How Do Smoking Cessation Products Affect Life Insurance Rates?

Are you using cessation products to quit smoking?  There are ways for you to get great non-smoker prices on life insurance.  There are endless benefits to quitting a smoking habit.  It helps to increase both your lifespan and your wallet.  To quit smoking you need strong will power and sometimes the help of products whether those are gum, lozenges, patches, or e-cigarettes.  These products all contain nicotine and are used to wean your body off cigarettes while supplying you with the nicotine but sparing you from the other chemicals found in tobacco.

Because there is nicotine in these products, some life insurance companies will still classify you as a smoker even if you don’t actually smoke anything.  The use of these products will cause cotinine to show up in your urine test which would be enough for the carrier to classify you in one of the tobacco risk classes and issue you smoker rates.

Have no fear cessation product users!  There are insurance companies that will consider you for the non-tobacco risk classes and therefore be given non-smoker pricing.  To be offered non-smoker rates, you have to be cigarette-free for at least 12 months.  Let’s say you have been using a cessation gum to quit smoking, but you have only been cigarette-free for 5 months.  Even though you currently do not smoke, you will still get the smoker-rate because it has not yet been at least 12 months.  However, if you have been cigarette free for at least a year but still, for example, chew Nicorette Gum daily there are insurance carriers who will offer you non-smoker pricing.

Insurance carriers rate certain tobacco/nicotine uses differently.  While one company may give non-smoker rates to gum and e-cigarettes, another company may only give non-smoker rates to gum.  We asked 20 life insurance carriers if they would consider giving a non-tobacco risk class to an applicant who uses nicotine gum and four carriers said they would consider it.  Of these carriers, three said they would consider giving a non-tobacco risk class to e-cigarette users.

These examples explain why it is very beneficial for you to work with an independent life insurance agency, like Quotacy, who has contracts with multiple carriers.  It also shows how important it is for you to be very detailed about your tobacco and nicotine product use on your life insurance application.  If we have all the correct information we are able to go to the appropriate life insurance carrier to ensure you get the best policy for your individual situation.

You can still protect your loved ones with life insurance even if you use smoking cessation products, and what’s better is that there is even a possibility you can get great non-smoker rates.  No one ever anticipates needing to use life insurance, but the unexpected happens.

Blood Cancers and Buying Life Insurance

According to the American Society of Hematology, blood cancers affect the production and function of your blood cells and end up preventing your blood from performing many of its functions, such as fighting off infections or preventing serious bleeding.  Approximately every three minutes, one person in the U.S. is diagnosed with a blood cancer.  September is both Life Insurance Awareness Month and Blood Cancer Awareness Month.  In this post, let’s discuss the different types of blood cancer and how these conditions can affect buying life insurance.

What are the different types of blood cancer?

There are three main types of blood cancer: leukemia, lymphoma, and myeloma.  An estimated 1,290,773 Americans are either living with, or are in remission from, leukemia, lymphoma, or myeloma.

Leukemia – cancer of the body’s blood forming tissues.

  • Mainly affects bone marrow and the lymphatic system
  • Usually, affects white blood cells – the infection fighting cells
  • There are many types of leukemia

Lymphoma – cancer of the lymphatic system.

  • Affects the lymphatic system – the body’s germ-fighting network – which includes the lymph nodes, spleen, thymus gland, and bone marrow
  • There two categories: Hodgkin lymphoma and non-Hodgkin lymphoma

Myeloma – cancer of plasma cells.

  • Plasma cells are white blood cells that produce disease- and infection-fighting antibodies
  • Cancerous plasma cells release too much protein and can cause organ damage
  • Cancerous plasma cells can also crowd the normal cells in your bones and weaken them

How does leukemia affect buying life insurance?

Leukemia can be either acute or chronic.  Chronic leukemia progresses more slowly than acute leukemia, which requires immediate treatment.  There are five types of leukemia: acute lymphoid leukemia (ALL), acute myeloid leukemia (AML), chronic lymphoid leukemia (CLL), hairy cell leukemia, and chronic myeloid leukemia (CML).  ALL is the most common form of childhood leukemia and AML and CLL are most common in adults.

Although individuals who have been diagnosed with leukemia generally cannot get preferred life insurance risk classes, that is Preferred Plus or Preferred, once treated with no recurrence, individuals can be considered for Standard life insurance rates.  Risk classes are dependent on the type of leukemia, your age at diagnosis, and how long it has been since completion of treatment.  The more years that have passed since treatment, the better your chances are for qualifying for Standard or Standard Plus.

Risk Classes
Preferred Plus
Preferred
Standard Plus
Standard

If you do not qualify for standard risk classes, you may be table rated and/or be required to pay a flat extra.  A table rating typically means you will pay the standard prices plus a certain percentage.  A flat extra is an additional fee that cushions the risk for the insurance carrier.  A flat extra can last the entire life of a policy or just a few years.

Table Rating
(alphabetical)
Table Rating
(numerical)
Pricing
A 1 Standard + 25%
B 2 Standard + 50%
C 3 Standard + 75%
D 4 Standard + 100%
E 5 Standard + 125%
F 6 Standard + 150%
G 7 Standard + 175%
H 8 Standard + 200%
I 9 Standard + 225%
J 10 Standard + 250%

Let’s take a look at a few examples.

Example 1

 

Jane Doe was diagnosed with acute lymphoblastic leukemia (ALL) when she was 8 years old.  She is now 30 years old and it has been over 20 years since treatment was completed.  Jane is a non-smoker and aside from her history of childhood cancer, she has a clean bill of health.

She applies for a 30-year $500,000 life insurance policy and is approved at Standard Plus.  Her monthly premium payments will be $50.

Example 2

 

John Smith was diagnosed with acute myeloid leukemia (AML) when he was 18 years old.  Part of his treatment was a bone marrow transplant.  He is now 32 years old, does not smoke, and it has been 13 years since treatment was completed.

He applies for a 20-year $500,000 life insurance policy and is approved at Table B.  His monthly premium payments will be $60.

Keep in mind that no life insurance company underwrites the exact same way.  (Underwriting is the process of evaluating an application and determining a risk class.)  Some will be stricter with leukemia than others.

How does lymphoma affect buying life insurance?

There are two categories of lymphoma: Hodgkin and non-Hodgkin.  The difference between the two is based on the type of cancer cells present.  According to Cancer Treatment Centers of America, Hodgkin lymphoma is rare, accounting for about .5 percent of all new cancers diagnosed.  Non-Hodgkin lymphoma is more common being the seventh most diagnosed cancer.

In the majority of cases, applicants with a history of lymphoma will be assigned a flat extra for the first few years, unless a good number of years (like ten) have passed since treatment.

Let’s take a look at an example.

Example

 

John Doe is a 54-year-old male, non-smoker, applying for a 20-year $250,000 term policy.  He was diagnosed with stage 3 non-Hodgkin lymphoma five years ago.  He went through chemotherapy that same year and continued preventative treatment for two years following.  There has been no sign of recurrence.  He gets check-ups once per year.

John is approved at Table B with a flat extra of $15 per thousand for five years.  Here’s what all that means.  John is getting $250,000 in coverage, so to calculate the flat extra you multiply 15 by 250.  John will have to pay an extra $3750 per year on top of his normal premiums for five years.  Once year five is over, his premiums will drop to the regular Table B premium which will be $140 per month.

Again, no life insurance company underwrites the same way.  There are insurance carriers that would decline John outright.  This is why working with an independent agency like Quotacy is beneficial.  We have contracts with multiple A-rated carriers, so your chances of being approved are better.

How does myeloma affect buying life insurance?

Myeloma has different forms, but 90 percent of people who have been diagnosed with myeloma have multiple myeloma.  It’s called such because it affects several areas of the body versus just one site.  There is currently no cure for multiple myeloma, so life insurance approval may prove difficult.  Unless you have had a bone marrow transplant, an applicant diagnosed with multiple myeloma will typically be declined for life insurance.  Myeloma is, however, the least commonly diagnosed type of blood cancer.

Plasmacytoma and localized myeloma diagnoses, these are forms of myeloma in which cancer cells are found in only one site, have higher chances of life insurance approval.  Standard rates are even possible if enough years have passed since treatment.

If you have a history of blood cancer, don’t hesitate to apply for life insurance.  Applying for life insurance is free and there is no commitment to buy.  Here at Quotacy we have access to many life insurance carriers and will help to get you approved for coverage.  Start out by using our term quoting tool to run as many quotes as you would like – no contact information required.  We look forward to helping you get life insurance.

What to Ask When Choosing a Home Warranty

There are a number of things to know about before getting your first Home Warranty Plan. Here are 10 questions to ask yourself and the provider when comparing your options.

Purchasing a home warranty to cover your major appliances and system components (refrigerator, dishwasher, garage door entry system, HVAC unit, etc.) can be tricky. You have to balance consideration of each warranty's options, premiums, deductibles, terms, and conditions. At the end of the day, what you really want is some assurance that, in times of need, you and your family will remain safe, comfortable and suffer the least amount of inconvenience.

What should you look for in a home warranty? There is no simple answer, and there is no one-size-fits-all home warranty solution. As with all your other investments, one of the best things you can do for yourself is to enter negotiations as well-prepared as possible. So we’ve assembled this checklist of questions to ask before you commit to a home warranty agreement to help you better understand your needs, your expectations, your reservations, and your own attitudes towards what makes a house a home.

1. How much wear and tear do your appliances already have?

Appliances exist for one reason: to make our lives easier and that means taking on the dirty work (literally, in the case of a dishwasher or washing machine). Some of us use them harder than others and age can add up over the years, but as long as you use your appliances according to manufacturer's instructions, a home warranty can help you keep your machines running without worrying about unexpected repair or replacement costs. Should your appliance's or system's major components break down due to your normal use, a home warranty can be there to help cover the costs to get back in working condition.

2. Do you plan on upgrading or replacing your appliances any time soon, even though they are still functioning?

New appliances and systems come with manufacturer's warranties which are great protection, however, they run out and are unit specific. A home warranty can provide more of an umbrella of protection for your home to cover multiple appliances and systems. Plus, some companies, americansfirstinsurance, for example, provide programs such as the Appliance Discount Program that can save you money on the purchase of brand new, brand-name appliances.

3. Are you aware of any pre-existing conditions or problems with your appliances that have gone unaddressed?

Home warranty companies want to help you keep your home in working order but there may be some limitations when it comes to addressing certain pre-existing conditions. Check with your potential provider.

4. Are there any essential components on your appliances (e.g., your refrigerator’s ice-maker; your HVAC system’s ductwork) that may not be covered by a particular warranty?

Today's appliances are amazingly complex machines with evolving pieces and parts. However, they still basically rely upon essential core parts to perform their necessary duties. Those components are what require protection and often can be most expensive to repair. Your home warranty should cover these core components.

5. How does a particular warranty complement or supplement your existing homeowner's insurance policy?

Home insurance is great protection for your home for what MIGHT happen (fire, flood, natural disaster, etc.). However, what about protection for things that WILL happen? For example, your air conditioner condenser finally giving out or your clothes dryer refusing to dry your clothes. Having a home warranty plan to work side-by-side with your home insurance can greatly help your home remain a comfortable and happy place.

6. Will a specific home warranty policy help you pay for routine preventative maintenance of your major appliances?

A home warranty may not cover your routine preventative maintenance, however, they may penalize you for NOT taking that action. American Home Shield will not do that. We understand you're busy and that time gets away from you. That's why we can help cover you when your major system and appliance components break down from normal use.

7. Will a specific home warranty policy help you to pay for significant cosmetic damage to your major appliances?

Home warranties are designed to cover parts and components that are designed to wear down from normal wear and tear. If that normal use causes cosmetic damage, you should be covered. However, if an overly excited family member causes damage to your dishwasher door, for example, you will not be covered.

8. Are any repairs, services or appliances too minor (e.g. your microwave oven) to be covered by a specific warranty?

It all depends on your provider and your contract. An americansfirstinsurance Home Warranty Plan, for example, covers every part of your refrigerator. Other companies may exclude coverage for a dozen or more parts. 

9. What is the upper limit for repairs and replacement that the warranty will cover?

This depends on your prospective provider, but AHS offers some of the most competitive levels of coverage. In some cases, americansfirstinsurance provides twice or even five times as much in terms of replacement coverage.

10. When can you make a claim with your prospective warranty provider?

You may currently have appliances in need of repair. Most companies may make you wait 30-60 days before you are able to submit a service request. 

So, which home warranty combines the best reputation, the greatest expertise, and the most satisfactory customer service?

That warranty is the one that can be of the most benefit to you when the time comes for you to maximize your home’s equity. And American Home Shield is confident that the home warranties we offer are world-class in that regard. As the home warranty industry creator and leader, we are proud to offer the best, most comprehensive and award-winning home warranty plans. Learn more about americansfirstinsurance Home Warranty Plans and get a quote today.

Term Life Insurance for 35 Years

35 years is a long time.

Think about some of the things that happened or were popular in 1981.

  • Raiders of the Lost Ark
  • MTV began
  • Prince Charles and Lady Diana married
  • Hall & Oates
  • The Rubik’s Cube
  • Donkey Kong

A lot can happen in that time of time. The fall of The Soviet Union. The Internet. Mobile phones. Emoji. 35-yr term life insurance.

Yes, you read that right. You can now buy term life insurance with a term period of 35 years from American General Life Insurance Company.

Until now, the longest term period available was 30 years. But with the new term length, you can lock in a low rate up to age 45 and keep it until you are 80 years old.

Will you need term life insurance for 35 years?

Maybe and maybe not. It all depends on your unique circumstances. Things to consider include:

  • How many years until your youngest child leaves home?
  • How many years until all your children (and perhaps grandchildren) graduate college?
  • How many years until you pay off your mortgage?
  • How many years until you retire?

This is a start, but there’s more to it. Thankfully, we’ve written a thorough guide to help you find out how long you will need term life insurance.

It’s important to note that you are never ‘stuck’ in a policy for the entire term length. Meaning, you can always cancel the policy before the term expires without incurring any penalties or fees. Most life insurance companies will refund any unused premiums as well. Just in time for last-minute holiday shopping!

The Truth About Home Warranties And Are They Worth It?

When you buy a new home you always have the option of purchasing a home warranty that, theoretically, covers the cost of repairs to various appliances and other home systems. But are these home warranties worth it and what should you be aware of before you actually buy one of these?

Before I get into some of the nuts and bolts behind these home warranty products let me explain that I actually managed the extended warranty program for Circuit City Stores for a period of time and these home warranties are a very similar product. In addition, I've studied the economics of insurance before and home warranties are basically insurance policies. So I know a fair amount about the economics of home warranties.

A Home Warranty Is An Insurance Policy

When you buy a home warranty - and they start around $420 - you are basically buying an insurance policy. The reason this is important to recognize is that insurance companies are in business to make money and that means that they expect to make money on the average policy they sell, which means that on average the people who buy these policies will lose money. Buyers will most likely pay more for the policy than they receive in return over the life of the policy.

Then why would you ever buy an insurance policy? Because you are willing to trade off the certain cost for a very uncertain cost. The insurance company can play the averages game but many consumers cannot or don't want to play that game and they are willing to pay a premium for the certainty. This is especially true as it relates to health care where a catastrophic illness can cost over $1 MM.

But when it comes to home appliances and other systems what is the worst thing that can happen? Maybe you need a new air conditioner or a refrigerator that might cost you a couple of thousand dollars. So for people who can handle that type of expense out of the blue, there is no need for them to buy an insurance policy - they basically "self-insure" from their own savings. But if a new air conditioner would break the bank then you might want to consider getting a home warranty.

How To Beat The Home Warranty Companies At The Averages

There is one advantage that the homebuyer has over the home warranty companies. They know more about what is being insured than the warranty company does and this asymmetrical information allows them to make a better decision about when to buy the warranty than the companies can make about when to sell the warranty. In fact, the companies will pretty much sell a policy on any property to any buyer because they just can't afford to inspect every home before issuing a policy. But a buyer is going to be more likely to buy a policy when they can see that a home has been poorly maintained - e.g. a trashed short sale - and is, therefore, more likely to develop problems. That's what I did when I bought my short sale. I bought a policy from Home Warranty.

This asymmetrical information leads to a problem for the warranty companies called adverse selection - the tendency of these companies to get stuck with bad deals. Consequently, they have to raise their prices to offset this bias, which means that anyone who buys such a warranty on a well-maintained property is overpaying.

Beware The Exclusions

It's important to understand what you are really buying when you get one of these home warranties. The contract is full of fine print which excludes a huge list of situations that you would reasonably expect to be covered such as:

  • Improper installation
  • Plumbing fixtures
  • Whirlpool jets
  • Ejector and sump pumps
  • Doorbells associated with intercom systems
  • Alarm system repairs above $400
  • Security video equipment
  • Central vacuum cleaner repairs above $400
  • The remote components of an automatic garage door opener
  • Ice and water dispenser in a refrigerator. In fact, it's not even clear if they cover the ice maker in the standard policy. I don't think they do.

That's just a small sample of my americansfirstinsurance Home Warranty contract. The entire list is enormous. But you can buy a higher cost policy that will cover some of these excluded items. Like I said...these guys are in business to make money.

Beware The Pre-Existing Condition

Just like in healthcare these home warranties have pre-existing condition clauses. When you call in a claim they will ask you a series of questions and if your answers indicate that you don't know for sure that this item ever worked properly since you owned the home then they will simply deny the claim. Now you can buy a premium plan that will cover unknown pre-existing conditions but, even then, if they somehow determine that you knew the item wasn't working when you bought the plan they will deny coverage.

Beware The Deductible

Just like in healthcare you have to pay a deductible for every claim made. On my Home Warranty contract, it's a trade call fee of $100.

The Warranty Company Does Not Guarantee All The Work Performed

This one really burned me up. The home warranty companies contract with various repair companies to actually perform the work and they will make sure that your reported problem is ultimately solved. However, apparently, and once again I can only speak from my experience with Home Warranty if the contractor's work directly or indirectly damages your home or appliance you are on your own to work out the issue with the contractor. americansfirstinsurance will do nothing to help you resolve the issue other than note a complaint in their system for future reference in dealing with the contractor even if americansfirstinsurance sent out an unqualified contractor in the first place.

For instance, we had a gas leak in our dryer and americansfirstinsurance sent out Bender's Plumbing of Addison to fix it. They fixed the leak but after they left we discovered that the dryer was no longer venting outside. Bender's Plumbing was dispatched again to fix this problem but incredibly they decided it wasn't their problem. Reluctantly we paid an appliance repair guy $80 to fix it and he explained that when Bender's moved the dryer the vent hose disconnected and was then crushed as the dryer was moved back in place. If Bender's had known what they were doing they would have opened a panel on the front of the dryer to reconnect the hose and pull it out of the way as they slid the dryer back in place.

Bender's initially promised to send me a check for $80 but it never arrived and then they wouldn't return my phone calls. And even though americansfirstinsurance should never have sent out a plumber to do an appliance repairman's work they refused to help resolve this dispute.

Your Realtor Gets A Commission For The Sale Of A Home Warranty

And this is a lesser concern because it does not involve a lot of money but your realtor does get paid a small commission to sell a home warranty. It's around $70 I think, which is such a small amount that my company rebates it back to our clients to avoid any conflict of interest however small. But you should still be aware of this because some realtors will do anything for a buck.

Why You Might Want Wedding Insurance

If you’re busy planning a wedding, you might want to consider insuring it.

Wedding insurance policies are relatively easy to understand, and the two main types are both inexpensive compared with the cost of a ceremony and reception:

  • Liability insurance covers you in case of an injury or property damage at the wedding. Liquor liability, sometimes a separate coverage, pays out if someone drinks too much and causes an injury or damage.
  • Cancellation coverage reimburses you for costs such as deposits and guests’ airfare if you need to cancel or reschedule the wedding for an unforeseen reason. Unfortunately, that doesn’t include a change of heart.

The most common wedding cancellation claims involve:

  • A vendor, such as a venue or a caterer, going out of business or being otherwise unable to fulfill its agreement.
  • Extreme weather, such as a hurricane or tornado.
  • A member of the bridal party or family being too injured or ill to participate.

Costs

Cancellation and liability coverage are sold separately. Prices are based on the number of guests or the wedding’s price tag, depending on the insurer, but each can cost under $200 for a wedding with fewer than 50 guests.

How to buy it

You can buy wedding insurance through an event insurer, such as Wedsafe or WedSure, or large insurers such as Travelers Insurance. Some insurers sell “event insurance,” which can also cover a wedding. Ask your agent if your current insurer has any options.

Is Guaranteed Issue Life Insurance a Good Option?

We often get asked questions along the lines of “My aging parent is very ill and medical bills have drained his/her savings account, but I cannot afford to pay for the funeral if he/she should pass away.  Can I buy life insurance on my parent?”  In this scenario, we do not advise purchasing “regular” fully underwritten life insurance.  More often than not, term life insurance is going to be ideal for most people, but not in this scenario.

Why we wouldn’t recommend term insurance in this case…

Term life insurance would typically not work in this case because the coverage amount would be too small, the client would likely be uninsurable because of health issues, and the client’s age would be outside the range a life insurance company would approve coverage for.

What we would recommend…

When we get this question, we usually tell inquirers that they have two options:

  1. Take the money you would have spent each month on term insurance and instead put it into a savings account so it can start accruing interest. You can then access these funds later when in need of money for your loved one’s final expenses.
  2. Purchase a guaranteed issue life insurance policy.

What is a guaranteed issue life insurance policy?

Guaranteed issue life insurance is a type of life insurance that you cannot be denied coverage on, hence “guaranteed”.  There are a few things you should know about this type of insurance.

  1. Guaranteed issue life insurance is typically known as “last resort” life insurance. It’s meant for those who may have been denied previously and/or are not in good health.
  2. Guaranteed issue life insurance policies are designed so that surviving loved ones can pay for your final expenses, such as a funeral, burial, and medical bills.
  3. Guaranteed issue life insurance premiums will never increase.
  4. A guaranteed issue life insurance policy accumulates cash value.
  5. Guaranteed issue life insurance policies have significantly lower death benefit amounts compared to term or permanent policies.
  6. There is no medical exam or questionnaire required for guaranteed issue life insurance. The only factor that is really taken into consideration is the age of the insured.  Because of this, guaranteed issue life insurance premiums are higher per thousand than most other types of life insurance.
  7. Benefits are limited to the first two years. This is called a Graded Death Benefit period.  What this means is that if you die within two years of buying the policy for any reason other than an accident, your beneficiaries typically only receive the total amount of what you paid in premiums.  (This can vary depending on the carrier.)

So, if you’re in relatively good health, fully underwritten life insurance may be a better option for you.  However, guaranteed issue life insurance is a great option for those with a desperate need.

How much does guaranteed issue life insurance cost?

While you can get millions of dollars’ worth of term life insurance coverage, guaranteed issue life insurance coverage often caps at $50,000.  Again, its design is based around simply helping your surviving loved ones pay for your final expenses.

Quotacy works with Gerber Life to provide guaranteed issue coverage options.  Gerber’s guaranteed issue policy is available in all U.S. states except for Montana.  Take a look at the examples and table below to get an idea on what a guaranteed issue policy can cost.

Example #1

 John Smith is 55 years old and has been denied for traditional life insurance because of his Stage IV prostate cancer.  He does not want to burden his children with his final expenses so he plans on purchasing guaranteed issue life insurance.

He’s automatically approved without having to undergo a medical exam or fill out any health forms.  John obtains $20,000 in coverage and his premiums are $91.30 per month.

If John passes away within two years, Gerber Life will refund to his beneficiaries all premiums that had been paid plus 10% interest.  However, if John happens to die because of an accident unrelated to his health within those two years, his beneficiaries will receive the full $20,000 death benefit.  After two years, his beneficiaries will receive the full death benefit regardless of how he dies.

Example #2

 Jane Doe takes care of her 79-year-old mother Sally.  Sally does not have any life insurance and Jane is worried that she won’t have the funds to give her mother the funeral she deserves.  Jane decides to buy a guaranteed issue life insurance policy on Sally.

A $12,000 policy is enough for Jane to ensure she can pay for a proper funeral and burial.  Sally is approved for coverage and the policy will cost $165.70 per month.

Although this type of policy is easy to acquire, it offers less coverage and higher premiums than traditional life insurance, so explore all your options.  If you aren’t sure if guaranteed issue life insurance is the best choice for you or want more information, contact us here at Quotacy and we can help you.

Recap of Guaranteed Issue Life Insurance:

  • If you’re between 50 and 80 years old, you can be accepted for guaranteed issue coverage regardless of your health.
  • There are no medical exams to complete or health questionnaires to fill out.
  • Cash value accumulates within the policy.

Remember, term life insurance quotes are free to run on americansfirstinsurance.com and there is no penalty for applying.  It doesn’t hurt to apply for term life insurance, then opt for the guaranteed issue if you end up being denied.  The more options you have, the better decision you can make.

Life Insurance for Business Owners

Are you a small business owner or a co-owner of a company? Among the many days to day responsibilities you encounter, you also are responsible for your family. You need to protect your family at home as well as your business family.

Life Insurance for Business Owners

Life insurance for business owners can help lay a proper financial foundation by protecting your current and future business. Let’s look into the different situations that life insurance can benefit your company or business.

Collateral Assignment Life Insurance

A life insurance policy can be used for business owners that require cash to begin a business or buy a company. Typically, when you buy a life insurance policy you will name a beneficiary. This beneficiary has an insurable interest to the insured. This beneficiary can be a family member, spouse or a business partner or company. When you’re getting a life insurance policy for an SBA loan or bank loan – it is the same overall concept. You have to assign a primary beneficiary, however- the lender will be named the collateral assignee. If you were to die the lender will get the balance of the loan from the life insurance death benefit. Your primary beneficiary will then get the balance once the loan is paid off.

What would happen in the event that you didn’t use a collateral assignment? If you had the lender the sole beneficiary, the lender would then collect one hundred percent of the life insurance policy’s death benefit. americansfirstinsurance life insurance can help you avoid that.

Executive Bonus Plan Life Insurance

With an executive bonus plan, you’re using a compensating method for specific employees by paying the life insurance policy premiums on the key employee’s life. The employer or business owner will pay for a benefit that is owned by the executive or employee. There are benefits to both the employer and employee when it comes to Executive bonus plans.

For the employer, there is no administration needed, the plan is simple, and costs are tax deductible. For the employee, the executive is the owner of the life insurance policy and of the cash values. The policy is not lost if they were to change employers. The death benefit can be income tax free.

Key Person Life Insurance

The purpose of key person life insurance is pretty basic:

A company buys a life insurance policy on a key employee, business owner or executive who is very important to the business. The company will apply for a life insurance policy, pay for all of the premiums and own the policy. The business is also the beneficiary of the life insurance policy. If the key person were to die, the company will receive the death benefit of the key person. The tax-free benefit can be used in a variety of ways. It can help make up for company sales as well as lost earnings. The benefit can also help cover some or all of the costs of finding a good replacement and provide proper training.

What would happen if the key person were to die unexpectedly? Could your business move forward without a hiccup? The life insurance death benefit can provide liquidity quickly so you can provide ongoing financial demands.

How about securing loans for your company’s growth? Sometimes loans are needed to help with the financing opportunities of expanding a business. Your lender will often seek collateral as security and the death of a key employee may pose too much of a risk to your lender. It is very common for a lender or bank to require key person life insurance on anyone that is vital to the life of your company.

One of the most important uses of key person life insurance is when there’s a need to buy out a deceased co-owner's interest in a company. There are some unfortunate situations that can arise if a key person policy isn’t in place. How would the deceased co-owner's family receive their share of the interest in the business without selling it off? How would the surviving owners pay off the dead owner’s family in order to avoid becoming partners with them?

Buy Sell Agreement with Life Insurance

When you’re an owner of a company or a partner in a business, a buy sell agreement can be an excellent way to avoid uncertainty. When a partner or company owner dies, the life of the business and it’s future are uncertain. With a buy-sell agreement, you can make sure you’re helping to protect you and your company from the unexpected or unintended transfer of ownership. By considering a buy sell agreement and funding it with life insurance, you can provide protection and extend the life of your company.

The buy sell agreement will aid the sale and purchase of a company based on a specified event. The most common events are retirement, disability or death of the owner of the company. The buy-sell will lay out specifically who will get what with regards to shares of the business. It will define how much and it will guarantee the buyer at a predetermined price. The buy-sell agreement also allows for the purchasing of company shares from the estate of the surviving family. Lastly, a buy-sell can be beneficial with creditors. Creditors will most likely be much easier to deal with when they can see that a company has protection established to make the loan decisions easier.

Business Succession Planning

Life insurance plays an important role as the driving force in succession planning. It is key that you have adequate coverage for you and your business partners. You need to get a formal valuation of your company and make sure that your coverage is updated with the growth of your company. Succession planning is a very important topic and can be vital to your business. If you let the estate plan dictate how your company transitions, it may cause significant issues. There are many companies that have had disastrous results due to poorly designed succession plans. Just ask the Robbie family and the Miami Dolphins.

Get Started

If you’re ready to get started, make sure you work with the following 3 resources:

  • Attorney
  • CPA
  • Life Insurance Broker

You’ll need experts in each of these areas in order to secure the best strategy and policy for your business succession plan.

How to Get Quotes and Apply

Once your plan is in place you can begin shopping for your life insurance policy. Simply use the free quoter on this page to get an idea of rates.

However, the best way to secure coverage is to have our research customized quotes. You can simply contact us at americansfirstinsurance.com.  We’re independent and licensed life insurance agents. We’ll find you the best policy at the most competitive price from dozens of top rated life insurance companies. Once we find you the lowest rate, we’ll help you apply conveniently online or over the phone. We’ll help you from start to finish.

Do Home Warranties Cover Plumbing?

Let’s face it; plumbing issues stink! Plumbing is one of those home systems we tend not to appreciate until there’s a problem with it. They can occur without any warning making for an unpleasant surprise that you have no choice but to address immediately.

Plumbing problems aren’t just unpleasant; they can also be expensive. Not only does the issue itself needs to be remedied, but also leaked water can cause several residual issues such as floorboard rot, drywall damage and mold, among others.

Related: A Guide To Leaks, Clogs, And Other Plumbing Issues You Can Fix

The average cost to hire a plumber for a typical job ranges from $160 to $430. Plus, plumbers often charge an additional premium to come out on evenings or weekends. The cost of parts for the repair can vary widely, especially in older homes where replacement pieces are harder to find.

What Do Home Warranties Cover?

If you’ve been asking yourself whether you should invest in a home warranty, the first step is to look at what’s covered under the warranty. Each plan is different and coverage can vary.

americansfirstinsurance Home Warranty plan covers the costs of repairing or replacing more than 20 major appliances and home systems, including plumbing. There are flexible plans that allow you to choose the best fit for your family’s needs and you can even build your own custom plan so you have the exact coverage you want.

Do Home Warranties Cover Plumbing?

Generally speaking, home warranties do cover plumbing when issues result from normal wear and tear. Not every plan is created equally, though, so it’s important to look at what exactly is covered, especially if you already have a contract. Some of the common plumbing troubles covered by AHS include:

  • Leaks and breaks in the water, gas, drain or vent lines
  • Faucets, shower heads, and shower valves
  • Built-in bathtub whirlpool motors, pumps, and air switches
  • Clearing sink, tub, shower and toilet stoppages

Be sure to check the yor contract for more details.

Give Yourself Peace of Mind

Unfortunately, plumbing issues are inevitable in any home. Since the best plan is to be prepared, you can ease your stress by giving yourself the gift of an American Home Shield plan.

How Can a Home Warranty Protect Your Dream Kitchen?

 
The day is finally here. After hours of research and meetings with contractors, a million pins on interest and only slightly fewer frozen dinners microwaved in your living room, you've built your dream kitchen!

Now — to make sure that it stays up and running — it’s time to protect it with a home warranty.The  E - exchanger Plan covers the repair and replacement costs of more than 20 of your home appliances and system parts. And E-exchange makes it easy — choose from existing plans or customize one that meets your needs without paying for unnecessary coverage.

You might think that because you have homeowners insurance you don’t need a home warranty, this is a common misconception but it's not true. Home insurance and home warranties offer different types of protection. A home insurance policy covers accidental damage to your home and belongings due to theft, storms, fires and some natural disasters. A home warranty is a service contract that provides for repair or replacement of your home appliances and system components that fail due to age and standard wear and tear.

Different Types of American Home Shield Plans

The Systems Plan covers items related to the major systems in your home such as air conditioning and heating (including ductwork), electrical and plumbing, water heaters, garbage disposals, water dispensers, central vacuums, smoke detectors, doorbells and ceiling fans. All things you take for granted, but that can cause major issues when they break down. For example, that new kitchen of yours will lose its luster pretty quick should you AC go out this summer. And it will be pretty hard to entertain should your garbage disposal or water dispenser go out.

The Appliances Plan covers, home appliances such as refrigerators, dishwashers, clothes washers and dryers, ranges/ovens/Cooktops, built-in microwaves, freestanding ice makers, trash compactors, garage door openers and built-in food processors. This plan helps get your household back up and running when one of these critical devices stops working. You don't want your refrigerator to break in the middle of summer, leaving you without cold beverages or frozen treats, right? What's summer without them, anyway?

Choose a plan that best fits what you need

The Combo Plan is our most popular and covers both systems and appliances.

The Build Your Own Plan lets you customize one that meets your needs without paying for coverage you might not need.

Optional Add-Ons

Don't think that you're limited to just standard appliances. You can always add coverage for things such as a pool/spa, water softener, well pump and septic pump. Simply select the plan that best suits your needs and then tack on any of these extras as appropriate. 

You’ve taken great care to build the kitchen of your dreams. It makes sense to protect your investment with an americansfirstinsurance Home Warranty Plan. Explore our plans, see a list of what’s covered and get prices in your neighborhood now. With this kind of peace of mind, you can sit back, relax and start trying cool summer recipes from your favorite chefs!