Myths About Life Insurance Replacements

Myths About Life Insurance Replacements

Life insurance replacement simply means discontinuing one life insurance policy to purchase another one. And, since life insurance is a complex financial tool, policy replacement is a very involved decision-making process. People in the life insurance industry are typically against policy replacement because they believe it does more harm than good. However, there are circumstances where replacement has benefited the policy owner. However, there are circumstances where replacement has benefited the policy owner. Since this…

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Overhead Expenses Can Affect Your Life Insurance Policy

Overhead Expenses Can Affect Your Life Insurance Policy

Overhead and administrative expenses include all the operating costs that a life insurance company incurs in the course of doing business. These costs fall into four basic categories, which are the cost of facilities, data processing, employees (labor), and sale expenses (commissions, marketing costs, sales offices, etc.). All of these expense factors will vary greatly from one company to another. Commissions are a significant part of the overhead expense factor primarily in the first year…

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What’s The Best Way To Choose a Life Insurance Adviser?

What’s The Best Way To Choose a Life Insurance Adviser?

Any adviser selling life insurance and/or annuities must be licensed with their state’s Department of Insurance, which can vary greatly from state-to-state. Contact information for each state’s insurance department can be found here. With insurance departments, the resources and compliance can sometimes be more relaxed in some states than others. An insurance department’s website can be a valuable source of information. On most websites, you can research whether or not an insurance representative is licensed…

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Can a Life Insurance Company Declare Bankruptcy?

Can a Life Insurance Company Declare Bankruptcy?

In the early 1980s, the worry of a life insurance company going bankrupt or insolvent was a rarity, which quickly changed during the 1990s when some well-known insurance companies were placed into receivership. In fact, insurance companies cannot declare bankruptcy; instead, they are placed into insolvency receivership or liquidation by the state’s insurance department.

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What Is Premium Financing In the Life Insurance World?

What Is Premium Financing In the Life Insurance World?

Premium financing has been around for years in the life insurance industry and has been heavily promoted, especially among wealthier clients. This arrangement involves an outside – third party – lending sources like a bank or hedge fund paying the premiums on a life insurance contract. The unique characteristics of premium-financing arrangements are: · The loan is assumed to be renewed until death. · The insurance proceeds are relied upon to be sufficient to repay…

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How To Determine the Performance of a Life Insurance Policy

How To Determine the Performance of a Life Insurance Policy

When determining the performance of a life insurance policy, there are four components, which are directly related to the actual premium you pay, to take into consideration. The premium you pay on your life insurance policy may fluctuate from year-to-year if any of these components change; they are mortality, administrative expense, interest rates and persistency.

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The Most Common Types of Life Insurance Fraud

The Most Common Types of Life Insurance Fraud

Life insurance fraud costs the industry hundreds of millions of dollars each year, and it can burden family members with an agonizing set of circumstances. It often involves deceiving family members or business partners, and among those horrors, it translates to higher rates for honest policyholders. In once case, a woman and her husband found that their son had somehow managed to change the ownership names and beneficiary on a life insurance policy. She and…

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