Frequently Asked QuestionsCheck here for answers to the most common insurance questions!
If I already have an Insurance and/or Investment Advisor, why should I work with CIFS?
We are not here to replace the members of your “financial team,” we’re here to work with them in order to help best serve you! While many Financial Planners and/or Investment Advisor’s will focus on a broad scope of important financial strategies and products, our experience and specialization is specific to ONLY the Life and Long Term Care Insurance industries. This focus ensures that we remain industry experts on the latest products and strategies that can best compliment your financial road map.
How does CIFS select the companies it represents?
As an independent insurance agency, we have the luxury of working with many of the best insurance carriers in the nation. We choose our companies based on a strict criteria, including: financial strength (A- or better), product breadth, and pricing.
Please feel free to contact us with any questions about the companies we use.
What kind of premium payment options are available?
Most carriers have similar, if not the same rules when it comes to accepted payment methods for premium payments on your insurance policy.
If you choose to pay your premium’s monthly, you will likely be required to setup an automatic draft from your Checking or Savings account.
If you choose to pay quarterly, semi-annually, or annually, you may still make your premium payment manually (by check or 1 time ACH transfer).
We find that the majority of applicants choose to setup automatic payments on their life insurance policies, primarily to avoid an unintentional lapse in coverage. We highly recommend considering this option!
It’s important to note that the payment option you choose will impact your premium cost. Paying your premiums annually will be less expensive than paying monthly.
How Are Accelerated Death Benefits Determined?
Most insurance companies use the same general approach to determining how much of a term death benefit can be paid out to the Owner. For example, with Transamerica’s Trendsetter® LB product, the factors that are taken into account for chronic, critical and terminal illness benefits when determining the payout amount are:
• The amount of the policy face amount accelerated and the future premiums that would be due.
• The Company’s assessment of the life expectancy of the insured, which is based on age and overall medical condition at time of claim.
• Accelerated benefit interest rate in effect (used to determine the present value of future benefits and premiums).
• Any administrative fees assessed.
• The death benefit is reduced based on the factors above to arrive at the final payout amount. Therefore, the more severe/life threatening an insured’s condition, the shorter his or her life expectancy and the more benefit the policy owner will receive.
Here’s an example of an estimated Critical Illness Accelerated Death Benefit:
The benefit amounts shown below are estimates based on a Trendsetter LB 30 policy, with a face amount of $200,000. 90% of the $200,000, which is $180,000, was accelerated for this example. Benefits are based on the severity of illness and the impact on remaining life expectancy.
Estimated Maximum Cash Payout…Male, Age 40, 30yr, SNS, $200,000 Face Amount
Severity of Illness
Age at Claim Minor Moderate Severe
45 $41,400 $82,598 $132,361
50 $42,638 $87,324 $139,543
55 $39,889 $88,775 $143,531
The longer you are expected to live, the lower the benefit you will receive. The shorter you are expected to live, the higher the benefit you will receive. The remaining amount of the face amount will be $20,000, which is the remaining amount after the maximum of 90% was accelerated from the face amount.
How Are Accelerated Death Benefit (ADB) Claims Processed?
Here again, most insurance companies that offer ADBs in their products follow a similar process. Below is the process Transamerica uses.
1. Policy owner must submit a notice of claim.
2. Claims area will set up a pending claim record.
3. Claims area will send out applicable claim kit that includes a letter, a form with request for APS, a copy of the ADB disclosure statement, a HIPAA notice and a W-9 form.
4. Policy owner returns claim form and must provide satisfactory proof of the insured’s terminal, chronic or critical illness.
5. Claims will evaluate whether the proof is satisfactory and, if so, will send to the Medical Department to determine the life expectancy of insured.
6. Claims will request a quote from Actuarial based on life expectancy and send to policy owner.
7. If policy owner consents to claim amount, we will process the claim check and send to policy owner with a statement reflecting the reduced life insurance coverage after the ADB payment.
How Much Life Insurance Do I Need?
The answer to this depends on the need(s) it is fulfilling. The most common use of Life Insurance is for Income Replacement protection, in case you were no longer around to provide for your family and loved ones. A general rule of thumb is 8-10x annual income, though this may either be too much or not enough depending on your needs. If you would like to know more, don’t hesitate to call us at (866) 609-4909.
How do I qualify for long term care insurance?
Long-term care insurance is underwritten according to your medical history and current health condition. When you apply, you must also be able to perform all of your “Activities of Daily Living”(ADL’s), including bathing, dressing, eating, toileting, continence and transferring.
What does long term care insurance cover?
With multiple companies and products competing in the long term care industry, it really depends on the type of plan you choose to purchase. Most long-term care insurance plans cover skilled and custodial services in a variety of settings, including in-home skilled and custodial care, adult day care, assisted living facilities, nursing home care and Alzheimer’s centers.
How much LTC insurance do I need?
When considering how much Long-Term Care Insurance protection you might require, its important to note that every individual or couple will have different needs. With that being said, a government survey (1) found that the “average length of time since admission for all current nursing home residents was 835 days, or approx. 2 years 4 months.” Considering the current costs of Long-Term Care for a Nursing Home in California, this means an individual requiring Nursing Home care could expect to pay approximately $242,378 during their 2-3 year stay.