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Life Insurance Basics for Insurance Agents

Life insurance is one of the most essential financial products available, providing financial security and peace of mind for individuals and their families. As an insurance agent, understanding the fundamental aspects of life insurance is crucial for effectively educating and assisting clients. This guide will cover life insurance basics for agents to help you decide if adding these products is right for you.

Life insurance is important financial protection that is paid upon the insured’s death in exchange for premium payments. It is a contract between an individual (policyholder) and an insurance company. This financial protection helps cover funeral costs, outstanding debts, daily living expenses, and future financial needs for the designated beneficiary.

Watch our quick YouTube video on life insurance basics

Types of Life Insurance

There are several types of life insurance policies, each one is designed to meet specific financial needs and objectives.

Term Life Insurance

• Provides coverage for a specific period (e.g., 10, 20, or 30 years).
• Offers a death benefit if the insured passes away within the term.
• More affordable than whole life insurance.
• No cash value accumulation.

Whole Life Insurance

• Provides lifelong coverage as long as premiums are paid.
• Accumulates cash value that policy holder can borrow against or withdraw if necessary.
• Premiums remain level throughout the policyholder’s life.

Universal Life Insurance

• Offers flexible premium payments and death benefits.
• Includes a cash value component that earns interest.
• Policyholders can adjust coverage amounts based on financial needs.

Variable Life Insurance

• Allows policyholders to invest the cash value in various investment options (e.g., stocks, bonds, mutual funds).
• Death benefit and cash value fluctuate based on investment performance.
• Higher risk but potential for higher returns.

See why critical illness insurance may be a good choice for your client

Some things to consider

As an insurance agent, it’s important to assess the clients’ coverage needs, financial situation and goals before suggesting a policy. Here are some things to consider:

1. Financial Needs Analysis – Determine how much coverage a client requires based on their income, debts, dependents, and future expenses.
2. Affordability – Ensure the client can comfortably afford premium payments without financial strain.
3. Policy Features – Explain policy riders, such as accidental death benefits, waiver of premium, or critical illness riders, to enhance coverage.
4. Long-Term Goals – Help clients align their life insurance choice with their retirement, estate planning, or wealth transfer strategies.

Are you an agent interested in adding life products; click here for online contract

Educating Clients

Educating clients helps them make informed decisions about life coverage. Be sure they understand all terms in simple language, provide real-life scenarios, and offer personalized recommendations.

Understanding life insurance basics helps insurance agents serve clients effectively. Knowing the types of policies, key features, and client needs, allows agents to provide tailored solutions that offer financial protection and peace of mind.

In many cases, long-term care insurance is an important financial planning tool. LTC policies provide financial assistance for the cost of care for chronic illnesses, disabilities or injuries associated with aging. Policies cover; nursing home care, assisted living facility care, home health aides, adult daycare and more. Although many older adults require long term care, there are some who do not. We will discuss; what happens with unused LTC policies.

Approximately 70% of Americans will need long-term care at some point. Although the level of care and length of time needed varies by individual. The likelihood of a need for long-term care increases with age. The premium for a LTC policy can be difficult to afford for many people especially on a fixed income.

Agents, click here to learn why you should offer ancillary health products

What happens if you don’t use the policy

If you spend your hard-earned money on a plan and never need it, do you just lose all that money? Is there any value in a LTC policy if you never use it? The answer to that question depends on the type of LTC policy the beneficiary chooses.  

Traditional LTC policies

Beneficiaries who opt for a traditional LTC policy can expect payment of the contracted amount if they require long term care. With these policies, if the beneficiary does not require these services, the policy has no value and can end up costing quite a bit.

Those who purchase traditional policies may have a difficult time maintaining coverage due to the rising costs as their age increases. Policies do not usually have a guaranteed premium amount. When this happens, many seniors find themselves unable to afford the policy and end up dropping the coverage.

There are partnership policy options for those who wish to purchase a traditional LTC policy. Partnership policies are a way for policyholders to protect assets if they exhaust long-term care benefits and must apply for Medicaid.  Each state has specific requirements for partnership policies and provide protection against inflation.

Hybrid LTC policies

Hybrid LTC policies may be a good alternative to traditional policies. They provide value even if the beneficiary does not require long term care. Hybrid policies may be combined with either a life policy or an annuity. In other words, there is value in this option in different circumstances.

With a hybrid policy, beneficiaries who decide to discontinue coverage may be able to leave with some cash. Annuity based plans provide the annuity’s value less the surrender charges. Those who add a return of premium rider could leave with their entire plan cost back. In this scenario, the beneficiary does not lose. If the beneficiary dies without using the policy, their heirs may receive a tax-free death benefit similar to a life insurance policy.

What to consider when purchasing a LTC policy

The premiums for LTC coverage may be expensive, therefore think carefully about your budget when choosing a plan. Age, health, coverage amount, elimination period are a few things that contribute to the cost of coverage. Many plans offer optional features, like inflation protection or a non-forfeiture benefit, that may also be important to consider.

In some situations, there are discounts on coverage. Some examples include; if the enrollee is in good health or if the policy is purchased by a couple.

Information for Agents

We have a number of long term care products available to offer your clients. Options include: traditional as well as fixed annuity & long-term care rider, Life and long term care or chronic illness rider. We also have several, affordable short-term care plans available. To find out more about our products; contact our office at 203-796-5403 or email teal@croweandassociates.com.

Agents who want to join the Crowe team or add a carrier to your contract; click here

The bottom line

By comparing the different coverage options, elimination and benefit periods, as well as costs, beneficiaries can make informed decisions. A licensed insurance agent can also add valuable insights into benefit options and costs.

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As a health insurance agent, there are many useful ancillary products available to offer your clients. One of the best products to offer is cancer insurance. Because we all know someone who has faced this diagnosis, we understand the toll in can take on the patient as well as their family. Unfortunately, it often comes with significant financial burden as well as the other challenges it brings. While a patient is struggling to heal and recover, they do not need added stress that treatment costs or loss of income can cause.

In this post, we go over what cancer insurance is, how it works, and why it’s important to add it to your product offerings.

Understanding Cancer Insurance

Cancer insurance is a type of supplemental insurance. It is designed to provide coverage for the various expenses associated with cancer diagnosis and treatment. Although traditional health insurance policies cover some medical costs, cancer insurance provides financial protection and fills the gaps left by standard health plans.

Watch a video on the value of ancillary health products.

How does this coverage work

Normally, cancer insurance operates as a form of indemnity coverage. In other words, if the beneficiary is diagnosed with a covered cancer, they receive a lump-sum cash benefit directly from the insurer. The policy holder can use the benefit at their discretion to cover a variety of expenses related to their cancer treatment and recovery. Some expenses may include the following:

Medical Expenses

Cancer treatment often involves many medical procedures, including surgeries, chemotherapy, radiation therapy, and medication. Cancer insurance helps offset some costs associated with treatments, such as deductibles, copays, as well as out-of-pocket expenses.

Find out about UHC Advantage Guard Hospital indemnity and cancer plans

Experimental Treatments

In some cases, individuals may decide to try either experimental or alternative treatments not covered by traditional health insurance. Cancer insurance provides the flexibility for patients to pursue these options by offering a way to afford such treatments.

Non-Medical Expenses

There are many costs associated with cancer and some are not medical. In some cases, a patient may need to travel to receive the best care. There can also be costs incurred for home health care services, and maybe childcare expenses for parents undergoing treatment.

Learn about other coverage options like critical illness insurance, click here

Income Replacement

It is difficult for many individuals undergoing cancer treatment to maintain a steady income. They require time off for both treatment and recovery. That is why this insurance is a great way to provide a financial cushion to replace lost income during this period. This allows policyholders to focus on their health and not finances.

Why this coverage is a good option

Although there have been many advancements in medical science, a cancer diagnosis remains a life-altering event that can wreak havoc on one’s physical, emotional, and financial well-being. While health insurance provides coverage for some of the expenses, out-of-pocket costs associated with cancer treatments can be substantial. Cancer insurance bridges this gap, offering financial protection and peace of mind during a challenging time.

Find out about other ancillary health insurance products, click here.

Additionally, this product is available to individuals of all ages and health. This makes it an accessible option for anyone concerned about the potential financial strain of a cancer diagnosis. Unlike traditional health insurance, this product focuses specifically on the unique needs of cancer patients, providing coverage and support.

Agents, click here to join the team at Crowe!

Already a Crowe agent, click here to add ancillary products to your Crowe contract.

Cancer insurance offers a vital layer of protection to ensure individuals and families confronting this diagnosis can focus on what matters most: their health and well-being. By providing financial support for medical treatments, non-medical expenses, income replacement, and more, cancer insurance offers peace of mind.

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Ancillary Health Insurance

Ancillary health insurance coverage can provide an additional layer of protection for those who need it.  Unfortunately, most health care plans do not cover every need a client has. Ancillary health products address gaps in coverage and offer additional benefits not included in a primary insurance policy.

Ancillary products include things such as, dental and vision, home health care as well as life products.  These plans provide a diverse array of coverage options.  Beneficiaries can find coverage options tailored to meet their healthcare needs.  In this post we will go over some ancillary health coverage options and why it is a good idea to contract to offer them.

See why ancillary products are a great addition to your business, watch our YouTube video

Dental & Vision Insurance

One of the most requested ancillary health products is dental insurance. Regular dental care, including check-ups, cleanings, fillings, and major procedures such as; root canals and crowns, are not usually covered by standard health plans. In most cases, when these benefits are are included in a Medicare Advantage plan, the coverage is minimum at best.  This leaves the client with a huge bill if they require dental care beyond cleanings. Dental insurance can offset the cost of these services, especially when beneficiaries use an in-network provider. Dental coverage makes it possible for individuals to maintain good oral health without financial burdens.

Vision insurance works similar to dental insurance. It covers routine eye care services such as, routine exams, prescription glasses, and contact lenses. Because many individuals need vision correction and regular eye exams to maintain good vision health. Vision insurance makes these services more accessible and affordable.

Long-Term & Short -Term Care Insurance

Long-term care insurance helps cover the costs associated with extended care services, such as nursing home care, assisted living facilities, and in-home healthcare. Medicare Supplement and Medicare Advantage plans provide limited coverage for long-term care, making long-term care insurance essential for individuals concerned about potential future care needs. Long-term care insurance policies vary in coverage options, benefit amounts, and eligibility criteria.

Learn more about short-term vs long-term care coverage

Short-term care insurance is very similar to long-term care in what it covers.  The real differences are in the amount of time the policies cover.  These policies cover care for a period of 1 year or less depending on the coverage option each beneficiary chooses.  It is also much easier to qualify for coverage, there are no waiting periods, and the cost is much more affordable than a long-term care policy.

Cancer, Heart Attack & Stroke Insurance

If an individual is diagnosed with cancer or had a heart attack or a stroke, they already have enough to worry about, they do not need to add paying bills to that list.   When it comes to the costs associated with Cancer, Heart Attack and Stroke, insurance that provides coverage for these conditions takes that concern away so beneficiaries can focus on recovery.

Once a beneficiary is diagnosed with any of these conditions, this coverage provides a lump-sum benefit amount. Beneficiaries receive payment in addition to other health coverage you already have.  The amount of the benefit depends on the plan purchased and provides a benefit of up to $50,000.  More than half the costs incurred with cancer can be non-medical.  Patients may need help paying bills if they or a spouse is unable to work.  The coverage may also provide financial assistance to receive out of network care with other providers.

Critical Illness Insurance

Critical illness insurance provides a lump-sum payment in the event of a serious illness or medical condition covered by the policy. This coverage helps individuals manage expenses not covered by their primary health insurance, such as lost income, medical bills, and additional caregiving costs. Critical illness insurance offers financial protection and peace of mind during challenging times, allowing individuals to focus on their recovery without financial strain.

If you want to add any of these products to your offerings, click here for online Crowe contract

Crowe agents who want to add a carrier, click here

Accident Insurance

Because accidents are unpredictable, it is not easy to guess if or when you need the coverage. Accident insurance is beneficial for anyone who lives an active lifestyle which can increase the possibility of an accident.  When this happens, you may lose pay due to injury especially if you are not eligible for workers compensation.  Accident insurance can help cover costs beneficiaries incur from medical treatments, injuries, hospitalizations, accidental death, dismemberment, or other loss.

Hospital Indemnity

Although accident insurance is a good choice to cover an emergency room visit, hospital indemnity insurance provides another option to cover costs if the beneficiary requires an extended hospital stay or several visits for rehabilitation or other care.  Once the beneficiary receives acre, they can submit a claim and, if it is valid, they receive a payment.

Click here to learn more about hospital indemnity plans

Disability Insurance

If a beneficiary is injured and it results in a covered disability, this insurance provides either short-term or long-term protection.  The amount of coverage, like other plans depends on what the beneficiary chooses.  This coverage gives the beneficiary a way to avoid the financial stress that comes from not being able to work. Beneficiaries may receive weekly payments for three months up to a year, depending on the policy. Get more information on disability insurance and what it covers.

Final Expense Insurance

Due to the high cost of funerals, many people choose to purchase a Final expense plan.  This can alleviate at least some of the stress that comes from losing a loved one.  A Final Expense plan can provide financial relief for your client’s family. Crowe and Associates’ agents have access to contracts with several top final expense carriers who offer level, graded and guaranteed issue types of plans. in all 50 states.  A few of the carriers we are contracted with are: AIG, Foresters, Mutual of Omaha, TransAmerica, Cigna, Baltimore Life, Columbian Life, Royal Neighbors, and Gerber.  Learn more about Final Expense plans.

Life Insurance

Although some employers offer life insurance coverage, the benefits usually rely on your employment.  In the event a beneficiary loses a job or stops working, they may opt to add a supplemental life plan.  There are many choices of life insurance, including term life insurance, whole life insurance and universal life insurance.

There are a wide variety of ancillary coverage options.  Each individual has their own needs.  A professional insurance agent can provide several options within a client’s budget tailored to supplement primary healthcare coverage.  Adding ancillary products is a great way agents can add a steady stream of revenue to their business.  Agents can add these products to their existing client’s coverage and both agent and client benefits.

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