Insurance Purchase Process

I purchased my Return of Premium Term Life insurance through HSBC. The process was smooth and the sales agent was diligent and helpful on explaining everything.

The sales agent takes care of all the paper work but you do have to help give answers to many employment, financial, health and beneficiary information.

Questions were related but not limited to:

  • How much is your income?
  • How much is in your savings and checking accounts?
  • How much debt do you have?
  • What is your employment information? (Address, employer name, etc)
  • What is your social security number? Address? Date of birth? (the usual)
  • Who are your beneficiaries? (Name, Relationship, Date of birth, Social Security Number)
  • How much is allocated for each beneficiary?
  • Do you have any chronic health conditions or disease?
  • Have you been recently hospitalized?

After the initial paper work was filled out and sent over to the insurance company, I had to schedule a health inspection. This is mainly for insurances with higher death benefits, I believe if the death benefit is lower then no health inspection is required.

For the health inspection it is handled by a third party vender who will go anywhere that is convenient for you and any time or day. You can also opt out of the appointment and just go to one of their clinics to complete the inspection. For the appointment, you can schedule it to be at your home, at your work place or anywhere else. The inspector will ask you questions about your health and more detail regarding your immediate family’s health conditions. You will be required to give your height and weight which won’t be measured. What will be measured will be your blood pressure and blood. This is used to test your cholesterol and overall health and will be less detailed than what your doctor checks for during your annual blood exams. Once the third party company confirms the the status of your health and the insurance approves your application, the term agreements for the monthly premiums need to be signed and the first payment must be made. You can choose to pay the premiums monthly or yearly.

 Life Insurance Basics

Life insurance: term or whole life? How about a middle road?

Life insurance is confusing and complicated, but it doesn’t have to be! Essentially there are two main types of life insurance: Term and Whole Life. What’s the difference?

Term Life Insurance:

  • strictly insurance
  • is only for a limited time (short term: ranges from 10-30 years)
  • cheaper premium

Whole Life Insurance:

  • insurance that promises profit that can be used to cover your premium and even add to the value of your death benefit
  • lasts your entire life
  • more expensive premium

Here are the cons for each:

Term Life Insurance:

  • is short term
  • there is no investment (the value does not grow over time)

Whole Life Insurance:

  • is expensive (will be able to afford less death benefits)
  • has no guarantee that the promised profit will grow
  • even if there are profits, it will be low as the insurance company will be charging fees

For term you are essentially just buying insurance, all the money that you have to pay monthly (or yearly) for this plan will be gone, but for whole life the money you pay is used to invest in mutual funds that hopefully will profit and be able to cover the monthly premium Continue reading