Key moments when you should update your life insurance policy

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A lot of people tend to forget to update their insurance policies. It’s easy to regard life insurance as just one of your monthly bills. Changes in premiums happen all the time, and it’s not often that these are explained to us. However, certain life changes mean you have to revisit your insurance policy. Here are some key moments in life that should trigger a call to your insurance agent.

You are getting married or getting a divorce: If you are gaining or losing a dependent, you need to update your insurance policy. Not doing so could either not include them into your plan or you’ll be paying a higher premium for a person you are no longer with.

You have children: If you’re not planning on getting a separate insurance plan for your children, you may want to include them in yours. Increasing your coverage is just one of the many options that is readily available to you. Such changes can help secure your children’s financial future, help them later on with education expenses, or simply see to it that they are honored part of your estate if the unthinkable occurs.

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You got a new job: Depending on which way your salary went, you need to revisit your insurance policies. It could be possible to be burdened with an insurance premium that’s too expensive for your new job. At the same time, upgrading your coverage is a good choice if you got a significant pay increase.

You finally retired: For people who are part of a group life insurance policy through an employer, retiring would mean losing the coverage. Now that you’re relying on insurance as your income adjusting it according to your lifestyle is necessary.

Delos H. Yancey III is the chairman, president, and CEO of State Mutual Insurance. He is a Certified Financial Examiner, a Certified Insurance Examiner, and a fellow of the LIMRA Leadership Institute. Visit his company's website for more on its services and history.

Top mistakes for first-time life insurance buyers

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Getting life insurance is a major milestone for any adult. It gives you peace of mind and is a great way to invest on your future retirement. However, given the importance of getting insurance, there are still people who make mistakes when enrolling for a plan for the first time. These mistakes could mean paying a higher premium for unwanted or unnecessary coverage. Here are some of the top mistakes first-time life insurance buyers make.

One of the biggest mistakes one could make is buying life insurance offered to them by family members or friends. You may trust them with your life and their intentions may be good, but getting the same insurance as people close to you or offered by family and friends without knowing all the terms might not give you what you need later on.

Another major mistake is getting swept away by the terms without actually thinking if the coverage fits your situation. The best insurance plans take into consideration a person’s needs, wants, and a budget they are comfortable with. Not being able to pay monthly premiums could ruin this long-term commitment.

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Making all beneficiaries primary beneficiaries is also a common mistake. This can have major consequences as primary beneficiaries receive both benefits of your insurance policy and the burden of paying debts. If primary beneficiaries are not appointed properly, your insurance benefits could be divided unevenly and cause trouble for those you will leave behind.

Lastly, failing to update insurance plans occurs often. When new health-related issues arise, your insurance may not cover it. When these situations occur, refer back to your plan or your insurance provider.

Delos H. Yancey III is the chairman, president, and CEO of State Mutual Insurance. He is a Certified Financial Examiner, a Certified Insurance Examiner, and a fellow of the LIMRA Leadership Institute. Visit his company's website for more on information regarding services and its history.

Top mistakes for first-time life insurance buyers

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Getting life insurance is a major milestone for any adult. It gives you peace of mind and is a great way to invest on your future retirement. However, given the importance of getting insurance, there are still people who make mistakes when enrolling for a plan for the first time. These mistakes could mean paying a higher premium for unwanted or unnecessary coverage. Here are some of the top mistakes first-time life insurance buyers make.

One of the biggest mistakes one could make is buying life insurance offered to them by family members or friends. You may trust them with your life and their intentions may be good, but getting the same insurance as people close to you or offered by family and friends without knowing all the terms might not give you what you need later on.

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Another major mistake is getting swept away by the terms without actually thinking if the coverage fits your situation. The best insurance plans take into consideration a person’s needs, wants, and a budget they are comfortable with. Not being able to pay monthly premiums could ruin this long-term commitment.

Making all beneficiaries primary beneficiaries is also a common mistake. This can have major consequences as primary beneficiaries receive both benefits of your insurance policy and the burden of paying debts. If primary beneficiaries are not appointed properly, your insurance benefits could be divided unevenly and cause trouble for those you will leave behind.

Lastly, failing to update insurance plans occurs often. When new health-related issues arise, your insurance may not cover it. When these situations occur, refer back to your plan or your insurance provider.

Delos H. Yancey III is the chairman, president, and CEO of State Mutual Insurance. He is a Certified Financial Examiner, a Certified Insurance Examiner, and a fellow of the LIMRA Leadership Institute. Visit his company's website for more on information regarding services and its history.

The differences between mutual and stock insurance

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Most insurance companies can be classified into one of these two categories: mutual and stock. Some exceptions to these are fraternal organizations that offer the same service; examples are Blue Cross or Blue Shield. Across the world, mutual insurance companies are more common. However, in the U.S., there are more stock insurers than mutual ones.

The policies the two types of insurers do not differ that much. Their main difference lies in the form of ownership. In a stock insurance company, the owners are the shareholders, or stockholders if the organization is a publicly traded corporation.

On the other hand, a mutual insurance company is owned by the policyholders, who are also referred to as “contractual creditors.” They are afforded voting rights in the selection of the board of directors and management.

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Because of the difference in ownership forms, the two types of insurers also contrast in the distribution of earned income and profits from investments. Stock insurers have an objective making a profit for their shareholders, doling out dividends when the company has a positive cash flow.

For mutual insurers, the goal is to meet the financial expectations and serve the needs of the policyholders, who are generally more interested in long-term financial gains than short-term financial demands.

Delos Yancey is a Certified Financial Examiner, a Certified Insurance Examiner, and a fellow of the LIMRA Leadership Institute. He is also the chairman of State Mutual Insurance, a mutual insurance company that is run for the benefit of its policyholders. Check out this blog to learn more about the insurance industry.

Common insurance policies you should seriously consider getting

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When looking for the most apt insurance policy for your needs and financial planning goals, it’s important to study the options carefully. Policies come with various features and add-ons, and the price will depend on the number of benefits included. The idea is to safeguard your most important assets.

Topping the list of must-have insurance policies is life insurance. This is important in ensuring that your dependents maintain financial stability when you’ve moved on. Study your annual income and decide on a plan that effectively replaces your earnings. Among other things, a life insurance covers burial costs and mortgage expenses, which can prove to be a huge burden for those you’ll leave behind.

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 A solid homeowner's insurance plan will make the process of replacing your home easier to deal with. Choose one that covers the cost of living somewhere else while your house is being renovated, as well as the needed structural replacement and the house’s amenities. While you’re computing, also keep in mind the cost of possible upgrades you might want to have.

It’s also great to be ready for possible future disability. Getting a long-term disability insurance will compensate for your compromised earning power if you can no longer work. This often comes hand in hand with a sound health insurance policy that will get you more financially ready for the rising costs of medical care should you fall ill. Just consider the argument that having one is much better than having to regret later as you deal with medical expenses.

Delos H. Yancey is the chairman, president, and CEO of State Mutual Insurance. He is a Certified Financial and Insurance Examiner and a fellow of the LIMRA Leadership Institute. Click this link for more information on Mr. Yancey and his company.

What are the benefits of investing in mutual funds?

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A mutual fund is a type of investment created by pooling money from several investors and focusing them all on a specific vehicle like stocks, bonds, money market instruments, and other assets. This kind of investment might be intimidating to some people, but a trustworthy financial advisor will always look after your best interest. Here are some of the many benefits of investing in mutual funds.

As far as investments are concerned, mutual funds are simple and easy to understand. Investing in mutual funds and reaping returns from them does not require a background in investment, economics, or finance.

Mutual funds are also widely accessible. They are offered at almost all brokerage firms, banks, mutual fund companies, discount brokers, and insurance companies. Opening an account doesn't get any easier.

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Mutual funds also have a broad market exposure, making them open to diversification. A single mutual fund can invest in hundreds of different investment opportunities. An option for investors is to diversify into multiple different mutual funds for maximum reach.

Unlike other investments requiring a huge sum of money to start, mutual funds are relatively affordable thanks to their low minimums. A lot of investment firms only require a minimum of $3,000 or less as the initial investment. There are also some cases in which the investor initiates a systematic investment program. In this case, the initial investment can be as low as $1,000.

Delos H. Yancey is the chairman, president, and CEO of State Mutual Insurance. He is a Certified Financial Examiner, a Certified Insurance Examiner, and a fellow of the LIMRA Leadership Institute. For more reads on State Mutual Insurance and their services, visit the company's website.

The interconnections among Affordable Care Act, Medicare, and Medical Supplement Insurance

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The Affordable Care Act as envisioned by the Obama administration wants universal healthcare coverage for Americans. The law then requires all citizens to have health insurance. Medicare subscribers are then already considered compliant and need not take to the Health Insurance Marketplace to avail of a policy.

There are some, however, who are enrolled only in Medicare Part B, or Medical Insurance. Generally, ACA or Obamacare doesn’t affect Medical Supplement Insurance or Medigap policies, but the aforementioned scenario presents a requirement problem for the availment of a Medigap policy. For one, a Medigap policy requires a subscription to both Medicare part A (hospital insurance) and Medicare Part B (medical insurance).

And as it is impossible to have Medicare Supplement Insurance without Medicare subscription, having a Medigap policy will always provide minimum essential coverage under Obamacare. Obamacare does not prevent employers and health insurance companies providing group insurance from denying health coverage for subscribers with pre-existing conditions. However, the Open Enrollment period for the availment of Medigap policies guarantees coverage for all subscribers of Medicare, regardless of their health conditions.

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The Affordable Care Act also imposes a late-enrollment penalty for subscribers to only Medicare Part B, and are belatedly subscribing to Medicare Part A.

It is also important to note that Medigap policies are not part of the Health Insurance Marketplace. Part D drug plans of Medicare are also exempt from this. The ACA provides for subsidies for drugs and is expected to drive down out of pocket costs for drugs.

Led by Delos 'Dee' Yancey III, State Mutual Insurance helps older Americans maintain a sense of security through products designed specifically for their benefit. To know more about the company, visit this website.

Retirement facts and figures to consider

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Amid a financial bloodbath of excess debt, lack of savings, and lack of income, America is going through a growing retirement crisis. In the next two decades alone, around 10,000 baby boomers will turn 65 years old every day.

Here are some retirement facts and figures to think about.

Got savings?: In a recent GoBankingRates.com survey, more than half of Americans had less than $10,000 saved for retirement. One in three had nothing saved.

Cost of care: Sixty percent of pre-retirees do not expect to receive enough income from Social Security and employer pension to pay for basic living expenses in retirement. Four out of 10 retires, too, will spend more than expected on health and long-term care costs during retirement. A mere 7 percent of those over age 65 have long-term care insurance.

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What successful retirement planning takes: One should keep consistent saving in mind to provide for a time when income is no longer generated from a job. The sad truth is that 35 percent of Americans reveals that they don’t contribute to retirement accounts such as a 401(k) or IRA, a 2009 CareerBuilder survey noted.

Retirement might not come on one’s terms: Gallup found that the average retirement age is 62, while the Center for Retirement Research at Boston showed that the average retirement age is around 64 for men, 62 for women. Yet 55 percent of retirees retired earlier than anticipated, citing health reasons and job loss respectively.

There’s a long road to financial literacy: Around the world, 3.5 billion adults, mostly in developing nations, lack an understanding of basic financial concepts, such as inflation and compound interest. This can cause stress and uncertainty, but also prompts millennials to talk to a financial advisor about retirement planning.

Delos H. Yancey III is the chairman, president, and CEO of State Mutual Insurance. For similar reads, click here.