The Life Insurance Insider

New Look to the Garden State Website

noreply@blogger.com (Michael Musselman) — Mon, 24 Aug 2009 14:32:00 +0000

Garden State Life Insurance recently updated its website. Let me know what you think, how it looks, what it is missing, etc.

www.gardenstatelife.com

Michael, Garden State Life Insurance

Life Insurance Claim Denials

noreply@blogger.com (Michael Musselman) — Thu, 18 Jun 2009 13:44:00 +0000

This is one of the most misunderstood aspects of life insurance and a constant source of animosity and suspicion between consumers and life insurance companies. Consumers think that insurance companies are out to get them, steal their hard earned money for years and then deny their claims over a technicality when the time comes. This is one of those areas where the life insurance industry has failed to educate consumers on the denial process and the misunderstandings that have resulted have come back to hurt their image. In honor of open communication, let me try to take a step towards setting the record straight.

First of all, let's establish what claims a life insurance company can and can't deny. Most state laws prevent insurance companies from denying a claim two years after the policy has been inforce. The only exception to this is if the beneficiary is convicted for intentionally killing the insured and even then the benefits are usually still paid but just to someone else. Within that two year period the life insurance company can deny your claim if you misrepresented anything in the application or underwriting process or if you commit suicide. If you die from a pre-existing condition that they didn't ask about, that you didn't know about or that had never been diagnosed, then the insurance company will still pay.

Another check and balance in the claims process is that each state in the United States has a department of insurance that is there to enforce the laws of that state. These departments of insurance work for the residents of the state and they are there to protect your rights. If there was an evil company out there unfairly denying your benefits, then all you have to do is file a complaint with your department of insurance and they can arbitrate between you and the insurance company to make sure they are upholding the laws of the state and treating you fairly.

So the key to take away from all of this, is to just be honest. If you are honest and forthcoming during the life insurance application process, then you have nothing to worry about. If there is any doubt on an application, then I would recommend erring on the side of more information is better. For example, if they asked if you have used a nicotine product in the past 12 months and you smoked one cigar when you were at a poker party, then I would recommend saying "yes" and then explaining that you don't generally smoke, but you had one cigar at a poker party. Most companies will still treat you as a nonsmoker and you also don't worry about your claim getting denied because you lied about smoking.

Michael, Garden State Life Insurance

Spending habits during a recession

noreply@blogger.com (Kawika Maszak) — Wed, 03 Jun 2009 20:35:00 +0000

There is a study recently published by M&C Saatchi, a global advertising agency with headquarters in London. It puts consumers into categories based on their behavior and reaction to the recession.

I'll get to those categories in a minute, but I think it's important to first note that the premise of this study is that while we are all effected by the recession differently depending on where we live and the local economy there, we generally are reacting to the macro economy - as it's reported by mass media.

We are bombarded daily by dismal reports of national or even global economic downturns. We cannot help but let this color our thinking. Yet, things might actually not be so bad in the immediate area around us.

So, the study and the categories are generated by how we are reacting to macroeconomics.

‘Reacting to Recession' is the name of the study. It identifies and categorizes attitudes and behavior adopted by different groups of consumers. The study finds eight consumer types with distinct approaches to spending in this recession.

Each identified group has adopted an overall specific behavior to cope financially with the downturn.

Crash Dieters

Scrimpers

Abstainers

Balancers

Treaters

Justifiers

Ostriches

Vultures

A caveat before the descriptions: they're not based on socioeconomic status, meaning that you can be in the Crash Dieter...and a millionaire.

Crash Dieters are the largest segment, grabbing 26% of adults participating in the study. The group was so named because it aims to "shed pounds" from their weekly budget by identifying and cutting out all non-essential spending until things improve. Crash Dieters are a heavily cash orientated group. Debt clearly frightens them (or is unavailable to them). They live from week to week and when the money runs out they're forced to take quite drastic action.

Scrimpers made up 13% of the study population. Cutting spending is still a main reaction, but they want to maintain their lifestyle and are reluctant to make sacrifices. "Trade down" is more their philosophy than "cut out." Cheaper stores and private labels have become more important to them.

Abstainers, like their Scrimper brethren, don't plan to make any huge cuts in spending habits. About 15% of the population are Abstainers. "The big purchases can wait until the economy improves," is what they'll tell you.

Balancers is one of the smallest groups. Nearly one in 10 people in the study fit into this category, which doesn't want to compromise or make any changes to their pre-recession lifestyle. However, a monetary crisis for them, say a job loss, triggers abrupt behavior. There's no "trading down" - It's gone.

Just over 12% of the study population are Treaters. You could describe them as Crash Dieters who occasionally binge. Every once in a while, the frugality they have adopted to deal with the recession gets rewarded by the purchase of something they promised themselves they wouldn't get.

Another 12% are Justifiers. They'll spend, but they need to have a reason - and it's not price-sensitive. If it's a newer version of something they already have, they want it and convince themselves it's a wise expenditure.

Everybody knows what an Ostrich does when it confronts danger - supposedly - and this is the way 9% of the study population is reacting to the recession. They're simply ignoring it - either because they have sufficient means to do so or because they have been brought up to believe that large balances on credit cards is the accepted norm.

At 4%, the smallest category was given the name Vultures. They're thriving on the carnage caused by the recession. Prices on many things have plummeted. They're swooping in and purchasing all they can.

The study is ostensibly for the purpose of how to market to these groups during the recession; and these distinctive categories of behavior strongly show that there may be only one recession globally...but we certainly are not all reacting to it in the same way.

Obviously, the propensity to purchase life insurance products at this time by these categories presents the same types of obstacles and challenges as any other industry.

Do you recognize yourself in any of them?

Intro to Buying Your Life Insurance Online

noreply@blogger.com (Michael Musselman) — Mon, 18 May 2009 14:58:00 +0000

As technology continues to improve, the concept of buying life insurance on the Internet is constantly evolving. Five years ago your buying choices on the Internet were pretty much limited to applying with quote sites that essentially acted as your online independent agent and gave you a list of premium rates. There was always the argument that if you knew what product you needed and you didn't want to mess with an agent buy online, but if you weren't sure what you needed, then go to a local agent and let them provide that extra level of service.

The lines have now blurred. Now many of the insurance companies themselves are selling their products directly online to consumers and many agents have gone online themselves. Both have added some of the convenience factors that were normally reserved to the online quote sites. Now many of the quote sites have added extensive educational resources to their websites and have added new dimensions of customer service to offer a little more than just a few emails and an envelope in your mailbox.

The one thing I will say is that if you have a special health condition (e.g. bipolar, high risk profession), then you are still better off finding a local independent agent that is familiar with the underwriting guidelines of the different companies and can find you the best policy. Agents that are connected within the industry can make contact with insurance companies and find out what kind of rate they will offer you given your special health condition and avoid the hassle of you going through the full application process with a number of companies to find out where you can find the best rate. That said if you don't have a quality independent agent in your area, then more and more of the best agents are setting up shop online and offering their services to more than just one area.

Michael, Garden State Life Insurance

realLIFE Stories

noreply@blogger.com (Michael Musselman) — Mon, 11 May 2009 15:55:00 +0000

If you have never taken the time to check out some of the videos that LIFE puts out, then I encourage you to do so. These can be especially helpful if you have a spouse who is reluctant to move forward with a life insurance purchase. Seeing the positive impact that life insurance can have on those we leave behind can do wonders for helping us to take care of these types of things we don't like to think about.

realLIFE stories

This month LIFE is working hard to bring awareness to disability insurance. As much as people put off purchasing life insurance, I would say that even more neglect disability insurance.

Michael, Garden State Life Insurance

More on that Pew Research Center study

noreply@blogger.com (Kawika Maszak) — Fri, 24 Apr 2009 19:10:00 +0000

In case you're not into listening to audio or podcasts, here is a link to the study I talked about previously.

The information they share is extensive but interesting - it's a good way to gobble up a lunch hour spent at your desk.

Has it shifted on your list of priorities?

noreply@blogger.com (Kawika Maszak) — Fri, 24 Apr 2009 03:10:00 +0000

I was listening to "All Things Considered" on the radio this afternoon while driving home. There was a segment about how the American public's perspective on luxuries versus necessities is changing.

Paul Taylor, executive vice president of Pew Research Center, talked about some interesting shifts.

Microwaves are now seen as luxuries, while some newer technologies — including flat-screen TVs — are considered necessities.

You can listen to the segment here.

I was hoping that Mr. Taylor might touch upon - yes, you guessed it....

If the current economic constraints are causing people to consider the microwave as a luxury item, where does life insurance fit along this continuum?

About Us

noreply@blogger.com (Michael Musselman) — Mon, 20 Apr 2009 18:37:00 +0000

I've never shared this with the readers of this blog and so whether you are a regular or first time reader I thought I would share the main reason why we created this blog.

This blog was created as a way for the authors to educate consumers about life insurance from an insurance company's perspective and engage in a dialogue with consumers about both the basics and complexities of life insurance. I have long held that one of the areas that we in the life insurance industry have fallen short is having a sell first explain later attitude. Education has typically been in the form of insurance company produced sales materials and life insurance agents, and I believe we can all see the conflict of interest that can arise there from time to time. I think that only through education about and understanding of life insurance will the millions of uninsured or under-insured Americans finally seek out the life insurance they need and obtain the proper coverage.

We will try to write helpful articles based on our industry experience, comment on relevant life insurance industry news and changes, and avoid directly plugging Garden State Life and its products and services. If you are interested in Garden State Life Insurance or it's products you can visit our main company site by clicking the company logo or the link in the navigation bar above or visiting our Wikipedia page.

And finally our disclaimer: While this blog is sponsored by Garden State Life Insurance Company, the articles written in this blog do not represent the opinions of Garden State Life Insurance Company, its subsidiaries, or its parent companies. These articles are meant to be informal and for entertainment purposes only. Everyone's situation is different and we suggest that you seek the advice of professional financial adviser for your particular situation.

Michael, Garden State Life Insurance

In Case You Didn't Believe Me

noreply@blogger.com (Michael Musselman) — Thu, 16 Apr 2009 13:16:00 +0000

Last week I wrote an article stating that life insurance rates are on the way up and that the time to buy life insurance is now. Life insurance rates have been decreasing to historic lows over the past couple of decades, mainly fueled by the need for companies to stay competitive with internet quote sites and independent agents.

In case you thought I was just using scare tactics to get you to buy or that I was just spouting off some kind of crazy theory, here is a link to a press release by Accuquote reiterating that many carriers have raised their rates or have rate increases scheduled within the next few months.

Michael, Garden State Life Insurance

Is my life insurance a good deal?

noreply@blogger.com (Michael Musselman) — Wed, 15 Apr 2009 15:19:00 +0000

This is a pretty subjective question, but I have a few thoughts to share that I think can make you more comfortable about your life insurance purchase.

Does it match your needs?

When you purchase life insurance that you don't need or doesn't accomplish what you intend, then that is a bad deal no matter how cheap it is. Think about why you purchased or are purchasing the life insurance. Debts, funeral expenses, income replacement, estate taxes, tax free investing, etc. all have different life insurance product needs. If you want to make sure your wife and small children have income to live on until the kids are grown, then find yourself a level term product that lasts until your kids are adults or the age you plan to retire. If you want to make sure your funeral expenses are paid for, then a guaranteed whole life insurance product that will pay if you die tomorrow or 50 years into the future probably makes the most sense.

Price

I always recommend that you research and shop around to find a plan with a good rate at a company with high ratings and a high level of customer service. I apply this philosophy to most of my shopping. When I get ready to purchase a new electronic gadget that I need, (or want, whatever) I will usually look up the product on both Amazon and Google Shopping just to see what the going rate is. I love shopping with Amazon. Their service is great and I really trust them as an online retailer. If their price is pretty close to the lower prices on Google Shopping, then I will usually buy from Amazon rather than risk saving a few percentage points to go with an unknown company or someone on Ebay.

When I buy running shoes, I usually go to a store that specializes in running shoes. The people there usually are runners and they know their shoes. They usually pull about ten pairs of shoes they recommend and we work for about thirty minutes to find the perfect shoe. Sure I could probably find a better rate if I purchased online or from an athletic super store but with a running shoe, finding the really good shoe is more important to me than finding the cheapest shoe.

When I purchased my life insurance, I took the same approach. I went to an online life insurance website that I trusted and got a list of companies and rates. I went with the second cheapest company for the type of product I wanted because the company had higher ratings and was only a few dollars more expensive per year. I didn't even check other websites or shop with other agents because I had found the shopping experience I trusted the most to find the life insurance product that fit me the best.

Michael, Garden State Life Insurance

The Time to Buy Life Insurance is Now

noreply@blogger.com (Michael Musselman) — Wed, 08 Apr 2009 14:21:00 +0000

If you are in the market for life insurance I would not advise putting it off any longer.

You've probably heard this a thousand times from everyone from a pesky insurance agent all the way to your mother. Obviously, you could die tomorrow and leave your loved ones in financial peril. I'm not trying to be morbid, but every day you go without proper life, health, disability, auto, and homeowners insurance you are risking a catastrophic event that could severely damage your family's financial situation for years to come.

Also, why don't you come to visit me more often? Is that how you are wearing your hair these days? Wah wah wah....There, I'm done nagging so you can start listening again.

Here is another reason why you might want to take care of those insurance purchases sooner rather than later. We have been hearing more and more in the news about the increasing struggles some of the insurance companies are starting to have. I'm not just talking about AIG. I'm talking about every company. Just like your retirement, every insurance company's asset portfolio that was safely tucked away in bonds and safe securities have taken a huge hit. Luckily they are required to have huge reserves and you don't have to worry about your policy. What you do have to worry about, especially if you have not yet purchased a policy, is that if they can't earn as much money on your premiums then they are going to have to start collecting more premiums and that means higher rates.

Term rates have been dropping at dramatic amounts over the past couple of decades, but that trend will probably stop until asset values start to recover. A few years ago, when these companies had capital and were looking to grow they could afford to invest in selling term life insurance policies at razor thin margins. Now that they are strapped for cash, they are pulling back by either raising rates or removing their competitive products all together in order to devote their resources to lines of business that are safer and produce a higher return.

For example, I ran across one company the other day that didn't want to raise their rates, but they instead created a new sneaky way to pay out the death benefit so that the total benefit would be lower than it seemed. These kinds of things are going to become more prevelent as companies try to generate more profits while maintaining their market positions.

So if you need life insurance and you want to take advantage of all the rate decreases that have occurred over the past couple of decades then now is the time to act.

Michael, Garden State Life Insurance

How Much Life Insurance Coverage Can I Have?

noreply@blogger.com (Michael Musselman) — Wed, 01 Apr 2009 15:36:00 +0000

Technically there is not a limit to the amount of life insurance coverage you can obtain or the number of life insurance policies you can have. There is not a law that limits life insurance coverage and it is essentially up to each individual company as to whether they want to insure you given the insurance you already have.

Most life insurance companies have a limit to the amount of total life insurance coverage that you can have with them and can have with all companies combined. They may restrict the amount you can have with them because insurance companies like to spread out their risk over many lives and they don't like having too much risk in one person. If you apply for a new policy and you already have a large amount of life insurance with other companies, then the life insurance companies might start to get nervous as to why someone might need the additional insurance. They start to fear that you know something that they don't.

Most companies have a hard limit that they will insure any given life for and they also have limits that are based on a certain percentage of your income. They will certainly ask more questions or deny someone who makes $40,000 per year applying for a three million dollar policy. Most insurance companies will also get nervous if they see that you have many small policies and apply for another. This is because they start to get suspicious that there might be some foul play going on and someone is trying to avoid certain underwriting test by buying multiple small policies. For example, if you knew that a certain insurance company didn't conduct an EKG for someone under $200,000 then you might purchase $199,000 from that company to avoid the test and do the same with a handful of other companies until you obtained the total amount of insurance that you wanted.

Michael, Garden State Life Insurance

How to Lower Your Life Insurance Rates After You Quit Smoking

noreply@blogger.com (Michael Musselman) — Tue, 24 Mar 2009 14:05:00 +0000

In my last post, I showed that in general smokers pay about 2 to 3 times as much as nonsmokers for their life insurance. If you have recently quit smoking or plan to quit smoking and hope to obtain lower life insurance rates, then I'll give a few guidelines to keep in mind as you go about trying to lower your rates.

Just because you quit smoking, doesn't mean that you instantly become a nonsmoker to an insurance company. Most companies will treat you as a smoker for one to five years after you stop smoking. In the application, they will usually ask if you have used any tobacco products in the past X months. That will be a good signal to you as to what their expectations will be in order to be considered a nonsmoker.

Does this mean that you should wait until you are treated as a nonsmoker to buy your life insurance policy? Others may disagree with me, but I would not suggest waiting. Every day that you put it off, you risk a decline in your health that makes you uninsurable or even dying without any coverage at all. Going a couple of years without any life insurance, when you need it, is pretty risky.

I suggest getting the best rate that you can get given your health and smoking status today and working to stop smoking and improving your health so that you can obtain a lower rate later. Most companies will even allow you to wait a specific amount of time and change your policy from a smoker rate to a nonsmoker rate. They will usually just have you take their nicotine test again and sign an amendment to your policy stating that you are have not used any tobacco products in the past X months.

Taking this approach will also cover you in case you do relapse and begin smoking again. If you give up after a year and decide that you want to resume smoking then you will have locked in the lower smoker rate at the younger age.

Michael, Garden State Life Insurance

How Much Higher are Smoker Life Insurance Rates?

noreply@blogger.com (Michael Musselman) — Tue, 17 Mar 2009 14:16:00 +0000

Someone asked me this today so I decided to post my answer to the blog for everyone to enjoy. Luckily, I happen to work at a life insurance company and I had a rate card for a term life insurance product handy.

On this particular product there are two smoker classes (Standard and Preferred Nicotine) and four non-smoker classes (Preferred Plus, Preferred, Standard Plus, and Standard Non-Nicotine). For a 40 year old male, the best rate for a smoker was three times higher than the rate for the best nonsmoking class.

There are two things influencing this price difference. One, smokers get charged more because they smoke. You knew that already from the title of the article. Two, there is not a preferred plus smoker class. Some companies are starting to add more nicotine classes to better segment their risks, but as a general rule most companies have fewer risk classes for smokers than they do for non-smokers. Therefore, in this example, someone who has the health of the hypothetical Preferred Plus Nicotine will get lumped in with the Preferred Nicotine group to form one risk class. The rate for the preferred plus smokers will be a little higher than if they had their own rate class and the rate for the preferred smokers will be a little lower.

If I use the same rate card and look at the worst underwriting class for both non-nicotine and nicotine (standard class). The 40 year old smoker pays only about twice the nonsmoker.

While the amount of this disparity will vary by company and age, this at least gives you an idea of the magnitude of price difference you can expect.

Michael, Garden State Life Insurance

Building on Michael's blog post about not lowering prices....

noreply@blogger.com (Kawika Maszak) — Thu, 12 Mar 2009 16:44:00 +0000

Michael's blog posting (Not Lowering Prices Can Be a Good Thing) reminds me of a marketing equation I was taught many years ago by a great boss and mentor when I worked for the Gannett newspaper company.

To the customer, cost is price over value. Or, expressed in a pseudo scientific way:

C = P/V

C is Cost

P is Price

V is Value

As someone who provides a product or service, the only concrete element in this equation over which you have control is Price.

And Price is very different from Cost.

Both Cost and Value are perceived concepts - and they are determined by the customer.

In other words, the customer looks at the Price of - in this case - insurance, and decides whether their perception of its Value is equal to or less than the Price.

If it is, the customer determines that the Cost is acceptable.

So, if you don't want to lower the Price, (and you shouldn't because in this case you are not going to decrease the offer) then you need to find ways to get the customer to elevate their perception of its Value.

Which is what marketing is all about.

Marketing and public relations pump up the V so that it's much more than the P.

And remember: the customer decides two out of three of the variables in this equation.

If you can make the product better, you need to make sure to let the customer know. If the product is already as good as it can be, you can still pump up the V by reinforcing its benefit and necessity. Luckily, with insurance that's an obvious concept.

Oh, and by the way - this equation applies just as much to Michael's last paragraph as it does to the rest.

In this case, your employer is the customer.

How will you pump up your V?

Not Lowering Prices Can be a Good Thing

noreply@blogger.com (Michael Musselman) — Tue, 10 Mar 2009 19:44:00 +0000

I read this interesting summary of a speech that Reed Holden, president of Holden Advisors Corp., gave at a recent disability insurance conference. He was basically encouraging the disability insurance industry to not think that they could regain profitability in the weakened economy by lowering their prices.

While he was speaking directly to the disability insurance industry, I think his message spreads across all insurance companies and all businesses that have a service or product to sell. I have been in the life insurance industry for ten years and the constant theme of how do we lower prices. If we can only lower prices, we can sell more and make more money. The easy way out, in other words. While I'm sure everyone likes lower prices, I'm not sure that taking this approach is always the best way to regain profitability, and I'm not sure it is even the best thing for the customer.

Sure, customers in all industries want lower prices, but at some point I think everyone would want a better product and a better standard of customer service before they would want to save another dollar. What good is it if you get your life insurance cheaper than anywhere else, but the product is not really what you wanted or needed and the insurance company cannot afford to properly service the product.

Mr. Holden encourages us all to increase our level of service and improve our products to provide more value to the customer. That is the harder way, but the best way to increase sales and profits. Any idiot with a red marker can lower prices, but only the best companies will figure out how to increase value. At my company, we actually have a meeting this Friday to discuss how we can improve our profits and sales. Stay tuned. Hopefully that means better products and services for all of our potential customers who are reading this.

Are you worried about rising unemployment rates and layoffs? I think we can all take this message to our jobs to stave off unemployment. Constantly be thinking of ways that you can improve your job performance or ways that you can provide more value to your company versus just trying to get your daily tasks done. While you may be paid today for the tasks you get done, your future employment could hinge on the value you create for your company above and beyond those tasks.

Michael, Garden State Life Insurance

Two in a Row for the Washington Post

noreply@blogger.com (Michael Musselman) — Tue, 03 Mar 2009 19:06:00 +0000

I am often critical of the mainstream media's reporting on the life insurance industry, but the Washington Post has impressed me with two great articles in a row. At the beginning of February, I made a post about a great article the Washington Post had about the risks of life insurance. In the paper's most recent effort, Nancy Trejos has written another quality article about making sure your life insurance coverage is as efficient as possible in order to reduce your costs.

While we all want to make sure that we are not under insured and that all of our risks are covered, having too much insurance robs you of income that you could be spending or saving today. In the example in the article, the woman wanted to make sure that her mortgage on her residence was covered by life insurance so that she could make sure that her adult daughter could inherit it without worrying about being able to assume her mother's mortgage. She has not purchased some random amount of life insurance based on a rule of thumb or based on emotion. She has defined the needs of her heirs and made sure the life insurance matches those needs.

The article also makes a great point that as the mortgage amount goes down the mother can reduce the amount of life insurance she has. This is a great point and should allow the mother to reduce the amount she spends on her life insurance as she pays down the mortgage. If you contact them, many companies will allow you to reduce your coverage as time goes by. The procedures will vary from company to company and policy to policy, but most companies are happy to allow you to reduce the face amount instead of forcing you to lapse the policy and risk losing you to another company. Some companies also sell decreasing term life insurance policies, but they are not as common as level premium policies and may not have as competitive of rates.

Finally, the article reiterates my stance on purchasing life insurance through your employer. One, you risk losing your coverage when you leave your job due to the fact that you usually cannot continue the policy when you leave the company. This means that counting on that coverage, even the free coverage some companies provide, can be risky. Secondly, if you are relatively healthy you can probably find lower rates by purchasing a policy on the open market.

Michael, Garden State Life Insurance

$30 billion...and it might still not be enough.

noreply@blogger.com (Kawika Maszak) — Mon, 02 Mar 2009 17:19:00 +0000

A friend of mine sent me an email this morning, asking if I'd heard the news that the US government will give AIG access to another $30 billion of new capital.

This after posting a quarterly loss of $61.7 billion.

I had heard the news, and while it's not good news - that's for sure - I can certainly see why our government has taken this step. My friend did not understand, and this is how I explained it:

AIG has operations that employ more than 100 million Americans. It has more than 30 million policyholders.

The $30 billion infusion will hopefully allow AIG to avoid having their credit rating downgraded. If that happened, it could force AIG to come up with billions of dollars it might not have. And it could easily destroy any potential sales of portions of the company in order to pare it down to become a stable entity.

Talk about a house of cards!

Sure, I'm not all that amused by the fact I wouldn't get the same kind of lenient treatment if I fell on hard financial times - but then I don't have the ability to affect the lives of 100 million employees, either.

Plug the holes in the boat so it doesn't capsize. There are people on board! And people come first. At least in my book.

Mortgage Life Insurance

noreply@blogger.com (Michael Musselman) — Tue, 24 Feb 2009 14:57:00 +0000

If you are like me, when you bought your home, you were flooded with offers for home warranties, homeowners insurance and mortgage life insurance. Mortgage life insurance is just a term life insurance product that is packaged in a way such that the death benefit is equal to the remaining balance on your loan. As you pay down your loan, the face amount decreases.

Inherently there is nothing wrong with this type of insurance but if this is something you are interested in purchasing, then I would encourage you to compare the rates to a regular term life insurance product. In most instances, you can find a level premium term product with a lower premiums and a similar, non-decreasing death benefit.

I have one last thought on the subject of mortgage life insurance. Do you need it?

I'm a big proponent of protecting your family with life insurance, but there is no rule that says that a paid for house is going to be their primary need if something happens to you. Even a paid for house requires you to pay taxes and maintenance. Also what good is a paid for house if you do not have any food to eat or any electricity. Luckily with a term life insurance product, your family can use the money however they see fit. Maybe it can be used to pay for funeral costs, pay monthly bills, make the mortgage payments and pay the real estate agent costs to sell the house so that they can buy or rent something that suits the new family income.

I would summarize by saying that I think a mortgage definitely increases the need for life insurance, but it does not necessarily mean that the money should necessarily be used to pay off the mortgage.

What are your opinions of mortgage life insurance or paying off a mortgage with life insurance?

Michael, Garden State Life Insurance

Is AARP's Life Insurance a "Rip-Off"?

noreply@blogger.com (Michael Musselman) — Fri, 20 Feb 2009 20:59:00 +0000

I've heard the term "rip-off" used twice recently with respect to life insurance. First with respect to any policy that has cash value and also AARP's life insurance products. I'll protect the identities of the accusers, but let's just say that they are not alone with their negative sentiments towards whole life insurance and AARP's life insurance.

Just because both of these life insurance offerings have less expensive alternatives does that mean that they are both "rip-offs"? I'm sure each person has a different reason for using that term, but when I think about it, I usually associate "rip-off" with stealing, theft, and lying. I don't think any company that sells whole life insurance claims that it is the cheapest form of life insurance. That would most likely be illegal in every state. I couldn't find anywhere on AARP's or New York Life Insurance's website where they claim their insurance to be the cheapest or even low cost. In both instances you pay a given premium and the company pays a death benefit. Sounds reasonable.

I know that in general Wal-Mart has cheaper prices than Target and my local grocery store, but for some reason I still prefer to shop at Target. I like the shopping experience at Target better and so for me it is worth paying a little more. I don't feel like Target is ripping me off. Now if the item is mispriced on the shelf, and the price is higher when I get to the register, then I feel ripped off. At that point they have essentially lied to me about what the item cost.

Maybe people prefer to purchase from AARP for convenience or to support an organization that provides overall value to its members. With respect to whole life insurance, maybe there are people that are willing to pay the higher premium in exchange for the extra security of having coverage that will be there as long as they want it.

In my opinion both whole life insurance and AARP offer different value propositions than cheaper alternatives. As long as the company doesn't tout that they are cheapest products then I wouldn't consider them a "rip-off". Maybe their costs are higher. Maybe New York Life is ripping off AARP. Maybe New York Life just has a higher cost of doing business. Who am I to acuse without knowing what is behind the pricing of those products.

What do you think? Is AARP ripping people off?

Michael, Garden State Life Insurance

What's in a name?

noreply@blogger.com (Kawika Maszak) — Mon, 16 Feb 2009 22:42:00 +0000

A new poll conducted by Rice University professor Douglas Brinkley for C-SPAN puts President Abraham Lincoln at the top of our list of most admired leaders.

The survey asked historians to rank each of our former 42 presidents on 10 qualities of leadership ranging from public persuasion and economic management to international relations and moral authority.

This no doubt makes the insurance company bearing Lincoln's name proud and happy.

In 1905, a man named Arthur Hall and a group of business leaders from Fort Wayne, Indiana, founded The Lincoln National Life Insurance Company. Hall, a lifelong admirer of Abraham Lincoln, wrote to the president's only surviving son, Robert Todd Lincoln, to ask for a photograph that the company might use on its letterhead. Robert replied, "I find no objection whatever to the use of a portrait of my father upon the letterhead of such a life insurance company named after him as you describe; and I take pleasure in enclosing you, for that purpose, what I regard as a very good photograph of him."

The company today is known as Lincoln Financial Group.

In 1928 the company crated the Lincoln Historical Research Foundation, and opened up the Lincoln Museum to the public in 1931.

There's never been a better time to be boring.

noreply@blogger.com (Kawika Maszak) — Mon, 16 Feb 2009 20:41:00 +0000

I came across this article over the weekend. After reading it I realized that as much as most of us crave excitement in our lives, thank goodness for people such as Lord Peter Levene, the chairman of 321-year-old Lloyds of London.

Insure Your Love Campaign

noreply@blogger.com (Michael Musselman) — Thu, 12 Feb 2009 16:35:00 +0000

One of my favorite websites for life insurance information and resources is Life and Health Insurance Foundation for Education (LIFE). They are a great resource, along with the Insurance Information Institute, for finding information about life and health insurance that is not biased towards any specific company.

This month LIFE is running an awareness campaign that ties in with Valentine's Day called Insure Your Love. It is a great reminder that while we can show love to our spouses with cards, flowers, and jewelry, we truly show how much we care by making sure they are safe and secure. I don't think my wife would find it very romantic if she opened up her envelope and found an application for a life insurance policy instead of a card this Valentine's Day like LIFE's video, but I do think our policies do give us both a sense of security knowing that the other and our children will be financially secure if something happens to one or both of us.

I whole-heartedly agree with LIFE that purchasing a life insurance policy is one of the most selfless acts a person can commit. It involves denying yourself the pleasure you could receive from spending that premium payment each month in order to provide a death benefit that can only benefit others. That seems like a pretty good example of selfless love to me.

Michael, Garden State Life Insurance

Washington Post Article on Life Insurance Risks

noreply@blogger.com (Michael Musselman) — Tue, 03 Feb 2009 22:09:00 +0000

The Washington Post had a great article on 2/1/2009 (The Risks of Life Insurance) explaining the current state of the life insurance industry given the current financial industry troubles. It also walks through the pros and cons of either staying with your current life insurance policy or trying to replace it with another. While most articles I read in the papers or stories I see on the news take a shallow, sensational approach to the life insurance industry that seems meant to create panic, this article addresses several topics in depth and has truly given the reader some valuable things to consider (see CNN Money for an example of the shallow, sensational approach).

Some good points the articles makes:

1) Don't Panic

The article makes a good point of reminding the reader that it is important to consider all the consequences of canceling your policy. While it may not be the best idea to stay with a crumbling insurance company in the long run, canceling your policy can lead to issues with future insurability, taxes, higher premiums with a new policy, surrender penalties, and in the end may not even be necessary. Take the time to talk to your financial planner or research alternatives and see if you can avoid some of these issues.

2) Know Your Policy

Annuities and life insurance policies with large investment pieces have different risks than simple term life insurance policies that do not have an investment portion. If the primary focus for your policy is investing, then you have to weigh the risks and returns of investing in a life insurance company versus the risks and returns associated with investing in other institutions like banks and corporations. If your primary focus is the death benefit and reducing your financial risks from an unexpected death, then you do not really have any alternatives besides life insurance. Then your focus needs to be on finding a strong company that will be there to pay your claim when the times comes.

3) There are No Guarantees

No matter how high their ratings or how large they are, there is a risk that any company can run into financial troubles. At some point you just have make the best decision you can with the facts you have and realize that it is probably riskier to do nothing out of fear of the economy rather than going with a quality company and trusting that they will remain solvent.

Michael, Garden State Life Insurance

Alltop Insurance News

noreply@blogger.com (Michael Musselman) — Tue, 27 Jan 2009 18:58:00 +0000

Recently the Garden State Life Insurance Blog, The Life Insurance Insider, was added to a site that aggregates RSS feeds. The site is called Alltop and it describes itself as an "online magazine rack". I've come across a lot of directories and feed aggregate sites, but this one is definitely one of the most extensive and useful I have used. The site's search engine works fairly well to help you find the right categories and the resources within each category appear to be very well laid out and researched. This is not your typical pay for submission or anybody can be listed directory. It appears that the site owner has done his homework and put together a great list of resources.

In addition to life insurance, one of my other passions is coffee and coffee roasting. I quickly found my way to the Alltop coffee "magazine rack" and saw a great list of sites that I recognized and a few that I didn't.

I encourage you to check out the insurance "rack" for other great resources like the Garden State Life Insurance blog. I'll add a link to my "Life Insurance Link" section on the right.

Michael, Garden State Life Insurance