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Q: What is universal life insurance?
A:Universal life insurance is permanent life insurance with an investment savings element and low premiums like term life insurance.
The first product is a one year annual renewable term life policy at the face amount listed on the policy. The second product is a cash value account that grow at either a guaranteed interest rate or the current rate whatever is higher.
Most universal life insurance policies contain a flexible premium option. However, some require a single premium (single lump-sum premium) or fixed premiums (scheduled fixed premiums).
Q: What is the difference between universal and whole life insurance?
A: Universal life insurance and whole life insurance are both considered to be permanent life insurance products. However, there are very distinct differences between the two types of life insurance.
Whole life insurance is a safer product in that most whole life policies have a guaranteed premium which gets you a fixed death benefit and cash value that grows at fixed, guaranteed rate. However, you will pay more for whole life and you are restricted in when you cash in the cash value.
Universal life insurance is much more flexible. You can change the death benefit the premium you pay and the interest in the cash value account grows at an amount subject to market conditions (there is usually a guaranteed minimum though). You can actually not make payments if you have sufficient cash value in which to draw off.
Q: What is the difference between whole life and term life insurance?
A: Whole life insurance is a permanent life insurance product. What does that mean?
When you purchase a whole life insurance policy that policy is guaranteed for as long as you can pay the premiums. In addition whole life has a cash account that grows at a pre-determined fixed rate.
Term life insurance is very simple. Pick a death benefit. Pick the number of years you would like coverage. The insurance carrier provides you with a premium based on your health. You pay the premium each year you have insurance until the policy runs out.
In determining the correct amount of life insurance it is important to consult a professional that will help you determine your personal and unique needs.
Q: What are Living Benefits and why are they important?
A: Living benefits are additional benefits associated with our life Insurance offered at Regency Insurance, and annuity solutions provided by optional riders. We call them Living Benefits, and we have been providing them to all of our customers. Based on the product, living benefits can provide benefits should a qualifying terminal, chronic or critical illness or critical injury occur, or if your desire is to have an income that you cannot outlive, and you do not have to pass away to reap the benefits. Regency Insurance can answer all your questions regarding Living Benefits.
Q: Do I need long-term care insurance?
A: Long-term care insurance becomes more important every single day as the cost of providing health care rises. Families are going bankrupt paying the long-term care expense for elder loved-ones that can no longer make it on their own.
Long-term care doesn’t just provide coverage for the nursing home or facility. Long-term care policies can also provide coverage for in-home care as well as many other benefits you may not be aware of.
It is very common these days for children to pay long-term care policies on their parents to protect their own assets in the event their parents some day need long-term care service.
*This is an example of a Living Benefit with the products that are offered through Regency Insurance. This benefit can be included in a policy and will not need to purchase separately. Call Regency Insurance to find out how long-term care insurance can be part of your life insurance.
Q: Do I need long-term disability income insurance?
A: Long-term disability insurance protects your family and you from lost income in the event you are injured and can’t work. Unlike life insurance where a beneficiary is paid, long-term disability pays you.
Living with a disability can be tough enough, but experiencing financial struggle while disabled is worse.
Under a standard long-term disability policy, you get 60% of your income to an age you determine. Most common age we see is 65 years old.
Q: Is my employer sponsored life insurance plan enough?
A: Employer sponsored life insurance is a benefit to receive as an employee. However, just because life insurance is offered through work doesn’t mean that your family is adequately protected in event you die.
There three questions you must ask of your employer sponsored life insurance policy:
- Am I responsible for premium payments and if so can I pay more to get more life insurance?
- How is the amount of life insurance determined? Is there a fixed benefit or is the life benefit paid as a multiple of my salary?
- Is the policy portable?
Get the answer to these three questions from your human resources manager and then consult a life insurance professional here are Regency Insurance to determine if you are adequately protected
Q: Are You Safe with Your Employer’s Group Life Insurance?
A: Unfortunately far too often employer sponsored group life insurance programs are not adequate for your family’s protection in the event you pass away.
Due to the cost of living and your own personal expenses, we at Regency Insurance recommend sitting down with our agents to go over what you are getting from your employer and what you and your family will need in the even you pass away.
Q: How much life insurance should I buy?
A: The most common reasons for purchasing life insurance include coverage of debt, specifically a mortgage, replacing lost income for survivors and making sure there are funds available for education of children.
How you actually determine how much life insurance you need is really a personal decision. Have an honest discussion about what you hope to cover with your life insurance and what your financial capabilities are and make your decision from there.
Determining how much life insurance you need requires an examination of your current and future financial obligations, along with the resources your family could tap.
Your future obligations are a combination of what it would cost to help your surviving family members meet immediate and ongoing needs like funeral costs, taxes, food, clothing, utilities, mortgage payments, and your future obligations like college and retirement funding.
The resources that your surviving family members could draw on to meet those obligations include your spouse’s or partner’s income, savings and investments, other income producing assets, and any life insurance you might already own.
The difference between the two—your financial obligations minus the resources your family has to meet those obligations—is the approximate amount of additional life insurance you need. If this sounds confusing, you’re not alone. That’s why most people turn to a qualified insurance professional when they want to figure out how much insurance they need. Here are Regency we can put together a quote to go over what those expenses might be and future financial obligations to ensure you and your family are covered adequately.
Q: What are the various types of permanent life Insurance?
A: There are four main types. Whole life insurance is the most traditional form of permanent life insurance. With it, the face amount (the death benefit) and the premium (the amount you pay for protection each year) are fixed at the time you buy your policy and stay the same even as you age. You also get a guaranteed rate of return on your cash values. Of course, any guarantee relies on the claims-paying ability of the issuing insurance company.
By contrast, the cash value in universal life insurance is linked to an interest rate determined by the insurer, and the cash value of variable life and variable universal life is linked the performance of the underlying investment options you choose to invest in and fluctuate with market conditions. These two types of insurance products are offered via a prospectus, so you should always request a current copy, as it contains valuable information like investment objectives, risks, and charges and expenses of the investment.
The cash value of universal and variable policies is not guaranteed, although some policies set a minimum death benefit. With universal policies (universal life and variable universal life) you can reduce or increase the amount of the death benefit and vary the amount or timing of premium payments, subject to certain limitations. If you’re having a hard time understanding the differences between these policies, don’t worry. You can learn more about permanent life insurance by contacting us a Regency Insurance and we can answer all of your questions.
Q: Why is there life insurance for children?
A: The idea of buying life insurance for your child is something no one wants to consider because it forces us to consider the unthinkable. But purchasing a policy for a child isn’t just about having financial protection if the unthinkable happens; it’s about ensuring the child’s financial future.
However, most life insurance policies bought on the lives of children are not purchased as a means of providing financial relief in the event a child passes. Instead whole and universal life insurance policies are bought as presents for children.
These life insurance policies become tools for the child later in life. It may take 20 years for the child to see the benefit of the present but these children are often rewarded quite well for the investment made in life insurance.
Purchasing a policy also locks in the child’s insurability. Usually, children don’t have to go through a medical underwriting process – the parents simply answer a few medical questions. As long as the policy remains in force, the child will always have life insurance. Most insurance policies today also offer optional riders that will allow the child to increase their insurance coverage when they reach certain milestones in life.
Q: Do I need life insurance if I am single?
A: It depends, first ask yourself – “is anyone financially dependent on me?” You may not have a spouse who is dependent on you but what about other family members? Even if no one is dependent on you, you may want to consider purchasing life insurance to cover the repayment of debts, taxes, funeral and other final expenses.
But before you make a final decision, think to the future. If you get married and have children someday, you may want to have life insurance coverage. If you buy coverage today while you’re young and healthy, you’ll get much better premium rates then if you wait. Rates increase as you age and if your health deteriorates.
Q: How do I know I am paying the lowest price for home or auto insurance?
A: The easiest way to answer this question is to call us at Regency Insurance to go over your coverages and find out what you need to be covered for. Keep in mind that cheaper is NOT always better since you might be cutting out coverages you will later need or regret not having.
An easy way to check if you are paying the best rate is to contact Regency Insurance when your policy is ready for its annual renewal and we can go over the policy details and check to see if there are any other companies that can offer a better price.
Q: What is an Independent Insurance Agent/Agency?
A: Regency Insurance is an Independent Insurance Agency.
What defines an Independent Insurance Agent is our ability to shop your insurance through multiple carriers. Our job is help you create the best coverage package to meet your needs and then go to the market and find the most competitively priced insurance carrier for those coverages. Our goal here are Regency is to find the right product to fit your budget and your needs. We do not want you to over pay for insurance in any way.
Q: How does my credit score effect my insurance premium?
A: According to the Federal Trade Commission, based on the numerous studies that have been done on the issue of credit score and insurance premiums, there is a direct relationship between credit score and an individuals propensity to get into severe car accidents as well as cancel for non-payment.
This has lead 46 out of the 50 states in the US to allow insurance companies to use credit score when determining auto insurance and home insurance premiums.
For you the insurance consumer this means that it is important to have a good handle on your credit score and try to keep it as high as possible because a low credit score is going to mean higher insurance premiums in most states.
Every insurance carrier uses credit score to different degree so contact us a Regency Insurance to find the best rate for you.
Q: What is actual cash value?
A: Actual Cash Value is a method for valuing property after an insurance loss.
What many people do not realize about actual cash value is that depreciation is taken out of the payment from the insurance company. If you have a kitchen fire and the cabinets in your kitchen are twenty years old. The company is going to pay you for twenty year cabinets. Not what it will cost to replace those cabinets today.
Most property owners prefer to insure their property at replacement cost instead of actual cash value.
Q: What is replacement cost?
A: Replacement cost is a method for valuing the reimbursement of property on an insurance policy.
The most important concept to understand in regards to replacement cost is “new for old, like kind and quality.” The insurance company is going to give you the amount of money (up to your policy limit) that it takes for the materials and labor to replace your home. In most cases, this is the preferred property valuation method.
Q: How does an umbrella insurance policy work?
A: An umbrella insurance policy works exactly as the name describes. The umbrella policy sits over the top of underlying insurance policies and provides an extra layer of liability insurance.
In the case of a personal umbrella underlying policies would include auto insurance, homeowners insurance, boat insurance, rental property insurance, etc. If the limit of liability is used up on the underlying policy then the umbrella kicks in to provide additional coverage.
Umbrella insurance policies are an important part of every insurance program.
Q: What is an umbrella policy and why would I need one?
A: An umbrella policy is a liability insurance policy that provides an extra layer of coverage over and above your underlying insurance policies, which may include auto, home, boat, or rental property.
There are also commercial umbrella policies that provide excess coverage over the top of business, business auto, and workers compensation insurance policies.
Why do you need an umbrella policy?
When something really awful happens, like you severely injure or kill somebody in a car accident, you want to make sure that your assets are protected. There is a good chance that your basic auto policy will not provide the amount of liability protection that you need, and an umbrella policy is where you would find that additional protection.
Don’t think that this can’t happen to you because we have plenty examples of where this has happened to regular people.
Q: What is personal liability insurance?
A: Personal liability insurance is most often found on the homeowner insurance, renter insurance or rental property insurance policy.
Personal liability insurance protects you and your family in the event there is a lawsuit resulting from 3rd party bodily injury or property damage.
An example of personal liability is a neighborhood child who gets hurt on the swing set in your backyard.
Q: Should my small business have business income insurance?
A: Business income coverage is not necessary for every business. However, if you decide to not purchase this coverage, it’s important to understand what you will not have coverage for in the case of a loss.
Business income provides reimbursement for lost revenue after a covered insurance loss. For a company that does not have a physical address that is crucial to its business, such as a contractor, business income is probably not necessary. For store front or main street businesses, like a coffee shop, business income is a must.
Q: What is the difference between general liability and professional liability?
A: general liability is slips, trips and falls meaning bodily injury and/or property damage to a 3rd party.A woman walks into your store and slips on a puddle, breaks her hip and sues your business for the medical damage. That’s General Liability.
Professional liability is protecting your business against bad advice or guidance. Any time you give professional opinion, advice or guidance you are opening yourself up to a professional liability claim.
Q: Is auto insurance mandatory?
A: Yes, auto insurance is mandatory in every state across the U.S., but insurance carrying laws vary. To make sure you have the right insurance, visit your state government’s transportation website and give Regency Insurance a call to get you the best rate.
Q: When do I file an auto insurance claim?
A: When filing a claim, sooner is better. The most important thing to remember about filing an auto insurance claim is to make sure you call EMS or 911 first.
The insurance company is going to want to see a police report especially if there was another vehicle or someone else’s property involved in the accident. Especially if there was damage done or an injury.
Q: What is renter insurance?
A: Renter insurance is an insurance policy built to suit the needs of individuals and families who do not own the property they live in.
In many ways a renter insurance policy is similar to a homeowner insurance policy except the building coverage has been removed. However, there is still coverage for personal property and personal liability among other important coverages.
For the amount of insurance contained within a renter insurance policy the cost is very minimal not to mention with most insurance carriers you get the same multi-policy discount on your auto insurance as you do with a homeowner insurance policy.
Q: How is condo insurance different from homeowner insurance?
A: Condo insurance has some very significant differences from traditional homeowners insurance. The notable is how the Dwelling or Building is insured.
When you purchase a condo you are purchasing the air in side the building. The majority of the structure is not yours. Therefore the insurance you purchase does not need to cover the entire building.
Additionally when you own a condo you will most likely be part of a condo association. If there are problems with the building or public space you can be Assessed as part of association to fix damages.
There is coverage on your condo policy for loss assessment.
Q: What is considered a pre-existing condition on health insurance policy?
A pre-existing condition on a health insurance policy is any prior medical condition you have developed or sustained prior to purchasing the health insurance policy.
On most health insurance policies pre-existing conditions are only a concern if the policy holder did not have prior coverage with another health insurance carrier.
Q: How do I offer my employees health insurance?
The best way to offer your employees health insurance is to sit down with us at Regency Insurance to discuss the unique needs of your business.
Health Insurance is not the type of product that you want purchase from a menu style format like what you get a Chamber of Commerce. Your business is unique and you need a unique health insurance policy to suit your needs and your employers.
Q: What is the cost of offering a group benefit program/health insurance plan?
A: The cost can really be whatever you (employer) want it to be (within reason).The cost of a group benefit program or health insurance program all depends on how much benefit you want to offer your employees.
There are many new high deductible and hybrid health insurance policies that offer great benefits at a cost that is manageable and if you’re looking for a Cadillac policy those are still available.
So the cost really depends on what you want, and we at Regency can work with you to set up the plan that fits your needs and budget.