In Life Insurance Selling Magazine, (June 2009) Byron Udell wrote something that I liked. He is explaining to a client how R.O.P. works. Here is how he explains it. ”Mr. Client, here’s how it works. You set up an account and put $1,000 per year in it. The insurance company also sets up an account and they put $1 million in it. If you die any time during the 30 years, we simply switch accounts. Otherwise, if you’re still here at the end of the term, you keep your account: The insurance company writes you a check for $30,000. Of course, the “account” pays no interest, but in today’s world, a return of your money is a whole lot more important than a return on your money” So even simply stated, if you don’t die during the term of your insurance, the insurance company will return all of your payments. So you are being covered in case tragedy occurs with zero risk.

Most people take it for granted that they are able to wake up each day and earn an income to support themselves and their families.  The ability to be independent in this regard is one of your most valuable assets. Your ability to create income or generate income is your most valuable asset.  During this recession many folks have come to realize that being able to generate an income is very important. We’ve seen people get laid off left and right. Their ability to generate an income was shut off by an event beyond their control. Additionally, most people do not understand that the chances of becoming disabled at some time during their working career are higher than they would imagine.  Hence, disability insurance is available to protect your assets.

Disability insurance is insurance that is intended to replace your income if you should become sick, disabled, or hurt, and the illness or accident prevents you from earning an income in your occupation.  Disability insurance will pay up to 60% of your gross income during your absence from work. Supplemental plans may cover up to 70% or 80%. (No plan will cover all of your salary for fear you will have little or no incentive to get back to work.)

It is important to note however, that not every policy is the same.  Carefully scrutinizing the details and comparison-shopping is necessary when shopping for disability insurance.  The least expensive policy is not necessarily a good choice.  The odds of being paid a monthly benefit that will cover your cost of living while you are disabled are not improbable if you have purchased a low-cost insurance policy.

The purpose of this article is to provide useful information about the features of disability insurance, so that you can make an informed decision when purchasing your insurance policy.

Types of disability insurance

Short-term disability is as it’s name implies.  This policy may pay benefits for two weeks up to two years.  Usually, your employer provides short-term disability policies.

Long-term disability as it name implies, will provide benefits for an extended period.  Long-term disability insurance usually lasts about 5 years.  This type of insurance will also expire when the person turns 65.  Some employers will offer this type of insurance as part of employee benefit package or will make it available at a specific cost.

The two main types of long-term disability insurance policies are non-cancelable and guaranteed renewable.  A non-cancelable and guaranteed renewable policy means that the insurer cannot cancel or refuse to renew your policy as long as the required premiums are paid on time.  However, the significant differences between the two policies are that with a guaranteed renewable policy the premiums can be raised, but only if it affects the entire class of policyholders.  Under a non-cancelable contract, the premium payment remains in effect as stated on the policy.  Consequently, initial premiums for guaranteed renewable policies can be less expensive than non-cancelable policies.

Today we are happy healthy individuals. We are able to perform necessary tasks in our daily activities without any extra help. Life would be great if we were guaranteed to continue to live healthy lives for years to come. But the future is unpredictable and we never know what ailment might strike us and change the course of our lives.

Some may argue that future is filled with suspense and we cannot control it, true but then we have to put in a small amount of effort to safeguard our future, equipping our lives with suitable amenities is no crime.

So to avoid late realizations, it is better to grasp the situation and thus equip ourselves. One way to accomplish this task is by thinking about insurance. The word insurance is certainly a golden one as it can be a source of consolation if we are stuck in the middle of any tribulation. Assuming that you know a lot about insurances, we are going take a look at one specific types of the insurance- long term care.

In regard to long term care, every individuals require a lot of care when he/she reaches the point of not being able to take care of themselves. The long term care provides such assistance for the individual for performing his daily activities such as bathing, dressing, commuting, and other indispensable activities.

Why do I need long term care insurance?

Some people or perhaps many people consider that long term care is just not for them. They hate the idea of being a burden to others and they don’t want to lose their independence, so they fail to protect themselves with long term care insurance. This is the biggest mistake a person can make. Long term care coverage is necessary because we may be affected by any of these ailments-Arthritis

•           Arthritis

•           Cancer

•           Heart disease

•           Diabetes

•           Strokes

•           Alzheimer’s disease

•           Depression

Do not panic, these are the various possible ailments one can face as they age. This may happen to anyone. Wouldn’t it be better if every one took up the precautionary measure of learning more about long term care?

Long term care insurance is actually a very helpful form of insurance that is commonly overlooked by many. Long term insurance provides a lot of benefits like home health care, where you will be provided with good personal care while you are at home.

Community care or adult day care, as the name suggests, provides care from a community care center. If a person is seriously ill or if he/she needs regular hospital care he/she can obtain that care from a nursing home. Hospice care, caregiver training and care coordination services are the other benefits for which the long term care insurance would pay for.

There are two different kinds of long term care insurance. There is individual long term care and there is group long term care. As the names suggests the individual long term care insurance involves the insurer and the insured person. This type is bought by the individual whereas group coverage is usually bought through an employer. I suggest people buy their own long term care insurance and refrain from buying group coverage.  .

We have to develop a positive attitude towards the future. This does not mean that you have to frighten yourselves and thus panic about your future. Careful planning and implementation of those plans would prove to be very helpful. It is better not to complicate matters just by saying that these ailments will not affect you. Not taking up the long term care may seem to be convincing now, but the future awaits and it might offer anything so it’s better to prepare ourselves for the unexpected than to not plan at all.

Life Insurance isn’t for the people who die. It’s for the people who live.

I recently found out that my colleague’s friend was diagnosed with Cancer. He is 48 and has three very young children. He makes about $125,000 per year. His wife is a stay at home mom. A few years ago he was quoted for life insurance and he decided not to take it.

The doctor has given him about 3-6 months to live and he only has $120,000 of life insurance. This will provide his family with one year’s salary.
• Mom now has to find a job, fast. (Yes, she has to find a job quickly in this economy.)
• Will she be able to afford the mortgage payment, car payments, taxes, utilities? (Not for very long.)
• Will they have to move to into an apartment? (More than likely. Drastic change in life style)
• Will mom be able to afford to send the children to a good college without a college fund in place? (Not likely.)
• How much will daycare/afterschool programs cost? ($4,000-$6,000 per year, per child on average)
• Will mom need two jobs to make ends meet? (Either 2 jobs or rely on family or government assistance)