Insurance – Suman Bhandari https://www.sumanbhandari.com Tue, 06 Jun 2023 18:23:14 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.2 https://i0.wp.com/www.sumanbhandari.com/wp-content/uploads/2024/07/cropped-Suman-Bhandari-1-e1729567587587.png?fit=32%2C18&ssl=1 Insurance – Suman Bhandari https://www.sumanbhandari.com 32 32 27850242 When should I buy life insurance? https://www.sumanbhandari.com/2021/06/04/when-should-i-buy-life-insurance/ Fri, 04 Jun 2021 17:16:00 +0000 https://www.sumanbhandari.com/?p=1148

“I am still young or I don’t have kids, I do not need life insurance.” Some people believe the best time to purchase life insurance is when they are middle-aged, some recommend early, there are mixed answers. When is the best time to purchase life insurance? 

Simple answer: The sooner the better. 

Why? First, understand the importance of life insurance. 

When looking at life insurance coverage from a pure cost perspective, younger age is recommended. At a younger age, you will qualify for lower premiums. And as you get older, you could develop health problems that make insurance more expensive or even disqualify you from purchasing a plan. 

To analyze the cost, the average cost of a 25-year level term policy with a $500,000 face amount is about $420 per year for a healthy 30-year-old male. In contrast, the annual premium for a 40-year-old male is about $750. The overall cost of delaying the purchase for 10 years is $3,300. 

Additionally, waiting to purchase life insurance can have a greater impact on an attempt to purchase a policy. You are not getting any younger and some medical conditions are more likely to develop as an individual grows older. A serious medical condition can have a significant impact on the premium or chances to get declined. 

Since term life insurance premiums don’t go up even if you develop health conditions, it’s usually a good idea to lock in your rate while you’re young and healthy.

Buying life insurance at the right time will help get the right policy for you at a comparatively cheaper price. 

Interested to learn more or would like to get a free quote? Just fill out our short, no-obligation quote form today to get started.  

]]> 1148 Mortgage Insurance Vs Life Insurance https://www.sumanbhandari.com/2021/06/02/mortgage-insurance-vs-life-insurance/ Wed, 02 Jun 2021 22:30:00 +0000 https://www.sumanbhandari.com/?p=1090

Congratulations! on your new home! Buying a new home is a major milestone for many couples as well as considered the biggest asset in your life. However, if something happens to you, have you taken the necessary step to protect it? Homeowners usually have few options to consider.

  • Purchase a life insurance policy from an insurance company
  • Get mortgage insurance from your mortgage lender

Should you get Mortgage Insurance or Life Insurance?

First, let’s look at some of the differences between the two.

 

Mortgage Insurance

Life Insurance

Beneficiary

Mortgage Lender (Banks, Credit union)

Designated Beneficiary (Spouse, Children)

Underwriting

Done at the time of claim. As a result, mortgage life insurance is not 100% guaranteed to payout, as the bank will decide if they will pay out when you make a claim.

Done at the time of application. If approved, your payout is guaranteed.

Premiums & Coverage

Level premiums and a decreasing amount of coverage. Coverage ends when your home is paid off.

Level premiums and level death benefits (as chosen by the insured). Coverage is unaffected by your mortgage ending or employment termination.

Policy Option

No options.

Offers a wide variety of policy types and options to choose from, such as term or permanent life insurance.

Renewal

Renewal required at the end of the renewal period usually the same term of your mortgage. However premium increases in accordance with rates at that time.

Renewal rates are guaranteed at the outset, and no further evidence of insurability is required if you keep the same policy

Cost

2-4% of the mortgage amount

Significantly less than mortgage insurance.

Flexibility

If you move your mortgage to another bank, you’ll have to prove that your health is still good. Your policy doesn’t automatically move with you if you change mortgage providers

Your policy stays with you even if you transfer your mortgage to another company. There’s no need to re-apply or prove your health is good enough to be insured.

Briefly, both are excellent choices when it comes to protection however, the main difference is mortgage insurance covers only your outstanding mortgage balance and the beneficiary is the lender, i.e your beneficiary will not receive any money.

With life insurance, however, your beneficiary gets a tax-free amount of money. The beneficiary has several options on how to use that money. They may choose to pay off the mortgage, use the remaining funds to cover the cost of childcare, education, living expenses, etc.

Do you want to apply for your life insurance? Contact today.

]]> 1090 Why Life Insurance Is Important? https://www.sumanbhandari.com/2021/06/01/why-life-insurance-is-important/ Wed, 02 Jun 2021 02:27:57 +0000 https://www.sumanbhandari.com/?p=761

Life insurance is meant to help protect your family’s financial future. In the case of your untimely death, life insurance is a key security coverage for your loved ones. It will give you security in knowing your family is protected. But there are several other reasons why a life insurance policy is necessary, besides offering financial assistance. 

Life insurance is about taking care of loved ones.

It’s about meeting responsibilities and keeping promises. You view your decision to purchase life insurance from your family’s point of view, not your own. You see life insurance as a tool that protects your spouse and children from the potentially devastating financial losses that can result if you die prematurely.

Life insurance is for the living.

It’s not about you. You know that, should anything happen to you, the life insurance you have purchased is in place to protect and provide financial relief for those who must carry on without you. It’s about them.

Life insurance is an expression of love and caring.

Because you care about your family, you want to ensure the financial security of family members if you’re suddenly not around to provide it.

Should you die, the proceeds will help you keep the promises you have made to the people who are important to you.

By protecting their financial future, you’re enabling your loved ones to maintain their lifestyle, if something unexpected should happen to you.

Life insurance buys time and options.

Too often, when an income earner dies, survivors are forced to make tough, dramatic decisions—and to do so quickly. They have to make the decisions at a time when they may not be emotionally in a position to make good choices. Life insurance gives survivors a chance to adjust over time rather than having to move to a downsized home or find a new job right away.

Your life insurance gives your family choices by providing the benefits to help pay off debts, to help meet housing payments and ongoing living expenses, to help fund college educations for your children or grandchildren, and much, much more.

Life insurance provides cash when it’s needed most.

Your life insurance policy can deliver a specified sum of money at the exact time of need. Upon your death, your family can be assured that the amount you’ve chosen—perhaps hundreds of thousands of dollars, maybe even millions—will be there almost immediately. And that death benefit is generally not subject to federal income taxes. For example, a $500,000 policy provides $500,000 in death benefit proceeds.

If you are not completely certain that your coverage is in line with your family’s needs, please contact us. When you meet, you’ll work together to determine how much coverage you need, review what products and policies are right for you, and review cost comparisons.

Now, look at this example.

Henry is a teacher with a wife and a son and makes $70,000 annually. He only has life insurance through work and covers 2 times of his annual salary.

His wife, Claire works as an administrative assistant and makes $45, 000 annually. Henry and Claire purchased a home three years ago, their son is 2 years old. Their mortgage loan is $400,000, have a car loan of $32,000 and the potential cost of sending children to university will total at least $60,000 in the next 18-20 years.

Unfortunately, Henry died in a deadly car collision on the way to work one morning, that $140,000 can perhaps cover his final expenses, car loan, and child’s university tuition down the road. (Assuming $30,000 for funeral, taxes etc, $60,000 for education, leaving $18,000)

Claire will now have to figure out how to raise the child, take care of daily living expenses, mortgage payments, child, and her own support with the income from her job.

Vs having Individual life insurance.

If, Henry has individual life insurance with the death benefit of $500,000. The total amount his family would have received is $640,000 (Group Life + Individual life). Claire would have paid her mortgage in full, have enough for their child’s education, paid off her car loan, spend a generous amount on her husband’s funeral cost, and still have over $125,000 cash. With her regular income and savings, she will be more comfortable supporting herself and the child.

Do you want to apply for your life insurance? Contact Us today.

]]> 761 Group (Work) Life Insurance Vs Individual Life Insurance https://www.sumanbhandari.com/2021/06/01/group-work-life-insurance-vs-individual-private-life-insurance/ Tue, 01 Jun 2021 18:10:50 +0000 https://www.sumanbhandari.com/?p=1047

I have life insurance from my work, Do i need private life insurance?

Or

Work has got me covered, I don’t need private insurance.

Having life insurance in any form is great. Before we answer the question, we must understand difference between Group Life Insurance and Individual Life Insurance. 

First lets start with the basic.

Group Life Insurance: 

Group life insurance is coverage that is offered by your work (sponsor) to a group of people (employee) who have some form of common association with that sponsor. Usually premiums are paid by sponsor.

Individual Life Insurance: 

Unlike Group Life, Individual life insurance is a policy that is paid by one person and covers a single person.

Now, lets look at the key differences.

  Group Life Plan Individual Plan
Coverage:      
  • With a group plan, the amount of coverage you have is typically one or two times your annual salary. Some group plans allow members to purchase additional coverage. For example up to 3 times the annual salary. 
  • Coverage rarely continues past age 65.
  • You choose based on your need. From $20,000 to $200,000 or a million or over. You choose. 
 
  • Can obtain term coverage to age 75 or 80, or permanent coverage until death.
Ownership:   Your plan sponsor (work) owns the policy, you have no control.  You own the policy and have 100% full control. 
Portability:      Your policy ends when you quit your job, or the sponsor no longer provides the plan. Hence, no longer insured. Your policy is yours forever (unless you cancel or die). Leaving your employer doesn’t affect your coverage.
Cost:   Cost is usually low and provided by your employer (but not for all). In some plans, employees are required to pay a premium. Example: The premium could start from $9 up to $30. You are responsible to pay the premium, however, you have the option to customize. If you need maximum coverage, the premiums will be a little high, if you need less coverage so is the cost. Example: For a 25 years old female, non-smoker, the premium starts as low as from $170 a year, i.e $14.16 a month for a 500K coverage.
Convertible:   Generally, you can convert the individual term option to permanent coverage. Can be converted to individual coverage if they retire, leave their job, or plan is terminated, however, the premiums upon conversion are not guaranteed, and may expensive due to age, health status, etc. Generally, you can convert the individual term option to permanent coverage.  

Now, look at this example.

Only Group Life insurance

Henry is a teacher with a wife and a son and makes $70,000 annually. He only has life insurance through work and covers 2 times of his annual salary.

His wife, Claire works as an administrative assistant and makes $45, 000 annually. Henry and Claire purchased a home three years ago, their son is 2 years old. Their mortgage loan is $400,000, have a car loan of $32,000 and the potential cost of sending children to university will total at least $60,000 in the next 18-20 years.

Unfortunately, Henry died in a deadly car collision on the way to work one morning, that $140,000 can perhaps cover his final expenses, car loan, and child’s university tuition down the road. (Assuming $30,000 for funeral, taxes etc, $60,000 for education, leaving $18,000)

Claire will now have to figure out how to raise the child, take care of daily living expenses, mortgage payments, child, and her own support with the income from her job.

Vs having Individual life insurance.

If, Henry has individual life insurance with the death benefit of $500,000. The total amount his family would have received is $640,000 (Group Life + Individual life). Claire would have paid her mortgage in full, have enough for their child’s education, paid off her car loan, spend a generous amount on her husband’s funeral cost, and still have over $125,000 cash. With her regular income and savings, she will be more comfortable supporting herself and the child.

The difference and the scenario presented above will help you understand the benefit of having Individual Life insurance without having significant impact in your budget. 

Do you want to apply for your life insurance? Contact Us today.

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