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4 Reasons Women Must Have Life Insurance

4 Reasons Women Must Have Life Insurance

Women have been changing their roles in the home and at work for decades now. They have found that more opportunity and options are available to them now than before. These days, we see women with full-time careers and women who take care of the home full-time – and pretty much everything in between.

Women have found a new work-life balance that was never available before. Due to these factors, many females also have found solvency and greater financial independence. However, there seems to be one huge gap in some women's financial plans.


Do Women Need Life Insurance?

 

Many financially independent women do not have life insurance. While certain insurance policies like health, homeowners, and auto insurance are necessities, many females forget about life insurance; like most men do. LIMRA found that nearly 48% of women do not have any life insurance. This could be problematic.


Here are four reasons why women must have life insurance:

1. Income Replacement

While it may be unpleasant to think and plan for one's death, life insurance is an easy way to ensure your family won't have financial worries when you pass, as they'll already be mourning your loss.

Life insurance covers funeral costs and more. For full-time homemakers, the cost of paying someone to handle the household duties is often covered under a life insurance policy. As hiring a maid or caretaker can be costly, this could be a substantial help to a family.

For women with full-time careers who have an income that supports a family, a policy can cover funeral expenses along with other day-to-day living costs. These type policies could ensure your family doesn't miss a beat if you were to pass.


2. Financial Gains

Life insurance policies tend to gain financial value over time. For women, your employment or marital status rarely matters when talking about life insurance plans. Agents should understand that this is even more important for women making more than their spouses.


3. Protect Her Interests

There can be situations where a woman does not need life insurance. If she is single without children, then life insurance could be put off. However, certain circumstances permit taking out a policy.

For example, a single woman may consider a life insurance policy if she has a lot of debt and someone co-signed for her loan. By doing so, she could protect the co-signer from taking her debt if she passes.

As well, a woman who is taking care of an aging or ill family member may benefit from taking a life insurance policy. Many policies cover those she cares for if she were to pass.


4. Less Expensive For Women

Life insurance policies and premiums are typically priced based on life expectancy for age groups and genders. As such, women typically pay less than men. This is due to the fact that men have shorter life expectancies on average. Women tend to outlive males by nearly five years.

One of the main contributing factors to gender lifespan is cardiovascular problems. Women tend to avoid heart attacks and strokes earlier in life. Men typically find these problems at a younger age than women.


What is the right life insurance plan for me?

There's no exact math when looking at life insurance. Each woman will have different wants and needs. On average, a woman will want to purchase a life insurance policy 5-15X her income at the moment.

For example, if a woman is making $100,000 per year, then she could purchase a life insurance policy from $500,000 to $1,500,000. Her needs, family, and age will contribute to what type of coverage she chooses. A young, single woman may only want 5X her income in coverage, but a married woman could want up to 15X her income. 

For more information on life insurance contact Skyline Risk Management Inc. (718) 267-6600 to voice your concerns. 

Actual Cash Value (ACV) Vs. Replacement Cost Value (RCV)

Actual Cash Value (ACV) Vs. Replacement Cost Value (RCV)

Buying items is simple. Selling things is a little more difficult, but still fairly straightforward. As long as humans have been around, we’ve been giving value to certain items, whether it be monetarily or otherwise. “How much does it cost?” isn’t that complex of a question – until it is.

So when it pricing complex? Pricing becomes a problem when claims adjusters get involved. Finding a definitive price for an item not on the market, after depreciation, and so forth is an art form. Well, more like a science. So how do claims adjusters find the true or definitive price of an item?


The Basics

Enter actual cash value (ACV) and replacement cost value (RCV). Actual cash value is the cost to replace an item minus depreciation. Replacement cost value is the cost to replace the asset at the full present value.

While these concepts may seem straightforward, things can get complex quickly. Adjusters not only need to decide on the value of an item, but there are also numerous local and state laws that can impact how ACV and RCV are calculated.


Diving Into Differences

Each state tends to handle ACV and RCV a bit differently. For instance, California includes an interesting tidbit in their legislation regarding these issues. In California:

“Actual cash value is the amount it would cost the insured to repair, rebuild, or replace the item lost or injured less a fair and reasonable deduction for physical depreciation based on its condition at the time of the loss.”

While seemingly fair, this leaves pre-loss condition in a tough situation. Many adjusters have found themselves between a rock and a hard place due to this law. Often, it can be difficult to determine what an item actually is – much less its exact condition at the time of the loss.


Unique or Obsolete

Furthering confusing things, an adjuster has to work with obsolete and unique items. Not even item loss will be easily purchased on Amazon.com. No, there will be a variety of items that hold a unique value for the owner. Many of these items will be tough to find pricing for.

This Honus Wagner baseball card sold for 2.1 Million in 2013

This Honus Wagner baseball card sold for 2.1 Million in 2013

As an adjuster, understanding that one man’s trash could equate to another’s treasure is paramount when dealing with these unique cases. When dealing with these cases, communication is key. The adjuster must work to understand the insured and what he or she places value on. You need to understand the insured and the item before placing a value on it.

When dealing with these items, begin by understanding what exactly the item is, how it was used, and if the insured still values it. Many times, an adjuster will need to dig deep and do some research before giving value to a unique or obsolete item.

If an adjuster is struggling to price an item properly, try:

  • Consulting experts in the field. Look for a certified consultant who can help you give value to a unique, obsolete, or high-priced item. Always verify these individuals’ credentials.
  • Use the Internet. While Internet pricing isn’t the most accurate, you’ll often be able to gather a working knowledge of the item and its value by going online.

Overall, the best way to determine value for an obsolete or unique item is to find a similar item already on the market. Finding a similar kind and like item can ensure fair pricing and valuation for both parties.


Understanding Antiques

Antique items open a whole other bag of worms for adjusters. Not every item that is older is considered a valuable antique. Most items are required to be a certain age and origin to qualify. A minimum of 100 years old is required for an item to be “antique” from an insurance perspective. Adjusters should handle antique items in a similar manner to obsolete and unique items.


Actual Cash Value Vs. Replacement Cost Value

Overall, understanding the actual cash value versus the replacement cost value isn’t that complex. Most homeowners will benefit from RCV more than ACV when an adjuster is looking into their claim. How a state handles these cases and individual policies will go a long way in determining how the claim is calculated.

For more information about Actual Cash Value (ACV) vs. Replacement Cast Value (RCV) contact Skyline Risk Management, Inc. at (718) 267-6600

Common Life Insurance Beneficiary Blunders

Common Life Insurance Beneficiary Blunders

It is no fun to think about the day when a life insurance policy will need to go into effect, but it is even less fun to think about a day when a life insurance policy or a day when a life insurance policy goes into effect but does not benefit the beneficiaries that the insured had intended to designate. In listing the beneficiaries on a life insurance policy, the manner in which one lists the intended recipients of the policy can make a big difference in who, if anyone, actually receives the money. In taking a look at some of the most common discrepancies that can arise during a life insurance policy payout, one can avoid making some of the common mistakes.

The first thing to know is that not only does a life insurance policy have the ability to have more than one beneficiary; it really should have more than one beneficiary. In fact, a life insurance policy can have up to three "classes" of beneficiaries whereby if the person, people, or entities named in one class are all deceased, the benefits would then be paid out to the next class of beneficiaries. By listing multiple classes of beneficiaries the insured ensures that they still have some say in who the policy funds go to if those for whom the policy was intended have passed.


Listing a loved one by relationship

The way in which you list a loved one on the insurance policy can be one of the biggest roadblocks to the benefits payout. The wording is crucial when naming a benefits recipient because, depending on the words you choose, the beneficiary may change. You can opt to list a beneficiary by their relationship to the insured or by their name. Each has its benefits and drawbacks. If you choose to list by relationship, then whoever currently holds the role when the insured dies will be the one to receive the policy benefits. If you list “wife” as the beneficiary, for instance, it would consider the spouse at the time of death as the beneficiary but exclude any former spouses. It can be convenient if that is the insured’s intention, but you also run the risk of unintentionally excluding a loved one from coverage due to a relationship change.


Listing a loved one as a group

The clearest and most common example of listing beneficiaries as a group is naming the insured's children as a class. While typical parent-child relationships do not legally change over time, the definition of "child" can create problems. In situations where step-children, adopted children, and children born after the insured's death come into play, the meaning of the word child can become unclear and again the policy may end up excluding someone that the insured did not intend. On the flip side, there are also benefits of listing one's children as a group as it would also include any children that were not currently born when the beneficiaries were listed.


Listing a loved one by name

Listing a loved by their name provides a clear idea of exactly who the insured would like to receive the policy payout. In most cases, this is the best way to make sure that the policy upholds insured's intentions. However, there is still risk in specifically naming beneficiaries as well if the insured forget to update the list when new meaningful relationships develop, such as new children or a new spouse.

Many other issues can arise when listing beneficiaries on a life insurance policy, but one clear solution to mitigating those problems is to make sure you are incredibly specific when designating beneficiaries.  The more specific you are in who exactly is to benefit from the policy, the less likely any discrepancies will arise.

For more information contact: Skyline Risk Management, Inc. at (718) 267-6600

Adjustable Life Insurance: A Change Might Do You Good

Adjustable Life Insurance: A Change Might Do You Good

If you are interested in a life insurance policy, but you want more flexibility than the standard coverage that universal or term life insurance policies provide, you may want to consider an adjustable life insurance policy.  An adjustable life insurance policy, also known as flexible premium adjustable life insurance, is a type of insurance policy that allows you to make more changes than your typical life insurance policy.  It combines features from both term and universal health care policies.

Policy Changes

One of the most significant benefits of an adjustable life insurance policy is the ability to increase or decrease the level of policy coverage as your situation changes, similar to a universal life insurance policy.  If you go through a life event such as a promotion or adding a family member, you may determine that it is necessary to increase your policy coverage.  With an adjustable life insurance plan, you have the ability to make the necessary changes. The insurance company may require proof to show that your insurable interest has changed, but it still allows for much more flexibility than a term life insurance policy. The policy also allows for changes such as altering the length of the policy term and changing the type of protection.  There may also be a time requirement on how long before you can make changes to the insurance. If the insurance company does put a required length of time on the policy before you can make a change, it is typically for one year.

When it comes to making changes to your life insurance policy, another big benefit that an adjustable life insurance policy offers is that it does not require you to cancel an existing policy, only to purchase a new insurance policy in order to obtain the coverage that you need. With an adjustable life insurance policy, being able to make changes to the current policy prevent you from having to get a new one.


Cash Value

Unlike a universal health insurance policy, an adjustable life policy includes the option to invest part of the cash value. While the policy is not likely to get the whole percentage of the return if the market is good, these policies can offer much higher returns than a universal health care policy. On the other hand, if the market is performing poorly, there is typically a zero percent return for the insured, so they do not risk losing the money that they paid toward their premium. An adjustable insurance plan offers a low- to no-risk option for your investment. You can withdraw returns whenever you'd like or leave them to mature.


Cons of Adjustable Life Insurance

In addition to not getting the full return on a well-performing investment, there is an additional drawback to adjustable premium life insurance policies.  Unfortunately, there is no guaranteed interest rate because the interest depends on how well the investment does. If the investments fail, you may not lose money, but you will not make any either.  You also face the risk of an increased premium over time, since the policy has allowances for such adjustments.

Adjustable life insurance policies offer the benefit of flexibility that other types of life insurance policies do not, as well as providing similar cash value opportunities to what a universal health insurance policy provides.  If an adjustable life insurance policy sounds like something that might be up your alley, contact your agent to review your portfolio and see if it may be beneficial for you to purchase one. While this type of life insurance may not be a good fit for everyone, it could be a good fit for you.

Has it been a while since you reviewed your life insurance policy? Contact Skyline Risk Management, Inc. at (718) 267-6600 to get free consultation on your life insurance policy!

Taming Your Animal Liability Risk

Taming Your Animal Liability Risk


For many of us, life would not be complete without our animal companions. They become part of the family, and just as you want to ensure that your human family members have coverage for liability claims, you also want to do the same for your furry family. The need for animal liability coverage is especially evident when it comes to man's best friend; in the unfortunate event of a dog attack or bite, you could find yourself in a very hairy situation if your homeowner’s or renter’s insurance policy doesn't have the proper coverage.

What is the Risk?

Of course, it is a natural human tendency to want to believe that our pet would never attack a person, but the truth is that nearly a third of all homeowners’ claims are from dog bites.  It’s not the number of claims alone that is important to be aware of, but also the amount paid out for those claims.  With large settlements being awarded to victims of dog attacks, proper liability coverage is now more important than ever.  Without animal liability coverage, the judgment could be a huge financial setback.


Additional needs for Animal Liability Coverage

Dog bites are not the only type of injury that prompts a need for animal liability coverage.  Even a friendly, but overly excited dog can knock someone down, potentially causing injuries severe enough to put someone in the hospital, especially if the victim is a child or elderly.  Animals other than dogs can cause concern from a liability standpoint as well. Many farm animals, and any animal that is considered exotic, can raise a flag of concern for the insurance company. Just as with dogs, you will want to make sure that your animal is acceptable to your insurance company. 


Insurance Requirements

 An important thing to know about liability coverage for your animals is that it is typically not included under a standard homeowner's policy. Some carriers allow you to endorse the policy for animal liability coverage, and others will exclude coverage for animal attacks altogether.  When you purchase a policy, the insurance company will ask you about the types of pets that you have. Make sure to be honest.  It is not worth stretching the truth about the breed of your dog to get a policy. If something were to happen, not only will you have no coverage, but the insurance company could take you to court for insurance fraud. Just because one carrier will not accept certain dog breeds does not mean that will be the case with every carrier.   If you did not have any pets when you purchased the policy, but later got a dog or any animal that might be considered exotic, make sure to check on whether that breed or type of animal is acceptable under the conditions of your policy.

Remember—as they say, the best defense is a good offense. Check with your agent to see what kind of animal liability coverage you have on your policy. If you do not have animal liability, but have a dog or exotic animal, talk to your agent about how to get the coverage you need. Also, make sure that your pet fits within the underwriting guidelines detailed in the policy.

Have a furry friend at home? Call a Skyline Risk Management, Inc. (718) 267-6600 to protect your pets! 

Final Expense Insurance: What, Why, & When?

Final Expense Insurance: What, Why, & When?

If you watch television at all, especially on the weekend, you've probably noticed commercials with some seniors talking about Final Expense Insurance. For most people, this topic is seldom discussed unless they've had to chip in for Cousin Ed's funeral because he died without life insurance. Final Expense Insurance may sound like a reasonable purchase, but the television ads aren't very specific about what it is.


What Is It?

All life insurance, no matter the product type, is a funding vehicle for a specific event or events that will financially affect you or your loved ones. It is, in simple terms, an affordable solution to a foreseeable financial problem:

  • Funeral and burial expenses
  • Final medical expenses
  • Debt reduction or elimination
  • Tuition expenses for surviving family members
  • Mortgage reduction or satisfaction
  • Income replacement
  • Financial legacy

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As clearly indicated in its moniker, Final Expense Insurance is life insurance that is specifically designated to pay final expenses at the death of the policyholder. It is typically purchased in amounts sufficient to pay funeral and burial expenses, and other final expenses left for surviving loved ones to deal with.

Although any type of life insurance can be used as a final expense policy, the type of insurance most preferred is Whole Life insurance, because coverage lasts for a lifetime and the premiums are guaranteed never to increase over the life of the policy.

Typically, insurance companies that offer Final Expense products will accept applications for people up to 80 years old and with some companies 85 years old. This is especially helpful for seniors who may have cashed in their regular life insurance policies or let them lapse because of financial difficulties. Also, many people go through life having their life insurance provided by their employer and then discover that they cannot keep it after retirement.


Guarantee Issue

Most life insurance companies that offer Final Expense Life Insurance also offer a "guarantee issue" product. This type of coverage is also referred to as graded benefit life and is an insurance plan that will cover you without regard to your medical history.

Typically, the policyholder must live two or three years before the full death benefit is available. If the policyholder dies during that period, the insurance company will return only the premium paid in up until death plus, in some cases, a small percentage of that amount added to the premium.


Why Purchase Final Expense Life Insurance

Final expense life insurance is the preferred product for people who want to designate a specific death benefit for their surviving loved ones to pay their final expenses. The policyholder wants to make certain they do not leave a funeral/burial expense debt to their survivors. With a moderate funeral costing about $10,000, you certainly don't want to have your grieving survivors responsible for paying for your funeral expenses.

For the many people who have waited until late in life to purchase life insurance, a final expense product may be their only option for obtaining coverage because of medical conditions or limited finances.


When to Purchase Final Expense Life Insurance

Most consumers understand that life insurance rates go up as you age, and for that reason, the earlier in life you purchase coverage, the less you will have to pay for it. Typically, hard-working individuals will put their careers ahead of their health and end up with medical conditions that could prevent them from purchasing a standard life insurance policy later in life. Fortunately, the guaranteed issue products offer a great solution, but with additional cost and a graded benefit period.

To speak with an insurance professional about Final Expense Life Insurance, contact Skyline Risk Management for help with identifying the most appropriate coverage at an affordable price.