Life insurance is something you buy to provide a death benefit for your loved ones and any other beneficiaries listed when you die. It can sere as protection if you die unexpectedly.
Annuities are contracts, like life insurance, but they provide protection when you live longer than you expect and can provide a guaranteed income stream for life. There are many varieties of life insurance and annuity options available for Iowa consumers.
Once you investigate these options, you will quickly learn that life insurance is much more than simply a death benefit and annuities have many benefits during the retirement phase of life. While life insurance can provide much needed security for our loved ones if you pass away early, some form of life insurance can also provide financial features for you while you are alive. Also, annuity products can provide a series of income payments at regular intervals in return for the premiums you have paid in, plus any interest earned. The payments could be for a certain period of time or for a lifetime. These payments may help to ensure a steady income stream for a dignified retirement period.
With a lot of options available for life insurance or annuity products in the market place, most people will need sound advice from an expert to navigate these products. Talking with a licensed insurance agent can help you understand the many types of life insurance and annuity products to determine what is best for your current financial situation and long-term goals.
Group Life Insurance
A business sometimes may offer group life insurance as a benefit to employees. Group life insurance can be included in the employee benefit plan paid for by the employer or the employer may offer a voluntary life insurance plan for which the employee will pay for the coverage. Generally group life insurance policies are “guaranteed issue,” which means employees don’t need to undergo medical examinations to determine whether they would be eligible for the coverage – they simply need to be actively working to be part of the insured group. Check with your employer for more information to see if group life insurance is an option available to you.
Annuities
Annuities may seem complicated but with the right help, it can be an important part of your retirement plan and guaranteed income stream. Learning how annuities work will make sure you are on top of your retirement plan.
The National Association of Insurance Commissioners (NAIC) has buyers guides for the following types of annuities:
Fixed Deferred Annuities
Fixed Indexed Annuities
Variable Deferred Annuities
Locating a Lost Life Insurance Policy or Annuity Contract
The National Association of Insurance Commissioners (NAIC) can assist consumers in locating life insurance policies and annuity contracts of a deceased family member or close relationship.
When a request is received, the NAIC will:
- Ask participating companies to search their records to determine whether they have a life insurance policy or annuity contract in the name of the deceased.
- Ask participating companies that have policy information to respond to the requester if the requester is the designated beneficiary or is authorized to receive information.
- For information on how to complete the request form, please see the Frequently Asked Questions.
Selling a Life Insurance Policy (Viatical Settlements)
Selling your life insurance policy to a third party so that you can receive cash for your policy while you are alive (an arrangement known as a viatical settlement) is complicated and should be done with extreme caution. There may be other options to get cash from your life insurance policy now and still allow your beneficiaries to receive benefits in the future.
A viatical settlement is an arrangement in which a third party company (“viatical settlement provider”) will give you as an owner of an insurance policy a small immediate amount of cash in exchange for the life insurance policy. The third party company would pay future premiums on the policy and would collect the death benefit upon your death.
If you are considering a viatical settlement arrangement, it’s important to ask many questions and always make sure the third party company (the viatical settlement provider) and the viatical settlement broker that are trying to purchase your life insurance policy are licensed to do so in Iowa.
Insolvent Life and Health Insurers
“The Iowa Life & Health Insurance Guaranty Association is a statutory entity created in 1987 [by] the Iowa Legislature. . . . The Guaranty Association is composed of all insurers licensed to sell life insurance, accident and health insurance, and individual annuities in the state of Iowa. In the event that a member insurer is found to be insolvent and is ordered to be liquidated by a court, the Guaranty Association will provide protection [up to statutory limits] to Iowa residents who are holders of life and health insurance policies and individual annuities with the insolvent insurer.” -- Iowa Life & Health Insurance Guaranty Association.
For more information, go to the Iowa Life & Health Insurance Guaranty Association’s website.