AccuQuote Blog

An annuity is a financial product that accepts payments (either a lump sum that accrues interest over time or payments in installments or premiums that will also accrue interest over time) and upon annuitization, will make a series of payments back to the individual, as a sort of income. An annuity is a tool that is meant to last. So even if annuities vary greatly in structure, they're meant to be long standing instruments that you should view as a long term investment. Annuities are good investment options for seniors because they are a supplemental income plan for retirement. They are low risk financial products as compared to other options for retirement. They also usually have guaranteed interest rates which seniors benefit from because this is again, a comforting low risk scenario. Even if the markets tank, they can expect to receive these returns. 

 How will you know if an annuity is a good investment option for you? 

The answer differs from person to person. First, says the California Department of Insurance, look at your financial situation, then your health, then your overall goals. You may be looking at an annuity because you want to supplement your retirement incomes. Start by looking at what you have with you: how much SSI is you looking to get and if you are on a pension plan of any sort. How many people will this income cover? Some retired couples may have annuities and pension accounts set up for themselves. Others may require supporting a child or other family member. Then think about how much it will cost you. Can you actually afford the premium payments? Do you have the luxury to leave the money inside the annuity for several years at a time? Are you going to need money for expenses like hospital bills, long term care or assisted living needs? Even if you decide to steadfastly keep the money inside your annuity, what surrender charges would you be looking at in an emergency? Some annuities have benefits and allowances like partial withdrawals, which allow you take a small amount out of the annuity contract without being penalized. Since annuities can be a complicated affair, it makes sense to receive sound financial advice from a qualified person who can independently review your financial status and make recommendations that are appropriate for you. 

 When you're ready to seriously consider buying an annuity, remember these advantages:

• Though the rate of growth is slower than other riskier investments, they can easily outperform a Certificate of Deposit's growth rate.
• They can guarantee interest rates at 3-4% for as long as 5 years.
• Annuities earn interest on a tax-deferred basis. So don’t pay taxes on any interest earned until its time for withdrawal. Fixed deferred annuities can offer competitive rates of interest as compared with other safe-money instruments.
• If you choose a lifetime income annuity, you can earn a monthly income for the rest of your life, which you won't outlive. However, you can also elect to receive benefits for a certain number of years instead. Make sure to find out how survivor benefits will work out in the case of your annuity in case you pass away during the benefits period.

Baby boomers facing retirement are looking at a serious shortage of retirement contingency plans. For rich clientele, an annuity is a specialized product that can serve them well. For older couples facing retirement in the imminent future, an annuity may not allow enough accumulation time. If you are a young couple and want to invest your money in higher interest earning accounts, consider the amount of risk you're willing to offset your investment at. Make sure to read up on all necessary documents before an annuity purchase. Check the credit rating of the company you'll be buying from, to make sure your investment will be safe in the long term. Buy only from a company that has been rated A- or higher by AM Best ore the equivalent S&P rating. And remember to get quotes so that you can compare and rate annuities before buying. 

Oh! those gushy feelings, where everything seems right with the world, and the ground has been taken from underneath your feet.

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There are some things in life you ought to do your homework on. One of these things is life insurance. When you're ready to purchase a policy, make sure to look through this list of do’s and don'ts. With a framework in mind, you'll be better equipped to shop for the best bargains, ask your agent all the right questions and opt for modifications and customization in your policies that most people won't even know about!

Do’s:

·         Do introspect on your need for life insurance. Quantify it in numbers if you can. If you have a family of four, how much will they need to support themselves without you? If you are not the primary breadwinner in the family, what minimal amount of coverage will be enough for your surviving family to pay off funeral costs, outstanding medical bills and other urgent expenses?

·         Do choose what type of life insurance you'll need. Do you have the need for permanent death benefit? If not, an affordable term life insurance policy will be better suited to your needs.

·         Do make a comparison chart of policies and quotes out there. Some large aggregator websites like AccuQuote offer free comparisons up to 5 carriers for a policy of your choice. When you're able to compare quotes and features in a policy, you're able to really choose what's right for you. Your best interest is served.

·         Do consider getting your family members insured as well, even if it means adding them on riders on your own policy. Adding child and spouse riders to your policy won't add too much to your bill (in the case of most life insurance companies). Child riders can cost as little as a few cents a month!

·         Do review your policy yearly. Not reviewing can mean losing hundreds of dollars in unnecessary premium payments, forgetting to update beneficiary lists, using a life insurance solution that no longer fits your needs and lapsing out on a policy provision. All these expensive mistakes can be avoided with a simple check every year.

·         Do get quotes on life insurance every few years to see if an improvement in your health will reward you with a lower priced policy.

·         Do inform your family of your policy and what they should do to file a claim in the event of your death. While we all avoid stark subjects of that nature, you are just displaying common sense when you choose to inform your loved ones about safety nets that you have put in place to protect them even when you're gone.

Don'ts:

·         Don't blindly believe everything your agent says. Make sure they have been around long enough for you to trust their opinion and judgment.

·         Don't buy whole life or permanent life insurance until you're absolutely certain that you can afford it! I know this is contrary to what many in the life insurance industry advocate, but at AccuQuote, we believe that buying term life insurance makes sense for many young, growing American families. You can be covered for so much more value per dollar with term life.

·         Don't buy what someone else has recommended to you. While it is hard to believe, life insurance can and is not a one-size-fits-all solution. Use a life insurance needs calculator (plenty available online) to ascertain what is right for you).

·         Don't opt for the monthly premium payment option if you can help it. You can save a lot by choosing to pay your premiums yearly.

·         Don't forget that your policy can be modified with riders to cover additional aspects. This offers a customized solution to life insurance owners.

·         Don't forget to read the fine print and ask a lot of questions. Are your premiums going to be affected because of a dangerous hobby you like pursuing? Is there accidental cover on your policy? Asking questions and clearing doubts as a responsible policy owner will reflect your attitude towards life.

This long list of do’s and don'ts is not meant to be preachy. Treat it as a welcome honest change to business as usual. Good luck on your search for the right life insurance; we hope you find exactly what you're looking for!

The start of a new year is a great time for many of us. It may have to do with the fact that we all like fresh starts. Or that we like taking stock of time gone by, reassessing our plans and charting forward a way ahead by planning for contingencies and working renewed toward successes. Or maybe we just need another good reason to stay up all night and have a good time. The New Year gives us all of that and more. This might sound clichéd but in the past couple years, I've actually found myself looking forward to the new year because it helps me with taking stock of where I've come so far and plan for the future. I've actually begun looking forward to New Year’s resolutions! I have begun warming up to the idea that planning things and getting prepared for them beforehand is not as boring as some people make it out to be. Every time I've tried it, it has been fun, scary, ambitiously egging on and curiously inspiring, but never boring. If you're true to yourself, you'll find that there are a lot of plans you've had for yourself that you've probably kept suppressed over the years. Reminiscing on the past can bring back memories long forgotten, good times you can attempt to recreate in the New Year, successes that you can hope to mimic again sometime soon. It can also be a frightening thing because of the failures it will throw light on. But taking the escape route and not allowing yourself catharsis on your failures can be disastrous. It means you'll never learn from your mistakes, and never know what to do to preempt them from happening again. Sometimes, thinking about the future is also a daunting process. Some of us have dreams and ambitions beyond our means, and we are afraid to let our dreams play out, fearing that we may be stuck in places we don't know how to get out of.

Writing for life insurance makes me wonder what interesting inclusion in a resolution list could I possibly make. Most people know by now that life insurance is a very necessary protection to have, at least for the primary breadwinner in the family. If you don't already know that, please stop whatever you're doing and consider taking up a life insurance policy to protect your breadwinner today. Too many families struggle with their loved ones going and don't know how to pick up the pieces and move on, especially financially, when something goes wrong. If you are married, you should consider also covering your spouse under some form of life insurance coverage.

But here's the clincher. We hope that you have room in your New Year’s resolution list for one more addition: Buy life insurance for your children. Many people think of it as a complete waste of time. This is not to increase the life insurance company's profit and ensure that your agent gets a rollicking start to his business this year. Camps are quite divided when it comes to purchasing life insurance for children. There are lots of people who believe that purchasing life insurance for a child is a huge waste of money. It makes sense on some levels. If the child is not earning, life insurance monies will offer no income replacement. It is overall just adding to expenses. But consider this:

·         The average funeral bill these days is anywhere between $7,000 and $10,000. Even for a child. Do you have enough in savings to pay for a child's sudden funeral should something untoward happen? While we don't wish for it, planning for some sort of contingency still helps than bucking under the pressure of arranging so much money at the last minute.

·         Medical bills left outstanding from sicknesses, emergency room charges and care costs. No one wants to think of them, but they are also additions to financial burdens that you can feel as a family, left behind after a child's funeral.

·         Children can develop conditions later on in their adolescent years that will lead to them being denied on life insurance applications in the future. Covering your child under some protection now can ensure that they're protected in the future with most life insurance companies allowing extensions and conversions of child policies to permanent life insurance.

Make it your new year’s resolution to protect your children for their futures, their health and their ability to remain insured despite the onset of sickness or other life-threatening conditions. You can buy affordable term life insurance policies for primary breadwinners and add spouse and child riders for a nominal price. With such affordable solutions available, don't put this on the back burner for yet another year. Do the right thing; get your child protected today.

This year, like every other year, is going to be a time of great change all around us. The Congress may have bestowed an extra life to coffers in state and federal governments around the country with an extension of deadlines so as to not reach a fiscal cliffs, but the truth of the matter remains. Our country is facing a real time threat to funds, resources and budgets and we can no more rest on guarantees that they will be around to protect us by the time we retire from our service years. We ought to be making wise choices that will stand us in good stead in the coming years, and take responsibility for our own futures. Especially if you already have the means to. So what's a good way to start doing that? By considering long term care insurance, it's advantages and what it would cost you to take care of your own health in the future on your terms.

 So what is long terms care? Long term care is a large number of services in healthcare and related fields given to people with chronic illnesses or disabilities. It also includes care-giving activities like taking care of daily routines (bathing, eating, changing clothes, using the bathroom) if a person needs it. Long term care is given when the illness or condition persists over several years. According to research estimates, primary (and unofficial) caregivers in long term care usually tend to be family members and loved ones, who are not paid for what they do. Caregiving as a family member is oftentimes expected, especially in the case of families that are strapped for cash and do not have adequate insurance protection for long term care needs. But research has also proven that this kind of caregiving can be taxing on all, especially the caregivers and their immediate other dependants as well. If you have the opportunity to put affordable insurance in place early on while you can, you owe it to yourself and your kids to take care of things sooner rather than later.

Some people like thinking that they won't be around for too long, and therefore won't need long term care. That is not the case for most people; research has again proven that life expectancy has increased significantly and people are living longer these days. With this information, it won't be safe anymore to assume that you won't need some form of long term care. And long term care is not just needed when you're old and n your retirement years. Families with a history of chronic illnesses or conditions that have early onsets should watch out for signs and symptoms and buy umbrella long term coverage for their entire families to protect young children as well.

 When people argue against the case for long term care, they often say that it's a waste of time because long term care never ends up being used. According to this US News article (http://www.usatoday.com/story/money/personalfinance/2012/11/12/long-term-care-insurance/1677385/), long term care insurance providers have changed their offering to include the customer's best interests a little more. Read an excerpt from the article that describes the new products below:

·         Shared care products that allow a married couple to take out separate plans that are connected. If the first person passes away without using it, the benefit transfers to the spouse," Newman says.

·         Hybrid products that are a life insurance policy that has a rider for long-term care insurance. Only a handful of companies offer it now, and it is being perfected, Udell says. But the hybrid provides a way to set up a pot of assets that can be used for long-term care. And if it is never needed for that, the family will receive a life insurance benefit.

·         Long-term care partnership programs, which are offered in about 40 states. The advantage: Americans who have a state-approved, private long-term care insurance policy will be able to hold onto more of their assets if they later need to apply for Medicaid.

So if you're looking to make your own way out, create your own safety net and rely on your own means in your retirement years, seriously consider a long term care insurance policy. Look also at how much you can afford in monthly payments. You can shop for long term care insurance on an aggregator website to help save some money. And don't forget that your whole life insurance policy can also allow the addition of an LTC insurance rider. Ask your carrier about adding an LTC insurance rider on your whole life policy, which will allow you to use the cash value to pay for LTC costs instead of using it for death benefit.