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Life Newsletter July 2020

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Volume 3, Number 10

IN THIS ISSUE...

IS LIFE INSURANCE TOMORROW’S PROBLEM? FINDINGS FROM THE 2020 INSURANCE BAROMETER STUDY

SALES OF TERM LIFE POLICIES INCREASE 8% IN FIRST QUARTER

FIVE THINGS YOU SHOULD KNOW ABOUT ANNUITIES

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The first article in this month’s newsletter contains a summary of the annual Life Happens and LIMRA 2020 Insurance Barometer study, which was prepared using January 2020 data that was available before the pandemic significantly impacted the U.S.

The second article reports the results of life insurance sales for the first quarter of 2020. Premiums from term life insurance sales increased 8%, which was the highest increase since 2007. Sales from other life insurance products like universal and whole life decreased 1%. The full effect of the pandemic on life insurance sales won’t be known until data from the second and third quarters is released.

The third article from the AARP Magazine lists five things you need to know before you consider buying an annuity.

IS LIFE INSURANCE TOMORROW’S PROBLEM? FINDINGS FROM THE 2020 INSURANCE BAROMETER STUDY

For the last decade, Life Happens and LIMRA have come together to understand the “financial pulse” of consumers as part of the annual Insurance Barometer Study . This year’s study, which was published on June 16, reviews 10 years of consumer data on life insurance and related financial issues, providing a point of view from January 2020, before COVID-19 significantly impacted the U.S.

Life insurance acts as a vital protective blanket for loved ones when the unexpected happens. But for many, this realization comes too late.

The Insurance Ownership Gap

Before the pandemic, close to half (46%) of U.S. adult consumers did not own life insurance. While 36% of respondents said they intended to purchase life insurance in the next 12 months, many were without it during the height of COVID-19 in the U.S. Lack of ownership may be adding to mounting financial stress Americans are facing. Almost half (44%) of those surveyed state that they would feel a financial impact within six months if the primary wage earner were to pass away. More than a quarter (28%) would feel it within one month. This doesn’t need to become a reality, but as more consumers delay taking action they are putting their loved ones at risk.

Ownership of life insurance this year fell among households in the lower and middle-income categories (i.e., under $100,000), declining by 25% over the past 10 years. For those who do own life insurance, the top reasons are:

Life Insurance: (Not) Something for Tomorrow

Be smart, buy life insurance when you’re young. Results show that 40% of people who own life insurance wish they had purchased policies at a younger age. While it’s best to get a life insurance policy when you’re young and healthy, research shows that many do not take action when they can typically secure a more affordable rate.

However, perception of cost may be the most significant barrier. Half (50%) of Millennials believe the estimated yearly cost for a $250,000 level-term life insurance policy for a healthy 30-year-old is $1,000 or more when in actuality, it’s closer to $160 per year. Other top reasons people do not own (more) life insurance are:

An Over-reliance on Employer Benefits and Decline in Ownership

Don’t hedge your bets. Over the last 10 years, a drop in ownership of life insurance and disability insurance could be tied to a broad decline in employer-paid group benefits, showing that consumers were over-relying on their employers for important financial protection. While over time this may lead many consumers to purchase individual coverage, the study found that only 16% of Americans have disability coverage. Ownership may be even lower now, in light of the unemployment numbers in April 2020, but could increase over time as people return to work or purchase individual policies. As many consumers look to take control of their finances and plan for a more stable future, both disability and life insurance should be important parts of their financial plan and safety nets.

Life insurance is today’s problem. To take action and get the protection you need, Life Happens has a free Life Insurance Needs Calculator and Disability Insurance Needs Calculator to help you evaluate your coverage needs.

SALES OF TERM LIFE POLICIES INCREASE 8% IN FIRST QUARTER

New premium for term life insurance policies rose 8% in the first quarter, with 40% of term life writers reporting double-digit sales increases, according to data released by the Life Insurance Research and Management Association (LIMRA) on May 28.

The term premium increase is the highest since the second quarter of 2007, according to LIMRA’s First Quarter 2020 U.S. Individual Life Insurance Sales Survey. Term market share jumped to 24% in the first quarter of 2020. Since 2011, term premium market share has been in the 21-22% range.

Sales of other products like universal life and whole life averaged 1% less than in last year’s first quarter.

We’ve heard from other insurance agents that life insurance sales in the 2 ^nd quarter have been brisk, but data have not yet been published for that quarter.

It appears that people are purchasing term policies in response to the coronavirus pandemic to provide at least temporary protection during the epidemic. Term policies are considerably lower in cost than other types of insurance policies. If you are interested in purchasing a term insurance policy or increasing the amount of your life insurance protection, please contact us as 877-734-3884 .

Read the entire article here .

FIVE THINGS YOUR SHOULD KNOW ABOUT ANNUITIES

This article that appeared in the AARP Magazine on May 21 is a well-written explanation of what you should consider before buying an annuity. The simplest form of annuity—a life annuity--provides income for your lifetime only; payments stop at your death. Other forms of annuities are available but some of these can be quite complicated and should be considered only by sophisticated investors.

This article explains that you should consider these five factors:

1. Life income annuities are simple, but many other forms of annuities are complicated and should be considered only by sophisticated investors .

2. Annuities require commitment . Be careful before you invest because generally you won’t be able to access your lump sum investment after you turn it over to an insurance company or you might incur significant surrender charges.

3. You need to know what you want . Income annuities provide guaranteed lifetime income. There are other types of annuities that are complicated and potentially more expensive. Most of them may be more appropriate for sophisticated investors.

4. Safety comes at a cost . The fees for income annuities are embedded in the payouts, and the safety comes at a cost because you can't access your principal in a lump sum after you hand it over to the insurance company. You could be faced with high surrender charges if you try to access your principal.

5. The insurance company—and the salesperson—matter . You should only buy an annuity by an A. M. Best A-rated insurer and a knowledgeable salesperson. Payouts and costs vary widely.

Suitability is an important consideration when buying an annuity. Insurance carriers will require you and the agent to perform a suitability analysis to verify that you understand what you’re buying and that the product meets your needs and to set limits on the amount of your assets that can be invested in an annuity. Insurance carriers and state insurance commissioners are particularly concerned about protecting seniors against buying inappropriate products.

Read the entire article here .

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HEALTH

DENTAL

MEDICARE

DISABILITY

LIFE

2021 Schedule
Affordable Care Act Open Enrollment

Open Enrollment begins November 1, 2020 and ends December 15, 2020
on the federal facilitated marketplace for plans to start January 1, 2021.

Before the next open enrollment period starts you can only enroll
for an Affordable Care Act plan if you have a qualifying life event.

You may be eligible to enroll for another type of plan.
Call us at 561-734-3884 or 877-734-3884 for details.

2021 Schedule
Medicare Annual Enrollment Period

Annual Enrollment begins October 15, 2020
and ends December 7, 2020 for a January 1, 2021 effective date.

You’re eligible to enroll now if you’re first becoming eligible for
Medicare or are eligible for another type of enrollment period.
Enrollment rules differ between Medicare Supplement plans and
Medicare Advantage, Medicare Advantage Prescription Drug,
and stand-alone Prescription Drug Plans.

Call us at 561-734-3884 or 877-734-3884 for details.

Get Rates & Plans Now

We offer a comprehensive set of Affordable Care Act (“Obamacare”) plans

to individuals and families qualified to buy health (tax- and non-tax subsidized) insurance and dental/vision and/or hearing plans through the Federal marketplace (this is called buying “on-exchange” or “on-marketplace”) or directly from insurance carriers (this is referred to as buying “off-exchange or -marketplace”). Our Affordable Care Act policies comply with the Affordable Care Act and contain all of the “essential health benefits” required by that law.

The dental/vision and/or hearing insurance

products are available both on an insured or discount basis

We offer short-term health insurance policies

for those who are looking for more inexpensive coverage and shorter term alternatives.

We offer Medicare Supplement, Medicare Advantage, and Part D Drug plans

to Medicare beneficiaries. Our site is compliant with federal, state, and carrier guidelines in selling these policies. See the Medicare section of this site for details.

We represent many carriers that offer supplemental benefits

to both individuals and families and Medicare beneficiaries, and the site contains information about hospital indemnity, cancer, critical illness, gap, accident, and international medical insurance offered by many different carriers. This section of the site also contains valuable information and tools about lowering the cost of prescription medications. Call us if you want more information about or would like to enroll in one of these products.

We also offer Short- and Long-Term Disability products

and can also help you meet the costs of long-term care, nursing home, or short-term (recovery) care needs.

Finally, we have a complete array of Life, Final Expense, and Annuity products

and offer pre-need services in Florida, as we have both life insurance and pre-need licenses in that state.

You pay nothing for our services:

we’re paid directly from the carriers we represent, Premiums are NEVER EVER marked up to include paying us for our services: you pay the same whether you order directly from the carrier or the marketplace on your own or directly through us or from our site.

We ONLY offer alternatives that are suitable for you and for which we feel meet YOUR needs.
When or if we feel a product or service is not appropriate for you from either a cost or benefit point of view we will tell you so.

We’re fully compliant with privacy and security guidelines, have signed all required privacy and security agreements, have developed a privacy and security policy, and take extraordinary steps to safeguard your protected health and personal information.
In short, we’re experts in all aspects of health and life insurance and also have relationships with professionals who can help you with very specialized situations.

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