Life insurance is a contract between an insured ( Life Insurance policy holder) and an insurer (Life Insurance Company), where the insurer promises to pay a designated beneficiary a sum of money (the “benefits”) upon the death of the insured person. The advantage for the policy owner is “peace of mind”, in knowing that the death of the insured person will not result in financial hardship for loved ones and lenders.
In our role of Independent Advisors representing a number of leading Life Insurance companies, TK Insurance has developed a criterion that we follow when selecting a specific Life Insurance product, as well as the Life Insurance Company that will issue your contract.
Healthstyle underwriting was introduced to the market place to meet the challenges of a very competitive industry. Healthstyle is a more refined underwriting process that recognizes each individual’s unique health and lifestyle. Your health style risk is determined by assessing specific factors to provide a more accurate prediction of life expectancy. Insurance costs for each client are based on this assessment; individuals with a longer life expectancy will receive significantly lower rates.
Since the final Life Insurance premium structure is determined by the individual Life Insurance Company, we have made a corporate decision to quote premiums that are indicative of someone that is in good health and by doing so we are not presenting unrealistic expectations of low premium structure. On average, 40-50 percent of our Life Insurance applications are awarded more favorable rates than what was originally quoted. We will inform you which Life Insurance Carriers offer preferred underwriting and where you have the possibility of obtaining lower Life Insurance premiums with good health history.
Longevity of need
In addition to the above, the anticipated longevity of the need will play the largest role in your selection of the optimal Life Insurance contract. When you receive our Life Insurance report, we outline various Life Insurance product designs for your consideration. Further, as important as pricing will be in your final decision, the best value for Life Insurance coverage must also be fully taken into account and flexibility of this Life Insurance contract to meet your future needs.
There are two main types of Life Insurance products in the marketplace, those that are of a short term nature and others that are required for a long term. We complete a survey of the marketplace to examine the Life Insurance pricing structure of top Life Insurance Carriers and from that list together we choose the Life Insurance Company which will provide you with the best value.
“THE PENN STATE STUDY” on payout of large face value Term Life Insurance Policies
In the spring of 1993, Penn State University completed a study regarding the fate of Term Life Insurance policies. This study reviewed 20,000,000 short-term Life Insurance policies with aggregate face amounts of $4,000,000. Included were 5-Year, 10-Year and 20-Year term contracts valid to age 65.
The study brought forward some very disturbing findings that you should be aware of:
Considering the findings of this study, the odds are 100 to 1 against Term Life Insurance surviving to do what it was designed to do.
|Probability of paying a death Claim before Age 65|| |
Probability of paying a death Claim before Age 75
“INDUSTRY STANDARDS” on payout at death of Term Life Insurance Policies
If you put higher face value policies into this calculation and focus only on the younger lives (which is where most term policies are sold), you really can get your claims rates down to only 1 or 2 per 1000 policies (i.e. a probability of paying a death claim of 0.1% or 0.2%). If you throw into the analysis all of the term policies sold through banks to provide mortgage or loan insurance, the lapse rate increases dramatically and you get into the 1 or 2 per 1000 claims rates even at the older lives. Term insurance provides you with a good short term solution.