Life Insurance 101

Learn the basics about life insurance in a flash. Hear from a one of the nation’s top insurance advisors who will explain why life insurance is so important, help demystify the life insurance process and quickly provide you with a good understanding of important insurance terms and concepts.

http://www.lifehappens.org/insurance-101-videos/life

Duration : 0:8:30

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What is the best life insurance company to work for with great commission?

What life insurance company is the best in the nation to work for and why? I am doing research and trying to figure out which life insurance company is best to work for or what is the best strategy working in the insurance field.

Allstate is by far the best. They are ranked in the top 50 employers book.

What exact is whole life insurance, and how do life insurance companies profit from selling it?

Agents are always extremely keen about selling my family whole life insurance instead of term. According to the agents, whole life is preferable to term since it does not expire and as a result the beneficiary is guaranteed some payment upon the death of the insured. However, why would the insurance company profit from such a setup if they are bound to pay back an amount that is at least equal to the total amount paid?

I have tried to do some research on my own, but I still can’t seem to fully understand this matter. Any help will be greatly appreciated!

Basically insurance only works when a large groups of people own that particular insurance. Everyone pays to protect their income, but not everyone is going to use their insurance. So that’s how basically insurance companies stay in business, unless something extraordinary has happen in this country where there’s lots of people are filing for claims and the insurance company can’t pay them all (such as the Hurricane Katrina event).

What is whole life insurance?
1) Its a level term insurance to a specified age (usually to age 95, 98 or 100) plus cash value.
2) It is very expensive when compared to term insurance
3) Cash value grows at a very low rate of return. In the first 10 years, you see a negative return on your money. But long term average is anywhere between 1-4%, depending on the company.
4) If you want to take money out, you have to borrow it and pay loan interest of 5-8%.
5) If you die someday, the insurance company pay the face amount of the policy (minus loans and missed premiums) to the beneficiary, but they keep all the cash value.
6) If you do get to live by the end of policy date (when you around age 100), the insurance company pay you the cash value, but you lose the insurance.

There’s only one reason why that agent is trying to sell you whole life insurance: MONEY!
Next thing you’ll know, that agent would try to sell you universal life insurance, a product that is more horrible than whole life, but it pays out more commissions.

Go with your instinct and find a different company who would listen to your needs. Try this site

http://free-best-life-insures-comparator-usa.blogspot.com/

Here you can get quotes from different life insurance companies in your area, its the best way to find an affordable life insurance with a reliable company.

What exactly is life insurance and how does life insurance work?

What exactly is life insurance and how does life insurance work?

I don’t understand, won’t you be dead or something so what does it do for you?

What happens if it doesn’t get cashed in, what does that mean?

Sorry I don’t understand, please explain.

Life insurance is insurance on your life. If you die the insurance company pays money to your beneficiaries. they could be family, friends, the company you work for even a charitable organization. as long as there is an insurable interest.

If you are dead the money from the insurance can pay for your funeral, your debts, mortgage, medical bills, car payments, children’s college education, your families survival if you are no longer here to provide for them, as well as pay for inheritance taxes, probate taxes (life insurance is tax free)

if you are single, no family, no responsibilities and don’t mind being buried by the state then you probably don’t need life insurance. Try this site to find the best life insurance

http://best-life-insurance-usa.info/

Here you can get quotes from different life insurance companies in your area, its the best way to find an affordable life insurance with a reliable company.

Hope this help,

Susan Orman on Life Insurance

Susan Orman on Life Insurance

Duration : 0:3:0

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NBC News – Investing In Life Insurance

Investing in life insurance can be an important asset in your investment portfolio.

Duration : 0:4:39

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How do life insurance agencies make their profit?

I have a few questions here and thanks in advance.

Can anyone please explain how do life insurance agencies (or financial advisory agencies) make their profit?

Is that true that the life insurance companies are paying around 100% of total first year premium to the agents? How do the agencies split that with the agents?

I would appreciate if you can throw in some numbers, since i am looking to invest some angel capital into an agency, so you would help if you give numbers.

Agencies make their money from First Year Commissions (FYC) on new policies, and renewal commissions and service fees on policies which have been on the books beyond the first year.

If an agent works for an established agency, he/she will get paid a percentage of the total FYC. The total FYC could be anywhere between 40%-120%, depending on the insurance companies the agency represents, and what type of policy is being sold. Health policies pay a lot less than life insurance policies.

Of the total FYC, the appointed sub-agent would receive anywhere between 50% and 90%, depending on the sub-agents contract with the agency. Most agencies will pay advance commission on 75% of the sub-agent’s FYC.

Example:

Let’s say that the sub-agent writes a life insurance policy, and the annualized premium is $1200. ($100.00 per month). Let’s assume that the agency’s FYC is 100%, and the sub-agent’s FTC is 80%. The agency’s FYC would be $1200, and it’s advance would be $900 (75%). The sub’s FYC would be $960, and the advance would be $720 (75%). The balance would be paid as earned on the final 3 last payments of the first policy year premium. If the total ANNUAL premium was paid initially with the application for the same policy, it would be a little less than $1200, around $1162 give or take. ALL FYC would be advanced in this case.

Once the policy is in force for 12 months, renewals and/or service fees will be paid, 2-20%, depending on the carrier, and the sub-agent would get his/her percentage of that. (I had a company that paid $100% FYC and 20% renewals)

Some companies pay bonuses, based on your total production and persistency rate, the percentage of business that stays on the books.

If you work for an insurance company as an employee/captive agent, your commission rate will be somewhat less, but your benefits will make up the difference, such as company-paid retirement, 401K, health and life insurance. In this case, your commissions would be put in a commission pool, and you would draw from that on a weekly or bi-weekly basis. When you initially start selling for one of these companies, you are on a guaranteed salary for a specified period of time, while you build your commission pool. Some of these types of companies will guarantee your salary, (based on production quotas), for up to three years, on a depreciating basis.

After the first year, you start earning renewals/service fees. Let’s say that over time, you build up your book of business to $500,000 of life insurance annualized premium, and your renewals are 3%. Your base pay would be $15,000, plus your FYC and bonuses.

Some of the captive companies will offer you an established book of business, with renewals and service fees. It’s possible to be offered an agency which is paying $300-$500 or more per week, which would either go into your commission pool, or be paid as part of your initial guaranteed salary. If you are assigned to an existing book of business, you have all those policyholders as potential prospects for new business, along with their family members and other people they know.

Here are some names of companies that have guaranteed starting salaries: (Not in any particular order)

New York Life, Met Life, Monumental Life, American General, American National, Western-Southern Life, Prudential, Liberty Life.

Life insurance affordability: FOX Toledo Market Minute

We’re continuing the life insurance topic, with a question from Gary from Rossford.

He asks, “Should I buy term or whole life insurance?”

Michelle Henry, from Generations Financial Group in Maumee, says identify the reason for having

the life insurance that will determine the kind you should get.

Term life covers a certain period of time or possible anticipated financial burdens.

Duration : 0:2:8

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