

As well as toughening up on smokers, the overweight have seen increases in their policies. Recently insurance companies have changed their approach to the obese, the Body Mass Index (BMI) that affects insurance has been lowered from the previous figure of 33 to a BMI of 28. This is a reduction of 16%, anyone with a BMI above 28 faces a 50% rise in premium prices.

Life insurance companies will calculate your BMI, if it exceeds the limits deemed acceptable by the company a doctor’s report may be requested. If the BMI is very high the company may ask you to have a medical examination, if this exam concludes that the customer’s weight is of concern then the policy will be increased by a minimum of 50%, but this can rise to 400% in the case of the morbidly obese.
Life insurance companies do have some tolerance for weight gain, for the middle aged they accept that people naturally put on weight as they age. Age is taken into account alongside weight when insurers take applications.

Obesity is a growing problem in the UK and a serious threat to health, as insurers are making clear, over the last 20 years obesity in UK adults has dramatically risen, with more than 60% men and 50% of women deemed overweight or obese.

So if you’re intending to apply for life insurance it would be beneficial to lose a few pounds first if you’re currently overweight. It’s not quite as simple for smokers, to be seen as a non-smoker by insurance companies you must not have consumed any form of nicotine during the previous 12 months, although some insurance companies extend this period to five years.

Due to the fact that premiums for smokers and the overweight as so high the importance of seeking out a competitive policy rises. The best way to do this is to use a comparison website such as Onlyfinance.com, which means you only need to input your information once and hundreds of policies will be reviewed, and the best price and package will be selected.

Obviously the policies found on a comparison site will still be higher for smokers and the overweight but the best available deal for you will be found. The importance of life insurance is becoming clear to everyone nowadays, it provides peace of mind, if something did happen then your family will not be left in a state of financial confusion. The popularity of policies has also mean the life insurance leads market has remained a busy and profitable one.

Advances in medicine and increased life expectancy have diluted the importance of life insurance, according to a leading South African surgeon. Dr. Marius Barnard asserted that these days critical illness insurance is a wiser investment due to its practical benefits.

Dr. Barnard, who created the first critical illness insurance in 1983, said: ‘If you die at 30, life insurance was more important, but if you get a critical illness at 55, or 45 when you are at the height of your earning ability and you have an operation and survive another ten to 20 years, then Critical Illness Insurance was more important.

Where workability decreases and the ability to provide for your financial needs diminishes, I think that the critical illness policy is much better.’
This view is based on a much higher national life expectancy, alongside rapidly developing medical research that makes it possible to diagnose previously fatal conditions and prolong the patient’s life. A patient diagnosed with a serious illness but living for a further twenty years would receive a payout on their critical illness cover that they would not get on their life insurance policy.

Critical illness insurance has risen in scope and popularity over the last few years to cover 58 conditions as opposed to 4 when it was first introduced. It now includes functional diseases such as multiple sclerosis and an estimated 12 million adults and children are covered by a critical illness policy.

However, there have been many stories in the press concerning aggrieved policy-holders whose insurers have reneged on their critical illness cover. An investigation carried out last summer by the BBC’s One Show discovered that many conditions that the policy-holders believed were covered were excluded and that the terms of the policies required meticulous medical records to be kept.
A spokesperson for the show said: ‘It’s no mean feat remembering every single visit to the doctor – but that’s what insurance companies expect you to do when you’re filling out a critical illness form – and it’s the kind of question that’s catching a lot of people out. The first thing is to remember that insurance companies are profit-making enterprises. The onus is on you to make sure that you’ve covered all your bases before you get ill, rather than expect any goodwill from the company when disaster strikes.’

Dr. Barnard is keen to highlight the number of successful cases of critical illness cover payouts: ‘All I hear when I walk around here is that 20% of critical illness claims are not paid. However, the fact is that 80% are paid. Statistics such as 20% of the claims are not being paid are not strictly true because 20% of the claims should not be paid because they don’t fit the criteria.’

He has also outlined what changes he would like to see in the form and structure of critical illness insurance. As things stand at the moment a lump sum is paid out to the holder upon diagnosis, but Dr. Barnard would prefer it to be paid out in stages as the illness increases in severity: ‘Diagnosis is getting better and most people have treatment and then walk out. If they continue to receive full payout at diagnosis, the cover will become so expensive it will no longer remain affordable for those that really need it.’