US Life Insurance Top Companies

Here is a list of U.S. life Insurance Companies which most recently have been coming out on top consistenly.
Feel free to Click "Life Insurance - US Top Companies" link in the Label.
And please to contact each company directly if you have specific plan or product questions.
But please note that almost all companies sell only through agents. If you contact a company to purchase coverage, they will not sell it to you. Rather, they will direct you to one of their agents.

And one more thing, I have no affiliation with the companies profiled in on this site,
and those companies do not necessarily endorse these profiles. All content is provided for informational and educational purposes only.

American General Life Insurance Company

American United Ratings
A.M. Best: A
Fitch : AA-
Standard and Poor's: AA-

American General Life Insurance Company
P.O. Box 1591
Houston, TX 77251
(800) 231-3655
Website : www.aigag.com

Banner Life Insurance Company

Banner Life Ratings
A.M. Best: A+
Standard & Poor's: AA

Banner Life Insurance Company
1701 Research Blvd.
Rockville, MD 20850
(800) 638-8428
Website : www.lgamerica.com

Cincinnati Life Insurance Company

Cincinnati Life Ratings
A.M. Best: A+
Fitch: AA
Standard & Poor's: AA-

Cincinnati Life Insurance Company
6200 South Gilmore Road
Fairfield, OH 45014
(513) 870-2000
Website : www.cinfin.com

Empire General Life Assurance Corporation

Empire General Ratings
A.M. Best: A+
Standard and Poor's: AA
Fitch: AA-

Empire General Life Assurance Corporation
P.O. Box 11266
Birmingham, AL 35202
(800) 327-1303
Website : www.empiregeneral.com

First Colony Life Insurance Company

First Colony ratings
A.M. Best: A+
Standard and Poor's: AA-
Moody's: Aa3

First Colony Life Insurance Company
700 Main St.
Lynchburg, VA 24505
(888) 325-5433
Website : www.firstcolonylife.com

Genworth Life Insurance Company

Genworth Financial Ratings
A.M. Best: A+
Standard and Poor's: AA-
Moody's: Aa3

Genworth Life Insurance Company
700 Main St.
Lynchburg, VA 24505
(888) 325-5433
Website : www.genworth.com

Lincoln National Life Insurance Company

Financial Ratings for Lincoln National Life
A.M. Best: A+
Standard and Poor's: AA-
Moody's: Aa3
Fitch: AA

Lincoln National Life Insurance Company
1300 South Clinton Street
Fort Wayne, IN 46801
(800) 444-2363
Website : www.lfg.com

Midland National Life Insurance Company

Financial Ratings for Midland National Life
A.M. Best: A+
Standard and Poor's: AA
Weiss: A-

Midland National Life Insurance Company
1 Midland Plaza
Sioux Falls, SD 57193
(605) 335-5700
Website : www.mnlife.com

North American Company for Life and Health

Financial ratings for North American Company
A.M. Best: A
Fitch: AA-
Standard and Poor's: AA

North American Company for Life and Health
222 S. Riverside Plaza
Chicago, IL 60690
(800) 800-3656
Website : www.nacolah.com

Ohio National Life Assurance Corporation

Financial ratings for Ohio National Financial
A.M. Best: A+
Fitch: A
Moody's: A1
Standard and Poor's: AA

Ohio National Life Assurance Corporation
P.O. Box 237
Cincinnati, OH 45201
(800) 366-6654
Website : www.ohionatl.com

Protective Life Insurance Company

Financial ratings for Protective Life Insurance
A.M. Best: A+
Fitc: AA-
Standard and Poor's: AA
Moody's: Aa3

Protective Life Insurance Company
P.O. Box 2606
Birmingham, AL 35202
(800) 866-3555
Website : www.protective.com

Pruco Life Insurance Company

Financial ratings for Pruco Life
A.M. Best: A+
Fitch: AA-
Moody's: Aa3
Standard and Poor's: AA-

Pruco Life Insurance Company
213 Washington St.
Newark, NJ 07102
(800) 778-2255
Website : www.prudential.com

ReliaStar Life Insurance Company

Financial ratings for Reliastar
A.M. Best: A+
Fitch: AA
Moody's: Aa3
Standard and Poor's: AA

ReliaStar Life Insurance Company
20 Washington Avenue South
Minneapolis, MN 55401
(877) 886-5050
Website : www.ing-usa.com

USAA Life Insurance Company

Financial ratings for USAA Life
A.M. Best: A++
Moody's: Aa1
Standard and Poor's: AAA

USAA Life Insurance Company
P.O. Box 659464
San Antonio, TX 78265
(800) 365-8722
Website : www.usaa.com

West Coast Life Insurance Company

Financial Ratings for West Coast Life
A.M. Best: A+
Fitch: AA-
Moody's: Aa3
Standard and Poor's: AA

West Coast Life Insurance Company
343 Sansome St.
San Francisco, CA 94104
(800) 366-9378
Website : www.westcoastlife.com

Fidelity Life Association

Fidelity and Guaranty Ratings
A.M. Best: A
Fitch: A-
Moody's: A3

Fidelity Life Association
1211 W. 22nd Street, Suite 209
Oak Brook, IL 60523
(630) 522-0392
Website : www.fidelitylife.com

Golden Rule Insurance Company

Golden Rule Ratings
A.M. Best: A
Standard and Poor's: A+

Golden Rule Insurance Company
7440 Woodland Drive
Indianapolis, IN 46278
(800) 275-5101
Website : www.goldenrule.com

Jackson National Life Insurance Company

Financial Ratings for Jackson National Life
A.M. Best: A+
Fitch: AA
Moody's: A1
Standard and Poor's: AA


Jackson National Life Insurance Company
1 Corporate Way Lansing, MI 48951
(800) 644-4565
Website : www.jnl.com

John Hancock Life Insurance Company

Financial ratings for John Hancock
A.M. Best: A++
Fitch: AA+
Standard and Poor's: AA+
Moody's: Aa2

John Hancock Life Insurance Company
P.O. Box 111
John Hancock Place
Boston, MA 02117
(800) 695-7389
Website : www.johnhancock.com

MONY Life Insurance Company of America

Financial ratings for MONY Life
A.M. Best: A
Duff & Phelps: AA-

MONY Life Insurance Company of America
1740 Broadway - M.D. 8-27
New York, NY 10019
(866) 262-6669
Website : www.mony.com

Old Republic Life Insurance Company

Financial ratings for Old Republic Life
Demotech: A"
Fitch: AA-
Standard and Poor's: AA-
Moody's: A1

Old Republic Life Insurance Company
307 North Michigan Avenue #1118
Chicago, IL 60601
NO CONSUMER LINE - SEE YOUR AGENT
Website : www.oldrepublic.com

The Penn Mutual Life Insurance Company

Financial ratings for The Penn Mutual Life
A.M. Best: A+
Fitch: AA-
Standard and Poor's: AA-
Moody's: Aa3

The Penn Mutual Life Insurance Company
600 Dresher Road
Horsham, PA 19044
(800) 523-0650
Website : www.pennmutual.com

Metropolitan Life Insurance Company

Financial ratings for Metropolitan Life Insurance Company
A.M. Best: A+
Fitch: AA
Moody's: Aa2
Standard and Poor's: AA

Metropolitan Life Insurance Company
MetLife Brokerage
440 US Highway 22
Bridgewater, NJ 08807
(800) 638-5433
Website : www.metlife.com

The Northwestern Mutual Life Insurance Company

Financial ratings for Northwestern Mutual
A.M. Best: A++
Fitch: AAA
Moody's: Aaa
Standard and Poor's: AAA

The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 3202-4797
(414) 271-1444
Website : www.nmfn.com

Sun Life Assurance Company of Canada

Financial ratings for Sun Life Assurance
A.M. Best: A++
Fitch: A+
Moody's: Aa2
Standard and Poor's: AA+

Sun Life Assurance Company of Canada
One Sun Life Executive Park
Wellesley Hills, MA 02181
(800) 786-5433
Website : www.sunlife-usa.com

Transamerica Occidental Life Insurance

Financial ratings for TransaAmerica
A.M. Best: A+
Fitch: AA+
Moody's: Aa3
Standard and Poor's: AA

Transamerica Occidental Life Insurance
4333 Edgewood Road N.E.
Cedar Rapids, IA 52499
(213) 742-2111
Website : www.transamerica.com

The Travelers Insurance Company

Financial Ratings for Travelers Life and Annuity
A.M. Best: A+
Fitch: AA
Moody's: Aa2
Standard and Poor's: AA

The Travelers Insurance Company
One Tower Square
Hartford, CT 06183
(860) 277-0111
Website : www.travelers.com

Western-Southern Life Assurance Company

Financial ratings for Western Southern Life
A.M. Best: A++
Fitch: AA+
Standard and Poor's: AA+

Western-Southern Life Assurance Company
400 Broadway
Cincinnati, OH 45202
(866) 832-7719
Website : www.westernsouthernlife.com

Holocaust Insurance Case Inches Closer to Settlement

A federal judge on Monday cleared the way for a long-running dispute over unpaid life insurance claims for Holocaust victims to move a step closer to a settlement. But opponents said they would keep trying to block the settlement, which, they argued, would benefit only a small number of those with potential claims.

The settlement would provide perhaps $50 million to Holocaust victims and their families — $35 million has already been paid — with some people receiving payments as small as $1,000. Though insurers have paid claims, opponents say that most of the hundreds of thousands of policyholders have received nothing and that billions of dollars are at stake.

By early last year, lawsuits against about 20 European insurance companies had been dropped or settled in a dispute that began more than a decade ago. And lawyers for some policyholders and the last of the companies, Assicurazioni Generali of Italy, said they were ready to settle.

In February, Judge George B. Daniels of Federal District Court in Manhattan approved the settlement. But a three-judge panel of the United States Court of Appeals for the Second Circuit agreed with Samuel J. Dubbin, a Miami lawyer leading the opposition, that many people with a potential interest had not been sufficiently notified of the pending settlement.

In court Monday, Judge Daniels said that by sending out more than 50,000 letters late last year, lawyers backing the settlement had overcome the objections, and he reaffirmed his earlier finding that the settlement was fair. The case now returns to the appeals court.

Robert A. Swift, a lawyer in Philadelphia who helped negotiate the settlement, told the court Monday that the agreement was a compromise. Mr. Swift, who said earlier that he had gotten the best deal he could, expressed skepticism about estimates that the unpaid claims were in the billions of dollars.

Mr. Swift had said he had little alternative but to agree to the settlement. A Supreme CourtMichael B. Mukasey, now attorney general of the United States, cited the Supreme Court decision in dismissing a class-action suit that Mr. Swift and others had pursued against Generali. ruling several years ago limited the ability of Holocaust victims in the United States to pursue European companies, and Judge

Mr. Dubbin holds out hope that an appeals court may overturn the Mukasey decision. And Congress is considering legislation that would strengthen the efforts of Mr. Dubbin and others against the insurance companies.

One of Mr. Dubbin’s goals has been to get the insurers to publish the names of Holocaust-era policyholders so that families who lost everything, including insurance documents, would know if they had the basis for a claim. Generali has refused to publish the names and says it has limited records for the Holocaust era.

In court Monday, Mr. Dubbin said he had evidence suggesting more information than the insurer had disclosed. He argued against approving the settlement in hopes of establishing proof of coverage that could yield higher payments. Marco E. Schnabl, a lawyer for Generali, said the insurer had disclosed “everything we have that reasonably could be connected to the Holocaust.”

Judge Daniels said it was unlikely that further inquiry would yield larger awards to policyholders and that it was not reasonable to further delay payouts to those agreeing to the settlement on speculation that the Mukasey decision might be overturned or that Congress would act.

“This may likely be the last best hope for substantial recovery,” Judge Daniels said. ( Joseph B. Treaster - January 8, 2008 - nytimes.com )

MetLife and Prudential Post Lower Profits

The life insurance companies MetLife and Prudential Financial said on Wednesday that profits fell in the fourth quarter, hurt by investment losses and, in MetLife’s case, comparison with a large investment gain a year ago.

New York-based MetLife reported net income of $1.08 billion, or $1.44 a share, down from $3.83 billion, or $4.95 a share, in the year-earlier quarter, when the insurer recorded a $3 billion gain from its sale of two Manhattan apartment complexes.

Quarterly operating earnings, excluding some gains and losses and the most common performance measure used by analysts, rose to $1.2 billion, or $1.60 a share, compared with $1 billion, or $1.36 a share, in the previous period, the company said. Revenue rose 7.6 percent, to $13.83 billion.

Analysts on average had expected the life and health insurer, with a market capitalization of more than $44 billion, to post a profit equal to $1.43 a share on revenue of $13.79 billion, according to Reuters Estimates.

In December, MetLife said it expected operating profit of $1.40 to $1.45 a share for the fourth quarter and $5.90 to $6.20 for 2008.

In the quarter, MetLife recorded net realized after-tax investment losses of $182 million, including $49 million in credit-related losses.

Investment losses also took a bite out of rival Prudential’s results.

The company, based in Newark, reported an 11 percent drop in net income to $792 million, or $1.75 a share, from $893 million, or $1.88 a share, in the year earlier quarter.

Analysts had on average expected net income of $1.88 a share, according to Reuters Estimates. ( February 7, 2008 - nytimes.com )

US Military Kin Struggle With Loss and a Windfall

For some relatives of service members killed in Iraq and Afghanistan, the money feels, at first, like an affront, as if the government were putting a price tag on a loved one’s life. Others are thrown off balance by the sudden infusion of $500,000, spending with abandon to assuage grief or finding themselves besieged by hard-up friends and relatives. And the newfound wealth often strains relations among in-laws.

Three years ago, advocates for military families succeeded in winning a significant expansion in survivor benefits, which include life insurance, a death gratuity, medical care and housing and education assistance. But the increases have left some widows and next of kin clearly rattled by the collision of mourning and money.

“It’s like winning the lottery, and your relatives all look at you like you’re a cash cow,” said Kathleen B. Moakler, director of government relations for the National Military Family Association, a nonprofit advocacy organization. “Money makes people do strange things.”

The parents of Sgt. Eli Parker of the Marines, killed by a roadside bomb in Iraq, used the $500,000 to finance their retirement, remodel their house near Syracuse and travel to Washington for the Marine Corps Marathon. After Sgt. Dominic J. Sacco of the Army was killed three years ago by an insurgent attack on his tank, his widow, Brandy, fielded requests for cash from family members she had not talked to for years — as well as from her husband’s ex-wife and a woman in prison who claimed that Sergeant Sacco had fathered her son.

Kayla Avery, whose husband was killed seven months after their West Point wedding, invested most of the payout, but not before buying new bedroom furniture, a Louis Vuitton wallet and a purple Coach bag to match her funeral clothes.

“I thought, ‘Well, this is my husband’s last Christmas gift to me,’ ” said Ms. Avery, 25, a graduate student in psychology who lives in Tennessee, near Fort Campbell, where her husband, First Lt. Garrison C. Avery, was an Army platoon leader.

It is impossible to know how many survivors of the service members killed in Iraq and Afghanistan have struggled with managing the benefits, and in interviews with dozens of military families, only a handful were willing to talk specifically about how they spent the money. Many families use the money to secure children’s futures, pay off mortgages, or otherwise make up for a long-term loss of income. But experts on military families say that they are seeing a growing number of problems, and that young widows — often naïve about finance and easily seduced by the glamorous accouterments of pop culture — seem to be especially vulnerable, trying to somehow fill emotional gaps with material things and ending up in debt instead.

“When you face sudden death, and the death of someone your own age, you think, ‘I could die, too,’ ” said Joanne M. Steen, co-author of “Military Widow: A Survival Guide” (U.S. Naval Institute Press, 2006). “All of a sudden you get hundreds of thousands of dollars, and there’s a perception that it’s going to last forever, but it doesn’t. You’re dealing with some really tumultuous emotions and unclear thinking.”

In 2005, the so-called death gratuity — the sum given to survivors for an active-duty death — jumped to $100,000 from $12,420, and the military’s group life insurance maximum rose to $400,000 from $250,000. Both are retroactive to October 2001, covering the nearly 4,500 service members who have been killed in the Iraq and Afghanistan wars since.

There are myriad other survivor benefits, too, many determined by specific circumstances. Joyce Wessel Raezer, chief operating officer of the National Military Family Association, said that a hypothetical widow of an Army corporal based at Fort Drum, in upstate New York, with three years of service and two young children would likely receive payments totaling $5,335 a month for the first year. In addition, a spouse would get free medical care for three years — the children into adulthood — and all would receive education assistance.

Through private companies, the Department of Veterans Affairs provides insurance beneficiaries the service of a professional financial planner for a year, but a spokesman said that only one in 10 families uses it.

Bill Saunders, director of client services for the Armed Forces Services Corporation, a private firm based in Arlington, Va., that offers military families advice on such issues, said that survivors are often overwhelmed by grief when they learn of the availability of financial advice, and that the military would do well to remind them after a few months.

“The money all shows up in their accounts within days or weeks, where there might have been $500 in there — ever,” Mr. Saunders said, referring to the lump sum of $500,000. “Many of these surviving spouses are young, which means they’ve never done any kind of money management or investing. So it’s completely foreign to them. It’s like saying, ‘Hey, would you like me to teach you Russian tomorrow? Come down to my office.’ And they don’t show.”

Ms. Avery, the widow who bought furniture and a purse — but not the BMW she coveted — credited her financial adviser with pushing long-term investment, but said she knows some widows who are now destitute.

“I do know that there have been widows who used all the money by paying cash for a house and paying cash for a car,” she said. “If they pay cash for a McMansion, they may not think about all the incidentals like heat and water and phone and cable and taxes and furniture.”

One widowed acquaintance, whom Ms. Avery declined to identify to protect her privacy, ended up applying to the Army for an emergency relief loan after blowing through the $500,000. “You have to have nothing — like the electricity has to be getting turned off” to qualify for such a loan, Ms. Avery said. “In grief, you’re in such a state of shock that you don’t take into account that you won’t have your husband’s salary in six months.”

Mr. Saunders said that a widow called his office in January wondering if there were any more monthly benefits she was entitled to (there were not). She had apparently spent the initial lump sum without buying a house or making investments.

“I said, ‘In that case, there’s not much more your government can do for you,’ ” recalled Mr. Saunders.

As they decide what to do with the money, survivors are often surrounded by people with their hands out.

“It wasn’t even two weeks after I had buried Nick, and I had people asking me for money,” recalled Mrs. Sacco, a 26-year-old nursing student who now lives in Topeka, Kan., with her two children. “There were quote-unquote friends whom I hadn’t seen in a long time who wanted to come and support me, but what they really wanted was money. It was pathetic.”

Though Sergeant Sacco’s ex-wife’s attempt to get benefits was unsuccessful, many survivors find themselves fighting over the military’s money with other family members, and rifts often develop between the late service member’s spouse and parents.

Rachelle Arroyave, 32, who lives in northern California, learned after the 2004 death of her husband, Staff Sgt. Jimmy Javier Arroyave of the Marines, that his mother was the life insurance beneficiary, even though the couple had two children and a baby on the way. Sergeant Arroyave’s mother got $400,000, while his wife received $100,000 from the death gratuity.

“I never thought to ask, and I take responsibility for not making sure,” said Mrs. Arroyave, whose children are now 10, 6 and 3. “But it was my husband. Why wouldn’t he take care of his wife and children? We had our whole lives planned out as to where we were going to retire and grow old together.”

Research databases did not turn up a current home telephone number for Sergeant Arroyave’s mother, and efforts to reach her through relatives were unsuccessful.Because of such situations, in 2005 the military began notifying spouses when service members choose someone other than a spouse or a child as their insurance beneficiaries or if the member declines the maximum coverage. This summer, as the law changes to allow service members to designate the entire death gratuity to whomever they wish, the military will require a similar spousal notification (now, half the $100,000 gratuity must go to the next of kin).

But the hurt and awkwardness can cut both ways. Debra vonRonn, whose son, Sgt. Kenneth G. vonRonn of the Army, died in a bomb explosion in Iraq in 2005, said she felt the military heaped a disproportionate amount of attention on her daughter-in-law, who received the official notification of death and was provided a car and driver for the funeral.

“They were married for one year, but I had him for 20 years,” Mrs. vonRonn said. “I understand that the spouse comes first, but they really need to pay a little more attention to the families. What about the parents? What about the sisters?”

Regardless of who gets the money or how it is spent, the initial reaction to the death gratuity can be viscerally negative. As Ms. Steen, a Navy widow herself, wrote in her survivor’s guide: “Some feel like they were paid off for their husband’s life.”

When Karie Darga’s husband of 12 years, Chief Petty Officer Paul J. Darga, was killed in 2006 on his fourth tour in the Middle East, she received the first $100,000 within the first few days.

“My casualty assistance officer handed me the check and I wanted to tear it up and throw it right back at him,” recalled Mrs. Darga, who lives in Norfolk, Va. “It was almost like accepting the money meant truly acknowledging that the death had happened.”

But Donna and Renny Parker, the upstate New York couple who remodeled their house, among other things, with the survivor benefits after their son was killed, said it has “been a positive thing.”

“I don’t think it’s blood money,” Ms. Parker said. “I just wish Eli was here to enjoy it.” ( March 22, 2008 - nytimes.com )

It’s never too late to Buy Life Insurance

No matter how old you are, you can always purchase a life insurance policy if need be. Of course, the older you get the more money you are going to have to pay. The reason for this is that life insurance companies see you as a higher risk as your age increases. With that being said, you can look into several ways of keeping your premium down even if you are getting up there in age.

As you can imagine, your best bet is to purchase life insurance when you are young. Most people decide to do this when they get married for the first time or have children. This way they can not only buy when they are young, but they can also make sure that their family will be in good financial shape should they pass away.

It is not always easy to purchase life insurance at a young age though. If you are older and need to buy a policy, you will want to shop around by speaking with more than one company. This will show you which ones offer low prices for older individuals. The better your health, regardless of your age, the better chance you have of obtaining a low and reasonable price.

You should never feel as if it is too late to buy life insurance. Sure, you may pay more when you are older, but if you need insurance you will want to buy it without delay. ( 2insure4less.com )

Everyone Can Find Affordable Life Insurance Rates: Even Smokers

Smokers are often under the impression that they can’t find affordable life insurance coverage. With 21% of the US population smoking, or about 45 million adult smokers in 2005, there is a need for life insurance companies to provide affordable rates to smokers.

Although smokers indeed pay more for term life insurance, there is generally a unique policy for almost every budget, every lifestyle, and every stage of life. The need for comparison shopping for the best policy is critical; as underwriting criteria and rates for smokers can differ drastically from company to company.

Who is Considered A Smoker? Insurance companies classify smokers differently based on their tobacco consumption. Some companies differentiate between moderate and heavy usage, and charge moderate users less.

Other companies use the classification of “standard” or “preferred” tobacco users, where smokers will generally fall into the preferred category if they smoke but are otherwise healthy with regard to their weight, blood pressure, and cholesterol.

Your Life Insurance Rates if You Quit Smoking
Those who recently quit smoking may qualify for non-smoker rates, depending on the insurer’s guidelines for how long a consumer must be tobacco-free. There are policies that offer graduated scales, with rates that drop the longer a person remains tobacco-free — sometimes reaching non-smoking rates in the course of a year.

Applying for Term Life Insurance
The process of applying for a term life insurance policy generally requires a medical examination that verifies the information provided by the applicant (height, weight, blood pressure, etc.). In order to identify tobacco users, most insurance companies administer a test that measures their body’s level of cotidine, a byproduct of nicotine, in their urine or saliva.

Nearly everyone can find affordable term life insurance rates when paired up with the right company — even smokers. Nearly a quarter of the US adult population smokes, creating a significant market for life insurance companies to offer competitive term life insurance products.

5 Ways to Save on Life Insurance

1. Buy When You're Young
Secure as much protection at a young age. Buying life insurance coverage while you’re young and your health is still good could help you save money on life insurance.

2. Select The Right Length Of Coverage
Everyone has different needs, and not one size fits all when it comes to term life insurance. While it may make sense for people in their 30s and 40s to secure a 20-year term length, a 10-year term might be more appropriate for someone nearing retirement.

3. Check For Price Breaks
Companies often offer “price breaks” at certain coverage amounts, e.g., $250,000 vs. $225,000. The truth is that many people can actually pay less money for more coverage. Check how little your prices increase when you increase coverage to $250,000, $500,000, or $1,000,000.

4. Buy The Right Amount Of Coverage
Many agents may try to sell you more coverage than you need. Independent financial planners recommend purchasing an amount of coverage equal to 6-10 times your annual gross income.

5. Review Your Policy Often
Conduct a review of your life insurance policy at least every three years, if not more often. Rates may be lower, and your circumstances may have changed, necessitating more or less protection. (blog.insweb.com )

How much life insurance do i need ?

In most cases, if you have no dependents and have enough money to pay your final expenses, you don’t need any life insurance.If you want to create an inheritance or make a charitable contribution, buy enough life insurance to achieve those goals.
If you have dependents, buy enough life insurance so that, when combined with other sources of income, it will replace the income you now generate for them, plus enough to offset any additional expenses they will incur to replace services you provide (for a simple example, if you do your own taxes, the survivors might have to hire a professional tax preparer). Also, your family might need extra money to make some changes after you die. For example, they may want to relocate, or your spouse may need to go back to school to be in a better position to help support the family.

You should also plan to replace “hidden income” that would be lost at death. Hidden income is income that you receive through your employment but that isn’t part of your gross wages. It includes things like your employer’s subsidy of your health insurance premium, the matching contribution to your 401(k) plan, and many other “perks,” large and small. This is an often-overlooked insurance need: the cost of replacing just your health insurance and retirement contributions could be the equivalent of $2,000 per month or more.

Of course, you should also plan for expenses that arise at death. These include the funeral costs, taxes and administrative costs associated with “winding up” an estate and passing property to heirs. At a minimum, plan for $15,000.

Other sources of income

Most families have some sources of post-death income besides life insurance. The most common source is Social Security survivors’ benefits.

Social Security survivors’ benefits can be substantial. For example, for a 35-year-old person who was earning a $36,000 salary at death, maximum Social Security survivors’ monthly income benefits for a spouse and two children under age 18 could be about $2,400 per month, and this amount would increase each year to match inflation. (It drops slightly when the survivors are a spouse and one child under 18, and stops completely when there are no children under 18. Also, the surviving spouse’s benefit would be reduced if he or she earns income over a certain limit.)

Many also have life insurance through an employer plan, and some from another affiliation, such as through an association they belong to or a credit card. If you have a vested pension benefit, it might have a death component. Although these sources might provide a lot of income, they rarely provide enough. And it probably isn’t wise to count on death benefits that are connected with a particular job, since you might die after switching to a different job, or while you are unemployed.

A multiple of salary?

Many pundits recommend buying life insurance equal to a multiple of your salary. For example, one financial advice columnist recommends buying insurance equal to 20 times your salary before taxes. She chose 20 because, if the benefit is invested in bonds that pay 5 percent interest, it would produce an amount equal to your salary at death, so the survivors could live off the interest and wouldn’t have to “invade” the principal.

However, this simplistic formula implicitly assumes no inflation and assumes that one could assemble a bond portfolio that, after expenses, would provide a 5 percent interest stream every year. But assuming inflation is 3 percent per year, the purchasing power of a gross income of $50,000 would drop to about $38,300 in the 10th year. To avoid this income drop-off, the survivors would have to “invade” the principal each year. And if they did, they would run out of money in the 16th year.

The “multiple of salary” approach also ignores other sources of income, such as those mentioned previously.

A simple example

Suppose a surviving spouse didn’t work and had two children, ages 4 and 1, in her care. Suppose her deceased husband earned $36,000 at death and was covered by Social Security but had no other death benefits or life insurance. Assume the surviving spouse is 36.

Assume that the deceased spent $6,000 from income on his own living expenses and the cost of working. Assume, for simplicity, that the deceased performed services for the family (such as property maintenance, income tax and other financial management, and occasional child care) for which the survivors will need to pay $6,000 per year. Assume that the survivors will have to buy health insurance to replace the coverage the deceased had at work, and that this will cost $12,000 per year.

Taken together, the survivors will need to replace the equivalent of $48,000 of income, adjusted each year for an assumed 4 percent inflation.

Thanks to Social Security, the survivors would need life insurance to replace only about $1,700 per month of lost wage income (adjusted for inflation) for 14 years until the older child reaches 18; Social Security would provide the rest. The survivors would need life insurance to replace about $2,100 per month (adjusted for inflation) for three more years when the non-working surviving spouse has only one child under 18 in her care.

The life insurance amount needed today to provide the $1,700 and $2,100 monthly amounts is roughly $360,000. Adding $15,000 for funeral and other final expenses brings the minimum life insurance needed for the example to $375,000.

What’s left out?

The example leaves out some potentially significant unmet financial needs, such as

* The surviving spouse will have no income from Social Security from age 53 until 60 unless the deceased buys additional life insurance to cover this period. It could be assumed that the surviving spouse will obtain a job at or before this time, but she could also become disabled or otherwise unable to work. If life insurance were bought for this period, the additional amount of insurance needed would be about $335,000.

* Some people like to plan to use life insurance to pay off the home mortgage at the primary income earner’s death, so that the survivors are less likely to face the threat of losing their home. If life insurance were bought for this goal, the additional amount of insurance needed is the amount of the unpaid balance on the mortgage.

* Some people like to provide money to pay to send their children to college out of their life insurance. We may assume that each child will attend a public college for four years and will need $15,000 per year. However, college costs have been rising faster than inflation for many decades, and this trend is unlikely to slow down. If life insurance were bought for this goal, the additional amount of insurance needed would be about $200,000.

* In the example, no money is planned for the surviving spouse’s retirement, except for what the spouse would be entitled to receive from Social Security (about $1,200 per month). It could be assumed that the surviving spouse will obtain a job and will either participate in an employer’s retirement plan or save with an IRA, but she could also become disabled or otherwise unable to work. If life insurance were bought to provide the equivalent of $4000 per month starting at age 60 until 65 and $3,000 per month from 65 on (because at 65 Medicare will make carrying private health insurance unnecessary), the additional amount of insurance needed would be about $465,000. ( iii.org )

Examining a policy

How do I know if a life insurance policy is right for me?

Read the policy carefully to make sure it meets your personal goals. Because your policy is a legal document, it’s important that you understand exactly what it provides. Ask for a point-by-point explanation for anything that is unclear and make sure the agent explains items you don’t understand.

If your agent recommends a cash value policy, ask:

• Are the premiums within my budget?
• Can I commit to these premiums over the long term?

Cash value insurance provides protection for your entire life. Cancelling a cash value policy after only a few years can be a costly way to get short-term insurance protection. If you don’t plan to keep the policy for the long-term, consider another kind of coverage such as term insurance.

If you’re considering a term policy, ask:

• How long can I keep this policy? If I want to renew it for a specific number of years, or until a certain age, what are the renewal terms?
• Will my premiums increase? If so, will increases start annually or after five or 10 years?
• Can I convert to a cash value policy? Will I need a medical exam if and when I convert?
• If it has a return of premium benefit, ask: What would the policy cost without this benefit? Will all of the premiums be refunded?

Is a policy illustration a legal document, like a contract?

A policy illustration is not part of the life insurance policy and is not a legal document. Legal obligations are spelled out in the policy contract. A policy illustration, however, can help you understand how a policy works.

What is in a policy illustration?

A policy illustration shows financial projections for each year you own the policy—including, but not limited to, premium amounts owed, cash values, and death benefits. For a term policy, the projections extend to the end of the term. With a cash value policy, projections extend past your 100th birthday.

Your actual costs and benefits could be higher or lower than those in the illustration because they depend on the future financial results of the insurance company. However, when figures are guaranteed, the insurance company will honor them regardless of its financial success. Ask your agent which figures are guaranteed and which are not.

A policy illustration can be complicated. Your agent or financial advisor can explain information you don’t understand.

What should I look for in a policy illustration?

Study the policy illustration to answer the following:

• Is my classification (i.e., smoker/nonsmoker, male/ female) correct?
• When are premiums due—monthly, annually, or according to some other schedule?
• What amounts are guaranteed and which are not?
• Does the policy have a guaranteed death benefit or could the death benefit change depending on interest rates or other factors?
• Does the policy offer dividends or interest credits that could increase my cash value and death benefit or reduce my premium?
• Will my premiums always be the same? Could premiums increase if future interest rates or investment returns are lower than the illustration assumes?
• If the illustration shows that I won’t have to make premium payments after a certain period of time, is there any chance I would have to start making payments again at any time in the future? ( pueblo.gsa.gov )
  

( http://www.pueblo.gsa.gov/ )

Working with an agent

What should an agent do for me?

The agent should be able and willing to explain the different kinds of policies and other insurance-related matters. You should feel satisfied that the agent is listening to you and looking for ways to find the right type of insurance at an affordable price. After a purchase, your agent also should review your life insurance needs from time to time and as your circumstances change as well as help in the claims process. If you’re not comfortable with the agent, or you aren’t convinced he or she is providing the service you want, interview another agent.

What should I expect during my meeting with an agent?

An agent will begin by discussing your financial needs. You should have basic personal financial information available—along with a general idea of your goals— before you meet or talk with an agent. He or she will ask questions about your family income, other financial resources you might have, and any debts. With the information you provide, the agent will be better able to assess your needs.

What types of questions will I be asked?

In addition to questions about finances, be prepared to answer questions about your age, medical condition, family medical history, personal habits, occupation, and recreational activities.

Always answer questions truthfully; a company will use this information to evaluate your risk and set a premium for your coverage. For instance, you’ll pay a lower premium if you don’t smoke; on the other hand, if you have a chronic illness, you can expect a higher premium. When it’s time to submit a claim, accurate and truthful answers will enable your beneficiary to receive prompt and full payment.

When you apply for life insurance, you may be asked to take a medical exam. In many instances, a licensed health care professional hired and paid for by the life insurance company will make a personal visit to your home to conduct the exam. ( pueblo.gsa.gov )

Should I buy life insurance on my child’s life?

The main reason for buying life insurance on anyone’s life is to replace income “lost” or pay for expenses caused by the death of the insured person. If your child dies, there’s no lost income, but there will be funeral, burial and related expenses that could run to thousands of dollars, which might cause a financial hardship to the parents of the deceased child. Another reason for buying life insurance on a child’s life is to guard against the possibility that, when the child is older, he or she might not be able to buy life insurance because of intervening illness or other circumstance. Still another reason for buying life insurance on a child’s life is part of a program to teach the child financial responsibility. Typically the insurance is whole life insurance, ownership of which is transferred to the child when he or she turns 21. Most insurance advisors recommend that families spend their insurance budget to buy life and disability income insurance on the parents first, before considering insurance on children’s lives. Death of a parent, particularly an income-earner, could have financial consequences that are devastating compared to the financial effects from a child’s death. ( iii.org )

Choosing a company or agent

You can buy life insurance at an insurance agency, brokerage firm, bank, or directly from a life insurance company on the Internet, over the phone, or by mail. Most companies have Web sites describing their products and services and some will direct you to a local agent.

How do I choose a company?

Contact your state insurance department for a list of companies licensed in your state, then:

• Ask friends and relatives for recommendations based on their own experiences.
• Talk to an insurance agent or broker.
• Conduct an Internet search.
• Research companies at a public library.

Generally speaking, life insurers are in excellent financial health. They’re required by law to maintain reserves to guarantee that they can meet obligations to their policyholders. However, you should still verify a company’s financial strength.

You can check any company’s financial condition by looking at its rating. Rating agencies, including A.M. Best Company, Fitch Ratings, Moody’s Investor Services, Standard and Poor’s Insurance Rating Service, and Weiss Ratings, assess the financial strength of companies. Rating information is available online or in publications usually found in the business section of your public library.

How do I choose an agent?

Collect the names of several agents through recommendations from friends, family, and other sources. Find out if an agent is licensed in your state by checking with your state’s insurance department. Agents who sell variable products also must be registered with the Financial Institutions Regulatory Authority, FINRA (formerly the National Association of Securities Dealers), and have an additional state license to sell variable contracts.

Ask what company or companies the agent represents and check his or her professional accreditations. Agents often belong to professional associations that offer continuing education and grant professional credentials. The National Association of Insurance and Financial Advisors offers local educational seminars for agents. The Society of Financial Service Professionals and the Financial Planning Association offer similar training for financial planners. Agents may earn such professional designations as Chartered Life Underwriter (CLU) and Life Underwriter Training Council Fellow (LUTCF). Agents who also are financial planners may carry such credentials as Chartered Financial Consultant (ChFC), Certified Financial Planner (CFP), or Personal Financial Specialist (CPA–PFS). ( pueblo.gsa.gov )

Why should I buy life insurance?

Many financial experts consider life insurance to be the cornerstone of sound financial planning. It can be an important tool in the following situations: Replace income for dependents If people depend on your income, life insurance can replace that income for them if you die. The most commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, siblings or adult children who continue to rely on you financially. Insurance to replace your income can be especially useful if the government- or employer-sponsored benefits of your surviving spouse or domestic partner will be reduced after your death. Pay final expenses Life insurance can pay your funeral and burial costs, probate and other estate administration costs, debts and medical expenses not covered by health insurance. Create an inheritance for your heirs Even if you have no other assets to pass to your heirs, you can create an inheritance by buying a life insurance policy and naming them as beneficiaries. Pay federal “death” taxes and state “death” taxes Life insurance benefits can pay estate taxes so that your heirs will not have to liquidate other assets or take a smaller inheritance. Changes in the federal “death” tax rules between now and January 1, 2011 will likely lessen the impact of this tax on some people, but some states are offsetting those federal decreases with increases in their state-level “death” taxes. Make significant charitable contributions By making a charity the beneficiary of your life insurance, you can make a much larger contribution than if you donated the cash equivalent of the policy’s premiums. Create a source of savings Some types of life insurance create a cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the owner’s request. Since most people make paying their life insurance policy premiums a high priority, buying a cash-value type policy can create a kind of “forced” savings plan. Furthermore, the interest credited is tax deferred (and tax exempt if the money is paid as a death claim). ( iii.org )

What You Should Know When Buying

Consumer tips

• To locate an insurance professional, seek recommendations from friends and professionals such as lawyers and accountants. Ask about this person's experience and background, and make sure he or she specializes in the advice and products you need. Once you have decided on an individual, be sure to provide that person with all relevant financial information.
• While you shouldn't put off an important decision that would provide protection for your family, take the time to make sure you fully understand any policy you are considering. You should be comfortable with the company, agent and product before purchasing anything.
• Be sure the insurance agent gives you choices and options before you make a final decision.
• Review the copy of your application contained in your policy. Promptly notify your insurance agent or company of any errors or missing information.
• After you have purchased an insurance policy, keep in mind that you may have a "free-look" period, usually 10 to 30 days after you receive the policy, during which you can change your mind. Read your policy carefully during this time. If you decide not to keep it, the company will cancel the policy and provide an appropriate refund.
• Review your policy periodically or when changes occur such as purchasing a home or having children. An insurance agent can help you make sure your coverage is always aligned with your needs.
• When you replace one policy with another you incur new costs and fees. That's why, generally speaking, it's in your best interest to keep a policy you already have and add on to your insurance protection, instead of replacing an existing policy. If you do decide to cancel a policy, contact the original an agent or company first to make sure you fully understand the financial ramifications.
• If you have a concern or complaint, start with your insurance agent who can often troubleshoot problems for you. If you're still dissatisfied, most state insurance departments have a consumer affairs division that handles complaints or you can contact your insurance company's customer service division.

The Types Of Life Insurance

There are two Types Of Life Insurance

Term

As the name implies, term insurance provides protection for a specific period of time and generally pays a benefit only if you die during the "term." Term periods typically range from one year to 30 years, with 20 years being the most common term.

One of the biggest advantages of term insurance is its lower initial cost in comparison to permanent insurance. Why is it cheaper when initially purchased? Because with term insurance, you're generally just paying for the death benefit, the lump sum payment your beneficiaries will receive if you die during the term of the policy. With most permanent policies, your premiums help fund the death benefit and can accumulate cash value.

Term insurance is often a good choice for people in their family-formation years, especially if they're on a tight budget, because it allows them to buy high levels of coverage when the need for protection is often greatest. Term insurance is also a good option for covering needs that will disappear in time. For instance, if paying for college is a major financial concern but you're pretty sure that you won't need life insurance coverage after the kids graduate, then it might make sense to buy a term policy that'll get you through the college years.

But what happens if you buy a term policy only to realize at the end of the term that you still have a need for life insurance? Well, it's sort of a good news, bad news story. The good news is that many policies will give you the option to renew your policy when you reach the end of the term. The bad news is that you'll probably face much higher costs since age is one of key factors used to determine life insurance premiums. To renew the policy, you also may have to present evidence of insurability (that's insurance jargon meaning, "take another medical exam and answer a new round of questions about your lifestyle, health status and family history"). If you're still a fine specimen with healthy living habits, you might requalify at a reasonable rate. But if your health has deteriorated, you may find that with continually increasing premiums it's too expensive to renew your policy or you may not even requalify.

So if you're considering a term policy, make sure you carefully consider how long you'll need the coverage. If you're pretty sure that your needs are temporary, then term insurance may be an excellent choice. But if you think there's a real possibility that you might need the coverage for a long time, then remember that if you want to renew your term policy after it expires or buy a new term policy at that time, your age, health status or other factors may make coverage very expensive.

To better understand term insurance, consider this analogy. When you purchase term insurance, it's sort of like renting a house. When you rent, you get the full and immediate use of the house and all that goes with it, but only for as long as you continue paying rent. As soon as your lease expires, you must leave. Even if you rented the house for 30 years, you have no "equity" or value that belongs to you.

One exception to this rule is what's called a return-of-premium term policy. With these policies, if you keep the policy in force for the entire term, say 20 years, the insurance company will refund the premium payments you made over that 20-year period. Of course, there is a price to be paid for this added benefit. The premiums for return-of-premium policies are considerably higher than premiums for standard term policies. The price difference can be 30%, 40% or more. Another factor to consider is that term insurance rates have dropped considerably over the past decade, mostly because people are living longer. If you own a standard term policy, there's really no harm done in dropping that policy in favor of a newer and cheaper term policy. But if you own a return-of-premium policy, dropping the policy before the full term has expired means that you will have paid a high price for your term insurance coverage and the premiums you paid won't be refunded.

When considering a term purchase, one thing to keep in mind is that not all term policies are the same. Some may include certain provisions as standard features, while others may require you to pay extra to add these features as "riders" to your policy. So if you're comparing term policies, remember that price is not the only factor to consider. Ask your agent about provisions such as accelerated death benefits, disability waiver of premium, and accidental death benefits.

Another provision that is very important is something called convertibility. This valuable feature is usually available in the first few years of the policy, and allows you to convert your term policy to a permanent policy (e.g., whole life insurance) without submitting evidence of insurability. Being able to convert to a permanent policy is a great option to have in the event that circumstances in your life change such as failing health or maybe just the realization that coverage is needed for a longer period of time than you originally anticipated. That's why when purchasing a term policy, it's never a bad idea to find out what kind of permanent policies are offered by the company you are considering. Some companies may only have strong term insurance offerings, while others may have very competitive products in both categories.

One final piece of advice. Here are some important questions to ask yourself when considering the purchase of a term policy:

• How long can I keep this policy?
• If I want the option to renew the policy for a specific number of years or until a certain age, what are the terms of renewal?
• When will my premiums increase? Annually? Or after a longer period of time, such as five, ten, or twenty years?
• Can I convert to a permanent policy? If so, how many years will this option be available to me and will I need a medical exam if I want to convert?

Permanent

Permanent insurance provides lifelong protection. As long as you pay the premiums, the death benefit will be paid. These policies are designed and priced for you to keep over a long period of time. So if you don't intend to keep the policy for the long term, this may be the wrong type of insurance for you.

Why would someone need coverage for an extended period of time? Because contrary to what a lot of people think, the need for life insurance often persists long after the kids have graduated college or the mortgage has been paid off. If you died the day after your youngest child graduated from college, your spouse would still be faced with daily living expenses. And what if your spouse outlives you by 10, 20 or even 30 years, which is certainly possible today. Would your financial plan, without life insurance, enable your spouse to maintain the lifestyle you worked so hard to achieve? And would you be able to pass on something to your children or grandchildren?

Another key characteristic of permanent insurance is a feature known as cash value or cash-surrender value. In fact, permanent insurance is often referred to as cash value insurance because these types of policies can build cash value over time, as well as provide a death benefit to your beneficiaries.

Cash values, which accumulate on a tax-deferred basis just like assets in most retirement and tuition savings plans, can be used in the future for any purpose you wish. If you like, you can borrow cash value for a down payment on a home, to help pay for your children's education or to provide income for your retirement. When you borrow money from a permanent insurance policy, you're using the policy's cash value as collateral and the borrowing rates tend to be relatively low. And unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions. You ultimately must repay any loan with interest or your beneficiaries will receive a reduced death benefit and cash surrender value.

If you need or want to stop paying premiums, you can use the cash value to continue your current insurance protection for a specified time or to provide a lesser amount of protection covering you for your lifetime. If you decide to stop paying premiums and surrender your policy, the guaranteed policy values are yours. Just know that if you surrender your policy in the early years, there may be little or no cash value.

With all types of permanent policies, the cash value of a policy is different from the policy's face amount. The face amount is the money that will be paid at death or policy maturity (most permanent policies typically "mature" around age 100). Cash value is the amount available if you surrender a policy before its maturity or your death. Moreover, the cash value may be affected by your insurance company's financial results or experience, which can be influenced by mortality rates, expenses, and investment earnings.

Types of Permanent Insurance

"Permanent insurance" is really a catchall phrase for a wide variety of life insurance products that contain the cash-value feature. Within this class of life insurance, there are a multitude of different products. Here we list the most common ones.

If you're the kind of person who likes premiums that will remain fixed and predictable over time, you may want to consider:

Whole life or ordinary life. This the most common type of permanent insurance. It provides you with the certainty of a guaranteed amount of death benefit and a guaranteed rate of return on your cash values. And you'll have a level premium that is guaranteed to never increase for life.

Another valuable benefit of a participating whole life insurance policy is the opportunity to earn dividends. While your policy's guarantees provide you with a minimum death benefit and cash value, dividends give you the opportunity to receive an enhanced death benefit and cash value growth. Dividends are a way for the company to share part of its favorable results with policyholders. When you purchase a participating policy, it is expected that you will receive dividends after the second policy year - but they are not guaranteed. Dividends, if left in the policy, can provide an offset (and more) to the eroding effects of inflation on your coverage amount.

Variable life. This type of insurance is offered via a prospectus and provides death benefits and cash values that vary with the performance of a portfolio of underlying investment options. You can allocate your premiums among a variety of investment options offering different degrees of risk and reward: stocks, bonds, combinations of both, or a fixed account that guarantees interest and principal. This type of insurance is for people who are willing to assume investment risk to try to achieve greater returns. With variable life you're shifting much of the investment risk from the insurance company to yourself. Good investment performance would provide the potential for higher cash values and ultimate death benefits. If the specified investments perform poorly, cash values and death benefits would drop accordingly.

While some people like the predictability of fixed premiums, others prefer adjustable premiums because they like having the option to make higher premium payments when they have extra cash on hand or lower ones when money is tight. If you find this kind of flexibility appealing, you may want to consider:

Universal life. This type of insurance allows you, after your initial payment, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You also can reduce or increase the death benefit more easily than under a traditional whole life policy. With universal life, you get the certainty of a guaranteed minimum amount of death benefit, as long as premiums are sufficient to sustain that death benefit. Any guarantee relies on the claims paying ability of the issuing insurance company. As such, do your homework and select a financially sound company. Most universal life policies will also provide a guaranteed rate of return on your cash values, with one important exception. It is possible that you will not accumulate any cash value if any, or all, of the following circumstances occur: administrative expenses increase, mortality assumptions are changed, the insurance company's investment portfolio underperforms, premium payments are insufficient.

Variable Universal Life. This type of insurance is similar to universal life. It is a flexible premium, permanent life insurance policy that allows you to have premium dollars allocated to a variety of investment options, including a fixed account. The policy generally provides income tax-free death benefit, has a cash value that grows tax-deferred, and is accessible through policy loans and/or withdrawals. Note that loans and withdrawals will reduce the death benefit by the outstanding loan amount plus any interest. The policy allows for increase or decrease of the policy coverage and premium changes to the life insurance benefit option. Some companies also give you the option to guarantee the death benefit with the Guaranteed Minimum Death Benefit Rider. Overall, variable universal life can be a good option for people who want to combine life insurance with a higher potential for investment return at a higher risk, of course. For more complete information, be sure to always request the appropriate product and fund prospectuses as they contain information you need to consider such as the investment objectives, risks, and charges and expenses of the investment.( life-line.org )