The good fortune of being worth millions at any age should not be put to waste by poor financial planning. Life insurance assures that no spouse, child or any loved one suffer financially after the death of an individual. It is such a tragedy for families to lose everything including the lifestyles that the family has been accustomed to when the breadwinner fails to buy life insurance or purchases too little. The proceeds of the life insurance can also be used to help pay estate taxes so it need not be taken out of the inheritances of the heirs.

Most millionaires are not the limo-riding, mansion-living celebrity type since such status has been attained by those working hard and steadily saving money all their lives. The relentlessly booming economy has created unprecedented wealth, along with a number of people with sizeable estates. However, millions worth of assets could very well mean estate taxes at the death of the owner.

Under the present estate tax laws, a portion of the estate can be transferred tax-free to heirs upon death. When an estate exceeds a certain amount, estate taxes become due. The bigger the estate, the bigger the tax bite. It could be as high as 55% at the top level. The entire estate can also be transferred to the spouse upon death if exclusion is not met provided the spouse is a US citizen. The estate will be subject to estate tax at the spouse’s death but heirs will get hit by the estate tax bill.

In a scenario like this, a family business worth millions of dollars built from scratch by a married couple would entail at least a million dollars for estate tax once the business in inherited by the children. There are even instances where the heirs are forced to sell all or a portion of the business just to pay the taxes. Estate transfer taxes can sometimes cause the failure of family businesses to make it to the next generation.

In a recent survey of “high net-worth individuals” or those worth more than $1million dollars in assets, exclusive of the home and above and beyond debts, some interesting data has been found out. The survey showed that 47% plan to consult a financial adviser about estate planning, 41 % plan to leave existing trust funds in place, 33% plan to either increase or maintain their plans for charitable giving, 33 % plan to either increase or maintain their plans for tax advantaged giving to their children, 26% will leave existing life insurance policies in place and less than 5% plan to drop life insurance, terminate their trusts or decrease their giving to charities or children.

Millionaires tend to be above average when it comes to planning for the future and it might be wise to follow their lead when it comes to life insurance. The bottom line, though, is to get life insurance online in the case that you feel that your current assets are not sufficient to provide for your family into the future.

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Insurance is a considerable expense which is based on individual claims history and the degree of risk involved. The applicant should be wary of insurance companies who are too willing to provide coverage for a poor health condition or is willing to connive to conceal such condition. This would indicate how the company conducts itself and will provide a preview of what to expect when claiming time comes.

Shopping around for a good insurance provider has never been easier with the advent of online purchases and updated information from the government agencies concerned. An insurance policy issued by a company not licensed to do business is worthless. The broker should be able to provide adequate information about the company underwriting the policy including its contact number for customer’s concern. It is highly recommended that the applicant check if the insurance company is licensed with the state department of insurance and to likewise check its financial stability with at least one of the insurance rating services.

An agent that is hard to contact may be an indication that it is unlicensed. These unscrupulous agents usually encourage applicants to upgrade existing policies unnecessarily. A pushy or insistent broker should send warning bells ringing in one’s mind. In short, an applicant should not let anyone or any company pressure him/her into paying for something before he/she is ready to do so.

The insured should expect to receive a policy after signing-up and paying a down payment. If it does not come as promised, the non-issuance of a policy should be immediately relayed to the insurance company for clarification. Be especially suspicious when a notice of cancellation is sent even when the premiums are paid. The insured should not be contented with an agent’s explanation that such notice is only a mistake. It is better to check as soon as possible since it is possible that premium payments are actually not being received by the insurance company. Payments should always be properly acknowledged.

Important personal information such as credit card numbers, bank account numbers, social security numbers and the like should only be provided after a thorough check of the company being dealt with. There should also be a legitimate need for this information. Since it is very difficult for victims of insurance fraud to get their money back, it is most important to do everything possible to avoid being a victim.

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Online buying is another way of having life insurance aside from the more conventional way of face-to-face transaction with an agent. The Internet has become more secure in recent years and has allowed transactions to take place and be finished without fear. Insurance firms are now offering deals specific to online purchasing with such features as cheap rates and quick purchasing result and removing the need to deal with an agent to pay extra fees.

Buying a life insurance online is advantageous to those who have a certain level of knowledge about the various forms of life insurance available and the premiums they want to pay. Substantial information is available on the websites of dealers which can still be researched thoroughly to help clarify the options available to the applicant. Internet life insurance deals may be insufficient when there are specific queries and concerns about individual circumstances that call for a more tailored approach. Policies that have specific features or more complex structures such as a Whole Life, Variable Life or Variable Universal Life policy may require the services of an agent.

Complicated policies require explanations that may be too detailed to cover online. Internet life insurance deals more with the basic policies. Online packages tend to be cheaper because of their simplicity as compared to the policies sold by agents which are more particular and flexible. The wisdom of choice really depends on the needs of the applicant.

Granting that the applicant’s needs jive with what online insurance deals can offer, there are several advantages in buying online. Online insurance agencies are usually licensed with many companies, thus the best policy for an individual’s unique situation can be had. Application can be done without pressure at the applicant’s pace. It is ideal for those who are uncomfortable in sharing private details face-to-face with an insurance agent. Online agents have considerable experience in finding policies for those with all types of risk factors. Most of the online quotes beat discounts from present insurers especially when tax consequences are considered. Probably the best attractions of online insurance deals are being relatively easy, convenient, fast and having a free application process.

If an applicant is unsure or is not comfortable with the online process, it would be advisable to speak to a specialist adviser for peace of mind. It is important not to be “forced” into something that one is not comfortable or confident with. An applicant should remember that he/she has the power of choice provided it is not too late.

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An honest assessment of one’s financial situation and the standard of living that is desired to be maintained for dependents or survivors should be done. Careful consideration as to what could be, such as who will be responsible for the final medical bills and funeral costs, possible relocation of family or change in the standard of living are inevitable realities that have to be faced in case of death of the primary breadwinner or care-giver. Current life insurance needs for the family or individual can be determined by the assumption of immediate death.

After the initial readjustment of the survivors, consideration has to be given to the longer term financial needs. This would include dependency period income for children, income for the surviving spouse, mortgage and other debt payoffs, college education funds and an additional emergency fund. A suitable policy more or less anticipates the future as close as possible.

With the careful assessment of the expected needs of survivors, a person can decide on the most appropriate policy type. Life insurance needs change over time, thus a life insurance program should be periodically evaluated. A review is ideal at least once every 5 years or whenever major life event changes occur such as change in income or assets, marriage, divorce, the birth or adoption of a child or purchase of a major item such as a house or business.

Life insurance needs would vary among single persons with no dependents or with dependents, couples with children or no children and older couples. The choice of the type of policy would largely depend on what the insured wants to accomplish beyond his/her lifetime. Life insurance is a way of ensuring that his/her survivors have a fighting chance in life without him/her.

Choosing between Term Life and Permanent Insurance can be a very tricky issue. There are those that promote buying Term Life and investing the difference. The difference would refer to the savings plan component of Permanent Life premiums. Term Life is considered by most as the better alternative because of its relative simplicity, competitive pricing and flexibility. Permanent Life has tax-advantaged savings and investment options.

When a person expects to work through the late years, a cash value policy is more suitable. Term Insurance during this stage is extremely expensive or may not be available at all. A very young person has practically no need for life insurance which progresses to greater and greater need as a person takes on more responsibility. This need is expected to diminish as one grows older.

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Some of the noteworthy providers of life insurance include Aetna, Allstate Insurance Company, American International Group, American National Insurance Company, Aon Corporation (formerly Combined Insurance Company of America), Auto-Owners Insurance, Banner Life, Farm Bureau Insurance, Garden State Life Insurance Company, Guardian Life Insurance Company, Jackson National Life, John Hancock Insurance, The Hartford, Kansas City Life Insurance Company Inc., Mass Mutual Financial Group, Metropolitan Life Insurance Company, Nationwide Insurance, New York Life, Northwestern Mutual Life Insurance Company, Prudential Financial, RBC, Sagicor USA Inc. (formerly American Founders Life), The Standard ( also known as Standard Insurance Company), State Farm Insurance, Thrivent (formerly Lutheran Brotherhood), Travelers Group and Western and Southern. With so many life insurance companies to choose from, applicants have a very wide range of choices. It is a good practice to shop around and understand one’s policy very well, regularly review and update it accordingly.

Aetna Inc. is a direct descendant of Aetna Insurance Company of Hartford, Connecticut which issued its first life insurance policy in 1850. AllState is the largest publicly held personal lines insurer in the United States. The American International Group (AIG) is a major American Insurance Corporation and has been ranked as the fourth largest company in the world according to the 2006 Forbes Global list.

Aon Corporation is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting and specialty insurance underwriting. Auto-Owners Insurance is a Fortune 500 company founded in 1916 and offers life insurance among its various lines of products. Garden State Life Insurance Company is a small direct life insurance company. The Hartford is a large investment and insurance company in the US. Mass Mutual Financial Group is a mutually owned financial protection, accumulation and income management company. MetLife is the largest insurance company in the US with its acquisition of Travelers Life and Annuity.

Nationwide Insurance is a large US insurance and financial services company. New York Life Insurance is the largest mutual life insurance company in the US. Northwestern is a major financial services company. Prudential Financial and its subsidiaries provide insurance, investment management and other financial products and services to both retail and institutional customers throughout the US and in over 30 countries. RBC is Canada’s largest Chartered bank. State Farm is a group of large US insurance and financial service company. Thrivent is a Fortune 500 financial services organization. Western and Southern is a diversified family of financial services companies.

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Investment opportunities in Whole Life Insurance are dependent on the surplus of the cash reserve which grows overtime. The cash reserve earns dividends paid by the insurance company. Cash values can be borrowed after some time or the policy can be cancelled to receive its cash surrender value.

A cash reserve can also be built with Universal Life. It traditionally provides more consumer information on such things as company overhead expenses, reserves, cost of insurance and how much goes towards savings. Term Life Insurance is what is considered pure insurance in the sense that it offers life insurance coverage and nothing else.

Variable Universal Life Insurance combines the premium payment and coverage flexibility of Universal Life Insurance with the investment opportunity of securities, stocks and bonds via mutual funds. The combination of insurance features with mutual funds results to a cash value that is reflective of the stock market environment and the choices that are made regarding the fund allocation.

It has been observed by industry analysts that although there are some favorable long-term drivers for the life insurance stocks, life insurers tend to be the last when financial stocks make their move. A big drag on earning at life insurance has been the losses and write-downs they had taken on bad investments in bonds and stocks of companies. Revenue growth at life insurers is also hampered by slow sales of variable annuities which is a specialized investment vehicle that makes installment payments and is a staple product of the insurance industry. Life insurers cannot count on its ability to generate more revenue through passing on higher premiums to customers since there is too much competition in the life insurance business to permit such escalation. It is still hard to see what could cause life insurance stocks to rise.

The economics of life insurance is such that it is a tax-favored product. The cash values grow tax-deferred and the death benefit is paid to the beneficiary free of income tax. In the case of life insurance being used as a wealth replacement tool wherein donors make a significant charitable gift or bequest, charity can only benefit if the insured dies early. Tax advantages are irrelevant since it is already exempt from taxes. It entails a fairly large cost to have a tax-deferred wrapper on the underlying investment. A well diversified and carefully managed stock or mutual fund portfolio will almost always outperform an insurance policy if the insured lives beyond statistical mortality.

People should strive to become an educated investor. Smarter decisions about money can be arrived at by becoming a better-informed consumer. Life insurance is a protection from future eventualities that could affect our loved ones and the cash value involved is not as lucrative as other investments. Investments should consist of diversified assets spread in stocks, bonds, cash and real assets.

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The policy automatically terminates and its benefits withdrawn when certain events occur. This would include non-payment of any premium within the grace period, termination, lapsing or conversion of the policy. A life insurance policy basically does not cover those that are not specifically mentioned as covered.

Fraud and false statements can be enough reason for an insurer to refuse to pay a claim. The questions in the application form should be answered truthfully. There is no advantage in doing otherwise as insurance companies check medical and credit records. False statements that manage to pass the application stage may still produce unwanted results when claim time comes.

It is not right to say that people with health conditions cannot buy life insurance coverage. Some insurers choose to charge premiums that reflect the level of risk an applicant represents instead of downright refusal to provide cover. Modern medical developments have made it possible for certain health conditions to be managed through proper medication, therapy or lifestyle changes. Medical information has allowed insurers to cover applicants with specific health conditions. However, more serious or incurable conditions present a significant risk that most insurers will not assume.

Life insurance benefits can only be had when the insured’s life is lost. Sometimes, circumstances may prevent the death benefit from being paid especially if they are particularly defined as something excluded from the coverage. The rules governing coverage essentially requires that an insurable interest is established in a person’s life. This would mean that the applicant, if not the insured, must demonstrate that the proposed insured’s passing would directly result in financial harm or hardship to the applicant. This is why there are several typical life scenarios that exist. Parents insure their lives in behalf of children or another loved one. Companies ensure the lives of key employees. Parents also insure the lives of their children and lending institutions require a specific minimum amount of life insurance on the person taking out the loan wherein the institution is named as the beneficiary.

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A group life policy provides coverage to a group of people under one contract. These contracts are typically sold to businesses to cover their employees or associations to cover their members. Lending institutions buy policies to cover their debtor’s loans in the event of death. Anyone who ceases to be employed or be a member of an association can convert to an individual policy and keep the coverage. The insurance company may not apply a new contestable period if the group life policy has been in force for two years and the insurance amount can be the same or less than the original policy. A policy that is converted before the two-year contestability period ends can be treated as is until the contestable period reaches the time limit under the original group policy.

Credit life insurance pays off loans or charge account balances when the insured dies. Some lenders or sellers require credit life insurance as a pre-requisite for a loan approval. A person who has an existing life policy can require the creditor to accept an assignment of benefits under the existing policy instead of purchasing a credit life insurance.

A policy that has an accelerated death benefit provision may pay the death benefits under certain conditions, even when the insured is still alive. An insurance policy with this type of benefit can provide an early benefit payment based on the need for long term care services with the same benefit eligibility requirements as a long-term care policy. It can also be paid for a specified disease or a terminal illness. This benefit can be part of the policy or attached as a rider.

There are certain benefit eligibility requirements that have to be met to have a qualified long-term care illness. A person should be diagnosed as chronically ill and receive long-term care services through a plan of care prescribed by a licensed health care practitioner. A chronically ill person due to disability or age is expected to be unable to do at least two of six activities of Daily Living (ADLs) without substantial help from another person for at least 90 days. These activities are bathing, dressing, toileting, transferring (mobility), eating and continence.

Some policies provide an aggregate dismemberment benefit that may provide benefit for dismemberment of hand and feet or loss of eyesight. A written proof of disability or continuance thereof may be required by the insurance company. When the insured ceases to be totally disabled, fails to submit proof of continuance of total disability when required or fails to be examined medically when required, the insurance company may choose not to provide any further benefit.

Term Insurance is the simplest type of life insurance and requires the smallest initial cash outlay. It is usually preferred to provide protection for a specific period of time. It can be a yearly renewable term or can extend to a longer period of time such as 30 years. Renewal of this type of policy at the end of the term is usually allowed even without providing evidence of insurability. However, the premiums typically increase at each time of renewal.

A Term Insurance provides a death benefit to the beneficiary if the insured dies while the policy is in force. There are no benefits paid or any cash value accumulated at the expiration of the policy. It is generally purchased by those with a temporary need for life insurance as well as those with limited budgets.

Permanent Life Insurance is designed to provide life insurance protection for a person’s lifetime. It can accumulate a cash value which is an amount of money that can be withdrawn or borrowed to be used as desired by the insured. The various types of Permanent Life Insurance differ in the flexibility of premium payments, how the cash value is invested and the death benefit guarantee.

Whole Life insurance does not expire as long as the premiums are paid and there is no need for renewal. The face amount of insurance and the premium are fixed. With premiums maintained at a level amount, the insurance company guarantees a death benefit and a cash value that increases every year. Loans or withdrawals done against the policy reduce the death benefit. This type of insurance often pays policy dividends subject to the terms and conditions of the policy but these dividends are not guaranteed. Guarantees are based on the claims paying ability of the issuing insurance company.

Universal Life Insurance is more flexible than Whole Life. The policy owner can change the timing and amount of the premium payments as long as the premiums paid are sufficient to cover the policy. Payments are applied to the cash value which earns an interest rate declared by the insurance policy.

Variable Universal Life Insurance is similar to Universal Life Insurance but offers more flexibility. Whereas, the Universal Life Insurance policies offers cash value that earns an interest, Variable Universal Life Insurance allows the policy holder to invest the cash value of the policy in a variety of investment options. Payments are generally applied to the cash value which fluctuates based on the performance of the investment options selected. The death benefit of Variable Universal Life contracts offers a choice between the death benefit and the death benefit selected plus the accumulated cash value.

With so many companies selling life insurance, it can be very easy to be attracted to the ones promising “discounts” and similar perks. It is important for a person searching for the right life insurance coverage to limit themselves to companies with high rating from two or more independent rating agencies. A low premium from an unstable company is never a good deal. After all, it is imperative that the company remains viable and existing on pay-up time for the benefits to be enjoyed.

One can always ask for a premium estimate from a licensed agent or broker to make shopping around much easier and systematic. In searching for the best deal, a person should know what particular rate class he/she fits into. Most insurance companies sell individual life insurance policies to price classes. The typical classes would be preferred-non smoker, standard-non smoker, preferred-smoker and standard-smoker. Those that are disqualified even from the standard rates due to certain health conditions or histories are offered insurance at “impaired risk” or “non-standard” rates. Comparisons of premium rates should take into consideration whether what are being compared are more or less on the same level in terms of coverage or benefit. It could be disastrous to choose simply on the basis of the price without looking into the expected benefits.

Rate discounts are given to specified insurance amounts. It is possible that a $500,000 life insurance would entail a smaller premium than for $450,000 because of the discount that kicks-in at the higher insurance amount. The manner of payment can also in effect produce certain discounts. Some companies levy high charges for paying premiums frequently, thus a yearly premium payment would be lesser than the total yearly sum of a semi-annual, quarterly or monthly payment.

Discounts can also be derived from a number of ways such as healthy living, good driving record, special education or training, multiple policy, long-term policy and higher deductibles. Most insurers take a person’s lifestyle into consideration when determining premiums. Some offer discounts of 5% to 15% when two or more policies are maintained with them. It is possible to ask for a reduced premium when coverage has been provided by a company for a good number of years. Although a higher deductible generally means a lower premium, it is best to consult the agent with regards to the pros and cons of higher deductibles.

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