Expect the Unexpected Video Contest Launches

This week Garden State Life Insurance launched its Expect the Unexpected Video Contest. Garden State Life Insurance has partnered with video contest site Memelabs.com on this contest which encourages parents to film their children finishing famous sayings and proverbs in order to compete for a $10,000 U.S. Savings Bond or $5,000 cash. It should be an exciting few months so check the video contest site often to see what types of crazy videos the kids and parents create.

The URL for the contest is http://www.memelabs.com/gardenstatelife.


Check the blog each week or subscribe to the blog as I plan to post one of my favorite videos on the blog each week. There won't be a prize for blog video of the week, but I'm sure that the glory that comes with this honor will mean more than a monetary prize....Ok, maybe not, but it will still make my weekly pick feel really good about themselves. Good luck!

Accidental Death Life Insurance Explanation

This is part seven in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Accidental death life insurance only pays the death benefit when the insured dies from accidental causes. The causes of death that the company covers and excludes are listed in the policy. The life insurance company is also supposed to list the covered and excluded causes of death in the marketing materials, but companies have gotten in trouble in the past for not being very upfront. Some companies have even tried to hide that their insurance only pays for accidental deaths so be sure and read the fine print when reading through marketing materials.

Accidental death life insurance is sold both as a stand-alone product and as a rider attached to regular life insurance policy. It is much cheaper than regular life insurance. This is partially because the chances of you dying in an accident are much lower. Also the insurance company has very little underwriting cost because your health status does not really affect your likelihood of getting in an accident. You should easily be able to get $100,000 of accidental death life insurance for only a few dollars per month if it is attached as a rider to another policy.

I am not really convinced one way or the other as to whether accidental death life insurance is a good purchase. I think it is a bad idea to only own accidental death insurance when your family is counting on that income when you die. Just because you are in good health now and you feel that the only way you could possibly die is by accident does not mean that you won’t get sick in the coming years. Actually, if you feel really healthy, then you should be buying regular life insurance because your premiums will be lower.

There is an argument to be made for attaching some accidental death coverage to your regular life insurance policy. If you die suddenly and unexpectedly rather than from an extended illness, then the extra insurance may be necessary since you will have less time to get your affairs in order. Also, since you are attaching it to another policy, there is very little additional marketing cost to the life insurance company and so it should be relatively inexpensive.

Variable Universal Life Insurance Explanation

This is part six in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Variable universal life insurance works exactly like fixed universal life insurance with the exception that the investment performance of the cash value in the policy is tied to mutual funds instead of the fixed assets of the company. Usually the company provides the policy owner a list of mutual funds that they can split their cash value across. This is similar to how most employers allow you to divide up your 401K retirement accounts.

As with fixed universal life insurance, there are some estate planning reasons that may make variable universal life insurance a wise purchase, but you should be seeking advice from a trusted, professional financial advisor before you purchase a variable universal life insurance product.

Universal Life Insurance Explanation

This is part five in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Universal life insurance was created back in the 1980s to take advantage of the preferred tax treatment that life insurance policies receive from the IRS. As with whole life insurance, the life insurance company will offer death benefit coverage for the rest of your life. Unlike whole life insurance, the premiums are not guaranteed to be level.

The easiest way that I can think of to describe universal life insurance is that you are basically setting up a savings account to pay your life insurance premiums. A premium is paid to the life insurance company. The company then takes out any administrative fees and deducts the cost of the life insurance (COI) and the rest of the premium is credited to an account. The balance in your account is then credited an interest rate by the insurance company. There is usually a minimum guaranteed rate for the policy, but the actual rate credited usually fluctuates above that amount based on how well the insurance company’s investments are doing. As long as there is a cash value balance above zero the life insurance policy does not terminate. This makes universal life insurance more flexible than term or whole life insurance. A universal life insurance policyholder can usually make premium payments whenever and for whatever amount they choose as long as the balance stays above zero.

One benefit to a universal life insurance policy is that the balance or cash value in the policy earns interest tax free, unlike other investment vehicles like money market accounts or certificates of deposit. Despite this tax favorable tax treatment, it is usually not a good idea to buy universal life insurance just for the tax-free investment since you also have to pay for life insurance. There are some legitimate estate planning reasons to buy universal life insurance, but it is usually not the best option for someone either needing only life insurance protection or only an investment vehicle.

Return of Premium Life Insurance Explanation

This is part four in a series of articles explaining the various types of life insurance products. To start at the beginning please click here.

Return of premium term life insurance is a fairly new concept. A return of premium term life insurance policy works exactly like a term life insurance policy with one exception. If you live to the end of the policy term, the insurance company returns your premiums in a lump sum (see my explanation of term life insurance). If you die within the level term period, then the death benefit is paid in full and the premiums are not returned.

Insurance companies developed this product due to the fact that policyholders or potential policyholders did not like the fact that they would pay into a life insurance product for the length of the policy and have nothing to show for it if they lived. Personally, I'd be happy just to still be alive when my term policy ends, but I guess I'm just a glass is half-full kind of guy.

The premiums for a return of premium product are much higher than the comparable regular term product from the same company. This is to pay for the return of premium benefit at the end of the level term period. On the other hand, premiums for a return of premium product are usually less than the comparable whole life product. This is due to the fact that the insurance company only has to insure your life for a fixed period of time and also due to the fact that you only get your premiums returned in full if you persist until the end of the term period. With most whole life products you can access the cash value at any time and if you lapse the policy the cash value that has built up is yours to keep.