Life Insurance Buyer’s Guide

December 3, 2020 17:48 newlambertagency

Life insurance is an essential part of life that isn’t discussed enough. Of course, no one wants to talk about the different plans and coverage in their day-to-day conversations; but it’s important to have a general idea about it so you can safeguard your family from any financial trouble that may arise in the future.

With the help of this life insurance buyer’s guide, you can put your mind at ease and make an informed decision.

Buying life insurance

When you decide to buy a life insurance policy, you would want a plan that fits your budget and provides the necessary financial support to you or your loved ones. So your first step should be to decide how much you need and how much you can afford. Then you can move on to find the type of policy you want and like. We will discuss that too in this life insurance buyer’s guide.

A good way to decide how much life insurance you need is to figure how much income your dependents would need in the event of your death. Life insurance can be a source of cash for handling taxes, mortgages, and illnesses. Hence, your policy must provide the necessary financial support if your income is no longer available.

Choosing the right type

Every life insurance policy pays off a specific amount of money when the insured dies. But not all policies are the same. Below are the 3 basic types of life insurance that we’ll discuss in this life insurance buyer’s guide:

  • Term life insurance
  • Whole life insurance
  • Endowment insurance

Just remember that no matter how fancy the policy title may seem, all policies contain one or more of the 3 basic types.

Term insurance

Term life insurance provides coverage for a specific period of time. This is the “term” of the policy. If the policy owner dies within the set term of coverage, their beneficiaries will receive a check from the life insurance company. Once the term is over the coverage terminates unless you convert or renew the policy.

A term life insurance policy can last anywhere from one year to 40 years with coverage amounts ranging from $50,000 to millions of dollars. Some term insurance policies are extendable for 1 or more additional terms if your health has changed. However, each time you extend the policy, the premium gets higher.

 Whole life insurance

Whole life insurance is designed to last your entire life, often has fixed premiums, and accumulates a cash value over time. In general, whole life insurance is the most comprehensive and fully featured type of permanent coverage. This means that it typically has the highest premiums as well.

Although premiums are higher than term life, whole life policies develop “cash value” which you may avail if you like. You can either take the cash amount or use it to buy some continuing insurance protection.

Endowment insurance

This type of insurance pays a sum amount to you if the policyholder lives to a certain age. And if you were to die before then, the death benefit would be paid to your beneficiary. Premiums are higher for endowment insurance thus are not a very popular type of insurance amongst Americans.

Thus to summarise this life insurance buyer’s guide – you need to know how much you can afford, what are the benefits and which type of insurance fits your requirement the most. Never buy life insurance without proper research – check the plans and compare, consult with an insurance agent and your family members, and only then make a decision.

Critical Illness Insurance: What Is It and Who Needs It?

November 28, 2020 11:28 newlambertagency

If you have never experienced any critical illness, you’re one of the lucky ones. Their treatments are quite expensive and pose a burden on every common man’s finances.

But you need to be prepared for everything that life throws at you. In the event of a big health emergency such as cancer, heart attack, etc. Critical Illness Insurance could provide you with a much-needed financial shield.

People usually assume that they’re fully protected under their health insurance plan, but the exorbitant costs of treating life-threatening illnesses are usually more than any plan will cover.

That is why critical illness insurance exists to help meet the high costs associated with critical illnesses and provide the necessary financial security.

Read on to know everything about them, a Critical Illness Insurance 101 if you will.

What are Critical Illness Health plans?

Critical illness health plans are fixed benefit health insurance plans which cover a specified list of critical illnesses. Some common illnesses covered include cancer, stroke, heart attack, major organ transplants, liver failure, lung failure, multiple sclerosis, etc.

Critical illness insurance can pay for costs not covered by traditional insurance. So if the policyholder is diagnosed with any of the covered critical illnesses during the term of the plan, the sum insured is paid in lump sum irrespective of the actual medical costs incurred.

Not just that, the money can also be used for non-medical costs related to the illness, including transportation, child care, etc.

The coverage limits may vary and the policy pricing is impacted by several factors, including the cost and extent of coverage, age, health, and the sex of the insured, and the family medical history.

What is not covered?

There are exceptions to critical illness insurance coverage. These exclusions are as follows:

  • Illnesses or treatments occurring within 60 to 90 days of buying the policy
  • Pre-existing illnesses during the waiting period
  • Congenital defects, ailments, or diseases
  • Diseases occurring due to alcohol or drug abuse
  • HIV/AIDS infections
  • Illnesses due to war or war-like situations
  • Maternity related illnesses
  • Death due to critical illness during the survival period

Why are such plans necessary?

Illnesses like cancer, heart-related ailments, etc. are on the rise. With various external factors like pollution, health ignorance, and genetics, many individuals are getting afflicted with common critical illnesses and are requiring intensive treatments.

Even the treatments required for critical illnesses are very expensive. Individuals need a specially designed plan which pays for such expensive treatments where normal health insurance might prove to be insufficient.

This is where Critical illness insurance can prove to be extremely beneficial for people who are at a high risk of falling prey to severe illnesses.

Also, the premiums which are paid for a critical illness plan are allowed as a tax deduction under Section 80D. Thus, you can avail tax benefits too from a critical illness policy.

Bottom Line

Since medical bills are a common cause of bankruptcy in the United States, it’s crucial to be prepared and protect yourself against the unpredictable fate, especially if you have a family history of any of the illnesses mentioned above.

What To Do When Term Life Insurance Expires?

October 9, 2020 07:22 newlambertagency

When you buy a term life insurance policy, you purchase it for a set term. You pay the premium and your family gets the complete benefit in the event of your death.

But what happens when the policy expires?

Even if your term life policy is ending, you may still need some sort of insurance protection. Especially if you have house payments, have dependent children, or have major debts.

Here are some options for you to consider:

Buy another term life policy

If you’re reasonably healthy and still have some financial obligations, buying another term life insurance policy is the best option. But as you’ll be older now, you might have to pay a higher price. Though buying a shorter term such as for 5 or 10 years could help lower the cost.

There’s also the chance of getting a better life insurance rates than your former insurer, you just have to shop around. Just keep in mind that you’ll probably have to answer health questions and take a life insurance medical exam during the application process.

Take it year by year

If you’re not interested in buying a new term life insurance policy, you could opt for annual renewable term life insurance, where you decide each year whether to continue coverage or not. This is the best choice for people who have very few financial obligations.

However, the rates can jump quite a bit each year so there’s that. Alternatively, you can ask your agent if you can extend your current term policy one year at a time turning your policy into an annual renewable term life – it’s the best option for people with terminal medical conditions who need life insurance at any cost.

Convert your term policy to permanent life insurance

It is well known that term life insurance is the best choice for many people, permanent life insurance does have certain advantages. Although it costs much more than term life, permanent life insurance lasts for the rest of your life – it includes whole, universal, and variable life insurance.

Your insurance provider may offer the option to convert your term life to a permanent life insurance policy — without taking a new medical exam or answering health questions again.

Most carriers allow you to convert term life to whole life insurance, which has a fixed premium, the investment return, and death benefit. While some may allow conversion to universal life, which offers flexible premium payments and permits changes to the benefit amount. It all depends on your insurance provider.

Although there’d be a deadline for conversion and age cut off, usually 75.

Be sure to browse around or consult an agent to better understand your next step.

Is Funeral and Burial Insurance Worth It?

September 28, 2020 04:14 newlambertagency

Let’s be honest. No one likes to think about their death or death-related situations. People already have enough on their plate to think about the financial aspects of their funeral.

Death is an uncomfortable subject. But once you have planned your future and made the necessary arrangements to execute those plans, you’ll have one less thing to worry about.

There are life insurance plans that cover burial or funeral expenses while some plans are specifically created for any type of burial you want or any specific arrangements that might interest you. So if the question, ‘is burial insurance worth it?’  or ‘what exactly are they?’ crosses your mind, then let us put your thoughts at ease.

So what is Funeral/Burial Insurance?

Also known as a burial or final expense insurance, Funeral insurance is designed to be a small policy that ranges from $5,000 to $25,000. The policy is paid upon the insured member’s death to either a designated recipient, such as the executor of an estate or a family member making funeral arrangements. You can also make prior arrangements to pay a funeral home directly that will then carry out all the required arrangements.

What do they cover?

As the name implies, funeral insurance covers the expenses that are directly related to the funeral ceremony – cremation or burial, depending on your preference. The expenses cover a headstone purchase, the cemetery plot, or an urn or other container for your ashes after cremation.

However, it does not cover hospice care, medications, or anything else you may need before you pass. Just like life insurance, the policy is paid out only after your death.

It’s really important that you choose the right person to handle your funeral arrangements – a person who will use the money for the purpose they’re intended for. Because, theoretically, your family members are not legally obligated to use the money for your funeral – they can use the money for anything they like.

How much do they cost?

The most common funeral insurance plan covers $10,000 and on an average, the policy costs $50 per month, However, depending on your age, gender or health, the monthly premium can be higher or lower.

But it must be noted that many financial and insurance experts say that this insurance is a “last resort” type of coverage. Because the same monthly premium paid toward a term life insurance policy can get you much higher coverage than a funeral or burial policy would pay.

That is why experts say that such type of policies are meant for those who cannot qualify for a term life policy, and have no funds saved up for their funeral.

Also, people often mistake burial insurance as a separate product from funeral insurance, but it’s essentially the same. However, the arrangements made with a funeral home before your death falls under pre-need policies that payout at your death, and not before.

What Types Of Insurance Do Small Businesses Need?

August 13, 2020 11:40 newlambertagency

If you own a small business, there’s no denying that the most important thing you need to protect your assets and finances is an insurance policy. But even small businesses differ in various aspects – some usually function with 10 or fewer employees, while some focus on smaller operations with just 3-5 staff.

Naturally, various types of insurance cater to different businesses’ needs. However, one thing’s for certain, and that is, finding the right insurance. And let’s face it – all businesses confront an element of risk daily, regardless of their size or the industry they are in so the need for insurance is indisputable

  1. Life insurance: As popularly known, this policy protects an individual (employee) against death. This type of insurance helps with peace of mind and builds overall morale and trust between the company and employees.
  2. Health insurance: Health insurance is no less than wealth insurance for employees on a payroll – it functions as a financial safeguard in case of any unforeseen health problems caused by accidents or disease for themselves or even for their family members. It ensures the financial security of employees and as a result, they perform better.
  3. Dental/Vision: Dental insurance pays a portion of costs associated with preventive, minor, and some major dental care. While Vision insurance and vision benefits plans typically cover the cost of an annual eye exam and prescription eyeglasses and/or contact lenses.  Although not many businesses offer them, these kinds of benefits help attract new workers and retain current employees.
  4. Key Person Insurance: Also called as Keyman insurance, it is simply life insurance that covers the key person in a business. In a small business, this is usually the owner, the founders, or perhaps a key employee or two. There are the people who are crucial to a business–the ones whose absence would sink the company. You need to consider key person insurance on those people.

What do small businesses must consider when choosing each type of insurance?

Major medical plans are expensive and not always better. With network restrictions, high premiums, deductibles, co-pays, and max out of pocket requirements, they can seem a bit worthless.

Major medical plans also require minimum participation rates and if a member in the group has excessive claims, it may result in an increased rate for everyone in that group. Individual plans with group billing options are often a better option for small employers. However, if someone in a small group requires maternity or has a major pre-existing medical condition, true major medical may be required to get everyone covered.

The payment method should also be given key consideration. For instance, when it comes to dental insurance, some plans pay a fixed fee for dental procedures. Payments may be made directly to dentists by the insurance provider. Other fixed fee plans reimburse the employee while indemnity plans make the insured employee responsible for paying the dentist. The insurance provider then reimburses a portion of the cost.

Also, you can avoid any inconvenience in case of a claim by knowing what is included and what is not. You can always consult your insurance agent in case some things are not crystal clear to you. Take time to read the terms of the policy and make sure to update them regularly to cover significant changes in your business.

Is there anything else a small business owner should know about choosing insurance?

If you’ve decided on choosing an insurance policy, you must know a few important things beforehand.

For instance:

  1. Is your guaranteed renewable?
  2. What happens if your business partner dies unexpectedly?
  3. Can you use your doctor or hospital?

Is Whole Life Insurance Worth It?

August 10, 2020 13:40 newlambertagency

In your otherwise busy lifestyle, there comes a time when you wonder about taking an insurance policy- it could be to safeguard your family or just to have a secure retirement plan. But when you sit down to Google about a policy that’ll offer the protection you desire, you’re immediately bombarded with terms you may not understand.

There is more than one type of insurance policy so naturally, it results in confusion. But if you find yourself wondering about Whole Life insurance, then we may be able to guide you and put an end to your confusion.

What is a Whole Life insurance policy?

Whole life insurance is a type of permanent life insurance, which means the insured person is covered for the duration of their life as long as premiums are paid on time. Permanent life insurance is different than term life insurance, which covers the insured person for a set amount of time (usually between 10 and 30 years).

Whole life insurance is the most common type of permanent life insurance policy that people purchase. They also cost more because they include an extra savings component, which is referred to as the “cash value”, which brings us to the next question, is whole life insurance worth it? Read on.

How do they work?

There are 3 major components of a Whole Life insurance policy:

Death Benefit: As the name suggests, the death benefit is a tax-free amount of cash which is paid out by the insurance company after you die. For instance, let’s say you bought a whole life insurance policy with $100,000 in coverage, then that $100,000 becomes the death benefit.

Beneficiary: A person that receives the death benefit is the beneficiary. Anyone can be your beneficiary- be it a spouse, children, a business partner, a friend, trust or organization etc.

Premiums: The amount of money you pay for your whole life insurance policy – payment could be made monthly or annually.

As the name implies, a Whole Life insurance policy lasts for your life as long as the premiums are being paid on time. That means if you buy it when you’re 30 and continue paying your premiums until you die, your family will receive the death benefit.

How does cash value work?

Cash value is your ideal volatility buffer for uncertain economic times and financial emergencies. That means a whole life policy can serve as a source of emergency funds for you if something goes wrong, or you may be able to take out a loan against the policy.

Over time, the cash value of your policy increases, and you may have the option to withdraw funds or borrow against it. The rules on how and when you can do this differ from company to company and the policies they offer.

The cash value of a policy earns interest and grows over time. Life insurance companies often guarantee a certain amount of growth every year and that is why people flocked to buy whole life insurance following the 2008 recession.

Hope the above information answers your burning question – is whole life insurance worth it?

You can always consult an agent for guidance and choose a policy that suits you the best.

Why Life Insurance Is (Even) More Essential During a Recession

July 23, 2020 11:32 newlambertagency

People often think that they should wait for the right time to purchase term life insurance or any other type of insurance. But what if the time is never right for you!

We always set a benchmark for our life – a stable job, marriage, or a promotion. But life waits for no one. There is never a right time when it comes to buying an insurance plan. The economy is always fluctuating, people are losing their jobs – at such an indecisive time it’s better to be prepared rather than waiting for a day that may never come.

You need to consider all the options to harness a safety net for you and for your family’s financial security and what’s a better option than taking up an insurance policy during a recession.

Why buy life insurance?

Apart from the obvious financial security, an insurance policy can help you transfer your savings from generation to generation and safeguard your assets whatever maybe the financial conditions.

An affordable term life insurance policy is a terrific option for those looking for the highest level of coverage possible for the lowest cost, for a specific amount of time. Some financial representatives suggest that you will no longer need life insurance when you are older.

Let’s examine a few of the facts about why and who needs life insurance.

Life insurance can help your family keep their home

Whether you’re paying rent or paying a mortgage, a term life insurance policy can help your family continue to make those payments after you’re gone.  This is crucial if you’re the primary earner in your house. Such kind of blanket protection would play a key role at the time of a recession as the chances of a family member losing their job is likely high which could, in turn, affect the overall household income.

Life insurance can help pay off debts

Recession leads to a lot of debt and if you somehow lose your job, you might find yourself turning to credit cards to cover everyday expenses — and, like many Americans, you might end up in a little bit of credit card debt.

A good insurance policy can help your family cover the outstanding debts (if any) if something were to happen to you. For instance, if you shared a credit card with your spouse, the proceeds from a life insurance policy can help you clear any outstanding debts after you die.

Life insurance keeps you prepared

If the recent pandemic has taught us anything it’s that the economy or the stock market isn’t the only unpredictable thing. You are never really prepared for every possible thing as it’s difficult to anticipate how the world will be in the next 6 months. Will we ever go back to the old normal? Will offices be reopened? Will the job opportunities improve after the dust settles?

The point is, the next few years might turn out to be nothing like we anticipated but that doesn’t mean we shouldn’t be prepared. An affordable term life insurance policy can provide you with much-needed stability even at difficult times. Determine how much coverage you might need and what it will cost using a life insurance calculator.

You just need to remember that you’re doing this for your family’s financial security and insurance policy just might be the key to rid you of any worries you might have about the future.

Tips to Approach Retirement Savings Plan for Women Entrepreneurs

July 13, 2020 10:07 newlambertagency

No matter what stage of self-employment you may be in, thinking about how to make your investments last in retirement should be a top priority.

Saving for retirement can be challenging for anyone, but especially for business owners who invest much of their own savings and earnings into their companies.

And if you’re a women business owner, having a retirement plan in place is even more critical as in general, women live longer than their male counterparts.

To set up a robust retirement plan, women business owners must consider the following:

Develop a plan for caregiving responsibilities

Because women are often the primary family caregivers for children and ageing parents, women business owners need to have a plan in place for how to manage and share these responsibilities. Building a support network is key.

Considering the financial ramifications of work absence is also advisable since less income means fewer retirement savings — and a prolonged period away from work could negatively impact the future success of the business.

Start investing early

In the initial phase of a start-up, companies are cash poor and hence business owners won’t have the required money for investing in their own retirement. And even as a business gets its legs and ramps up, entrepreneurs often focus on the growth of their business and end up reinvesting.

But at such a lean time, women entrepreneurs must consult a financial advisor who can make recommendations for their personal retirement savings — as well as for their business. If you start early, the stronger would be your retirement plan and your savings would be that much more alluring.

Invest cash distributions in retirement vehicles, not the business

When you start to receive a considerable cash distribution from your business, it would prove advantageous to invest in stocks, bonds and non-traditional investments so as to diversify away from the single enterprise.

Of course, it would not be prudent to invest business profits in these same investment vehicles. Businesses require a certain level of liquidity to meet their financial obligations and having funds tied up in investments like long-term bonds, for example, could prove to be problematic.

Reduce tax liabilities through HSAs

If you’re a female entrepreneur with the ability to pay for upfront medical expenses through a high deductible plan, the tax advantages of health savings accounts (HSAs) are many:

  1. a) if the contribution is made as a payroll deduction, no taxes are paid on the contribution,
  2. b) investment earnings in an HSA account are not taxed, and
  3. c) qualified health expense withdrawals from an HSA account are tax-free.

By adopting these strategies to balance retirement savings with business growth and set up a conducive ‘women retirement plan’, female entrepreneurs can look to their futures more confidently — which can only be good for business.

Why Should You Choose a High Deductible Health Plan?

July 3, 2020 10:18 newlambertagency

For a growing number of Americans, it has become crucial to choose a deductible health plan. The trend started a decade ago and shows no signs of disappearing. At many firms, it’s the sole health insurance that’s offered for employees.

However, there are still a considerable amount of people who find themselves without employer-offered insurance benefits. Be it a student who’s in between jobs or self-employed individuals, people are needed to re-evaluate their Texas health insurance plans.

Thus, in such a case, one option to consider that will favour your budget is a high deductible health plan. A High-Deductible Health Plan (HDHP) is a health insurance plan with low premiums and high deductibles, compared to traditional health plans.

How does an HDHP work?

An HDHP involves the participant assuming all expenses until a deductible amount has been met. Any expenses that are greater than the deductible will be covered as part of the health plan. The insurer covers all medical expenses after the deductible has been met in full.

It can pay much lower monthly payments for medical coverage, with premiums being more reasonable it is possible to save money for the future in case a high deductible arises. Also, monthly medical costs decrease substantially with an HDHP.

HDHPs also offer some unique ideal for young people as they do not often deal with major illnesses. Health coverage is something they have just in case something happens unexpectedly. When the probability of a medical expense is low, an HDHP offers adequate coverage with lower costs in the long run.

People with HDHPs can also contribute to a Texas health savings account, which is a health savings account that allows you to contribute and withdraw money for qualified medical expenses without being taxed. So, if you combine your HDHP with an HSA, you can pay that deductible, plus other qualified medical expenses, using the money you set aside in your tax-free HSA.

The insurance benefits of an HDHP also give you some peace of mind as it covers for any catastrophic event and at the same time helps you save between 30 and 60% on medical costs.

You must consider the following when choosing a health plan that suits you:

  1. If you’re healthy and usually go to the doctor once a year, a lower monthly premium may be a good choice for you.
  2. If a chronic health condition means that you go often to your primary care provider (PCP) or specialists during the plan year, you must decide if savings from low premiums are greater than the cost of regular care or medication.

Carefully analyzing the ins and outs of high-deductible health insurance may help you find the coverage that’s right for you. In addition to saving you money, finding the right plan for you can help ensure that you’ll receive coverage for the health care you need when you need it.

Term Life or Whole Life Insurance: Which Is Right For You

June 23, 2020 12:14 newlambertagency

Life insurance can be very confusing. With all complex terms used by insurance providers, it can be very daunting for an average person to choose the best type of life insurance.

Deciding whether to purchase whole life or term life insurance is a personal decision that should be based on the financial needs of your beneficiaries as well as your financial goals.

Life insurance can be a very flexible and powerful financial vehicle that can meet multiple financial objectives, from providing financial security to building financial assets and leaving a legacy.

Read on to understand how to choose the best life insurance for you.

Let’s look at the 2 major life insurance policies:

Term life insurance

Term life insurance is “pure” life insurance. The policyholder pays premiums regularly. If they die while the policy is in effect, their beneficiary (or beneficiaries) receives a death benefit.

It’s very straightforward, which is the selling point for people who want a simple life insurance option.

The key definition when it comes to term life is the term – how long the policy is active. Term life policies expire after a set number of years, making them good policies for anyone who expects to build wealth over time and won’t need the financial safety net life insurance provides later in life.

Term life insurance is also relatively inexpensive. Because there aren’t any additional fees or maintenance, it’s much more affordable than whole life.

So if you’re looking for an optimum family life insurance, Term is the way to go.

Now let’s look at the other side of the coin.

Whole life insurance

Whole life insurance is a type of permanent life insurance, which stays in effect for as long as you pay the premiums. This means you never have to worry about uninsurability or losing your safety net as you get older.

Whole life is more complicated than term overall, but one definition you need to know is the cash value, which is an investment-like product coupled with the insurance policy.

Each month, a certain portion of your premium will go into a tax-deferred savings account or the cash value of the policy. (The exact amount that goes into savings is determined by your policy.) The policy’s cash value grows over time.

You can do many things with the cash value, including taking out a loan, drawing from it for retirement or funding the policy.

There’s also universal life insurance which is a type of permanent life insurance. With a universal life policy, the insured person is covered for the duration of their life as long as they pay premiums and fulfil any other requirements of their policy to maintain coverage. Like many permanent life policies, universal life insurance combines a savings component (called “cash value”) with lifelong protection. When you pass away, the policy’s death benefit is paid out to your beneficiaries.

If you’re looking for a straightforward policy that is affordable and can be cancelled without losing any value, then you should consider Term life insurance.

And, if you’re looking for a customised policy that doesn’t expire and works as a forced saving vehicle, then Whole life insurance is what you need to consider.