Once you get your life insurance quote, there is just one thing standing between you and the issuance of a life insurance policy. And that thing is life insurance underwriting.
What is life insurance underwriting?

Life insurance underwriting is the process of evaluating the amount of risk that you present to the insurance company. When a life insurance company looks at you as a potential policyholder, it must decide how risky your life is and how likely you are to die before they’ve gotten enough premium payments from you in order to make a profit on the policy.

In order to do this, the insurance company underwriter will look at your age, weight, smoking status and height and determine statistically how likely you are to die. Next, they will factor in your health history, family health and attempt to determine how risky the health history makes you.

The next step is to look at how all of these factors can work together to create combined future health problems and if anything in your health history will work to make you less likely to develop these future problems.

Lastly, the life insurance underwriter will look at your lifestyle and determine whether or not that makes you more or less of a risk. They will look at your moral turpitude, your vocation and your hobbies (avocation). The more risky a lifestyle you lead, the more likely your policy will be declined or charged higher rates.

As an example, when looking at your moral turpitude they might draw conclusions about your lifestyle based on the amount of drinking you do, any sexually transmitted diseases you might have had or any driving-related issues you have had.

When looking at your vocation, the life insurance underwriters might consider any travelling you do for work, what type of work you do and the amount of risk it presents to your life based on the actual duties of the occupation and the kinds of situations your work might put you in.

Lastly, looking at your hobbies, your life insurance underwriters will determine whether there is any kind of innate danger within your hobbies. For instance, if you enjoy finger painting, then you have a very low-risk hobby with little opportunity for injury or death. But if your hobby is motocross rating, then your mortality opportunities are exponentially increased and your underwriters will be more likely to rate or decline your policy.

The importance of life insurance cannot be stressed upon. Many of us come across confusing questions such as how are premiums calculated, how can I get a decent deal in life insurance, what all aspects should my life insurance cover, and many more. Thankfully, there are several things you can do to get rid of your doubts and confusion. Let us understand life insurance better.

What is life insurance?

This is a policy that you can insure against your life. I.e. it is an insurance policy that you can avail after your death.

Why is life insurance so important?

There is so much hype about the importance of Life Insurance, why is this? There is a chance that any of us might fall terminally sick, get seriously injured, or die. In order to cope after these grave illnesses, it is important to have a back up.

The perfect back up would be life insurance. Life insurance with the help of certain life insurance agents or companies gives you the best deal to give your family a financial back up after you are gone. This is of immense help as your family is sure to need financial aid after you are gone. Keeping all this in mind, it is important to ensure that you get a good life insurance policy fast.

When is the right time to avail life insurance?

When it comes to life insurance the younger the better. Many of us are misinformed that only the old and elder people will need life insurance. This is not so. When you are younger, you are going to have lesser health problems so make sure you get the right life insurance policy right away when you are young.

How to get life insurance?

There are many online websites that will give you full fledged info on life insurance. You can even get a Free Life Insurance Quote from them. This is the approximate amount you need to pay for your life insurance plan.

Hope these questions cover the basics of life insurance for you and help ease your doubts a bit.

Whole (or permanent) life insurance policies are more than meet the eye. Sure they offer a death benefit that caries through the rest of your life as long as you pay your premium and keep the policy in force, but more than that they offer an additional benefit of premiums accruing into something called cash values. These cash values can grow in a few different ways:

1. They can grow at a fixed rate like in a traditional whole life policy.
2. They can grow at a variable rate by choosing a sub account to invest them in. Sub accounts in a variable policy may have fixed investments like money markets, they may have stocks, bonds or mutual funds.
3. They can grow at a variable rate tracking the returns of a specific index-like the S&P 500 or the Dow Jones Industrial Average.

The third kind of growth is seen in an equity indexed life insurance policy. When you have an equity indexed life insurance policy, your cash values grow as they would in a variable policy but the sub account you choose is created to mimic the performance of a particular index. If that index goes up, then your cash value will likely go up. But if the index goes down, then so will your cash value.

One of the most important things to remember about an equity indexed life insurance policy is that there is no guarantee that you will earn money. Many illustrations for life insurance will show the great amounts of cash that can be accumulated in an equity indexed life insurance policy, but there is always the chance that the index you choose for your sub account will go down in value and will reduce the cash values you accumulate. The great things about equity indexed life insurance policies, however, is that they often have a floor, or minimum amount that you are guaranteed to gain. While this threshold is often significantly less than the fixed rate of return in a traditional life insurance policy, it at least offers some sort of gain while markets are down. On the other hand, there is also often a ceiling or maximum gain you can experience which may be less than the actual increases experienced by the index that you choose.

Life insurance is a necessity for people whose spouses and/or other dependents rely on their incomes. Regardless of the type of insurance you decide to purchase, the payoff goes directly to your designated beneficiaries and is not taxed, so the beneficiaries receive the entire face value of the policy. The two most common types of life insurance are term life and whole life. Understanding the difference between the two can help make the decision about which is best for your situation easier.

Term life insurance is purchased to cover a specific time period, usually not more than 20 years. The premium is set when the policy is purchased and does not change for the length of the term. If the insured dies during the term covered by the policy, the beneficiary or beneficiaries receive payment for the amount of the policy. When the term expires, the policy is no longer in force, and the insured person will have to purchase a new policy.

Generally, applicants for term life have to undergo a medical exam to qualify for it.

The advantage of term life policy is that the premium is usually lower than for other life insurance products. The disadvantage is that term insurance does not increase in value over time, so the premium are simply an expense-it does not accrue to the benefit of the insured. One cannot, for instance, borrow against the value of term life insurance.

On the other hand, whole life insurance policies are issued to cover the entire life span of the insured. The premium for a whole life policy will be substantially higher than one for a term life insurance policy of the same value, but the policy does accrue value over time. If s/he needs cash at some future point, the insured can borrow against the value of the policy.

If the borrowed funds are not paid back before the insured’s death, the dollar amount of the loan will be deducted from the face value of the policy and the balance will be paid to the beneficiary or beneficiaries.

Some of those who purchase whole life use it as one tool in their estate-planning arsenal, because the beneficiaries do not pay taxes on life insurance payoffs. If a person has considerable assets and wants to avoid having some of them tied up in probate or subject to estate taxes, whole life can be a useful option in attaining those goals.

Some companies offer term life policy that can be converted to whole life during the covered term. The premium will increase, but the insured is not obliged to take another round of medical tests to qualify for the insurance.

Life in post retirement phase is never the same. After years of active, busy and disciplined working life style, what a person wants is a life of comfort and peace. A comprehensive retirement insurance planning insurance policy takes complete care of your financial needs during the post-retirement phase of life.

Benefits

Retirement insurance planning insurance comes with a number of benefits.  You get ample income during your post-retirement years and thus you don’t have to depend on anyone for your requirements.  The contrary, you can still provide financial back up to your kids and their families.

Some of the benefits of retirement insurance policy are as follows;

1. Tax benefits galore

Investing in retirement policy is the best way to avail of tax benefits.

According to government law in most of the countries, premiums paid for life insurance policies are exempted from tax deduction.
2. Protection to family

The main purpose of having a life insurance policy is to provide protection to your near and dear ones in case something happens to you. A comprehensive retirement planning insurance policy ensures that your spouses and children do not have to face economic constraints even during your absence.

3. Ample retirement income

Retirement insurance policy boosts your retirement income and thus gives you to live a life of luxury and comfort even when you are not earning.

4. Most reliable

Investing in retirement insurance policy is the most trusted and reliable form of investment.

It is hundred times better than falling prey to other market-driven investment plans. While value of money invested in share market may rise and fall depending upon the market trends, money invested in life insurance provides you stability as it always comes back to you without any loss.

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