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Life insurance is not an immediate concern or priority when you are young or do not have a family. Often, the idea of financially preparing for the future is limited to diligently setting aside money in the bank. Modern lifestyles are also highly dependent on latest technological advancements, and much of your disposable income goes to acquiring the newest gadget that’s available in the market.
This is all well and good, but life insurance as a financial safety net is an incredibly wise option—and an even better investment when purchased at an earlier age, because the premiums (or the amount you agree to pay to keep the life insurance policy active) are typically much lower. This all has to do with risk assessment.
Before we go into how risk assessment plays into computing your premiums, here’s a brief refresher on how life insurance works: life insurance functions as financial protection for your family’s future. This is especially important if you are a breadwinner, so your family or other beneficiaries are protected.
So how exactly is your coverage determined? It’s all up to you. Life insurance companies typically offer life insurance products that provide different coverage amounts. A thorough discussion with your agent will help you come up with an amount that you believe will be most helpful to your family. The higherthe life insurance coverage (and the more benefits) you opt for, the higher the premium will be.
Going back now to the subject of risk assessment—younger individuals usually end up with relatively lower premiums than those who belong to an older age bracket, even if the coverage amount is the same. This is mainly because the younger you are, the healthier you are assumed to be. Naturally, as we age, we become exposed to more health risks, which can be further compounded by certain lifestyle choices if we are not mindful. It is also sometimes more difficult to get approved for a life insurance policy when we’re older, as high-risk health concerns (i.e. heart disease, diabetes) have a higher chance of occurring at a latter age.
There are, of course, other factors to consider when premiums for life insurance policies are computed. But as with anything that could be potentially life-changing, it’s never too early to start planning and setting safety nets in place. If you want to get started on yours, feel free to contact us. We are only happy to help you find the life insurance product that will best serve your future needs.
When you’re shopping for something, it’s normal to take your time going through all the available options in the market. The internet has made it even easier to access information that can help you make informed decisions about your purchase, and more often than not, the brand or company responsible for a particular product is a major consideration.
It’s the same with life insurance. It is still a product, something that you will be spending your hard-earned money on over a period of time. Hence, you have every right to think carefully and thoughtfully about which life insurance company offers the kind of financial protection that best fits the needs of your family.
When it comes to narrowing down your list of possible providers, one important item to note is the stability of the life insurance company. You can measure this by looking at certain numbers, such as premium income, total assets, reserves (or the funds that are set aside in anticipation of future pay-outs), number of years the company has been in existence, and number of customers (or policyholders, as the life insurance industry says). These financial figures are good indicators of the ability of a life insurance company to fulfill their promise to you. They can also give you an idea of how a life insurance company is doing in terms of growth and sustainability. If you already have a couple of companies in mind, you can simply check their corporate websites for this type of information. You can also check to see which are highly-rated, but keep in mind that some ratings companies receive payment and thus may be tilting the scale towards paying partners.
Reputation is closely linked with stability, and is associated with market perception. A life insurance company can post impressive numbers, but at the end of the day, you want a provider that will deliver on its promises in a timely manner. An insurer’s claims history can be used as a reference point, although bear in mind that a large figure does not necessarily mean that a particular company is better than others at fulfilling its obligations. The amount of claims paid differs from time to time, and is dependent on the number of people whose claims are deemed valid and compensable. You can read testimonials from policyholders and beneficiaries to gauge overall customer satisfaction, or ask around for referrals. If a life insurance company is perceived as reputable and trustworthy, policyholders are more likely to endorse it to their friends and family, so there’s no harm in considering word-of-mouth accounts.
A diverse product line can also be used as a standard when choosing a life insurance company. Typically, you can be insured with whole life insurance or term life insurance, but there are a variety of products that can be designed to fall under each of these categories. The life insurance benefits you sign up for should align with your plans and needs, as well as your current and projected financial capacity. The more products a life insurance company has to offer, the better your chances of finding a product that suits you and your level of comfort. Plus, a diverse product menu suggests that the life insurance company consistently pays attention to market demands and is working towards designing products that will provide maximum financial protection at reasonable premium levels.
Researching for information that can help you decide takes time, but it certainly has it rewards. However, if it feels like an overwhelming task or you’re not sure where to begin, you can always enlist our help. We at Jon Derrick are always ready to walk you through the process, prepare life insurance quotes for your review, and provide advice that can lead you to a sound decision. This way, you can rest
assured that the life insurance policy you will take home guarantees your family a financially safe and secure future.
Saltillo – November 2013
I recently returned from Saltillo, MX from working with Christian Relief Funds (CRF) education program for disadvantaged, extremely poor children. We have 62 sponsored children in the program and 63 on the waiting list for a sponsor.
Every trip is rewarding and heart breaking at the same time. On this trip, we were informed 4 of our sponsored children had decided to drop out of school to go to work. The four ranged from 14 to 16 years old. Unfortunately, their future becomes even more bleak with this decision as they will be hard pressed to ever live outside a slum of cardboard and scrap wood shelters.
The positive side of our trip is we are progressing on our plan to open a community center for the children and their families that are in the program. The hope for this center is that it will be a safe place where kids can feel understood and supported; that those kids on the edge of dropping out will be empowered to stick with it. We have a leader selected for the program who will relocate to Saltillo in January 2014. We are currently recruiting a small team to go as well. Our plan for the center is to provide the following to name a few:
One on One Tutoring for the children
Extra-curricular activities (music, art, computer classes, as well as, sports camps)
English lessons with a Bible story
Education program for the parents
Life Skills for the parents
If you would like to donate toward our program in Saltillo please go to www.Christianrelieffund.org and make a donation. Please type for MEXICO in the comment section. Also, the children on the waiting list should show up on the sponsor a child portion of the website within the next week or so.
What is LIFE?
Life is time. Life is family. Life is friends, work, fun, joy, love, a gift, hard, cruel, taxing and life is death.
What is life to you? Most of the time life is good. I cherish family, friends, and faith that God will work things out for my good whether I like the course life has taken or not. Life is good. However, life can be taxing and heavy when hard times hit. We feel great sorrow when we lose a loved one, friend or acquaintance.
In my line of work, as an insurance agent, I constantly see the tough times that people go through. I see parents and spouses sacrifice to make ends meet for their family. They sacrifice so their family is taken care of through the uncertainties of life.
In over 27 years in the business I have had clients die at the young age of 16 to the old age of 99. I have had clients who died in just about every possible way; drug over dose, car accident, suicide, cancer, heart attack, hit by a car, old age. The majority of the life insurance checks I have delivered have been at ages most of us would consider premature, age 16 to 60. It is never easy.
I have been able to help the survivors when the deceased has provided for them with life insurance. I have sat with survivors both of us in tears as I give them a life insurance check. Tears of sadness due to the passing of a loved one, however, tears of love and thankfulness because their loved one cared enough to make sure they were provided for. But it is never easy.
If you have not taken care of your family with life insurance please do so. Whether it is with my agency or another agent and company it is so important to do it now. We are not guaranteed another breath. I would urge you to talk to someone. It is too important to keep pushing off.
Life can be good even in the bad times. Choose to leave a lasting love message for your loved ones.
How does auto insurance work?
This is final part in our four part series on auto insurance. We have found that many insurance consumers have no idea how their auto insurance works and how it can be used to protect them. For that reason, we wanted to write a series to help make sure that people are making well-informed decisions when it comes to purchasing their auto insurance and choosing the coverage that best fit their needs. Our previous posts included Liability Coverage, Uninsured/Underinsured Motorist, and Collision/Comprehensive Coverage. This post will explain additional coverages available for your auto insurance.
Today’s post is actually not about any of the three key coverages, but additional coverages you can use to protect you on your auto insurance. These additional coverages are optional and you must tell your insurance agent whether or not you want to add these to your auto insurance, as well, as the amount you wish to have for each.
Rental Reimbursement is a coverage on your auto insurance that will help cover the costs of renting a vehicle, while yours is being repaired in the shop after an accident. The amount of this coverage is decided by you and is usually about $35/day. If you and your spouse work far apart it would be a pain to have to car pool together while your vehicle is being repaired. Rental Reimbursement can help you avoid the hassle.
Personal Injury Protection
Personal Injury Protection, PIP, helps reimburse you for lost wages, child care expenses, medical expenses, and other similar things if you are in a covered accident. Again, the amount of reimbursement is dependent on the limits you decide to purchase.
If you are in an accident, medical payments may be used to cover reasonable and necessary medical bills for you and your passengers. Like the above coverages, you may choose the amount of coverage you wish to purchase for additional monthly premium.
Towing and Labor
Towing and Labor will cover any roadside assistance you need. If your car breaks down or you have a blowout and need someone to come out to help or to tow the vehicle then Towing and Labor will help cover these expenses. You choose the amount you wish to be covered per occurrence.
These are not the only additional coverages, but are the ones that most people need and purchase on their auto insurance. These coverages help fill in the gaps that the 3 key coverages miss. If you have questions about your auto insurance and how you can ensure that you are receiving all the protection you need, give us a call at 817-423-0048. We love helping inform our customers and making sure that they are being properly insured at the best possible price. We hope you have enjoyed this series and that it has been beneficial to your understanding a product you will spend so much money on throughout your life: auto insurance.
How does auto insurance work?
This is Part 3 in our four part series on auto insurance. We have found that many insurance consumers have no idea how their auto insurance works and how it can be used to protect them. For that reason, we wanted to write a series to help make sure that people are making well-informed decisions when it comes to purchasing their auto insurance and choosing the coverage that best fit their needs.
Collision and Comprehensive Coverage
Our first two posts covered Liability Coverage and Uninsured/Underinsured Motorist Coverage on your auto insurance. The third key coverage of auto insurance is two-part and called 1) Collision Coverage and 2) Comprehensive Coverage. Unlike Liability, Collison/Comprehensive Coverage is not required by law. These are optional coverages that cover the damage done to your own vehicle in different scenarios.
While Liability Coverage pays for the repairs of the other party’s vehicle if you are at fault in an accident, Collision Coverage pays for the damages to your vehicle when you are at-fault. Whether you hit another vehicle, a fire hydrant, a tree, a house, etc. Collision is used to cover the damages to your vehicle when YOU strike another object. Collision Coverage has a deductible tied to it, which is typically $500, though it can be increased or decreased. If you were to increase your deductible it would make your auto insurance rate decrease, while if you decreased your deductible you would have to pay a higher rate. The deductible is the amount that you are responsible for before your auto insurance will pay to repair damages. So, if you are at fault in an accident and there is minor damage to your vehicle that only costs $500 to repair, then you would be responsible for the whole amount if you had a $500 deductible. If you were in an at-fault accident and it cost $2,000 to repair your vehicle, then your auto insurance would pay $1,500 after you paid your $500 deductible.
Comprehensive Coverage works in much the same way as Collision Coverage. It has a deductible attached to it that is also typically $500, but can be increased and decreased to as desired. Comprehensive Coverage is the part of your auto insurance that will pay for damages to your vehicle when you are struck by an object. A limb could fall on your car, a rock could fly from a truck on the highway and hit your windshield, hail could do damage to your vehicle. Each of these cases and any other scenario where something else strikes your vehicle are covered under the Comprehensive portion of your auto insurance. So, let’s imagine that you are visiting family and your vehicle is parked out in front of their house. That night, while you sleep, there is a hailstorm that dents up your car and cracks your windshield, causing $2,000 worth of damage. Like the Collision example above, your auto insurance would pay $1,500 after you covered the $500 deductible.
These are the two coverages that increase the price of auto insurance the most. If your vehicle is getting old and not worth as much, then it may not be worth it to pay more for these two coverages. You may not care to have the vehicle repaired if an accident were to happen. However, if you have a 5-year old vehicle that still has a decent value then it makes sense to insure the property damage to the vehicle. These are all things to think about and ask about when you are talking to your insurance agent. This is also why it is important to have, at the least, annual reviews of your auto insurance policy to make sure that the coverages are still fitting your needs.
Our fourth and final post will be up in a few days and will explain additional, optional coverages that are available on your auto insurance policies!
How does auto insurance work?
This is Part 2 in our four part series on auto insurance. We have found that many insurance consumers have no idea how their auto insurance works and how it can be used to protect them. For that reason, we wanted to write a series to help make sure that people are making well-informed decisions when it comes to purchasing their auto insurance and choosing the coverage that best fit their needs.
Uninsured/Underinsured Motorist Coverage
Our first post in this four part series on auto insurance was about liability coverage. Unlike liability (the coverage you carry for the other party if you are at-fault in an accident), uninsured/underinsured motorist coverage is not required by law. This is an optional coverage on your auto insurance that protects you in case you are in an accident, the other party is at-fault, and the other party does not carry the legal insurance or does not have enough insurance to cover your bodily injuries and property damage. Additionally, this coverage would protect you if you are involved in a hit and run accident as there would be no other party to collect from.
Uninsured/Underinsured motorist coverage is structured in basically the same way as liability coverage. You could be covered $30,000/$60,000/$25,000. This means if you were in an accident and the other party was at-fault and a) does not have insurance b) does not have enough insurance to cover your damages or c) it is a hit and run accident, then your auto insurance policy would pay up to $30,000 per person’s injuries in your vehicle. The policy would pay up to $60,000 per accident for injuries to people in your vehicle. And your policy would pay up to $25,000 per accident to repair damages to your vehicle.
Imagine if you did not have uninsured/underinsured motorist coverage on your auto insurance policy and you were struck by another vehicle who fled the scene. You and your two children were injured in the accident and had to go to the hospital. One of your children’s injuries required surgery. On top of these costs, your vehicle cost $10,000 to repair. If you didn’t have good health insurance and were not carrying collision coverage (which we will explain in part 4) on your vehicle then you would be out of luck. All of the medical expenses and the cost to repair your vehicle would fall to you and in some cases could be crippling to your family’s financial well-being.
You cannot have uninsured/underinsured motorist coverage limits higher than the liability coverage limits you carry on your auto insurance policy. So, if you have 50/100/25 limits of liability then you could have no higher for your uninsured/underinsured coverage limits. As you can see in the example above, the slightly higher premium you pay each month to have uninsured/underinsured motorist coverage on your auto insurance is worth it in order to protect your family from a very difficult situation. These types of situations are things we cannot foresee and are completely out of our control. It is better to plan ahead and make sure another person’s irresponsibility does not cost you and your family.
Our next post will explain how collision and comprehensive coverage on your auto policy can be used to protect your family and your vehicle. Stay tuned!
How does auto insurance work?
There are three major types of auto insurance coverage: Liability Coverage, Uninsured/Underinsured Motorist Coverage, and Collision/Comprehensive Coverage. Beyond these three there are also a few optional coverages that can be added to an auto insurance policy. We have found that many insurance consumers do not have any idea what their auto insurance policy actually covers them for. Most people just found the cheapest price they could get without understanding how the policy would actually protect them. It is our job as insurance professionals to ensure that our customers understand the coverages that are available to them and how their auto insurance can be used to protect the people and possessions they care about most. We wanted to write this four part series as a practical explanation to understand the 3 key coverages of auto insurance, along with a few additional coverages that can be added to your policy.
Liability Coverage is the coverage that every driver is legally required to have and is the portion of your insurance that covers the other party if you are at fault in an accident. Liability insurance coverage will pay for the bodily injury and property damage of the other party up to the limits of coverage that you carry on your auto insurance policy. This protection is intended to protect you from being personally sued for the amount of the damages. Instead, you pay a premium to your insurance company monthly, so that when the time comes that you are at fault in an accident they will pay the large sum of damages that you owe to the other party.
The mandatory, legal limits of liability coverage in Texas are 30/60/25. If you were at fault in an accident and had these minimum liability limits then your policy would pay up to $30,000 per person’s bodily injury in the other party, up to $60,000 per accident for the other party’s bodily injury, and $25,000 per vehicle per accident for the damage done to the other party’s vehicle. As you can see, these amounts would be crippling for an individual to pay by themselves. Higher limits of liability are available to offer you further protection. Imagine if there were four people riding in the other vehicle. Three of them had $20,000 in medical bills and doctors’ fees (maxing out your $60,000 per accident liability coverage), while the fourth was more critically injured and had $40,000 in medical bills, doctors’ fees, surgery, and rehabilitation. Because your policy covers $30,000 per person and $60,000 per accident, it would be maxed out at the first three passengers. The fourth person’s injuries of $40,000 would all fall on you. In the same way, if the damage to the other vehicle cost $25,000 to repair then your policy would cover it, but lets say it was a new, sports car and was totalled. The cost to replace this vehicle would most likely be higher than the $25,000 in property damage coverage per vehicle per accident. Now imagine that the accident involved two other vehicles that each had multiple passengers. The bodily injury and property damage costs could greatly exceed the limits you are protected up to.
As you can see, in some cases it would be very important to have higher liability limits than is required by law. You should have a conversation with your insurance provider to make sure you are comfortable with the amount of liability coverage that you have on your auto insurance policy. I know most of us would not be able to pay for the damages done in the example above out of pocket. So, for some it may be worth paying a slightly more each month to ensure that the limits of liability are going to fully cover the damages done in an accident where you are at fault.
Check in soon for the second article of our four part series on auto insurance! We will be explaining and discussing Uninsured/Underinsured Motorist coverage.
Why do you need life insurance? There are many reasons to have life insurance from providing income for the surviving family members to paying off the mortgage to covering final expenses to leaving money to your favorite charity. You can even have a policy to pay estate taxes.
The primary reason for most people is to protect their family’s financial future. Life insurance is a perfect way to show your love to your spouse and/or children long after you are gone from this earth.
There are two basic types of life insurance: term life and permanent. Term life insurance provides coverage for a specific period of time, usually 10, 15, 20 or 30 years. Your premiums will never go up during this period of time. If you pass away during the time period, your beneficiaries will receive a death benefit payment. If you live to the end of the time period, you have two options. You can either convert to a permanent plan with no medical test or you can go through the underwriting process for a new term policy.
Permanent Life Insurance provides you with a death benefit that is meant to last your entire life. Part of the money you pay goes into the cash value where it can grow. You can always tap into the cash value, however, it is usually best for the performance of your policy to try and not take any of the cash value.
Please call us at 817-294-9711 to set an appointment to learn more about protecting what is most precious to you.