Lifespan of Modern Home Appliances

 
Homeowners often assume that with an increase in technology comes an improvement of everyday life. So it can come as a surprise that when appliance manufactures add techs, like sensors and displays, they are actually shortening the product’s lifespan.
 

Major home appliances like washers, stoves and even refrigerators have plugged into the digital revolution thanks to the introduction of smart appliances by brands like LG and Samsung. You can now do things like scan food items into your fridge, and it will then make recipe recommendations based off of the current contents — that’s one less excuse for ordering takeout.

Unfortunately, the added bells and whistles have overshadowed the fact that appliances just don’t last as long as they use to. The current average lifespan of major home appliances is around 10-15 years — compared to roughly 20-30 years when appliances were mostly mechanical in nature. That’s why your mom’s avocado-green washing machine lasted so long.

Today, the presence of LCD screens, Wi-Fi, and even load-sensitive sensors have increased the vulnerability of our modern appliances — the more gadgets, the more things that can fail. This, coupled with thinner plastic parts replacing the more durable porcelain and copper parts of the past means more calls to the repairman. Just like our cars, home appliances were once bulky behemoths made of heavier, more resilient materials.

However, there are two simple recommendations on how to avoid premature breakdowns with modern appliances. First, simply reading through the manual and getting a sense of how to properly clean and maintain your appliance is highly recommended to preserve its lifespan. Second, when problems do arise, don’t jump the gun and swap it for a new one. If the appliance has not yet exceeded the average lifespan, chances are fixing the specific problem and keeping it for its full lifespan will save you more in the long-run.


Although the lifespan of major appliances has decreased over the years, the added technology has greatly improved our lives. For what they now lack in years, these modern machines make up for in energy efficiency and technological versatility. It’s a small price to pay for managing more productive lives in our fast-paced digital age.

Owning new, modern appliances are great. But it’s even better knowing that when they fail, you’ll be covered with a Home Warranty Plan from E-exchanger.

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Can I Buy Life Insurance on My Significant Other?

Americans are waiting longer to get married.  This doesn’t mean that today’s couples love each other less than generations past.  Most couples are postponing marriage because they want to be financially secure first.  Part of being financially secure is owning life insurance.

It’s very common for married couples to purchase life insurance on one another or name each other as beneficiaries of their policies.  When you buy life insurance on someone, you need to have consent and insurable interest.  Insurable interest exists when one person financially benefits from another person living.  Essentially, they are worth more to you alive than dead.  With married couples, it’s obvious that they have an insurable interest in one another.  They live in the same house, both contribute toward bills and maybe raising children together.

The life insurance industry changes and adapts to keep up with societal norms.  According to the U.S. Census Bureau, the number of U.S. adults who are unmarried yet cohabitating has risen 29 percent since 2007.  For couples that aren’t married but want to buy life insurance on one another, you may need to check a few more boxes, but it isn’t as difficult as it used to be.

Buying Life Insurance on Your Fiancé/Fiancée

Being engaged shows a higher level of commitment and financial dependency than dating – in the eyes of the life insurance company.  It’s typically not an issue for engaged couples to buy life insurance on one another.  Some life insurance companies will want to know that a wedding date is set, but this isn’t always required.

How to Buy Life Insurance on Your Significant Other

If you’re looking to get life insurance on your significant other or name them as the beneficiary of your policy, E-exchanger can help.  We have helped many married and unmarried couples purchase life insurance.  Start the process by running a free and anonymous term life insurance quote.

If you want to buy life insurance on your significant other, be sure to complete the online quote and application using their information.  (Remember: You can always contact us directly if you want one-on-one assistance.)  After running quotes, when you’re ready to apply you will be brought to a page that looks like the screenshot below.

You can see it asks that you fill out the form with the insured’s information (your significant other.)  The life insurance company will need to personally contact the insured (your significant other) to verify application information and, if necessary, to schedule the medical exam.

Remember, you can’t just buy life insurance on anyone.  Consent is required.  If you believe life insurance is important for your significant other, but he or she doesn’t agree, you can’t just buy it on them anyway without their knowledge.  If you’re having trouble getting them to understand the importance of life insurance, check out our blog post How Do I Get My Spouse to Buy Life Insurance?  There are some tips that may be helpful.  We look forward to helping you and your loved one buy life insurance.

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How Can a Home Warranty Protect Your Dream Kitchen?

 
The day is finally here. After hours of research and meetings with contractors, a million pins on interest and only slightly fewer frozen dinners microwaved in your living room, you've built your dream kitchen!

Now — to make sure that it stays up and running — it’s time to protect it with a home warranty.The  E - exchanger Plan covers the repair and replacement costs of more than 20 of your home appliances and system parts. And E-exchange makes it easy — choose from existing plans or customize one that meets your needs without paying for unnecessary coverage.

You might think that because you have homeowners insurance you don’t need a home warranty, this is a common misconception but it's not true. Home insurance and home warranties offer different types of protection. A home insurance policy covers accidental damage to your home and belongings due to theft, storms, fires and some natural disasters. A home warranty is a service contract that provides for repair or replacement of your home appliances and system components that fail due to age and standard wear and tear.

Different Types of American Home Shield Plans

The Systems Plan covers items related to the major systems in your home such as air conditioning and heating (including ductwork), electrical and plumbing, water heaters, garbage disposals, water dispensers, central vacuums, smoke detectors, doorbells and ceiling fans. All things you take for granted, but that can cause major issues when they break down. For example, that new kitchen of yours will lose its luster pretty quick should you AC go out this summer. And it will be pretty hard to entertain should your garbage disposal or water dispenser go out.

The Appliances Plan covers, home appliances such as refrigerators, dishwashers, clothes washers and dryers, ranges/ovens/Cooktops, built-in microwaves, freestanding ice makers, trash compactors, garage door openers and built-in food processors. This plan helps get your household back up and running when one of these critical devices stops working. You don't want your refrigerator to break in the middle of summer, leaving you without cold beverages or frozen treats, right? What's summer without them, anyway?

Choose a plan that best fits what you need

The Combo Plan is our most popular and covers both systems and appliances.

The Build Your Own Plan lets you customize one that meets your needs without paying for coverage you might not need.

Optional Add-Ons

Don't think that you're limited to just standard appliances. You can always add coverage for things such as a pool/spa, water softener, well pump and septic pump. Simply select the plan that best suits your needs and then tack on any of these extras as appropriate. 

You’ve taken great care to build the kitchen of your dreams. It makes sense to protect your investment with an E-exchanger Home Warranty Plan. Explore our plans, see a list of what’s covered and get prices in your neighborhood now. With this kind of peace of mind, you can sit back, relax and start trying cool summer recipes from your favorite chefs!

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When Does a 10-Year Term Policy Make Sense?

Term life insurance can be seen as income replacement if you were to die prematurely.  It’s affordable and customizable.  One of the ways you can customize your term life insurance is with the term length.

The term length of a policy determines how many years you have insurance coverage for.  A permanent life insurance policy lasts forever – hence calling it “permanent.”  A term life insurance policy lasts a specific number of years – a “term”.  The typical term length options are 10, 15, 20, 25 or 30 years.  So, if you were 30 years old and you purchased a 25-year term policy, you would be insured until you were 55 years old.

A 10-year term policy is one of the cheapest life insurance policies you can buy, which makes sense because the coverage it provides lasts the fewest amount of years.

The Estimated Monthly Cost of a
$250,000 10-Year Term Policy
for a Healthy, Non-Smoker

Age

Male Female
25 $11

$10

30

$11

$10

35

$12

$11

40

$14 $13
45 $20

$17

50

$28 $23
55 $41

$31

60

$63

$46

Even though a 10-year policy may not last very long, there are still situations in which it makes sense to purchase one.

Buy a 10-year term policy if it’s all you can afford.

You may have a lot of bills.  Maybe you’ve got credit card debt.  You couldn’t possibly afford to buy life insurance now, right?  Wrong.  It’s in situations like these when you likely need life insurance the most and can’t afford not to have it.  If your income were to suddenly disappear, what would happen to your family?  If you were already struggling financially, your death won’t make things easier.  Final expenses – such as any debt you had and your funeral costs – would be up to your family to somehow pay.

A 10-year term policy can protect your income and your family’s future while you work toward paying off debt.  A little bit of life insurance is always better than none at all.  Once your finances are more secure, if you decide you want to purchase more life insurance this is always an option.  You can either convert your 10-year policy into a permanent policy (if your policy is convertible) or you can purchase a new term policy.

Buy a 10-year term policy if you are close to retirement.

Most of the time term life insurance policies are purchased to cover the most financially-vulnerable years, such as when your children are small and you have quite a few years left on your mortgage loan.  Other times term life insurance policies are purchased to protect financial responsibilities that may crop up later in life, such as the purchase of a vacation home or your adult child’s graduate school tuition.

As an example, let’s say you are 55 years old and you and your spouse pull the trigger and finally buy that dream condo on the ocean.  It will be a great place for your children and grandchildren to visit.  However, one of your children isn’t quite done with graduate school and tuition isn’t decreasing anytime soon.  You have savings, Social Security benefits will be starting soon, and even though you’re healthy, you still want to be sure that if the unexpected happened, your spouse wouldn’t have to sell the condo and your child could finish school.

The Estimated Monthly Cost of a
10-Year Term Policy
for a Healthy, Non-Smoking 55-Year-Old
Coverage Amount Gender
$100,000 Male = $22
Female = $20
$250,000 Male = $42
Female = $32
$300,000 Male = $48
Female = $37
$500,000 Male = $73
Female = $55
$750,000 Male = $107
Female = $80
$1,000,000 Male = $136
Female = $102

Buy a 10-year term policy to supplement your existing life insurance.

Perhaps you planned ahead when you were young and bought life insurance right after your first child.  You locked in a great low premium payment for a 30-year $250,000 term policy.  Perfect.  Your child will be financially protected through her college years and your spouse could pay for your funeral and rent each month.

Now, fifteen years later you’re 40 years old and realize that your $250,000 policy won’t cover your $400,000 mortgage loan.  Instead of applying for a brand new 30-year policy with a $500,000 coverage amount, you can opt to add to your current coverage with a new 10-year policy $250,000 policy.  This will ensure you have an appropriate amount of coverage for the next ten years while you’re paying off your mortgage and through your daughter’s college years – without being over-insured.

Buy a 10-year term policy to protect a loan.

Whether you need to take out a personal or business loan, lenders need to know how you plan on paying back the loan.  They also like a backup plan as assurance that they won’t lose money should you die unexpectedly before the balance is paid in full.  One such option is to assign a term policy as your payment backup should you die.  Lenders will be more inclined to approve your loan if they see you have all intentions of paying it back – even in death.

Interested in a 10-year term life insurance policy?  Finding out how little a policy may cost you is incredibly easy.  Visit E-exchanger.com/lifeinsurance. – run as many quotes as you want without being required to enter contact information.  We look forward to helping you purchase life insurance.

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The Truth About Home Warranties And Are They Worth It?

When you buy a new home you always have the option of purchasing a home warranty that, theoretically, covers the cost of repairs to various appliances and other home systems. But are these home warranties worth it and what should you be aware of before you actually buy one of these?

Before I get into some of the nuts and bolts behind these home warranty products let me explain that I actually managed the extended warranty program for Circuit City Stores for a period of time and these home warranties are a very similar product. In addition, I've studied the economics of insurance before and home warranties are basically insurance policies. So I know a fair amount about the economics of home warranties.

A Home Warranty Is An Insurance Policy

When you buy a home warranty - and they start around $420 - you are basically buying an insurance policy. The reason this is important to recognize is that insurance companies are in business to make money and that means that they expect to make money on the average policy they sell, which means that on average the people who buy these policies will lose money. Buyers will most likely pay more for the policy than they receive in return over the life of the policy.

Then why would you ever buy an insurance policy? Because you are willing to trade off the certain cost for a very uncertain cost. The insurance company can play the averages game but many consumers cannot or don't want to play that game and they are willing to pay a premium for the certainty. This is especially true as it relates to health care where a catastrophic illness can cost over $1 MM.

But when it comes to home appliances and other systems what is the worst thing that can happen? Maybe you need a new air conditioner or a refrigerator that might cost you a couple of thousand dollars. So for people who can handle that type of expense out of the blue, there is no need for them to buy an insurance policy - they basically "self-insure" from their own savings. But if a new air conditioner would break the bank then you might want to consider getting a home warranty.

How To Beat The Home Warranty Companies At The Averages

There is one advantage that the homebuyer has over the home warranty companies. They know more about what is being insured than the warranty company does and this asymmetrical information allows them to make a better decision about when to buy the warranty than the companies can make about when to sell the warranty. In fact, the companies will pretty much sell a policy on any property to any buyer because they just can't afford to inspect every home before issuing a policy. But a buyer is going to be more likely to buy a policy when they can see that a home has been poorly maintained - e.g. a trashed short sale - and is, therefore, more likely to develop problems. That's what I did when I bought my short sale. I bought a policy from Home Warranty.

This asymmetrical information leads to a problem for the warranty companies called adverse selection - the tendency of these companies to get stuck with bad deals. Consequently, they have to raise their prices to offset this bias, which means that anyone who buys such a warranty on a well-maintained property is overpaying.

Beware The Exclusions

It's important to understand what you are really buying when you get one of these home warranties. The contract is full of fine print which excludes a huge list of situations that you would reasonably expect to be covered such as:

  • Improper installation
  • Plumbing fixtures
  • Whirlpool jets
  • Ejector and sump pumps
  • Doorbells associated with intercom systems
  • Alarm system repairs above $400
  • Security video equipment
  • Central vacuum cleaner repairs above $400
  • The remote components of an automatic garage door opener
  • Ice and water dispenser in a refrigerator. In fact, it's not even clear if they cover the ice maker in the standard policy. I don't think they do.

That's just a small sample of my E-exchanger Home Warranty contract. The entire list is enormous. But you can buy a higher cost policy that will cover some of these excluded items. Like I said...these guys are in business to make money.

Beware The Pre-Existing Condition

Just like in healthcare these home warranties have pre-existing condition clauses. When you call in a claim they will ask you a series of questions and if your answers indicate that you don't know for sure that this item ever worked properly since you owned the home then they will simply deny the claim. Now you can buy a premium plan that will cover unknown pre-existing conditions but, even then, if they somehow determine that you knew the item wasn't working when you bought the plan they will deny coverage.

Beware The Deductible

Just like in healthcare you have to pay a deductible for every claim made. On my Home Warranty contract, it's a trade call fee of $100.

The Warranty Company Does Not Guarantee All The Work Performed

This one really burned me up. The home warranty companies contract with various repair companies to actually perform the work and they will make sure that your reported problem is ultimately solved. However, apparently, and once again I can only speak from my experience with Home Warranty if the contractor's work directly or indirectly damages your home or appliance you are on your own to work out the issue with the contractor. E-exchanger will do nothing to help you resolve the issue other than note a complaint in their system for future reference in dealing with the contractor even if E-exchanger sent out an unqualified contractor in the first place.

For instance, we had a gas leak in our dryer and E-exchanger sent out Bender's Plumbing of Addison to fix it. They fixed the leak but after they left we discovered that the dryer was no longer venting outside. Bender's Plumbing was dispatched again to fix this problem but incredibly they decided it wasn't their problem. Reluctantly we paid an appliance repair guy $80 to fix it and he explained that when Bender's moved the dryer the vent hose disconnected and was then crushed as the dryer was moved back in place. If Bender's had known what they were doing they would have opened a panel on the front of the dryer to reconnect the hose and pull it out of the way as they slid the dryer back in place.

Bender's initially promised to send me a check for $80 but it never arrived and then they wouldn't return my phone calls. And even though E-exchanger should never have sent out a plumber to do an appliance repairman's work they refused to help resolve this dispute.

Your Realtor Gets A Commission For The Sale Of A Home Warranty

And this is a lesser concern because it does not involve a lot of money but your realtor does get paid a small commission to sell a home warranty. It's around $70 I think, which is such a small amount that my company rebates it back to our clients to avoid any conflict of interest however small. But you should still be aware of this because some realtors will do anything for a buck.

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Why You Might Want Wedding Insurance

If you’re busy planning a wedding, you might want to consider insuring it.

Wedding insurance policies are relatively easy to understand, and the two main types are both inexpensive compared with the cost of a ceremony and reception:

  • Liability insurance covers you in case of an injury or property damage at the wedding. Liquor liability, sometimes a separate coverage, pays out if someone drinks too much and causes an injury or damage.
  • Cancellation coverage reimburses you for costs such as deposits and guests’ airfare if you need to cancel or reschedule the wedding for an unforeseen reason. Unfortunately, that doesn’t include a change of heart.

The most common wedding cancellation claims involve:

  • A vendor, such as a venue or a caterer, going out of business or being otherwise unable to fulfill its agreement.
  • Extreme weather, such as a hurricane or tornado.
  • A member of the bridal party or family being too injured or ill to participate.

Costs

Cancellation and liability coverage are sold separately. Prices are based on the number of guests or the wedding’s price tag, depending on the insurer, but each can cost under $200 for a wedding with fewer than 50 guests.

How to buy it

You can buy wedding insurance through an event insurer, such as Wedsafe or WedSure, or large insurers such as Travelers Insurance. Some insurers sell “event insurance,” which can also cover a wedding. Ask your agent if your current insurer has any options.

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What to Ask When Choosing a Home Warranty

There are a number of things to know about before getting your first Home Warranty Plan. Here are 10 questions to ask yourself and the provider when comparing your options.

Purchasing a home warranty to cover your major appliances and system components (refrigerator, dishwasher, garage door entry system, HVAC unit, etc.) can be tricky. You have to balance consideration of each warranty's options, premiums, deductibles, terms, and conditions. At the end of the day, what you really want is some assurance that, in times of need, you and your family will remain safe, comfortable and suffer the least amount of inconvenience.

What should you look for in a home warranty? There is no simple answer, and there is no one-size-fits-all home warranty solution. As with all your other investments, one of the best things you can do for yourself is to enter negotiations as well-prepared as possible. So we’ve assembled this checklist of questions to ask before you commit to a home warranty agreement to help you better understand your needs, your expectations, your reservations, and your own attitudes towards what makes a house a home.

1. How much wear and tear do your appliances already have?

Appliances exist for one reason: to make our lives easier and that means taking on the dirty work (literally, in the case of a dishwasher or washing machine). Some of us use them harder than others and age can add up over the years, but as long as you use your appliances according to manufacturer's instructions, a home warranty can help you keep your machines running without worrying about unexpected repair or replacement costs. Should your appliance's or system's major components break down due to your normal use, a home warranty can be there to help cover the costs to get back in working condition.

2. Do you plan on upgrading or replacing your appliances any time soon, even though they are still functioning?

New appliances and systems come with manufacturer's warranties which are great protection, however, they run out and are unit specific. A home warranty can provide more of an umbrella of protection for your home to cover multiple appliances and systems. Plus, some companies, E-exchanger, for example, provide programs such as the Appliance Discount Program that can save you money on the purchase of brand new, brand-name appliances.

3. Are you aware of any pre-existing conditions or problems with your appliances that have gone unaddressed?

Home warranty companies want to help you keep your home in working order but there may be some limitations when it comes to addressing certain pre-existing conditions. Check with your potential provider.

4. Are there any essential components on your appliances (e.g., your refrigerator’s ice-maker; your HVAC system’s ductwork) that may not be covered by a particular warranty?

Today's appliances are amazingly complex machines with evolving pieces and parts. However, they still basically rely upon essential core parts to perform their necessary duties. Those components are what require protection and often can be most expensive to repair. Your home warranty should cover these core components.

5. How does a particular warranty complement or supplement your existing homeowner's insurance policy?

Home insurance is great protection for your home for what MIGHT happen (fire, flood, natural disaster, etc.). However, what about protection for things that WILL happen? For example, your air conditioner condenser finally giving out or your clothes dryer refusing to dry your clothes. Having a home warranty plan to work side-by-side with your home insurance can greatly help your home remain a comfortable and happy place.

6. Will a specific home warranty policy help you pay for routine preventative maintenance of your major appliances?

A home warranty may not cover your routine preventative maintenance, however, they may penalize you for NOT taking that action. American Home Shield will not do that. We understand you're busy and that time gets away from you. That's why we can help cover you when your major system and appliance components break down from normal use.

7. Will a specific home warranty policy help you to pay for significant cosmetic damage to your major appliances?

Home warranties are designed to cover parts and components that are designed to wear down from normal wear and tear. If that normal use causes cosmetic damage, you should be covered. However, if an overly excited family member causes damage to your dishwasher door, for example, you will not be covered.

8. Are any repairs, services or appliances too minor (e.g. your microwave oven) to be covered by a specific warranty?

It all depends on your provider and your contract. An E-exchanger Home Warranty Plan, for example, covers every part of your refrigerator. Other companies may exclude coverage for a dozen or more parts. 

9. What is the upper limit for repairs and replacement that the warranty will cover?

This depends on your prospective provider, but AHS offers some of the most competitive levels of coverage. In some cases, E-exchanger provides twice or even five times as much in terms of replacement coverage.

10. When can you make a claim with your prospective warranty provider?

You may currently have appliances in need of repair. Most companies may make you wait 30-60 days before you are able to submit a service request. 

So, which home warranty combines the best reputation, the greatest expertise, and the most satisfactory customer service?

That warranty is the one that can be of the most benefit to you when the time comes for you to maximize your home’s equity. And American Home Shield is confident that the home warranties we offer are world-class in that regard. As the home warranty industry creator and leader, we are proud to offer the best, most comprehensive and award-winning home warranty plans. Learn more about E-exchanger Home Warranty Plans and get a quote today.

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5 Types Of Life Insurance For Seniors

Here is the ultimate truth about life insurance: the only policy that matters is the one that is in force on the day you die. – Tom Hegna, economist, author, retirement expert

Tom Hegna’s quote is powerful. If you have loved ones who would suffer financially should you pass away, you need a life insurance policy that is in force.

Seniors generally have five options for life insurance. We’ll review each type to help you make an informed decision.

When you’re ready to apply, you can be confident that you’re purchasing the best policy you qualify for at the most competitive price.

Five Types Of Life Insurance For Seniors:

1. Term

2. Whole

3. Guaranteed Universal

4. Universal

5. Final Expense

Next Steps:

How To Apply

1. Term

As the name implies, term life insurance provides a benefit for a specific amount of time. Contrary to popular belief, term life insurance is purchased by seniors regularly.

Primary components to understand about term when deciding if it’s a good fit for you:

  • How old are you? At some point, your age can disqualify you from purchasing term. Each life insurance carrier is different, but generally age limits look like this:
    • 80 years old – 10 year term
    • 75 years old – 15 year term
    • 70 years old – 20 year term
    • 65 years old – 25 year term
    • 58 years old – 30 year term
    • Unsurprisingly, term life insurance premiums increase with age.
  • How is your health? Less than perfect health means higher premiums or a possible decline. As we age, it's common to develop chronic health conditions including:
    • hypertension
    • diabetes
    • cardiovascular disease
    • anxiety

Bottom line – your age and health are two main components to securing life insurance. It’s possible you will need to complete a para medical exam that often includes an EKG.  Typically after age 70, many carriers will include a cognitive and physical function test.

One more thing – there is no exam (simplified issue) term life insurance options for seniors, too. At up to age 65, healthy seniors may be able to purchase a moderate amount of term life insurance (up to $500,000). From ages 66 – 75, healthy seniors may have the options to purchase a modest policy of up to $99,000.

2. Whole

Whole (permanent) life insurance provides a death benefit for the rest of your life and also accumulates a cash value. Unlike term life insurance, whole life insurance remains in force as long as you pay your premiums. Additionally, your premiums remain the same amount for the life of the policy.

What is a cash value?

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. – Permanent Insurance, Life Happens, a nonprofit life insurance awareness organization

Whole life insurance has some main characteristics:

  • Not common for seniors to purchase, however can make sense in some instances:
    • Desire to leave a specific amount to a beneficiary (i.e. family member, university or charity).
    • Utilize the policy loan option.
    • As a strategy to minimize estate taxes.
  • Policy lasts a lifetime.
  • Premiums are more expensive than term life insurance.
  • Accumulates cash value.
    • Ability to take policy loans from the cash value.
  • Underwriting guidelines are similar to term life insurance for seniors.
    • Usually the cutoff age for purchasing whole life is 75-80 years old.
    • Your age and health factor into whether or not you qualify for whole life insurance.

Bottom line – whole life insurance isn’t purchased by seniors all the time, but it can make sense in certain circumstances. Underwriting is similar to term life insurance.

3. Guaranteed Universal

Think of Guaranteed Universal life insurance (GUL) as a branch between term and whole life insurance. GUL is regularly recommended to seniors because it has some of the appealing aspects found in both term and whole life insurance.

Key features of Guaranteed Universal life insurance:

  • More affordable than whole life insurance.
  • Tends to be more expensive than traditional term life insurance.
  • GUL is technically not considered permanent life insurance because you select the length of the policy.
    • However, the policy length is routinely expected to outlast your life.
  • Does not accumulate a cash value.
  • Premiums can be level for a lifetime.
    • Premiums are not tied to investment volatility or interest rates.
  • GUL is often often used for:
    • Minimizing estate taxes.
    • Providing a legacy to a beneficiary.
    • Financing end of life expenses.
  • The underwriting process is often the same as a term life insurance application.

Bottom line – Guaranteed Universal life insurance is commonly purchased by seniors. Level premiums, a policy term that outlasts your life, and the ability to leave a legacy to your beneficiary(s) are primary reasons many seniors select a GUL.

4. Universal

Universal life insurance (UL) lasts a lifetime. The name implies that it’s similar to a GUL. However, there are some key differences and Universal life insurance is usually not purchased by seniors.

Let’s examine the specifics:

  • Universal life insurance is considered a form of permanent life insurance as it lasts a lifetime.
  • UL does have a cash value component.
    • Cash value is directly linked to policy’s investment performance.
    • Ability to take policy loans against the cash value of the policy.
  • Designed to provide flexibility in your policy:
    • Premium payments must be made to cover the cost of the policy.
    • Additional premium payments can be made to the savings component of the policy.
  • Policy is directly affected by the volatility of its investments.
    • In other words, the investment earnings are not guaranteed.
    • Depending on the policy’s performance, premium payments may need to be increased to maintain the policy.
  • Death benefit is adjustable.
  • Underwriting guidelines for UL are usually the same as a term life insurance application.

Bottom line – Universal life is not usually purchased by seniors. The policy does last a lifetime and provides flexibility, however, there are risks associated with the structure of the policy.

5. Final Expense

Final Expense (FE) life insurance makes all the sense in the world for seniors under certain circumstances. Aptly named, Final Expense works well for those seeking funds to cover end-of-life financial needs.

What you need to know:

  • Final expense is permanent life insurance and lasts a lifetime.
  • FE secures funds for end of life costs:
    • Funeral and burial expenses.
    • Medical bills.
  • Policies amounts typically range between $50,000 – $100,000.
  • Often FE policies can grow a cash value, meaning that you can access funds during the life of the policy (policy loans).
  • Underwriting for Final Expense is different than standard term life insurance:
    • Approval can be instant after you pass the health questionnaire.

Bottom line – Final Expense is a popular life insurance option for seniors. While the policy amounts are modest compared to other life insurance options, it may be the right amount of life insurance needed for your family. Further, the underwriting process is more lenient and instant approval is possible.

How To Apply

Your life insurance needs determine which policy is the best fit for you. Seniors have specific life insurance considerations and as an independent life insurance agency, we’ll collaborate with you to find the best policy at the most competitive price. Independent agents are not held captive to a particular life insurance carrier and you will receive multiple quotes from multiple carriers.

This is important – Some life insurance is better than none. And, the best time to become insured is today.

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The Real Benefits of Home Service Contracts

It's Saturday morning. With a cup of coffee in hand, you flip open the blinds and gaze out at your backyard. Despite the sunny morning, you notice standing water in the corner of your lawn.

Your heart sinks as you realize the water is your flooded leach field.

The home warranty contract you had when you first bought the house a year ago would have covered this, but you opted not to renew it last month.

What is a Home Warranty?

A home warranty is a service contract and covers wear and tear related repairs or the replacement of important home system components and appliances that break down over time.

A home warranty protects you and your family from bearing extreme expense and hardship from breakdowns not covered by your home insurance policy. Plans vary and can cover major home systems such as air conditioning, heating, electrical and plumbing as well as major home appliances such as kitchen ovens, stoves, refrigerators, and washers.

"I'm never going to have to pay for anything again!"

This isn't true.

Home warranty service contracts can cover a lot of major repairs or replace important systems and appliances, but only if you're signed up for the right one.

And there are a lot of companies out there advocating on behalf of these service contracts and the warranties they offer, and just like anything, they're not always truthful and the expectations they set with consumers can be misleading. They advertise that, under their umbrella policies, homeowners will never have to pay out of pocket again for repairs and services for their homes.

This isn't true.

Unfortunately, there are a lot of gross misrepresentations within home service contracts and the advertisements promoting them. Where, homeowners are led to believe if they spend more for what looks like an all-inclusive contract, they'll never have to pay for repairs or services to their home again, no matter what they are.

This isn't true.

The Honest Benefits of Owning a Home Service Contract

  • 1.The ability to call on a network of available pre-screened contractors for whatever their specialty is.
    • Instead of choosing a contractor blindly, a home service contract includes the right people to call on for the right jobs, mitigating the frustration of doing your own, unadvised research and dealing with the costly repercussions of illegitimate contractors who overcharge or are unfit to do the job. Not to mention, you'll never be covered for an all-out replacement.
    • In the earlier example of the flooded leach field, the service company the homeowners call on independently – because they no longer have the benefits of in-network contractors included in a home warranty – could falsely charge them. Instead of only replacing the sewage ejector pump causing the problems, the contractor might also cite septic tank malfunctions and replace the line from the house. How would the homeowner know?
    • Most homeowners don't have the time to manage what a contractor is doing or the knowledge to determine what repairs are needed and which are unnecessary. They just know they need it fixed. Home service contracts and their representatives are motivated to do the right thing on behalf of the homeowner because they are the ones who are paying for it.
  • If you pick wisely, you really will save money. Home service contracts really do pay claims.
    • The best part about the home warranty is when the consumer walks away without a penalty for wears and tears that naturally will happen to their home over time. Protect yourself, your family and your home by preparing for – not if, but – when your home systems and appliances malfunction or need repair or replacement.

 

 

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Life Insurance for Business Owners

Are you a small business owner or a co-owner of a company? Among the many days to day responsibilities you encounter, you also are responsible for your family. You need to protect your family at home as well as your business family.

Life Insurance for Business Owners

Life insurance for business owners can help lay a proper financial foundation by protecting your current and future business. Let’s look into the different situations that life insurance can benefit your company or business.

Collateral Assignment Life Insurance

A life insurance policy can be used for business owners that require cash to begin a business or buy a company. Typically, when you buy a life insurance policy you will name a beneficiary. This beneficiary has an insurable interest to the insured. This beneficiary can be a family member, spouse or a business partner or company. When you’re getting a life insurance policy for an SBA loan or bank loan – it is the same overall concept. You have to assign a primary beneficiary, however- the lender will be named the collateral assignee. If you were to die the lender will get the balance of the loan from the life insurance death benefit. Your primary beneficiary will then get the balance once the loan is paid off.

What would happen in the event that you didn’t use a collateral assignment? If you had the lender the sole beneficiary, the lender would then collect one hundred percent of the life insurance policy’s death benefit. E-exchanger life insurance can help you avoid that.

Executive Bonus Plan Life Insurance

With an executive bonus plan, you’re using a compensating method for specific employees by paying the life insurance policy premiums on the key employee’s life. The employer or business owner will pay for a benefit that is owned by the executive or employee. There are benefits to both the employer and employee when it comes to Executive bonus plans.

For the employer, there is no administration needed, the plan is simple, and costs are tax deductible. For the employee, the executive is the owner of the life insurance policy and of the cash values. The policy is not lost if they were to change employers. The death benefit can be income tax free.

Key Person Life Insurance

The purpose of key person life insurance is pretty basic:

A company buys a life insurance policy on a key employee, business owner or executive who is very important to the business. The company will apply for a life insurance policy, pay for all of the premiums and own the policy. The business is also the beneficiary of the life insurance policy. If the key person were to die, the company will receive the death benefit of the key person. The tax-free benefit can be used in a variety of ways. It can help make up for company sales as well as lost earnings. The benefit can also help cover some or all of the costs of finding a good replacement and provide proper training.

What would happen if the key person were to die unexpectedly? Could your business move forward without a hiccup? The life insurance death benefit can provide liquidity quickly so you can provide ongoing financial demands.

How about securing loans for your company’s growth? Sometimes loans are needed to help with the financing opportunities of expanding a business. Your lender will often seek collateral as security and the death of a key employee may pose too much of a risk to your lender. It is very common for a lender or bank to require key person life insurance on anyone that is vital to the life of your company.

One of the most important uses of key person life insurance is when there’s a need to buy out a deceased co-owner's interest in a company. There are some unfortunate situations that can arise if a key person policy isn’t in place. How would the deceased co-owner's family receive their share of the interest in the business without selling it off? How would the surviving owners pay off the dead owner’s family in order to avoid becoming partners with them?

Buy Sell Agreement with Life Insurance

When you’re an owner of a company or a partner in a business, a buy sell agreement can be an excellent way to avoid uncertainty. When a partner or company owner dies, the life of the business and it’s future are uncertain. With a buy-sell agreement, you can make sure you’re helping to protect you and your company from the unexpected or unintended transfer of ownership. By considering a buy sell agreement and funding it with life insurance, you can provide protection and extend the life of your company.

The buy sell agreement will aid the sale and purchase of a company based on a specified event. The most common events are retirement, disability or death of the owner of the company. The buy-sell will lay out specifically who will get what with regards to shares of the business. It will define how much and it will guarantee the buyer at a predetermined price. The buy-sell agreement also allows for the purchasing of company shares from the estate of the surviving family. Lastly, a buy-sell can be beneficial with creditors. Creditors will most likely be much easier to deal with when they can see that a company has protection established to make the loan decisions easier.

Business Succession Planning

Life insurance plays an important role as the driving force in succession planning. It is key that you have adequate coverage for you and your business partners. You need to get a formal valuation of your company and make sure that your coverage is updated with the growth of your company. Succession planning is a very important topic and can be vital to your business. If you let the estate plan dictate how your company transitions, it may cause significant issues. There are many companies that have had disastrous results due to poorly designed succession plans. Just ask the Robbie family and the Miami Dolphins.

Get Started

If you’re ready to get started, make sure you work with the following 3 resources:

  • Attorney
  • CPA
  • Life Insurance Broker

You’ll need experts in each of these areas in order to secure the best strategy and policy for your business succession plan.

How to Get Quotes and Apply

Once your plan is in place you can begin shopping for your life insurance policy. Simply use the free quoter on this page to get an idea of rates.

However, the best way to secure coverage is to have our research customized quotes. You can simply contact us at E-exchanger.com.  We’re independent and licensed life insurance agents. We’ll find you the best policy at the most competitive price from dozens of top rated life insurance companies. Once we find you the lowest rate, we’ll help you apply conveniently online or over the phone. We’ll help you from start to finish.

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