Many Americans receive health insurance through a government entity or platform. This is true for younger individuals who may be looking to healthcare.gov or older individuals that rely on Medicare programs for their health benefits.

Scammers know this. They use the information to form clever and even threatening scam tactics to try and steal the personal information of countless individuals. Unfortunately, many are quite successful. This leads to a cost of $68 billion lost to scams each year.

As such, it is important to know the signs of a scammer before you interact with one. Not only will this save you from identity theft, the information can help you educate countless others. Keep reading for 8 red flags of health insurance scams.

1. You Are Asked Upfront For Money

A common tactic involves scammers pretending to be insurance agents. Commonly, they will say that they can get you a better plan rate or higher discount, but you will have to pay them first to render this service.

Simply put, government entities and insurance companies alike do not function this way. Never give your financial information or personal information to individuals like this.

2. They are Trying to Sell a Specific Plan

Similar to the point above, insurance agents and government entities alike don’t work this way. Agents and government aids do not have a preference to sell you one plan over the other, rather, they want to find the best plan for your needs.

If you find an individual pushing a hard sell on one specific type of plan, it’s a red flag that the caller is illegitimate.

3. They Can’t (or Won’t) Answer Simple Questions

When someone is hired as part of an insurance agency, they know all about the plans up for offer. This is how they help connect you with the plan that best fits your needs. When you are dealing with a caller who either can’t, or won’t, answer very simple questions about their policy offerings, the only policy they are offering is a scam.

4. They Say They Work With The Government

Whether it’s for healthcare or for your taxes, a federal government agency will never call you and never ask for your personal information such as your name, address, social security number, and bank information.

However, we understand that this particular scam makes many individuals nervous for risk of missing something important. In these cases, it’s best to hang up on the caller and contact the government body directly to verify the origin or purpose of the call.

5. They Claim You Need to Update Your Insurance Card

Healthcare reform is a big headliner anytime a new bill is circulating in congress. As such, when there is healthcare legislation happening, the uptick in scams starts happening fast. This is because a scammer will try to exploit your uncertainties by blaming reform on the need to collect your information.

Like in the point above, the government will never call and ask for your information. If you are worried however, you can always contact the government agency directly to verify the origins of the call.

6. The Offer is Too Good To Be True

Oftentimes scammers will offer you plans and discounts that are far too good to be true, especially when compared to the general average of plans from open enrollment. In cases like these, scammers may be offering you “insurance” that only amounts to a medical discount card at best, and an entirely fake plan at worst.

Depending on when you find out about the dupe, it may be too late to enroll in another plan.

7. You receive a Phishing Email

Phishing emails might be difficult to spot at first as they are made to look as legitimate as possible. However, even the best scammers can’t make a fake email look real.

Red flags to look out for include an email coming from an incorrect or unknown address, spontaneous requests for information, or links which direct you to financial forms. These warning signs usually indicate the email is a scam.

8. You are Being Threatened

Some scammers go the aggressive route and attempt to harass and threaten other individuals into divulging their credit card, banking, and personal information. Know that, like asking for personal information, you will never be threatened over the phone by a legitimate government entity.

Resources for Reporting

In the event that you suspect a scammer, there are several reporting agencies available to help keep yourself and others safe. The following is a list of agencies that allow you to report scams, fraud, and file formal complaints.

• Medicare Fraud
• State Insurance Fraud Bureau
• National Health Care Anti-Fraud Association
• ftc.gov/complaint

Working With Trusted Arizona Agents

One surefire way to avoid a scam isto work with an agency that boasts years of experience on the local and state-level.

A staple in Casa Grande Arizona, the Gebhardt Insurance Group offers a variety of coverage from a host of major insurance carriers with an experienced staff that can help you determine the right coverage for your business. Give us a call at 520-836-3244 to get a quote and make an appointment to take the final steps in insuring your business.

Any time family members depend on your livelihood and services for their daily needs, life insurance becomes an important part of your financial planning. In the event of your death, expected or otherwise, your policy coverage is the difference between your loved ones being financially protected or buried in grief and debt.

From this perspective, the decision to get life insurance seems rather simple. Unfortunately, many individuals delay getting coverage far longer than they should, creating an avoidable risk for those they love.

Below, we discuss the different types of life insurance you can purchase and the different life milestones that indicate it is time to enroll in a plan.

Types of Life Insurance

Life insurance is not a one-size-fits-all solution to financial security. Depending on your health and the stage you are at in life, some policies may hold more appeal than others.

Term Life Insurance

The simplest form of life insurance by far is a term policy. This is a bare-bones, no-strings-attached plan that offers a set term of coverage (30 years, for example) in exchange for a premium. If you pass away before this term is up, your spouse, family, or beneficiary will receive a death benefit— a sum of money paid on your passing to cover expenses, repay outstanding loans, and ensure the financial security of your loved ones.

Whole Life Insurance

Similar to term life insurance, “whole” policies also offer a death benefit in exchange for a premium. However, in comparison these premiums are far higher for the same amount in death benefit due to the different overall structure of these plans.

When purchasing whole life insurance, there is no term limit. So long as you pay your premium, you will have coverage for the remainder of your life.

Furthermore, “whole” policies have a cash value that earns a set interest rate over time. This is possible as part of your elevated premium cost goes to funding this value, essentially acting as a tax-deferred savings account that is attached to your policy.

Universal Life Insurance

Building on the policies above, we have Universal insurance. As the others, they function off the same premise but have slightly different policy structures.

For a universal policy, you have more control over your premium and death benefit by being allowed to alter these amounts at any time. Because your premium goes toward both the death benefit and the cash value of your plan, by lowering these thresholds you can readjust your premium to be far lower than before.

Here, the cash value also works a bit differently. Unlike whole plans which accrue interest at a fixed rate, Universal plans will accrue interest that fluctuates along with market pricing.

The above three policy types represent the most common life insurance options for most individuals, however, there are many more policies than what we have described here. With policies such as variable life insurance, variable universal insurance, simplified issue insurance, and even final expense insurance, individuals are recommended to speak with an insurance agent to pick the plan that meets their needs.

Knowing that such a variety of plans exists, it’s time to look at some of the major life events that should have you considering life insurance.

When Life Insurance is a Necessity

Discussed previously, life insurance is a way to give financial security to those who rely on you for their daily quality of life. This includes having a large enough death benefit to cover expenses, outstanding loans, and potential funeral costs.

As you will see, many of these events are those which happen earlier in adulthood. This serves to debunk the rather harmful myth that life insurance is reserved for the elderly. Not only can life’s unpredictability leave our loved ones in a challenging situation if we pass prematurely, it is universally cheaper to begin coverage when young and healthy.

Some telltale milestones are listed below:

1. You are married or own assets with a spouse 

For most individuals sharing a life with their spouse, financial security rests in the balance of both partners shouldering some of the burden. Should one spouse die unexpectedly, this would create financial hardship in maintaining assets, repaying loans, and a host of other expenses normally shared between two earning individuals.

Here, it is recommended that your policy death benefit covers any existing balances on loans and other major expenses. This is especially true for private student loans, most of which are not dischargeable after death. If your death benefit fails to cover your outstanding loan amount, your partner will be responsible for paying the balance.

2. You are the breadwinner of your household

In single-income households or households where the lifestyle of one partner is largely dependent on the increase in earning capacity of the other, you will similarly want to buy a life insurance policy. In the case of your unexpected death, your benefit should help cover your personal finances and any outstanding loans such as those for vehicles and education.

For individuals in this situation, Term life insurance is a highly recommended policy type, given that your policy term limit will cover your working years.

3. You have minor children

As an addition to the above, you want to ensure that if you have children, you also have life insurance. This allows for your remaining spouse or guardian to meet the financial obligations left behind while still providing adequate financial support to your children’s day-to-day life.

As with calculating the worth of a stay-at-home parent, you need to be honest and exact when calculating the costs of your children, potentially even adding expenses such as college tuition. This will help you arrive at a more accurate number for your ideal death benefit amount.

4. You are a stay at home parent

While the stigma of being a stay-at-home parent is lifting as the years go on, there is still some confusion as to how life insurance benefits as a spouse who does not earn an income in a traditional job.

The recommendation here is to compile the costs that would accumulate should you have to pay for the services this partner provides. This includes housekeeping, child care, meal preparation, school help, and more. According to Salary.com, the worth of a stay-at-home parent is upwards of 162,000 annually, giving more than enough reason to purchase insurance should something unexpected arise.

5. You Have disabled adult children or support aging parents

Similar to minor children, a disabled adult child or family elder often does not have the capacity to support themselves. As such, if you are a part of contributing to their daily expenses, getting insurance that can maintain that support in your absence is integral to their quality of life.

In these cases, life insurance can help cover their immediate needs, but it is also wise to speak with an estate planning attorney to ensure your family has secure, long-term care.

6. You own a business that employs other individuals

Similar to how a buy-sell agreement ensures a company has a plan of action should a business partner pass away, life insurance can provide an added benefit to the financial stability of the company when placed under the same circumstances.

Many small business owners fund their start-up process with a series of loans, some of which they use personal assets as collateral. Furthermore, their business is a reliable source of income for their employers. Because of these two factors, having a life insurance policy that can repay your loans and maintain employee payroll for a set period of time is integral to being a responsible business owner and planning ahead.

7. Your job is high risk

A high risk job means your chances of becoming fatally injured are far higher than normal. If you are in this category, life insurance is integral to the financial health of your family, even if your premiums reflect a higher price.

Shop Local: Insurance Agents in Casa Grande, AZ

The above instances are only a handful of examples where an individual may need life insurance. However, as a rule, if anyone depends on you financially, no matter your age, life insurance is heavily recommended. Even though it may be a challenging thought to engage with, it’s the responsible decision to make.

At Gebhardt Insurance Group, we understand the different policies of several life insurance companies. As experts in the field, we can help you understand the various benefits and offers made by different plan providers, all in a way that is concise and simple, helping cut down on time, misunderstanding, and potential mistakes in coverage.

Ready to speak with an insurance experiment about the plan that’s right for you? Give us at call at 520-836-3244.

As we enter into another recession, US residents are searching for alternatives to employer-sponsored healthcare.

Why? With skyrocketing unemployment rates and an uncertain job market, short term plans (also known as “term health insurance plans”), may be the only affordable option to bridge the gap experienced in coverage.

Unfortunately, there is no easy way to find the short term plan that works for you. Each insurance provider has their own requirements, limitations regarding coverage, and plan details.

As such, the information below is a starting point to explain some of the most common routes insurance providers take when developing short term insurance plans, in addition to some of the unexpected consequences consumers face when failing to read the fine print.

What is Short Term Health Insurance?

Many major insurance companies offer plans that offer health insurance coverage. In the state of Arizona, these policies are offered up to 364 days at a time. This gives you the opportunity to re-enroll after your current plan has expired, or, simply end your coverage period and allow employer-sponsored benefits or Medicare to kick in.

As these plans are open for enrollment at any time (with some offering coverage as soon as the next day), they provide a flexible option to remain insured if you have missed the open enrollment period for the Affordable Care Act.

What Does Short Term Coverage Actually Cover?

Generally, these policies seek to provide coverage for individuals against major medical events such as unexpected illness or accidents. However, several policies also include provisions for prescription drugs, preventative care, and maternity care.

Pitfalls of Short-Term Plans

While these plans are flexible, inexpensive, and allow you to keep your current medical providers, they are riddled with unexpected problems.

They Are Often Not ACA Compliant

any short term health plans are not compliant with the Affordable Care Act (ACA) and therefore do not provide the “10 essential health benefits” designated by this program:

1. Hospitalization 
2. Ambulatory services
3. Emergency services
4. Lad services
5. Mental Health and Substance Care
6. Rehabilitation 
7. Prescription medicine 
8. Maternity and Newborn Care
9. Pediatric services
10. Preventative and wellness care

As such, you are never guaranteed minimum essential coverage by short-term plans and can, in the future, find out that your policy covered far less than you originally expected.

You Might Face Balance Billing

The flexibility of short-term plans comes from the fact that they don’t have a “network.” Without a network, there is no set or established list of health care providers who you know will accept your insurance policy. As such, you might visit a doctor only to find out later that they do not accept your insurance, thus resulting in a medical bill that must be paid for mostly out of pocket.

No Coverage for Pre-Existing Conditions

One of the largest differences between short and long-term insurance plans is how they cover pre-existing conditions. Short-term plans are meant as a backup for medical problems that have not yet happened, they are not made to cover a condition you are already aware of.

Here, some insurance providers will trust your portrayal of your previous health conditions until you file a claim while others will not. In either case, verifying your health status requires an underwriting process in which up to 5 years of your past medical records can be used to determine your status. If they find you do, in fact, suffer from pre-existing conditions, this is grounds to deny you coverage.

Navigating Insurance Providers

As you may have gathered, insurers have a great deal of autonomy when it comes to what they offer as part of their temporary plans. Because of this, it is often necessary to check in with individual insurance providers to get information on what they cover. In the state of Arizona, the following providers are offering temporary coverage:

1. Blue Cross Blue Shield of Arizona (in partnership with IHC)
2. Everest Prime
3. Golden Rule (UnitedHealthcare)
4. Independence American Insurance Company
5. LifeShield
6. Madison National
7. National General
8. Philadelphia American Life Insurance
9. Standard Life
10. Companion Life
11. United Security Health and Casualty

While these are the current providers offering plans in Arizona, this information is subject to change. For the most up to date information, it’s best to check in with the insurance providers themselves to see whether they are still offering coverage.

Some Insurance is Better Than No Insurance

When it comes to your health, having sub-par insurance for a period of time is almost always better than having no insurance at all. However, it’s important to think in the long-term and start shopping for a plan that is sustainable enough to maintain on a regular basis.

At the Gebhardt Insurance Group, we offer a variety of coverage from a host of major insurance carriers with an experienced staff that can help you determine the coverage you need. We can help everyone from individuals looking for a basic health policy to families, persons with pre-existing conditions, and even those who are looking to purchase life insurance.

If you have any questions, give us a call at 520-836-3244 to get a quote and make an appointment to take the final steps in insuring your business.

What is life insurance? It is an insurance contract that is established between the policyholder and the insurer that will pay a benefit upon death. There are various types of life insurance products on the market today. One type of life insurance is called permanent life insurance. Permanent life insurance pays a death benefit to the named beneficiaries and can be a great investment. 

Facts Regarding Life Insurance

According to a study by LIMRA titled “Life Insurance Ownership in Focus” more than 87 million Americans have a life insurance policy. The number of Americans that have life insurance is trending upward; however, the average amount of coverage has decreased. Approximately 70% of U.S. households have life insurance.

The Difference Between Term and Permanent Life Insurance

Term life insurance is much simpler than permanent or whole life insurance policies. The buyer agrees to make premium payments for a specific term or period. These policies are commonly purchased for terms of 10, 20, or 30 years. Term policies are fairly affordable and are most popular among households that have dependent children.

Term policies pay a specified death benefit if the insured party dies during the term of the policy. Buyers often choose a term based on when certain milestones are likely to occur. For example, parents may choose a term policy that extends to the estimated time their children will be graduating from college. A term policy can be very important so that dependent loved ones have financial support if you pass away.

A permanent life insurance policy also pays an amount to the beneficiary when the insured party dies. There is no other defined term or length for a permanent life policy. A whole life policy typically has a fixed premium amount. These types of policies often contain clauses preventing an insurer from revoking or otherwise terminating the policy unless premiums go unpaid.

Permanent life policies also have a savings component that builds cash value that the policyholder may borrow or withdraw from. As funds accumulate, they are invested in a tax-protected account. The investment portion of the policy may be subject to stock market fluctuations and the invested funds may generate dividends. Common types of permanent life policies include variable and universal life insurance.

Why Purchase Permanent Life Insurance?

Each consumer has a unique set of individual circumstances. Life insurance policies are fortunately not a “one size fits all” product. Many lower-income individuals immediately recognize that permanent policy premiums are beyond their financial means. These policies tend to be more expensive than term policies.

It is critical that consumers considering a whole life policy are prepared to maintain it. Those with a need for a life policy that exceeds 30 years often find it difficult to find a term policy. Those with a considerably younger spouse who want to ensure that they will have financial support should seek a permanent life policy. Children with permanent disabilities should also be considered when choosing a life insurance policy.

Variable Life Insurance

Variable life is a type of permanent life policy where the cash value and death benefit fluctuate based on the performance of invested funds. When the investments perform well, the earnings may be used to pay premiums or added to the death benefit amount. Variable policies may or may not have a guaranteed return rate. Keep in mind that the cash value may decline in years where investments perform poorly.

Universal Life Insurance

A universal life policy is a type of permanent policy that invests funds. The key aspect that differentiates universal policies is that they generally have a fixed rate of interest. The policies are quite flexible. The policyholder may choose to skip premium payments as long as the minimum required premium is paid during that year. Policyholder’s may have the option to tailor the amount of premium allocated toward the death benefit or cash value.

Indexed Universal Life Insurance

An indexed universal life policy allows the policyholder to maintain cash value in a “fixed account or equity index account.” The investment component is considered to be less risky than variable universal policies. The policyholder can typically pay a premium between a set minimum and maximum range. The cash value of the policy is usually accessible at any time without penalties.

Tax Benefits of Permanent Life Insurance

• The cash value of a policy will increase tax-deferred as a retirement account would.
• Withdraws from the cash value will usually be tax-free up to the amount you have already paid in premiums.
• Life insurance policy beneficiaries can receive the death benefit without having to pay taxes.
• Life insurance policy premiums are typically paid with “after-tax” dollars. 

Medical Examination Requirements

A life insurance company often will have applicants undergo a medical examination performed by a professional. You may be asked to complete a questionnaire. A full medical exam may include taking blood or urine samples and other various tests. This is part of the underwriting process that insurers complete when issuing policies.

There are “guaranteed acceptance” life policies available in the market as well. The premiums tend to be comparatively expensive and the death benefit may be restricted to a low amount. These policies are often viewed as being a poor overall value except for those with serious medical conditions.

Policy Waiting Periods

Some policies may have a waiting period. This is an amount of time that must elapse before the policyholder is eligible for the full benefits of coverage. These are commonly referred to as “elimination periods” or “qualification periods” during which you are paying premiums. For example, consider a policy with a two-year waiting period. If the policyholder dies during that time they may only be able to recover the amount already paid in premiums.

Comparing Life Insurance to Other Types of Investments

A permanent life policy is not the best option to choose exclusively for investment purposes. Although there are clear tax advantages, life insurance does not offer an employer match like a 401(k) or other retirement accounts. Those who qualify for Roth IRA’s may find these to be a superior option for investment purposes. It is recommended that you always consult a financial advisor or other professional.

Advantages to Purchasing Insurance Through an Independent Agency

If you have shopped around for insurance recently you have likely encountered an overwhelming number of options. Trying to compare policy options can be time-consuming. Unlike a captive insurance agent, an independent agent can offer policies from various insurance companies. These professionals are positioned to efficiently evaluate and identify the best options for your unique set of circumstances and goals.

Independent Agency Provides Life Insurance in Casa Grande

The Gebhardt Insurance Group is a well-established provider of insurance solutions and is locally based. We can help you save money on insuring your home, vehicles, business, and much more. Contact our team of professionals today at (520) 836-3244.

It should come as no surprise that the costs of life insurance typically increase with age. Seniors should expect fewer coverage options and higher monthly premium prices. Life insurance companies view those ages 60 and over as a much greater risk. What are the best life insurance plans for people age 65 and over? The answer varies according to your individual circumstances and what benefits you are seeking.

What is Life Insurance?

A life insurance policy is a contractual agreement between the holder of the policy and an insurer. The insured makes premium payments in exchange for some lump sum death benefit payable to the beneficiary named by the deceased. There are dozens of types of life insurance policies. Term and permanent are the two primary types of life coverage.

Life Insurance Considerations

There are a host of considerations that seniors may factor into their policy selection as follows:

• Whether there is a living spouse or not
• Other assets that the individual has such as a home, retirement account(s), etc.
• Any current debt and the amount(s) owed
• If any children are still dependent financially
• Any estate taxes that would apply upon death
• Whether elderly parents or adult children who are disabled are relying on support financially       

Term Life vs Whole (Permanent) Life Insurance

A term life policy lasts for a specified time period of up to 30 years. Compared to whole life insurance, it may be seen as a temporary policy. Term policies are generally more affordable. The insurer may not ultimately have to pay a death benefit if the insured outlives the policy term.

A whole (permanent) life insurance policy remains in effect as long as the premium is paid and usually builds cash value. The insured party may use this cash according to the terms of the contract. These are typically much more costly than term policies.

Annual Premium for	$500,000, 10-Year	Term Policy	(Healthy/	Non-Smoker)
	Age 40	Age 50	Age 60	Age 70
Male	$242	$547	$1,476	$4,523
Fe,ale	$211	$449	$986	$2,807

The above chart shows the large disparity in prices based on gender. Premiums for females ranged from roughly 13% to 38% less costly.

Age Limitations on Life Insurance Products

As you advance in age, there are fewer options available for term policies. These age-related limitations vary by company. Generally, the maximum term available for those 70 years of age is 20 years. At ages 75 and 80, the maximum terms decline to 15 and 10 years. Whole life policies for this age range are quite costly and are rarely offered beyond age 75. Seniors are also likely to encounter a requirement that they submit to a medical examination.

Concerns Regarding Medical Conditions

Seniors in their early 60s who are in good health may qualify for a term policy with a monthly premium of roughly $100. Being in good health allows access to better rates. This is partly due to the chance that the policyholder will live beyond the term of the policy. These healthy individuals may find that submitting to a medical exam lowers their rates.

MetLife typically requires applicants over the age of 50 to submit to an electrocardiogram and both blood and urine tests. New York Life often requires those over the age of 70 to undergo cognitive and physical testing. Prudential Insurance may reference a database showing any prescription drugs applicants take.

Avoid Buying Cash Value Policies Over Age 65

Universal life insurance policies are a form of whole life policies that accumulate cash. Policyholders can obtain a loan from their policy while still alive. These types of policies are generally not recommended for seniors. The premium tends to be high due to the cash value feature of these policies. In addition, they tend to have administrative or management fees that can approach 3%. The policies are often best for those focused on longer-term goals.

Burial or Final Expense Policies

Those well into their 70s will likely have few options. Those over 80 years of age may only be eligible for a burial policy. Burial insurance is a form of whole life coverage that exclusively pays “final” expenses. The death benefit in the policy is unlikely to exceed $40,000, with many in the $10,000 to $15,000 range. Typically they do not require a thorough medical exam. These policies are useful for seniors with health concerns who want ensure their family does not have to pay for funeral expenses.

Evaluating the Insurance Carrier

You may recall seeing advertisements, such as those with celebrity spokesmen, discussing life insurance policies with “guaranteed” acceptance. They commonly promote that no medical exam is required. The insurer knows that these policies are particularly appealing to those with health concerns. As a result, the policy premium is typically inflated and death benefits are generally limited.

You should feel comfortable that a life insurance company is stable and legitimate before purchasing a policy. It is often advisable to check their Standard and Poor rating or AM Best standing. Avoid purchasing policies that have extremely confusing terms and conditions. You should have a firm understanding of what the agreement entails.

The Advantage of Purchasing Through an Independent Agent

There are many types of life insurance products on the market from many carriers. A smart way to consider your options is by consulting with an independent agent. These insurance professionals are able to identify your needs and find policies that are suitable. An independent agent is not “captive”, meaning that they may offer policies from more than one carrier. This allows seniors more life insurance options and will help with finding an affordable solution.

Life Insurance Agency in Casa Grande

Our team of insurance professionals at the Gebhardt Insurance Group has provided life insurance to those of all ages for years. We also assist those locally with auto, homeowners, business insurance and much more. We encourage you to contact us today at (520) 836-5244.

Those who buy a life insurance policy generally do so as a means of financial protection for their families. The beneficiary of the deceased will receive a lump sum benefit if the death occurs while the policy is active. Funds are commonly used for funeral and burial costs, debts such as a home mortgage, and future educational expenses of children. Life insurance coverage is broadly categorized as either term life or whole life (permanent life) insurance. Whole life policies make up approximately 60% of those sold within the market.

Overview of Types of Life Insurance Policies [1]
Term Life	Whole Life (Permanent)
Level Term	Traditional
Decreasing Term	Universal
Renewable	Variable
Non-Renewable	Variable Universal

Term Life Insurance

These policies offer financial security for the beneficiary of the policyholder for a defined “term” or time period. In comparison to a whole life policy, they are considered a temporary option. It is the most simplistic and least costly option that may extend up to a 30-year-period. Those with minor children may maintain these policies until their kids have grown and no longer depend on them. Term insurance products are typically purchased exclusively for death benefit coverage. Unlike other forms of life insurance, they generally do not have a cash value component that may accumulate funds.

Renewable vs Non-Renewable

Most term policies extend over a multi-year period. A term of 20 years is quite common, after the time period has passed, the policy may be renewable. Establishing a long-term policy generally provides you with a stable premium cost that will not increase over time. Another advantage is if the insured party begins experiencing health concerns they already have existing coverage in place. Older adults and those will health issues are viewed as a greater risk and will have difficulty obtaining a new policy. Non-renewable policies end after the term and buyers will then have to shop for a new policy. When a term policy is renewed, the new premium is likely to be higher. This increase is likely because the insured party is now older. Renewals also may account for inflation and the rising cost of living.

Level vs Decreasing Term

Another distinction between types of policies involves whether they are level or decreasing. Most term policies have a level premium, but policies may or may not have a level death benefit. A level death benefit amount is clearly established when the policy is purchased and will remain unchanged throughout. Over 90% of term life policies issued are level. A policy with a decreasing level has a death benefit amount that is reduced at some interval over the policy term.

We will consider a scenario of a decreasing term policy that has an initial $250,000 death benefit with a 20-year term. This example has a 2% annual (yearly) decrease. We will track it at five-year intervals thus realizing a 10% decrease every five years.

Years	Level Death Benefit	Decreasing Death Benefit
0	$250,000	$250,000
5	$250,000	$225,000
10	$250,000	$202,500
15	$250,000	$182,250
20	$250,000	$164,025

Why Would Someone Select a Decreasing Term Policy?

Policyholders may consider a decreasing term policy if their primary concern is paying off a long-term loan upon death. One example is a home mortgage that is being paid off and the balance is steadily falling. The insured may have teenage children entering college soon and progressing into the workforce; therefore, their financial dependency is also diminishing. A decreasing policy is likely a more affordable option in most cases.

Whole (Permanent) Life Insurance

A whole or permanent life insurance policy also provides a death benefit as long as the premium is paid. It will also allow you to accumulate cash value depending on the type of permanent policy. A certain portion of the premium payments is invested. These funds may be invested in the stock market and potentially diversified similar to a mutual fund. If the investments perform well, the life insurance company may then pay you dividends based on earnings. These cash value arrangements often have great tax advantages. Many types of permanent life policies allow you access to the funds for purposes such as:

• To make your premium payments
• To extend yourself a loan at a lower interest rate than you could obtain in the market
• As funding for other investment opportunities
• For use as supplemental income in retirement

Whole Life vs Universal Life

Whole and universal life fall under the category of cash value policies. The distinction is primarily related to how premiums are paid and how cash accumulates. Whole life policies make the schedule of premium payments more simplified by using a set schedule. Whole life policies also generate a fixed return that “guarantees” you some cash value.

With universal life, the policyholder has some degree of flexibility in making their premium payments. The cash value component of the policy is more volatile and is dictated by short-term interest rates. Although a universal life policy may also have some “guaranteed” cash value, it is subject to changes in the investment markets. A possible disadvantage is that death benefits could decrease and policy premiums may increase in response to market conditions.

Variable vs Non-Variable

Variable life policies are highly volatile because premium funds are heavily invested in stocks, bonds, and other market funds. If these investments perform poorly the death benefit and cash value will decline. When investment performance is good there is a significant upside with strong increases in cash value. Policies deemed as non-variable are more conservative and not subject to the sizable extremes found in variable policies. They typically guarantee a minimum interest or cash value; however, lack the potential for large cash value gains from investment performance.

Variable universal life insurance coverage is a hybrid product. These policies use a variable cash value approach that has the investment-based risks and rewards. They also offer policyholders flexibility in their premium payments and death benefits that are typically associated with universal models.

Employer Plans

Larger employers often provide basic group life insurance policies to all employees. Many are paid entirely by the employer or have a small amount of employee contribution. These are generally small policies that rarely have a death benefit greater than $100,000. Usually medical exams and health inquiries are not required. Most of these policies are not sufficient for individuals with dependents. Many do offer the employee the option to add supplemental life coverage that is sometimes available at a good value. We will take a look at a couple standard plans offered by large Arizona employers.

• The City of Mesa: Their standard program provides full-time employees with life coverage equal to their annual salary at zero cost.
• The University of Arizona: Offers an Employer-Paid Life Insurance benefit with automatic enrollment for those eligible for benefits. It contains a $15,000 term policy that includes an additional $15,000 “seat belt incentive”. Also included is a $15,000 policy for Accidental Death and Dismemberment.
• Hexcel Corporation: They have an office in Casa Grande that employs roughly 500 people. They provide a group life policy to employees at zero cost that has a $50,000 maximum benefit.

Buyer Considerations & Premium Allocation

Those considering life insurance obviously have many options to consider. You should consult with an experienced insurance agent who will help you find an appropriate plan that reflects your specific goals. Those looking to accumulate cash within the policy may choose a minimum level death benefit plan.

Enrollment Details & Tips

Depending on the policy that you are applying for, you may be subjected to a medical examination. This is more likely if your policy will provide significant benefits. All types of life policies will have a named person that is the beneficiary. You will need this individual’s social security number or other tax identification information. If the beneficiary is a minor child, you may establish a trust account for benefit distribution. Your policy premium should be an amount that is fairly affordable. This is particularly important if you choose a policy that may have rising premiums.

Independent Life Insurance Agency in Casa Grande

Would your family be faced with severe financial difficulties in the event of your death? Life insurance is a critical means of protection. At Gebhardt Insurance Group, we can help you secure a policy based on your current and long-term needs and goals. We represent many of the best life insurance carriers in the market and understand potential concerns about affordability. If you have an existing life insurance policy that has not been reviewed recently, we encourage you to contact us as well. It is very important to do so if you have had life changes involving dependents, marital status, income, or employee benefits. We can be reached at our office by calling (520) 836-3244.