Blog - Leonard Financial Solutions

4 Mistakes that Can Hurt Your Life Insurance Policy

10/15/2021

Did you know that certain mistakes can hurt your life insurance policy in New Jersey? The worst part is, you probably wouldn’t know if you were making them! Fortunately, a bit of education goes a long way in choosing the right life insurance policy for your needs and budget.

Here are four mistakes you don’t want to make, as they can hurt your life insurance coverage.

Waiting too long to buy insurance.

When people are young and healthy, life insurance is usually one of the last things on their mind. What they probably don’t realize is that this is the BEST time to purchase life insurance coverage.

Buying life insurance sooner, rather than later, can work in your favor if you want to secure a policy at the lowest price possible. Rates are cheapest when you’re young and healthy and then increase over time. The longer you wait to take out life insurance, the more costly it will be.

Buying the least expensive policy.

Another mistake that people make is choosing the cheapest policy. You’re feeling good, so why not compromise and get cheap life insurance? While some life insurance is better than none, opting for the least expensive option is not always best.

Instead, meet with a financial advisor in NJ who can go over your options for term and permanent life insurance. Even if one plan looks more expensive, it might actually turn out to be more cost-effective in the long run.

Overlooking the investment portion of the insurance.

One of the great features of permanent life insurance is that it includes an investment feature called cash value. This portion of your policy earns interest and may be available for you to withdraw or borrow one day.

To build up this account, part of your premium goes toward the cash value each month. As long as you make your monthly payments, your policy will stay active, providing you with both life insurance coverage and cash savings.

Borrowing from your policy when you don’t need to.

While it’s certainly reassuring to have some money put away, you don’t want to borrow it for just anything. If you take too much money out, your policy can lapse and you will no longer be covered. Not to mention, you can significantly decrease the death benefit that’s available to your beneficiaries.

Of course, this is not to say that you can’t borrow against your life insurance policy - it is yours after all. But, it’s important to be aware of the potential consequences that can occur if you do withdraw money.

These are four common mistakes that people make all the time, but it can end up hurting them in the long run. To discuss life insurance in New Jersey, contact Leonard Financial Solutions today. One policy can give you life insurance coverage and an investment!

Will the COVID-19 Vaccine Affect My Life Insurance?

7/27/2021

Now that the COVID-19 vaccine is widely available to kids and adults 12 and older, many people have questions about what the future looks like if they get vaccinated. Some social media posts have suggested that life insurance companies can deny death benefits to those who are vaccinated because the vaccine is “experimental.”

However, there is absolutely no evidence to support these claims. In fact, the posts have been flagged and removed because they are false. Unfortunately, once people see posts like this, they get mixed information. That’s why we felt it was important to cover this topic and address the question of, “Will the COVID vaccine affect my life insurance?”

The COVID-19 Vaccine Has NO Bearing on Your Life Insurance Coverage

According to the American Council of Life Insurers (ACLI), life insurance companies cannot deny a death benefit because the deceased is vaccinated against COVID. And, they don’t consider whether or not a policyholder had the vaccine when deciding to pay a claim. Life insurance contracts are very clear about how their policies work and what can cause the denial of a claim. But the COVID vaccine is not a factor.

This is important to know as some people are worried about getting the vaccine because they don’t want to lose their insurance coverage. But you can safely tell yourself and other loved ones that the COVID vaccine has no effect on life insurance policies.

Why are Some Life Insurance Claims Being Denied?

As mentioned above, there are clear reasons why a death benefit may be denied. While it might seem like something is being denied because of the COVID timeline, there’s probably something else going on. For example, you can be denied a death benefit if the following applies:

The deceased died within two years of taking out the policy. In most states, the insurance company can deny a death benefit if the policyholder died within two years. Usually, they’ll look at medical records to see if there were any misrepresentations.

The deceased had an Accidental Death and Dismemberment policy. This type of policy does not cover medical-related deaths or suicide deaths.

The deceased was not paying their premiums. Insurance companies are not obligated to pay out a death benefit if the policyholder was not paying their premiums. Usually when this happens, the policy is terminated relatively quickly.

What Happens if You Die from COVID-19 Complications?

Bottom line: If you or a loved one dies from COVID-19 complications, your insurance company will pay out your death benefit. And if you or a loved one dies suddenly after getting the COVID-19 vaccine, the policy will pay out as well, providing that the policy is up to date. To ensure that you have enough coverage to protect your loved ones, schedule a consultation with Leonard Financial Solutions.

Everything You Need to Know About Getting Life Insurance After Age 50

7/12/2021

Life insurance is something that you buy to protect someone after you are gone. This could include a spouse, child, parent or sibling. Many people are aware that a life insurance policy is best taken out when they’re young and healthy, but what happens when that’s not the case? Does life insurance still make sense if you’re older than 50?

Here is everything you need to know about taking out a life insurance policy after age 50.

Consider Your Financial Dependents

If you are still financially responsible for someone, it makes sense to have life insurance. Otherwise, how would they take care of themselves if you were to die? These days, it’s not uncommon for people in their 50s to still have young, financially dependent children.

However, if you don’t have anyone who is financially dependent on you, life insurance is not a necessity. You may still want a policy so that a dependent will receive money when you die, but you can also put that money into other savings tools.

Be Aware You Have to Go Through Underwriting

To get life insurance after 50, you’ll have to go through underwriting. This process involves answering questions and completing a health exam. As long as you’re in good health, underwriting shouldn’t be a problem.

But, if you’re a smoker or have health troubles, expect to pay more than someone who is healthy. Some of the most common reasons why people are denied life insurance are because of obesity, diabetes, mental health problems and line of work.

Choose a Shorter Term Policy

You don’t want to overpay for coverage, so it’s important to weigh your options and determine how much life insurance you need. There are benefits to both whole life insurance and term life insurance, but we generally recommend term policies for those over age 50.

A term policy is meant to protect your family. If you were to die during the length of your policy, your family would receive the coverage amount. A whole life insurance policy lasts a lifetime, but it’s expensive and you might not have enough time to build a cash value.

Compare Life Insurance Quotes in NJ

Lastly, talk to an insurance agent who can run a few insurance quotes for you. This way, you can pick the right policy and term length for your needs. Leonard Financial Solutions is transparent in everything we do. We can help you find the best rates for life insurance, whether you want a term or permanent policy.

If we think that your money could be better invested somewhere else, we’ll let you know. Once you’re older, life insurance is not always a necessity. Schedule a free consultation with our life insurance brokers in NJ to discuss your options for life insurance after 50.

Is Life Insurance through Your Employer Enough?

4/1/2021

Group life insurance through work is an excellent employee benefit that doesn’t require much thought. You choose your limits and forget about it, right? Not exactly. While group life insurance in New Jersey is a nice perk, it can also give you a false sense of security. If you’re like most people, you’ll likely need additional life insurance coverage to meet your financial needs.

In this article, we’re going to discuss what employer-provided life insurance is and how to ensure you have enough coverage to protect your family.

What is Employer-Provided Life Insurance?

Employer-provided life insurance is a type of group insurance typically offered as part of your benefits package. The purpose of this insurance is to provide your beneficiaries with some money in the event of your death. Your employer pays some or all of the premiums.

However, there are some shortfalls to be aware of. For example, many employers don’t offer enough life insurance. Experts recommend getting coverage that’s at least six times your annual salary. You’ll need more than this if you have a non-working spouse, a large mortgage or a large family.

Additionally, it’s possible that you could lose your insurance if you change jobs. Make sure you understand your policy and where it’s lacking so you can fill in the gaps as needed.

How Supplemental Life Insurance Works

Basic group life insurance is affordable and convenient. The main issue is if it will provide your family with enough money if you were to die. This is why most people benefit from a supplemental policy. You can do this through your work or through a private insurer. Either is fine, but do find out what your employer will charge and shop around for the best rates.

When choosing a supplemental life insurance policy, there are two main options: term or permanent. With term life insurance, you get coverage for a defined period of time such as 10, 20 or 30 years. If you die during this time, your beneficiaries will get the death benefit. This type of policy is affordable but does not have a cash value.

Permanent life insurance provides coverage for an entire lifetime. As long as you pay your premiums, you’re covered and your family will receive the death benefit if you die. These plans also accumulate a cash value which you can tap into. While expensive, these policies can be used as a savings tool.

Finding Life Insurance in New Jersey to Fit Your Lifestyle

Life insurance protects the people who matter most. To find an affordable life insurance plan that fits your lifestyle, contact Leonard Financial Solutions. We can go over your options for term and whole life insurance and the various plans available.

How is COVID-19 Affecting Life Insurance Policies?

3/31/2021

The coronavirus pandemic continues to affect many aspects of our lives, particularly when it comes to health and longevity. COVID-19 has forced many people to think about their health and the importance of being prepared. What would happen to your family if you died unexpectedly? Would your beneficiaries have enough money to pay the bills?

Let’s take a closer look at how COVID-19 is impacting life insurance and what you need to know to be prepared.

Does Life Insurance Cover COVID-19 Deaths?

Yes. Your policy will cover you if you pass away from COVID-19. Life insurance companies cannot change the terms of coverage for active policies, so anyone who was covered before remains covered.

Is it Harder to Get Life Insurance with the Pandemic?

Applying for life insurance in New Jersey may take longer and be more expensive, especially if you’ve been infected with coronavirus or recently traveled to an area with a heavy outbreak. In fact, some insurers have stopped selling policies to customers older than a certain age. We can expect terms and rates to continue changing as insurers adapt to this “new normal.”

The good news is that some insurance companies are removing on-site medical exams because of shutdown and social distancing. This means you might be able to get life insurance without having to do an in-person exam.

How are Insurers Responding to the Pandemic?

Some insurance companies are willing to defer premium payments for the time being for those who have lost their jobs. If you’re temporarily struggling to make your monthly payments, it’s worth talking to your life insurance company to see what options you have.

Will COVID-19 Affect Life Insurance Long Term?

It’s too early to know the answer to this question, as some people who have had COVID-19 are reporting long term effects. If there are lasting consequences to the coronavirus, it’s possible that the cost of coverage will increase for COVID-19 survivors.

How Important is it to Have Life Insurance in NJ?

Life insurance has always been essential but it’s even more so now. Anyone who provides care or financial support to their family members should have life insurance. If you aren’t married and don’t have any kids, you probably don’t need life insurance just yet. However, it’s important to know that this could change in the near future.

Don’t be left without life insurance! The pandemic has reminded us that life is fragile. Contact Leonard Financial Solutions for free life insurance quotes in NJ.

Whole Life vs Universal: What's the Difference?

3/1/2021

Whole life and universal life insurance are two types of permanent life insurance. Unlike term insurance that guarantees a death benefit payout during a specific period, permanent policies provide lifetime coverage. There are two parts to a permanent policy - a savings portion and an insurance portion. If you are to cancel this policy at any time, you will receive the policy’s cash value minus any fees.

While whole life and universal life insurance are similar, there are differences between the two. Let’s explore these differences and ways to determine the best policy for your needs.

Whole Life Insurance

Whole life insurance in NJ offers coverage for the rest of your life, regardless of how long you live. As long as you pay the premiums each month, your policy stays valid and your beneficiaries will receive the death benefit when you die.

Every time you make a payment, some of the money goes toward the insurance and some goes toward your savings. Your cash value continues to grow with each payment. Because of this, you can expect a nice lump sum of savings as you get older.

Here are some pros and cons to whole life insurance:

You can borrow against the cash value of your policy.

If you surrender your policy, you’ll receive the cash value.

You can receive your dividends annually in cash, let them accumulate interest or use them to reduce your policy’s premiums.

Whole life insurance policies tend to be expensive. It’s best to take out this policy when you’re young and rates are cheaper.

Universal Life Insurance

Also known as adjustable life insurance, universal insurance in NJ is flexible and allows you to reduce or increase your death benefits at any time. Similar to whole life insurance, part of your payment goes toward the savings and the other part goes toward insurance.

The advantages and disadvantages to universal life insurance are:

You can increase, decrease and stop coverage without surrendering your policy.

You can borrow money from your cash value to cover unexpected expenses.

Interest rates depend on the market conditions. If things are good, you can grow your savings. If they’re not, you may not get the returns you hoped for.

Which Permanent Life Insurance Policy is Right for You?

The best way to find out what type of life insurance policy is right for you is by speaking with a financial advisor in NJ. At Leonard Financial Solutions, we’ll learn about your finances, long term goals and desire for flexibility. From here, we can recommend the best policy for your needs.

Regardless of which policy you choose, rest assured that you are making the right decisions to protect your family. Contact Leonard Financial Solutions today for an appointment.

How to Read Your Life Insurance Policy

2/9/2021

Once you obtain whole life insurance in NJ, you’ll want to take the time to understand your coverage. Your life insurance policy outlines your benefits and obligations, so it’s important that you understand what they are. In doing so, you can make sure there are no coverage gaps that could leave your family unprepared.

Below are some tips for reading your life insurance policy. If you have more questions, contact Leonard Financial Solutions. We can help you select life insurance in NJ that fits your needs and budget.

Cover Letter and Declaration Page

The first few pages of your insurance policy typically contain basic information such as the name of the insurance company, how much you will pay each month and the terms of the policy’s free look period, or the period when you can cancel the policy without penalty.

After the cover letter comes the first part of your policy, which is usually the benefits and specifications, otherwise known as the declaration page. This information should be familiar to you, as this is what you discussed with your life insurance broker in NJ. Here are some of the things you’ll find in the declaration:

Benefit amount
Amount of your payments
Name of the insured
Policy issue date
Policy number
Payment class

Insuring Agreement Section

The insuring agreement outlines the major details of your policy, such as what’s covered and your rights. For example, can you change the beneficiary? Can you borrow against your cash value? To help you understand what’s in the insuring agreement, it’s generally broken up into the following sections:

Tables and illustrations show potential future premiums, cash value details and death benefits

Definitions to help you understand your policy

A settlements section that provides instruction on how a beneficiary can make a claim

Endorsements and riders that can change your policy

Additional Provisions

Additional provisions may also be included in your life insurance policy. Provisions vary between policies. They’re based on the state insurance regulations, the insurance company and the type of policy you purchased. Your grace period can also be found in this section. If you miss a payment, most policies allow a grace period to prevent your policy from lapsing.

Hopefully this will help you better understand your life insurance policy. If you still have questions or are looking to choose a new policy, contact Leonard Financial Solutions for personalized solutions.

3 Reasons Why Life Insurance is an Invaluable Gift for Kids

1/5/2021

What do you buy for the child who has everything? A life insurance policy makes a great gift, though it’s not something that people think about often. This policy can give your child or grandchild a financial head start in life whether they choose to go to college, buy a house or pursue a different dream. It can also protect their future family - your grandchildren or great-grandchildren.

Below are three reasons why life insurance in NJ is an invaluable gift to children.

1. Life insurance is cheaper when kids are young.

Life insurance premiums are based on a number of factors, and age is one of them. Premiums are typically lower for children because they are young and healthy. As children grow older or if their health condition changes, life insurance premiums will cost more. To lock in great rates for whole life insurance in NJ, it’s best to take out this policy when your child is young.

2. Provide financial stability for the future.

Most parents want to secure their child’s future, but this isn’t easy to do when you’re raising a family and paying bills. A life insurance policy has cash value that grows over time. When you pay the premium each month, part of your payment goes toward the premium and part goes toward building a cash value.

This cash value can then be used for things like a college tuition, a new home or a wedding. What a wonderful gift for the future! Plus, whole life insurance is far more flexible than a 529 plan that can only be used for educational-related expenses.

3. Invest in something practical and long-term.

While it’s not as fun as a game or toy, life insurance is a practical gift that your child or grandchild will come to value and appreciate. Toys and games are a dime a dozen and offer short-term fun, but they won’t be there for your child when they’re an adult and ready to start their life. You can even include a letter with your life insurance purchase to let your child know your hopes for them.

These are three great reasons why life insurance in NJ is an invaluable gift for kids. To learn more about taking out a whole life insurance policy for your child or grandchild, contact Leonard Financial Solutions today. We can help you choose a policy that meets your needs and budget.

How to Use Whole Life Insurance for Retirement

11/5/2020

You might not be thinking about your life insurance policy on a regular basis, but there are certainly additional benefits to this policy that you may not know about. Aside from paying your beneficiaries money upon your death, it can also be used for retirement planning in NJ. Now this is more worth thinking about, isn’t it?
Let’s explore how your permanent life insurance policy can be utilized as an additional source of income when you retire.

Build Cash Value

One of the main benefits of a permanent life insurance policy is its ability to build cash value. The cash value of a policy is the balance remaining after a portion of your payment has gone to the premium. Each month that you pay into your policy, some of the money goes toward the premium and some goes toward cash value.

Over time, the cash value account grows and can be used as a source of income when it comes time for retirement. And as long as the amount withdrawn isn’t more than the amount you’ve paid in premiums, you don’t have to pay taxes on it either.

Borrow from Yourself

Another option that you have is to use your cash value as a loan. It’s essentially a loan that you’re getting from yourself so you don’t have to deal with anyone else or their terms. You don’t technically have to pay this money back, but it’s a good idea to do so because it accrues interest and won’t take away from your death benefit. But this can be a nice cushion if you plan to purchase a second home in Florida or pay off your mortgage.

Save on Income Tax

There are some tax advantages to using your life insurance to fund your retirement. Let’s say that you have $50,000 coming out of your IRA account, along with $25,000 in Social Security. This full $75,000 would be taxable income. On the other hand, if you get the $50,000 from life insurance, you’re only taxed on the $25,000 from Social Security.

Not only do you reduce your taxable income this way, but also you lower the tax bracket you’re in. This means you pay less taxes on the $25,000 from Social Security. The only downside is that whole life insurance is expensive to invest in. This is one of the reasons why we recommend starting these policies early.

Start Planning for Retirement

So should you fund your entire retirement though a whole life insurance policy? Not necessarily. There are other vehicles you should invest in as well to build wealth. That said, we want you to know that permanent life insurance is one of the ways you can reach your retirement goals. To discuss your options for retirement planning in New Jersey, contact Leonard Financial Solutions today.

Can I Keep My Life Insurance When I Retire?

11/4/2020

For most of your adult life, you likely had a life insurance policy. Most people get their life insurance policy from their employer and don’t think much about it. These policies are generally offered as part of a benefits package for full-time employees. It’s also possible that you took out a life insurance policy once you had children so that they would be protected if you died unexpectedly.

However now that you’re about to retire, you might be wondering if you need to keep your life insurance in New Jersey. Once you retire, you won’t have benefits from your job anymore, so that means you have to take out a new policy or not have one at all. What’s the best option?

Life Insurance is for Your Beneficiaries

While there is no simple answer for everyone, we’ll do our best to explain the purpose of life insurance and why you may not need it anymore.

When you take out a life insurance policy in NJ, you’re not insuring your life. You are protecting family members from the loss of income if you were to pass away. That’s why life insurance is highly recommended for working adults, as their families probably couldn’t keep up with their bills if they were to die unexpectedly.

There are different types of life insurance depending on your needs and budget. Term life insurance offers coverage for a specific period of time, usually 10-30 years. Permanent life insurance is a lifetime policy that helps build cash value.

Do Your Children or Spouse Depend on Your Income?

If your spouse or partner will have a steady source of income if you die, then you probably don’t need life insurance. Many couples live off Social Security and their retirement savings so there’s no income to replace. But this isn’t the case for everyone. If your spouse will lose a substantial amount of your pension income, life insurance can help fill the gap.

Another instance where you may want to keep your life insurance policy is if you have a spouse or adult children who are dependent on you. Even if they aren’t, some people like having something to leave their children or grandchildren.

How Much Life Insurance Do I Need?

If you plan to keep your life insurance after retirement, you’ll probably need to review it because there will be some changes.

Think about your situation and the people who would experience a loss if you were to die today. What amount of money would allow them to keep living and paying the bills? This will help you determine how much life insurance you need. You’ll also likely find that a term insurance policy will fit your needs. We do recommend permanent insurance if you have a high net worth or a thriving business, as you could be subject to taxes.

While this doesn’t give you a simple yes or no answer, we hope it provides you with some insight as to who needs life insurance in NJ when they retire and who doesn’t. To learn more about your options for retirement, schedule a consultation with Leonard Financial Solutions.