AccuQuote Blog

Our life insurance blog is dedicated to providing you with valuable information from experts on the topics of insurance, financial planning and personal finance.

Can I Still Get Life Insurance If I Use Marijuana?

By Byron Udell


I never thought I’d be writing a blog post like this, but with the “holiday” (April 20th, or 4/20) approaching, it makes sense to talk about how smoking marijuana can and will affect your life insurance rates.

Fact is, most companies will still consider you insurable if you like to indulge, whether it be recreationally or medically.  However, those companies will most likely put you in the “smoker” or “tobacco” classes, which have rates as much as 4x those assigned to otherwise healthy non-smokers.  Of course, your rate also depends on other factors like your health and lifestyle.

There are a select few companies who will give you a non-smoker, preferred rate if you only use marijuana 1-2 times a month.  There’s no way the average consumer would know which companies treat marijuana smokers favorably; that’s why comparison shopping and using a smart quote tool is so important.

Like with any health condition or lifestyle choice, it’s imperative that you’re 100% honest and forthcoming on your application.  If you're not, and they find your THC (the active chemical in marijuana) levels elevated, your whole policy can and probably will be rescinded, or voided.  Even worse, if you die, and they found out you smoked, vaped, ate, or consumed marijuana in any way, your death benefit will NOT be paid.

You should know that if you use cocaine, heroin, methamphetamine, or any unauthorized prescription drugs, you WILL be denied coverage.  Also, if you have been arrested for selling or possessing marijuana, you will most likely be denied coverage.

It’s probably a good idea to stop smoking for a week or two before you get your medical exam. For more tips to help you get the best exam results, check out this short video.

All life insurance companies are different and they will quote differently.  That’s why it’s ideal to shop the market.  At AccuQuote, we do this for you!

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“Hmm…How Should I Spend My Tax Refund?”

By Byron Udell

For many people, tax time is kind of like Christmas in the spring – only you don’t have to hang all the decorations!  When you get an extra check in the mail, it’s natural to start thinking about all the cool stuff you can buy.

According to the IRS, the averagetax refund this year is $2,815.

What are you planning to do with all that money?

I have to tell you, there’s no better time thanright now to FINALLY get life insurance.Of course, I’m a life insurance guy, so that’s what I would say.But hear me out. There are 4 really good reasons you should at least think about buying now:

1)  You have the money in your hands!  Sure, you could buy a few “toys” which will be fun for a little while, but wear out and break later.  Or you can use your money on something that will last…something that will be worth more than you pay to get it.

2)  Term insurance is cheaper than ever.It’s shockingly affordable.

If you’ve ever hesitated to get life insurance because you worried it would cost too much, maybe this example will put your mind at ease:

A 40-year old man (non-smoker) with average health can get $500,000 worth of coverage for a 25-year term for just $899/year or$78.66/month.  If he paidupfront for the whole year, he would still have $1916 from his tax refund to play with.

3) The younger and healthier you are, the lower your premiums will be.Even if you’re working on improving your health, the clock is still ticking.Science hasn’t found a way to stop people from aging yet.  And even healthy people fall victim to unexpected accidents and illness.  If you’re healthy and apply now, you never have to worry about an accident, diabetes diagnosis or cancer scare sending your rates through the roof.

4) You know you need it.  You don’tneed a new Apple watch.  You don’tneed to trade in your 37’ LCD television for a 40’ LED.  Your kids don’tneed the newest cell phones.

But if you die, your family will need to cover your final expenses.  They probably willneed to replace your income. They’ll definitely need time to grieve.  Now, you can hope that you live forever, or that you have a couple million dollars in the bank when you do go…or you can prepare now, just in case the dream scenario doesn’t quite work out.

You get to make that choice.

(Here’s the cool thing: with premiums like the one in the example above, you can take care of your life insurance and still have cash left over to spend on a toy or two.)

 

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Read The Motley Fool Before You Retire

By Byron Udell

If you’re a regular reader of this blog, you know that I think The Motley Fool really gets it right when it comes to doling out personal finance advice and providing educational and informative content.

Well, my man Jason Hall is at again, this time giving us a thorough and comprehensive guide to what we should be thinking about as we head into retirement.  The title of the piece, “Read This Before You Retire,” is direct and to the point (like me!).  The headline tells you how important the information contained in the article really is.

Jason goes as deep as any journalist I know in his research and reporting.  For this story, he called on me to comment on how to prepare for the unexpected.  He quoted me talking about life insurance and long term care.  While sudden death is unexpected, eventual death is a certainty (as far as I know, the odds of death are still 1 out of 1).

When it comes to long term care, the numbers, which I lay out in the TMF piece, show that needing assistance when you’re older is fairly likely.

It’s a great read.  Enjoy and learn from it.

 

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The SECRET of How to Win the Game of Life Insurance (Part 3)

By Byron Udell

 

Now that you know the SECRET to winning the game of life insurance (DIE WITH YOUR POLICY IN FORCE!), it’s time for some real world examples.

I told you earlier that The Secret can work with term insurance, universal life, or any other kind of life insurance.  Now I’m going to show you exactly what I mean.

Winning the Game with Term Life Insurance

On the surface, the only way to win the game with term life insurance is to do something you don’t want to do—die before you’re supposed to (dying young is not exactly ideal, at least not in my mind).  But even if you don’t die before your time, term might still work, but only if you’re smart enough to “convert” your policy to permanent insurance before  you lose the right to do so, and then hold on to the coverage long enough to die with it in force.

What about Permanent Insurance?

It costs more than term, but it DOES have a level premium for the rest of your life.

Consider this example:  I bought a policy last year…age 55.  1MM of coverage at a price of just over $10,000 a year.  Assuming I live to age 85, I will have made 31 payments of $10,000, or around $310,000.  My family will receive $1,000,000 tax FREE—for a gain of $690,000.  That’s an AFTER TAX rate of return of over 7%, and the pre-tax equivalent rate of return, at least for me, is well over 11%, and it’s a conservative, fully guaranteed contract, issued by a multi-billion dollar, A+ rated financial institution that’s been around for well over 100 years. 
 
And remember, that high return is if I die about when I’m supposed to.  If I die early, then my policy really pays off. The returns are astronomically high.  When I bought my policy, I tried to fathom a scenario under which I could live long enough to make the purchase a bad deal.  The fact is, I can’t.  Even if I live to 100, I still WIN the game.

Let’s look at another example, one that’s more representative of our average customers:  Age 43, female.  500K policy, LIFETIME guaranteed premium of about $2,500 a year.  Say she lives to age 86.  She will have paid in $2,500 times 43 years, or a total of $107,500.  Again, at her death, her family would receive $500,000 …tax free… for a net gain of $392,500.  The AFTER tax internal rate of return on that is over 7.5%.  The pre-tax equivalent is, again, right around 10 or 11%, depending on your tax bracket.

In today’s world of ZERO interest, where else can you go and get returns this high WITHOUT taking market risks?

The Choice is Yours

Some people ask, HOW can the life insurance company make any money on a policy where they’re returning a 7% rate of return if you die at life expectancy, and an astronomical return if you die early?  Especially when they’re only earning roughly 5-6% on the premiums you’re paying!

In case you weren’t listening, they DON’T make money on those policies.  Again, If YOU DIE WITH YOUR POLICY IN FORCE, the insurance company WILL LOSE money on it.  The people who buy—and DROP—their policies PRIOR to dying are the ones who subsidize the returns for people who are smart enough to DIE WITH THEIR POLICIES IN FORCE.  Look at it like this:  the losers pay the winners, and the house (the insurance company) takes a small cut.  I know it sounds crazy, but it really is that simple.  

Here’s the bottom line:  TO WIN THE GAME OF LIFE INSURANCE…you have to own a policy that you’ll be able to KEEP until you die.  Now for most of us, that means a policy with an affordable, predictable, and level premium for life.  

The choice is yours.  If you are going to own life insurance, you’re either going to WIN the game, or you’re going to LOSE the game.  We WANT our customers to WIN.  When you call us at 800-442-9899 or get a FREE quote on AccuQuote.com, we’ll tell you how to win, and give you simple ways to make that happen.  As always, it will be up to you as to whether you decide to take our advice.

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The SECRET of How to Win the Game of Life Insurance (Part 2)

By Byron Udell

 

We left off at the end of Part 1, where I had already shared the secret to winning the game of life insurance (DIE WITH YOUR POLICY IN FORCE!).  But even though the secret sounds so simple and obvious, we learned that so many people disregard it and lose the game.  Why and how does that happen?

Well, we all die, so obviously these people don’t lose the game of life insurance because they live forever.  They lose because their policies LAPSE BEFORE THEY DIE!

This can happen for a variety of reasons.  Sometimes, it’s because they no longer want the policy… maybe they’re divorced or they bought it for someone they no longer care about, so they intentionally drop the policy.  Sometimes, it’s because they run across some tough times, lose their job, and have some difficult decisions to make… like… should I feed my kids?…or pay this life insurance bill?  Obviously, that’s an easy decision.  Maybe there was a change in address and the life insurance carrier wasn’t notified, which would cause the insured to not receive bills and, in turn, cause the policy to lapse.

The bottom line on all these reasons—and others—is that the insurance company doesn’t care WHY they lapsed.  They’ve collected premiums for years… but they NEVER end up having to pay a claim on that policy.  In other words, they WIN and you LOSE. 

And the profits the insurance companies make on all these lapsed and expired policies actually SUBSIDIZE the ridiculously high rates of return for the people SMART enough to continue to own their life insurance and DIE with their policies in force (you can call this group of people the winners circle!).  

In Part 3, I’ll lay out exactly how to win the game with both a term and a permanent policy.  Stay tuned!

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