Life Carriers & Resources

Life Insurance for Young, Old, Healthy or Impaired Risk

  • Our Carriers
  • American General
  • American National
  • AXA Equitable
  • Banner Life
  • Centrian (CT Only)
  • Cincinnati Life
  • Companion of NY
  • Fidelity
  • John Hancock
  • Kemper
  • Lincoln National Life
  • Mass Mutual
  • MetLife Investors
  • Minnesota Life
  • MetLife
  • North American Co.
  • OneAmerica
  • Prudential Financial
  • Protective Life
  • SBLI of MA
  • Symetra
  • Transamerica
  • United of Omaha
  • William Penn Life (NY)

 

Young Family

The Thompson Agency offers competitive Life Insurance products from the nation's most highly rated carriers, to Life Insurance Professionals, Independent Agencies and Financial Planners throughout the United States.

We field calls from all over the country from Career Life Insurance professionals, Independent Agents and Financial Planners seeking product, marketing, or underwriting guidance for standard, impaired risk and substandard risks, from small case solutions to jumbos, young and old.

Many of our customers are Property & Casualty Agents who don't necessarily speak fluent Life Insurance but understand the value of responding to client inquiries, as well as proactively marketing Life Insurance products to their existing Personal Lines clients for account rounding and the enhanced retention that multi-line customers traditionally provide. We understand that Life Insurance may not be in your wheehouse so we provide an extra level of reassuring support to see your case through the channels from application, to issue, to delivery, to payday.

This website provides you with relevant tools of your trade including a robust Life Insurance Quote Engine, Forms Engine, Life Insurance Needs Analysis, special links for drop-ticket (FastApps) processing, free Anti-Money-Laundering Training, Long Term Care Quote Engine, Disability Income Needs Analysis, Marketing Support, Social Media Posts, two Marketing Communications Microsites, our LTC-360° Microsite explaining LTC Funding Solutions and more and more.

Do you have a tough case (or any case) we can help you with? Call Adam: 860.693.8034 — or Peter: 860.693.8031. Call Today! — 800.842.8289

Challenge Clients to Calculate their Life Insurance Needs »

A simple letter with a Life Insurance Needs Estimator may be all it takes to stir things up. People are curious. They will do the math. We can personalize the letter and Needs Estimator with your logo and contact information.

See the Letter & Life Needs Estimator »

Research from LIMRA indicates that customers who go through a needs analysis are significantly more likely to purchase life insurance. Of those who performed a life insurance needs analysis, 73% went on to purchase a policy versus just 49% of those who had shopped for life insurance but never performed a needs analysis. LIMRA, Life Insurance Buyers/Non-Buyers Study

The Basics of Term Life Insurance

As the name implies, term insurance provides protection for a specific period of time and generally pays a benefit only if you die during the “term.” Term periods typically range from one year to 30 years, with 20 years being the most common term.

Advantages

One of the biggest advantages of term insurance is its lower initial cost in comparison to permanent insurance.

  • Why is it cheaper when initially purchased?
    • Because with term insurance, you’re generally just paying for the death benefit, the lump sum payment your beneficiaries will receive if you die within the term of the policy.
    • Term insurance is often a good choice for people in their family-formation years, especially if they’re on a tight budget, because it allows them to buy high levels of coverage when the need for protection is often greatest.
  • Term insurance is also a good option for covering needs that will disappear in time.
    • For instance, if paying for college is a major financial concern but you’re pretty sure that you won’t need life insurance coverage after the kids graduate, then it might make sense to buy a term policy that’ll get you through the college years.

When the Term Ends 

But what happens if you buy a term policy only to realize at the end of the term that you still have a need for life insurance?

  • Well, it’s sort of a good news, bad news story. The good news is that all policies will give you the option to convert (exchange your term policy for a permanent one), so if something has changed with your health you don’t have to worry about re-qualifying.  The bad news is that your new policy will have much higher costs since the permanent policy you are converting to now lasts for much longer than the term and your current older age is another key factor in determining the cost. (See more in the Convertibility section below)
  • If you’re still in good health with healthy living habits, you may be able to re-qualify for a new term or permanent policy at a reasonable rate. But if your health has deteriorated, you may find that it’s too expensive to apply for a new policy or you may not even re-qualify.

Types of Term Insurance

While all term insurance provides a level death benefit to your beneficiary when you die, in the term period, there are a few different types of term insurance that you should be aware of.

  • Traditional term, as you have learned provides a death benefit for a period of time. In order to qualify for this plan, you will need to go through full underwriting (what is insurance underwriting?).  Simply put you will need to be examined (blood draw, urine sample, height/weight check, medical questions, blood pressure, etc.) and depending on your health history they may require reviewing your medical records.  This is the lowest cost term option.
  • Simplified Issue Term – as the name suggests this type of term policy offers a simplified method of medical qualification. The good news is that there is NO paramed exam or medical records review with this type of plan, which also means that the time it takes from when you apply to having your policy is much faster.  The bad news is that the increase in convenience, and speed of processing time, comes at a cost.  All simplified issue term policies are more expensive than their fully underwritten cousins.
  • New Accelerated Underwritten term – In the last few years’ carriers have begun to make updates to their underwriting processes for traditional level term. For many traditional term carriers, if your health is good, and the death benefit you are looking to purchase is within a specific range, you would not be required to have a paramed exam, and your policy may be process with what they are calling accelerated underwriting.
  • Return of Premium Term – this is a unique traditionally underwritten term insurance option. While term insurance is very inexpensive, one of the disadvantages is that you are only paying for the death benefit.  Less than 2% of all term policies will payout a death benefit, so at the end of your term period where does that leave you?  With return of premium term, as the name suggests, if you reach the end of the term period, you then are provided options.  You can surrender the policy and get 100% of your premiums back, or you can use that “cash value” to help reduce the cost of a new permanent policy.  These types of term policies are significantly more expensive than traditional term, but the plus side of getting all of your money back, may outweigh the cost.

Convertibility

Another provision that is very important is something called convertibility. Some insurance contracts only allow “conversion” in the first few years of the policy, while others allow it at any point during the term. This valuable feature allows you to convert your term policy to a permanent policy (e.g., whole life insurance, Universal Life Insurance) without submitting evidence of insurability (insurance jargon for updated health information, medical records, etc.). Being able to convert to a permanent policy is a great option to have in the event that circumstances in your life change such as failing health or maybe just the realization that coverage is needed for a longer period of time than you originally anticipated. That’s why when purchasing a term policy, it’s never a bad idea to find out what kind of permanent policies are offered by the company you are considering. Some companies may only have strong term insurance offerings, while others may have very competitive products in both categories.

Bottom Line

So if you’re considering a term policy, make sure you carefully consider how long you’ll need the coverage. If you’re pretty sure that your needs are temporary, then term insurance is probably the right choice for you. But if you think there’s a possibility that you might need the coverage for a long time, then remember that if you want to renew your term policy after it expires or buy a new term policy at that time, your age, health status or other factors may make coverage very expensive.  To better understand term insurance, consider this analogy. When you purchase term insurance, it’s sort of like renting a house. When you rent, you get the full and immediate use of the house and all that goes with it, but only for as long as you continue paying rent. As soon as your lease expires, you must leave. Even if you rented the house for 30 years, you have no “equity” or value that belongs to you.

The Basics of Universal Life Insurance

Permanent insurance (Universal Life & Whole Life) can provide lifelong protection, and the ability to accumulate cash value on a tax-deferred basis. Unlike term insurance, a permanent insurance policy will remain in force for as long as you continue to pay your premiums. Because these policies are designed and priced for you to keep over a long period of time, this may be the wrong type of insurance for you if you don’t have a long-term need for life insurance coverage.

Why would someone need coverage for an extended period of time?

Because contrary to what a lot of people think, the need for life insurance often persists long after the kids have graduated college or the mortgage has been paid off. If you died the day after your youngest child graduated from college, your spouse would still be faced with daily living expenses. And what if your spouse outlives you by 10, 20 or even 30 years, which is certainly possible today. Would your financial plan, without life insurance, enable your spouse to maintain the lifestyle you worked so hard to achieve? And would you be able to pass on something to your children or grandchildren?

Benefits of Universal Life

Universal Life offers flexible and adjustable premiums that give you the option to make higher premium payments when you have extra cash on hand or lower ones when money is tight.

Universal Life allows you, after your initial payment, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You also can reduce or increase the death benefit more easily than under a traditional Whole Life policy.

In recent years, there’s been considerable interest in what’s commonly referred to as Universal Life with Secondary Guarantees (also known as a “No-Lapse Guarantee”, or a “Guaranteed Universal Life policy). With an ordinary Universal Life product, the policy could lapse under certain circumstances (e.g., interest rates fall below projections, insurance costs or administrative expenses rise, etc). When you buy a policy with a “secondary guarantee,” you’re guaranteed that the policy won’t lapse even if the above factors come to pass.  One of the most attractive things about Guaranteed Universal Life policies is that they provide lifelong coverage at rates that can be considerably lower than other forms of permanent insurance.

Many Universal Life policies that may not have the “Guaranteed” benefits of a Guaranteed UL will make up for that by providing a competitive interest rate where cash values in the policy can grow.  There are several types of Accumulation Universal Life options, two of the more popular options are below:

  • Current Assumption UL – a Universal Life policy that may offer some period of Guaranteed death benefit, but uses the insurance carriers’ investment portfolio to establish a current interest rate for the growth of the cash value in your policy.
  • Indexed UL – a Universal Life policy that may offer some period of Guaranteed death benefit, but the cash value is tied to the growth of an index, usually the S&P 500. There are different methods to how your cash value is invested, but this type of plan provides greater upside potential than a current assumption UL product, and downside protection (if the S&P 500 is negative at the end of the year, your policy would get a 0% rate and will never lose money)

Cash Value – an available and useful Key Feature

Another key characteristic of Universal Life insurance is a feature known as cash value or cash-surrender value. In fact, permanent insurance is often referred to as cash-value insurance because these types of policies can build cash value over time, as well as provide a death benefit to your beneficiaries.

Cash values, which accumulate on a tax-deferred basis just like assets in most retirement and tuition savings plans, can be used in the future for any purpose you wish. If you like, you can borrow cash value for a down payment on a home, to help pay for your children’s education or to provide income for your retirement. When you borrow money from a permanent insurance policy, you’re using the policy’s cash value as collateral and the borrowing rates tend to be relatively low. And unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions. You ultimately must repay any loan with interest or your beneficiaries will receive a reduced death benefit and cash-surrender value.

If you need or want to stop paying premiums, you can use the cash value to continue your current insurance protection for a specified time or to provide a lesser amount of death benefit protection covering you for your lifetime. If you decide to stop paying premiums and surrender your policy, the guaranteed policy values are yours. Just know that if you surrender your policy in the early years, there may be little or no cash value.

The Basics of Whole Life Insurance

Permanent insurance can provide lifelong protection, and the ability to accumulate cash value on a tax-deferred basis. Unlike term insurance, a permanent insurance policy will remain in force for as long as you continue to pay your premiums. Because these policies are designed and priced for you to keep over a long period of time, this may be the wrong type of insurance for you if you don’t have a long-term need for life insurance coverage.

Why would someone need coverage for an extended period of time?

Because contrary to what a lot of people think, the need for life insurance often persists long after the kids have graduated college or the mortgage has been paid off. If you died the day after your youngest child graduated from college, your spouse would still be faced with daily living expenses. And what if your spouse outlives you by 10, 20 or even 30 years, which is certainly possible today. Would your financial plan, without life insurance, enable your spouse to maintain the lifestyle you worked so hard to achieve? And would you be able to pass on something to your children or grandchildren?

Why choose Whole Life

If you’re the kind of person who likes predictability over time, Whole Life insurance might be right for you. It provides you with the certainty of a guaranteed amount of death benefit and a guaranteed rate of return on your cash values. And you’ll have a level premium that is guaranteed to never increase for life. Another valuable benefit of a participating Whole Life policy is the opportunity to earn dividends. While your policy’s guarantees provide you with a minimum death benefit and cash value, dividends give you the opportunity to receive an enhanced death benefit and cash value growth. Dividends are a way for the company to share part of its favorable results with policyholders. When you purchase a participating policy, it is expected that you will receive dividends after the second policy year – but they are not guaranteed. Dividends, if left in the policy, can provide an offset (and more) to the eroding effects of inflation on your coverage amount.

What are the advantages of whole life insurance?

  1. A fixed and known annual payment.
  2. Guaranteed maximum insurance costs and guaranteed floor on interest credited to cash values.
  3. Cash value interest or earnings accumulate tax-free or tax deferred, depending on whether gains are distributed at death or during lifetime.
  4. Whole life, through the combination of guaranteed cash values and available dividend formulas, frequently pays higher effective interest on cash values than is available from tax-free municipal bonds.
  5. Cash values are not subject to the market risk associated with longer term municipal bonds and other longer term fixed income investments.
  6. Policy owners can borrow cash values at a low net cost. Although policy owners must pay interest on policy loans, cash values continue to grow and as the insurance company credits at least the minimum guaranteed rate in the policy. Consequently, the actual net borrowing rate is less than the stated policy loan rate.
  7. Life insurance proceeds are not part of the probate estate, unless the estate is named as the beneficiary of the policy. Therefore, the beneficiary can receive the proceeds without the expense, delay, or uncertainty caused by administration of the estate.
  8. Policy owners can use life insurance policies as collateral or security for personal loans.

What are the disadvantages of whole life insurance?

  1. The premium may be too expensive.
  2. In the early years, the amount of protection is lower relative to the premium spent compared with term insurance. However, later, as term premiums rise compared to the level premiums for whole life which can provide an increasing death benefit and cash value, the reverse typically will be true.
  3. Surrender of the policy within the first five to 10 years may result in a loss of cash value due to surrender charges.
  4. Lifetime distributions of cash values that are gains over your investment (premiums paid in) are taxed as ordinary income.

Cash Value – understanding this Key Feature

Another key characteristic of permanent insurance is a feature known as cash value or cash-surrender value. In fact, permanent insurance is often referred to as cash-value insurance because these types of policies can build cash value over time, as well as provide a death benefit to your beneficiaries.

Cash values, which accumulate on a tax-deferred basis just like assets in most retirement and tuition savings plans, can be used in the future for any purpose you wish. If you like, you can borrow cash value for a down payment on a home, to help pay for your children’s education or to provide income for your retirement. When you borrow money from a permanent insurance policy, you’re using the policy’s cash value as collateral and the borrowing rates tend to be relatively low. And unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions. You ultimately must repay any loan with interest or your beneficiaries will receive a reduced death benefit and cash-surrender value.

If you need or want to stop paying premiums, you can use the cash value to continue your current insurance protection for a specified time or to provide a lesser amount of death benefit protection covering you for your lifetime. If you decide to stop paying premiums and surrender your policy, the guaranteed policy values are yours. Just know that if you surrender your policy in the early years, there may be little or no cash value.

The Basics of Final Expense Insurance

Final expense insurance is designed to cover the bills that your loved ones will face after your death – think medical bills and funeral expenses. Final expense insurance is also known as burial insurance, since even bare-bones funerals cost thousands of dollars.

Final Expense Insurance: The Basics

A final expense life insurance policy isn’t the same as what’s popularly known as “insuring your life.” With term and permanent life insurance, the value of your policy is proportionate to your earning power now and for the rest of your life. With funeral insurance, the value of your policy is proportionate to the expense of your desired funeral. While other forms of life insurance can top a million dollars, it’s rare for final expense insurance policies to get above $40,000.

Do I need final expense insurance?

That depends. If you already have term or whole life insurance, your loved ones can use your existing policy to pay final expenses. If you have term life insurance and you outlive the policy term, you may want to consider final expense insurance at that point.

Alternatively, if your family will have plenty of assets to work with when you die, you could use what’s called “self-insurance.” “Self-insurance” is one of those terms that sounds more complicated than it is. To self-insure is just to use your own money rather than use a life insurance payout.

Could your family self-insure for your final expenses? It’s a good idea to figure around $10,000 for the funeral expenses, but will you also want a catered party after the memorial service? A trip to a faraway land to scatter your ashes? Will you leave big bills behind? If you answered “yes” to any of those questions, consider springing for final expense insurance. And it’s probably best not to count on the lump sum death payment from Social Security to pick up the slack. It’s only $255.

Is final expense insurance expensive?

That depends on your age, and there’s no delicate way to say this. The older you are, the higher your premiums will be. That’s because the insurance company takes on more risk when insuring older folks, given the fact that they’re statistically closer to death. If you buy final expense insurance when you’re 45, you’ll pay less each month than if you wait until you’re 75.

Can’t I just pre-pay for my funeral? 

You certainly can, and some people do. This approach has advantages and disadvantages. When you pre-pay for your funeral, you get to personalize it to your taste. You can grill different funeral directors until you find one you love. You can pick out the perfect casket and the choicest plot in the cemetery. Another advantage of pre-paying is that it will most likely prompt you to talk your choices over with loved ones, leaving them more confident that they know your wishes.

The disadvantage of pre-payment is that it’s less flexible than burial insurance. Will you or your family be able to get a refund if your funeral plans change? Will you lose the money you pre-paid if you move to a different area? What happens if the funeral parlor goes out of business? With final expense insurance, your surviving relatives will receive a payout they can spend anywhere. If you go with final expense insurance instead of pre-payment, you have less control, but your family has more flexibility. The choice is yours.

If you want to leave a clear indication of your wishes without necessarily locking in the funeral home, you could always combine burial insurance with a document stating your preferences. Kept with your will (you have a will, right?), this document would cover issues like burial vs. cremation, open vs. closed casket. etc.

Visit our Final Expense Life Insurance page to view your options »

 

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