Q. Can I cancel this product anytime?
A. Term policy can be canceled anytime. It renews every year, and it’s prorated if you decide to cancel mid-year. Keep in mind that if the policy lapses due to non-payment, you might have to go through the underwriting again (new medical).
Q. What happens if I forget to pay for the policy?
A. There is a grace period of 60 days in most states (please call us if you want to know more about your state). After the grace period, you might have to go through underwriting (maybe a new medical exam or your medical record request from you doctor). Try to make the premium payments on time so that the policy doesn’t lapse. Lapse policy means loss of coverage.
Q. Can I buy another policy other than this at a later time?
A. A single individual is allowed to buy 20 times their income or 20 times the net worth. If you have a stay at home spouse, they can buy the same according to the household income. This is the rule of thumb. If you have this situation, please contact us for the most up to date information.
Q. What happens if I move out of the country?
A. Legal contracts are pretty much the same for most companies. All companies should comply with state and federal laws. All companies will pay the death of benefit if an insured passes away overseas. There is a clause built in your policy called contestability clause. This clause can be exercised by the insurance company if the individual passes away overseas within 2 years of buying the policy. If you have plans to move to India (or any other country) in the future, you would probably want to contact nrilifeinsrance.com. We have thousands of Indian clients, and we can tell you which company you should purchase your life insurance from.
Q. How do I file for the claim?
A. Only a death certificate and claim form is required by the beneficiary. Most of the claims are paid within 2 weeks of claim form submission. If death happens overseas, it can take a bit longer.
Q. What is the claim process if death happens overseas?
A. The process is the same as if the death happens in the U.S. A claim form and a death certificate are needed. Foreign claims can take some time. The insurance company wants to make sure the insured has passed away for sure. Try to buy life insurance from a company that has an international presence. For example, an Indian living in the U.S. who has plans to move back permanently or temporarily should do extra research about the company, or they can call NRIlifeinsrance.com, and benefit from our experience and research.
Q. Who are the major parties in the life insurance policy?
A. There can be 3 major parties in a life insurance contract: the insured, owner, and the beneficiary. For example, a 35-year-old man has a wife and 2 kids. He buys a term policy for $1M. He is the owner and the insured of the policy and the wife is the primary beneficiary. Second example, the same individual buys a permanent life insurance for his kids who are minors. In his case, he is the owner and the beneficiary, and the minor child is the insured.
Q. Can any individual be the beneficiaries of my life insurance policy?
A. Anyone can be added to your policy. Government or insurance companies do not have any restrictions on individual beneficiaries.
Q. Can I change the beneficiaries anytime?
A. It’s your policy, so you can change the beneficiaries as you wish.
Q. Can I make my kids who are minors as a beneficiary of my life insurance?
A. If you have kids who are minors, you should always put your spouse as a primary beneficiary and your revocable living trust as a contingent beneficiary. If something happens to both spouses while kids are minors and kids are the contingent (second) beneficiary on your life insurance, they will not see the money until they are age 18 in most states.
Q. Can I put my parents and my family in India as a primary or secondary beneficiary of my life insurance?
A. Yes, you can. Because death benefits in both India and U.S. are federal and state income tax-free, they will not have any issues getting the benefits. Unfortunately, our firm has experienced this situation in the past, so we can explain to you more on this.
Q. Why should l buy life insurance from NRI Life Insurance?
A. This is the most common question we answer on daily basis. Price will not be any different regardless of where you purchase your life insurance from, whether you purchase from nrilifeinsrunce.com, any other website or directly from the company. What we offer is great service and a promise to buy you the best and the cheapest life insurance in the marketplace. We shop around for every client we take on to get the best coverage.
Q. What happens if the insurance company goes bankrupt?
A. Your life insurance is not FDIC or SIPC insured. The National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) can help determine the level of protection your state provides. Most states have coverage levels of $100,000 to $300,000 for individual policyholders. Visit NOLHGA.com
Q. Can I buy this policy joint as a husband and wife or with my kids?
A. Term policies are individual policies. Therehas to be a separate policy for husband and wife. Minor kids do not qualify for term. Once your kids are age 18, they will qualify for the term policy. There are a few permanent products that can be purchased jointly. But keep in mind, both husband wife have to pass away for the beneficiaries to get the death benefit.
Q. At what age I can buy a term policy for my kids?
A. You can buy a term policy at age 18. Permanent policies can be purchased when the child is born.
Q. If I’m on H1B and EAD visa, can I buy a term policy?
A. Yes, you can. The issue is that not all companies will give a favorable rating on the policy, and due to that the premiums will be higher. We have helped thousands of H1B visa holder get a life insurance at the best rating. There are many companies out there that will not discriminate H1B and EAD’s.
Q. If my employer is providing life insurance through work, can I still purchase it outside?
A. Yes. Employer coverage is temporary and is only present as long as you are employed by your employer. It’s always in your best interest to buy a life insurance coverage outside of your employer.
Q. Why should I buy it outside when my employer is giving me the life insurance for free?
A. Let’s assume you make $100k in income a year. Your employer is going to provide you with 2X of your pay for free. So you are covered by your employer for $200k if you pass away. According to the IRS, first $50k of employer PAID life insurance is tax-free and the remaining is going to be taxed at ordinary income tax bracket. If you decided to purchase more from your employer with your after-tax dollars, the death benefit is going to be tax-free.
Q. What happens to my life insurance policy if I leave my employer?
A. You have a group life insurance while you are with your employer. Once you leave your job, you are no longer part of the group. You might not have any future coverage. That is the main reason you should always purchase a life insurance from outside. It’s always cheaper to buy a life insurance from outside. The reason for the cheap price is the medical exam. When you buy your own life insurance outside, you are required to do a medical exam, and if you are healthy you will pay less for the life insurance.
Q. Can I buy a life insurance directly from an insurance company? If I can, why do I need nrilifeinsurance.com?
A. Every insurance company has different health guidelines. The same medical exam can be used for any company in the U.S. for the next 6 months. Once the medical exam is done any insurance company, including NRIlifeinsurance.com, can use that medical report and shop around with all the companies to get you the best rate. It’s a lot of hard work, but someone has to do it. We shop around for every client we get. It’s our job to make sure you get the best rates possible.
Q. How much do I pay nrilifeinsurane.com to buy a life insurance policy?
A. ZERO
Q. Will I be able to get coverage if I have a health issue?
A. Health issues can affect your premiums for your life insurance. Just because we have such a rigorous shopping around policy, we will make sure you get the cheapest rates possible.
Q. Should I buy a term policy or a permanent policy?
A. Term policy is a need and permanent is a want. You need to be insured until you are working or until you have liability. You want to be insured forever and the premiums are much higher for permanent policies.
Q. Are the premiums for the life insurance tax deductible?
A. Premiums are not tax deductible, because the death benefit is tax-free. In the previous example, you saw that only $50k of employer-paid life insurance is tax-free, and the remaining is taxed. It is taxed because the employer took a deduction on the premiums.
Q. Do I have to pay taxes on the death benefit on the term life insurance?
A. Outside of your employer life insurance death benefit is tax-free, because the premium paid was after tax.
Q. Do I pay taxes on the employer life insurance?
A. Employer paid life insurance after $50k is taxed at ordinary income tax brackets.
Q. What is the longest term I can purchase?
A. Last age to purchase a 35 year term is age 43, 30 year term is age 57. It’s such a good deal because being insured until age 87 is beyond human life expectancy.
Q. If all companies have the same coverage, benefits, and term and conditions, why can’t I just buy the cheapest company?
A. You can absolutely buy the cheapest policy. The challenge is that the cheapest company might not give you the best rating. This is because the price of the policy is determined after you have a completed a blood and urine exam.
Do you have an old 401k still sitting with a previous employer or an IRA and don’t know how to invest it properly? Hi, this is Laddi Jhuty, CFP, and an investment advisor. I have been helping our Indian community invest their portfolios for the past 15 years. Please give me a call at 4083735570 to review your investment portfolio. Go to lsjfinanial.com
