December 2012

Believe it or not, millions – or possibly billions – of dollars from Life insurance policies are going unclaimed every year

The primary reason: Many people fail to tell their loved ones when they take out a Life policy or don’t let them know that they are the beneficiaries. If the funds from a policy go unclaimed for five to ten years, they will go into a general fund for the state. This means that although the policyholder has paid premiums into the policy, the individual(s) intended to receive the proceeds would never receive them.

It’s essential that people – especially the elderly – make sure that they keep their affairs in order, and informing a beneficiary about a Life insurance policy plays a key role in this effort.

A word to the wise…

American males have an almost one in two chance of developing cancer during their lifetimes, while females have more than a one in three chance, according to the latest data from the U.S. National Cancer Institute.

That frightening reality is leading more and more people to consider buying Cancer insurance. This coverage, which provides benefits only if you’re diagnosed with cancer, will supplement your Health insurance by paying for out-of-pocket medical expenses, such as deductibles and coinsurance, or for treatments that your health plan doesn’t cover. In some cases, you can use the cash for paying ordinary household expenses to ease the financial burden of the illness.

Premiums vary depending on the benefits provided and, for some insurance companies, according to your age and gender. Coverage is relatively inexpensive – with premiums as low as $10 a month or less.

Some Cancer plans, called “expense-incurred policies,” pay a percentage of treatment expenses up to a maximum amount. Other plans, called “indemnity policies,” provide a fixed amount for each benefit, with the money paid directly to you to use as you wish.

Newer types of Cancer policies pay a single, lump-sum cash benefit upon diagnosis. Critical Illness insurance also provides a lump sum payment after diagnosis, but covers more than one type of disease, such as cancer, heart attack and stroke. You collect the benefit if you’re diagnosed with any of the covered illnesses.

A Cancer insurance policy usually has a waiting period between the time you purchase coverage and when benefits can be paid. If you’re diagnosed during this period, the policy won’t pay. The insurance company might also deny coverage if you are diagnosed after the waiting period, but had cancer symptoms before you purchased the policy.

Although Cancer policies advertise that they will provide benefits regardless of what other policies pay, your Health insurance might include a “coordination of benefits clause,” which means the Cancer plan won’t pay for duplicate benefits.

Our specialists will be happy to provide a comprehensive review of your Health insurance situation and recommend the coverage best suited to your needs and pocketbook.

Given its low price, Accidental Death and Dismemberment insurance (AD&D) might sound like a good idea, especially when you see headlines about fatal crashes and freak accidents and think, “What if that happened to me?”

An AD&D policy will pay a lump sum of to your beneficiary if you die in an accident and a portion of the benefit to you if you’re severely injured.

When it comes to AD&D, Here are a few do’s and don’ts:

Do understand how the coverage works. An AD&D policy will pay the full benefit if you die in an accident and spells out the percentages of payment you receive for injuries, such as loss of a limb, sight, or hearing. For instance, you might get 50% percent of the benefit if you lose a hand or foot, and 25% for the loss of an index finger and thumb on the same hand. Your death or injury must result directly from an accident and occur within a certain timeframe, usually 90 days.

Do consider it only as an extra – not a primary – layer of protection. Although any premature death is tragic, an accidental death happens in a split second, giving a family no time to prepare. AD&D provides that extra layer of coverage that might be worth considering if you work in a dangerous occupation. However, you should not make it a part of your a financial plan.

Don’t count on it as a replacement for Life insurance. An AD&D policy pays the full benefit only if you’re killed in an accident. To provide a death benefit for your beneficiaries regardless of how you die, it’s better to buy Term Life coverage – which costs about the same as AD&D if you’re young and healthy.

Don’t think of AD&D as Disability insurance. This coverage protects your most valuable asset – the ability to make a living and support a family – by replacing a portion of your income if you become disabled and can’t work. AD&D provides a single lump-sum payment and only if you suffer certain accidental injuries as defined in the policy.

To see if AD&D is for you, feel free to give our insurance professionals a call.

Most people leave behind many of their bad habits after adolescence. However, if you’re well into adulthood and still smoking, driving recklessly, overweight or out of shape or paying your bills late you’ll probably be paying a lot more for Life and Health insurance.

Here are some costly behaviors to avoid:

• Smoking. Many people start to smoke as teenagers. Kicking the habit is a good idea at any age – but when it comes to insurance rates, the sooner the better because of the health risks involved. “Smoking absolutely raises your Life Insurance Premiums,” says Maureen Leydon, vice president and chief underwriter for MetLife in Boston. “Depending on your overall risk profile, your rates could more than double.”
• Reckless driving. If you have driving tickets and are accident-prone, your premiums could increase because the insurance company will factor in anything that can impact your longevity to determine your rate. “The amount of the increase depends on the number of violations or accidents, the severity and how recent they are,” says Leydon. “A DUI will usually increase your premium for Term Life insurance by $2.50 or $3.50 per $1,000 of coverage.”
• Being out of shape. “We look at your height and weight as well as other factors.” notes Leydon “However, our definition of overweight might be different from a medical diagnosis. We also look at the potential for other risk factors that come with being overweight such as cardiovascular issues and Type II diabetes.” For example, an overweight 45-year old woman with a $500,000 20-year term Life policy might have to pay more than twice as much in premium than a woman whose weight was normal.
• A poor credit record. If insurance companies believe that you won’t be able to make the premium payments, they won’t charge you more – but they might reject you for coverage.

The bottom line: Avoid bad habits to lower your premiums, and enjoy a longer and healthier life!