DUBLIN–(BUSINESS WIRE)–The “United States Home Loan Market Competition Forecast & Opportunities, 2028” report has been added to ResearchAndMarkets.com’s offering.
The United States home loan market is expected to experience significant growth to 2028
The United States home loan market is undergoing a transformation, driven by several key factors that are reshaping the lending landscape. These factors include a growing pool of potential homebuyers, the automation of loan processes, and the pervasive trend of digitalization.
Home loans, typically extended by financial institutions, serve as the financial backbone for individuals aspiring to acquire residential properties. These properties can range from completed, move-in-ready homes to those still in construction phases. Banks and non-banking financial companies (NBFCs) both offer home loans, often determining interest rates based on the borrower’s creditworthiness. These loans commonly come with lengthy repayment periods of up to 30 years, structured through equated monthly installments (EMIs).
In recent years, the demand for mortgages in the United States has experienced a notable upswing, primarily catalyzed by heightened home purchasing activities during the COVID-19 pandemic. Consequently, this surge has generated substantial demand within the purchase market, attracting banks, nonbank lenders, and investors operating in the mortgage sector.
Furthermore, despite the economic repercussions of the pandemic, the desire for homeownership in the United States remains unwavering. The broader economic expansion and the growth in the number of households have contributed to the increasing rate of homeownership.
Notably, 2020 witnessed a 2.6% annual uptick in homeownership, welcoming over 2.1 million new homeowners into the fold. Geographically, the Midwest and South regions of the United States exhibit higher homeownership rates compared to the Northeast and West. With this surge in homeownership, a concurrent rise in the demand for home loans is anticipated.
Automation has emerged as a pivotal force in streamlining the home loan process, substantially elevating the overall customer experience. The mortgage industry has eagerly embraced technology to expedite and simplify mortgage applications, thereby widening access to home financing and home-buying services.
A cornerstone of this technological revolution is digitalization, with the U.S. digital payments sector expanding at a commendable rate of 23%. These technological strides are designed to expedite mortgage applications, curtail expenses, and enhance the overall client journey. Consequently, the escalating wave of digitalization is poised to further propel the United States home loan market.
The ascendancy of nonbank lenders has introduced a seismic shift in the market landscape. Nonbank lenders have emerged as a credible alternative, especially for borrowers seeking refinancing options. Over the past decade, nonbank mortgage lenders have not only gained market share but have also eclipsed traditional banks in prominence.
In 2020, seven out of the top ten mortgage lenders in the United States hailed from the nonbank sector. These lenders have strategically invested in diverse technologies to fortify their operations, spanning from platform modernization to automated compliance solutions. Consequently, the continued ascent of nonbank lenders is set to stoke the growth engine of the home loan market.
In summation, the United States home loan market stands at the cusp of substantial growth, underpinned by a confluence of factors, including surging demand, automation enhancements, and the burgeoning influence of nonbank lenders.
Market Dynamics
Market Trends & Developments
Increasing number of fintech companies
Rising focus towards loan sector by Bank and NBFCs
Increasing construction activities
Rapid urbanization
Attractive marketing strategies
Drivers
Increasing home ownership
Automation in loan process
Growth of nonbank lenders
Challenges
Security concerns
Surging competition
Competitive Landscape
Bank of America Corporation
JPMorgan Chase & Co.
Citigroup, Inc.
Wells Fargo & Co.
U.S. Bancorp
PNC Financial Services Group, Inc.
American Express Company
Ally Financial Inc.
Truist Financial Corporation
Goldman Sachs & Co. LLC.
Voice of Customer Analysis
Sample Size Determination
Respondent Demographics
By Gender
By Age
By Occupation
Brand Awareness
Factors Influencing Loan Availing Decision
Sources of Information
Challenges Faced
Impact of COVID-19 on United States Home Loan Market
Impact Assessment Model
Key Segments Impacted
Key Regions Impacted
Report Scope
United States Home Loan Market, by Type:
Home Purchase
Refinance
Home Improvement
Construction
Others
United States Home Loan Market, by End User:
Employed Individuals
Professionals
Students
Entrepreneurs
Others
United States Home Loan Market, by Tenure Period:
Less than 5 years
6-10 years
11-24 years
25-30 years
United States Home Loan Market, by Region:
South
Midwest
Northeast
West
For more information about this report visit https://www.researchandmarkets.com/r/culceq
About ResearchAndMarkets.com
ResearchAndMarkets.com is the world’s leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.
DUBLIN, Oct. 4, 2023 /PRNewswire/ — The “United States Home Loan Market Competition Forecast & Opportunities, 2028” report has been added to ResearchAndMarkets.com’s offering.
The United States home loan market is expected to experience significant growth to 2028
The United States home loan market is undergoing a transformation, driven by several key factors that are reshaping the lending landscape. These factors include a growing pool of potential homebuyers, the automation of loan processes, and the pervasive trend of digitalization.
Home loans, typically extended by financial institutions, serve as the financial backbone for individuals aspiring to acquire residential properties. These properties can range from completed, move-in-ready homes to those still in construction phases. Banks and non-banking financial companies (NBFCs) both offer home loans, often determining interest rates based on the borrower’s creditworthiness. These loans commonly come with lengthy repayment periods of up to 30 years, structured through equated monthly installments (EMIs).
In recent years, the demand for mortgages in the United States has experienced a notable upswing, primarily catalyzed by heightened home purchasing activities during the COVID-19 pandemic. Consequently, this surge has generated substantial demand within the purchase market, attracting banks, nonbank lenders, and investors operating in the mortgage sector.
Furthermore, despite the economic repercussions of the pandemic, the desire for homeownership in the United States remains unwavering. The broader economic expansion and the growth in the number of households have contributed to the increasing rate of homeownership.
Notably, 2020 witnessed a 2.6% annual uptick in homeownership, welcoming over 2.1 million new homeowners into the fold. Geographically, the Midwest and South regions of the United States exhibit higher homeownership rates compared to the Northeast and West. With this surge in homeownership, a concurrent rise in the demand for home loans is anticipated.
Automation has emerged as a pivotal force in streamlining the home loan process, substantially elevating the overall customer experience. The mortgage industry has eagerly embraced technology to expedite and simplify mortgage applications, thereby widening access to home financing and home-buying services.
A cornerstone of this technological revolution is digitalization, with the U.S. digital payments sector expanding at a commendable rate of 23%. These technological strides are designed to expedite mortgage applications, curtail expenses, and enhance the overall client journey. Consequently, the escalating wave of digitalization is poised to further propel the United States home loan market.
The ascendancy of nonbank lenders has introduced a seismic shift in the market landscape. Nonbank lenders have emerged as a credible alternative, especially for borrowers seeking refinancing options. Over the past decade, nonbank mortgage lenders have not only gained market share but have also eclipsed traditional banks in prominence.
In 2020, seven out of the top ten mortgage lenders in the United States hailed from the nonbank sector. These lenders have strategically invested in diverse technologies to fortify their operations, spanning from platform modernization to automated compliance solutions. Consequently, the continued ascent of nonbank lenders is set to stoke the growth engine of the home loan market.
In summation, the United States home loan market stands at the cusp of substantial growth, underpinned by a confluence of factors, including surging demand, automation enhancements, and the burgeoning influence of nonbank lenders.
Market Dynamics
Market Trends & Developments
Increasing number of fintech companies
Rising focus towards loan sector by Bank and NBFCs
Increasing construction activities
Rapid urbanization
Attractive marketing strategies
Drivers
Increasing home ownership
Automation in loan process
Growth of nonbank lenders
Challenges
Security concerns
Surging competition
Competitive Landscape
Bank of America Corporation
JPMorgan Chase & Co.
Citigroup, Inc.
Wells Fargo & Co.
U.S. Bancorp
PNC Financial Services Group, Inc.
American Express Company
Ally Financial Inc.
Truist Financial Corporation
Goldman Sachs & Co. LLC.
Voice of Customer Analysis
Sample Size Determination
Respondent Demographics
By Gender
By Age
By Occupation
Brand Awareness
Factors Influencing Loan Availing Decision
Sources of Information
Challenges Faced
Impact of COVID-19 on United States Home Loan Market
Impact Assessment Model
Key Segments Impacted
Key Regions Impacted
Report Scope
United States Home Loan Market, by Type:
Home Purchase
Refinance
Home Improvement
Construction
Others
United States Home Loan Market, by End User:
Employed Individuals
Professionals
Students
Entrepreneurs
Others
United States Home Loan Market, by Tenure Period:
Less than 5 years
6-10 years
11-24 years
25-30 years
United States Home Loan Market, by Region:
South
Midwest
Northeast
West
For more information about this report visit https://www.researchandmarkets.com/r/efxqax
About ResearchAndMarkets.com ResearchAndMarkets.com is the world’s leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.
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Finding a suitable insurance policy can take time. One option to make the process easier is to work with an independent insurance agent. An independent insurance agent is a third-party salesperson who has a relationship with multiple companies and gets paid a commission when they sell you a policy. Because they aren’t bound to a single insurance company, they can help you compare options across several carriers to find the right policy for you.
What is an independent insurance agent?
An insurance agent represents one or more insurance companies and earns a commission when they sell a policy on behalf of an insurer they represent. Agents can also help customers assess their insurance needs and provide assistance if they need to file a claim.
There are two types of agents: captive agents and independent insurance agents.
A captive agent works for a single company, either as an employee or as an independent contractor. Captive agents may show you price quotes from multiple companies for comparison, but they can only sell you a policy from the company they represent. An independent insurance agent is someone who represents multiple insurers and can sell you a policy from any of the companies they represent.
Financial Industry Regulatory Authority. Insurance Agents. Accessed Sep 3, 2023.
An independent insurance agent must have a contract with each company it represents. The contract spells out how the agent can act on behalf of the insurer, as well as the commission the agent will be paid.
Major carriers often use captive agents to sell their products. Independent agents generally work with a range of companies, including smaller ones you may not have heard of. Because they’re familiar with smaller insurers that may specialize in certain niches, independent insurance agents may be able to help if you’re having trouble finding affordable coverage or your insurance needs are complex.
How an independent insurance agent can help you
Not everyone needs to work with an independent insurance agent. For example, if you’re shopping for auto insurance on a single vehicle and you have good credit and a clean driving history, you can probably shop for quotes online without enlisting a pro. But there are some situations when independent insurance agents can be particularly helpful.
Auto insurance:If you’ve had multiple crashes or a serious driving violation, like a DUI or reckless driving charge, your insurance company may classify you in its nonstandard category. That means it considers you a high-risk driver.
International Risk Management Institute. Substandard. Accessed Sep 5, 2023.
Independent auto agents can often help you find affordable coverage because they frequently work with smaller companies that are more likely to issue nonstandard policies.
Homeowners insurance:Working with an independent insurance agent can be helpful if your homeowners insurance costs have shot up or you’ve received a nonrenewal notice. A local independent insurance agent will often be familiar with insurers who write policies in your area and can shop for quotes on your behalf.
Life insurance:If you have a pre-existing medical condition, a risky occupation, hobbies an insurer considers dangerous, you could benefit from working with a life insurance independent agent who specializes in impaired risk underwriting. Your agent may be familiar with the carriers who will insure clients with specific risks. The agent may also be able to request information about your situation from the insurer before you formally submit an application.
While a good independent insurance agent can help you find affordable coverage, understand your policy and file a claim, it’s also important to understand what your agent can’t do. For example, many insurance agents want clients to know that they can’t get retroactive coverage for something that has already happened. Also, you shouldn’t wait until after your policy has been canceled to contact an independent insurance agent, as companies view a customer who lets coverage lapse as riskier and may charge higher rates.
How do independent insurance agents get paid?
Independent insurance agents are paid a commission. The commission structure varies based on the type of insurance and carrier.
Typical life insurance commissions range from 60% to 80% of the first-year premiums, with a smaller amount going toward commissions in subsequent years. Some agents don’t earn commissions after the third year of the policy.
For auto and home insurance, typical commission rates are 5% to 15% of first-year premiums. Agents typically earn 2% to 5% on premiums for renewal in the following years.
Keep in mind that an independent insurance agent gets paid a higher commission for selling you a pricier policy. If you’re looking at buying a particularly expensive policy, such as permanent life insurance, consider hiring a fee-only financial planner or insurance consultant to be sure it’s appropriate for you. They won’t earn a commission and can help you objectively assess your needs.
Independent insurance agents vs. brokers
Independent insurance agents and brokers both earn commissions and can help you shop for a policy, but there are a few key distinctions. One key difference is that insurance agents represent the insurance company, while brokers represent a customer.
An insurance broker’s role is to determine the right amount of coverage for the client and search for the best price and terms. However, brokers can’t technically sell you a policy. An agent is needed for underwriting and “binding” the policy, or providing temporary coverage until the final policy is issued.
A new analysis from real estate information portal Trulia revealed that the overwhelming majority of real estate agents actually own homes as opposed to rent.
The company scoured Census data from 2007-2012 to come up with the homeownership rates, and found that 84.9% of real estate brokers and sales agents owned property.
That compares to just 70.1% for individuals in all other occupations combined.
Appraisers Own, Rarely Rent
Trulia also found that many other housing-related jobs had high levels of homeownership, with appraisers and assessors of real estate the most likely to own.
This group exhibited a homeownership of 87.9%, which was second only to “farmers, ranchers, and other agricultural managers.” And yes, that latter group tends to need to own land to run their respective businesses.
In the construction world, construction managers boasted an 82.9% homeownership rate while construction workers owned just 65.9% of the time. That’s a sizable gap for those barking orders and those actually hammering in the nails.
Finally, there are the architects, which had an ownership rate of 80.1%.
If you’re wondering why these individuals tend to own as opposed to rent, Trulia believes it’s a combination of believing in the importance of homeownership, along with knowing the ins and outs of the home buying process.
And it’s not just demographics. Trulia also took the time to determine what the homeownership rate would be based on the age, income, and location of these real estate workers, with occupation omitted.
They found that the actual rate of homeownership was always higher than the expected rate, meaning there is likely something tied to the occupation.
The Postman Isn’t Just Delivering Mail…
While these numbers are all higher than the average, there are other occupations that yield even higher homeownership rates.
Interestingly, postal service mail carriers are big time homeowners, seeing that their homeownership rate was a staggering 84%. Only farmers and ranchers beat them out.
Perhaps they get inside information when delivering all that mail…or just get an itch to buy, who knows? But their expected rate is only 79.4%.
Those that protect and serve also tend to own, with 83.6% of firefighters and 80.1% of police officers also homeowners, partially because of programs aimed at helping them purchase homes.
And those that look after the landscaping also own quite a bit of real estate, with the homeownership rate a whopping 75.3% for such workers.
Meanwhile, those looking after our appearance don’t seem to be looking into real estate. Just 63.3% of “miscellaneous personal appearance workers” owned real estate, though 69.1% of hairdressers, hairstylists, and cosmetologists were homeowners, perhaps because they’re typically self-employed.
Still, their expected rates of homeownership are significantly lower, so they’re still bucking the odds.
Chefs Less Likely to Own Homes Than Expected
Not every occupation had a higher homeownership than expected, based on demographics, income, and location.
For some reason, chefs and software developers were less likely to own than their profiles would suggest. Could be too much time spent in the kitchen or on the computer.
And that’s not all. Economists were also nearly two percent less likely to own a home than expected, perhaps because they overthink the whole thing.
An accidental death benefit rider is a life insurance policy add-on that pays out an extra sum of money if you die in an accident. Many policies also pay the additional benefit if you die from injuries within a specified period after the accident, such as 90 or 180 days.
The higher payout death benefit is also known as “double indemnity” or “triple indemnity.” This is because it may be double or triple the amount of money your beneficiaries would get if you died of natural causes.
Accidental death benefit riders are a common option for most types of life insurance, including term and permanent life policies. They’re slightly different from accidental death and dismemberment (AD&D) riders, which offer a payout if you survive an accident or lose a limb or experience another debilitating injury, like blindness or paralysis as a result.
Accidental death benefit riders: The fine print
Examples of accidents that may be covered by an accidental death or AD&D rider include car crashes, fires, workplace accidents, falls and accidents involving firearms. The accidents that are excluded vary by insurer. Many policies won’t pay out the additional benefit if you had an accident while participating in dangerous recreational activities or under the influence of drugs or alcohol. Some insurers might not offer you the rider if you work in a risky occupation, like firefighting or law enforcement.
With some insurers, you can purchase stand-alone accidental death insurance instead of adding the rider to a life insurance policy. This coverage only pays out if you die in an accident. It’s most common among people who don’t qualify for traditional life insurance but still want their beneficiaries to receive some money if they die unexpectedly.
🤓Nerdy Tip
Fewer than 7% of deaths in the U.S. occur due to unintentional injury, according to the Centers for Disease Control and Prevention. Given that it’s far likelier you’ll die of natural causes instead of an accident, it’s important to make sure your policy’s regular payout provides enough coverage for your loved ones.
When you’re buying a life insurance policy, you may need coverage that begins right away, but full underwriting can take weeks to complete. Simplified issue life insurance is an option for people who need immediate coverage. However, that convenience comes at a cost. You’ll often pay higher premiums and receive a lower death benefit than you’d get through a standard life insurance policy.
What is simplified issue life insurance?
A traditional life insurance policy requires a medical exam and may take four to eight weeks to be in force. Simplified issue life insurance is a type of life insurance policy that bypasses the typical underwriting process and allows you to purchase coverage immediately.
With simplified issue life insurance, you’ll skip the life insurance medical exam and lab tests. Instead, you’ll provide some basic information, like your age, address, occupation, height and weight, and answer a health questionnaire.
You can apply online, by phone, or in person through a life insurance agent or broker. Usually, you’ll find out immediately whether your application has been approved or denied. If approved, you can typically have your policy in force that same day.
How does simplified issue life insurance work?
Simplified issue underwriting is available for most types of policies, including term life, whole life, and some types of universal life insurance. According to a 2020 report by the Society of Actuaries, major insurers approve about 70% of simplified issue applications
.
When you apply for a simplified issue policy, the insurance company will base its decision on the information you’ve provided. But carriers also use third-party reports to determine your eligibility, such as:
MIB Group reports. Your file with the MIB Group, formerly known as the Medical Information Bureau, shows whether you’ve applied for individually underwritten life insurance, health insurance, disability insurance, and long-term care insurance in the last seven years, along with whether you’ve been rejected for coverage
.
Prescription drug history. Insurers check databases that aggregate your prescription drug history using records from health insurance companies, pharmacies, and health care providers.
Motor vehicle records. Insurance companies will check for things like DUIs, suspended driver’s licenses and speeding tickets when they decide whether to insure you.
Some companies also use internet searches and random phone interviews to verify information. The use of criminal background screenings and medical billing data is becoming more common, as well.
Answering “yes” to a question that indicates a health condition doesn’t necessarily disqualify you. But if your answers are inconsistent with third-party information collected, your life insurance application could be referred for further review. For example, if you say you have no history of heart disease but your prescription records show you take medication for a heart condition, the insurer could require standard underwriting.
Who’s eligible for simplified issue life insurance?
Simplified issue life insurance is available to people up to age 75, according to the Society for Actuaries report. Though age restrictions vary by carrier, you’ll often qualify for a higher death benefit if you’re in the range of 16 to 55 years old.
Unlike with guaranteed life insurance, however, you can be rejected for simplified issue insurance. If you have a serious underlying health issue or you engage in dangerous activities, your application could be denied or referred to an underwriter.
How much coverage can you get?
When you apply for a simplified issue policy, your insurer has less information about you than it would get if you went through a full life insurance underwriting process that included a medical exam. That makes you riskier to insure from an insurer’s perspective. As a result, simplified issue policies generally have lower death benefits than traditional policies.
Though some insurers offer as much as $500,000 in coverage, a typical simplified issue term policy will offer coverage amounts ranging from $100,000 to $250,000. Customers older than 55 are frequently limited to $100,000.
Simplified issue permanent life insurance policies are typically designed for burial and other final expenses, so they offer lower death benefits. Many simplified issue whole life insurance policies have maximum death benefits between $25,000 and $50,000.
Simplified issue life insurance pros and cons
Advantages of simplified issue life insurance
Simplified issue life policies don’t require a medical exam or bloodwork.
If your application is approved, coverage can begin the same day.
You can typically buy more coverage than you’d get through a guaranteed issue policy.
Disadvantages of simplified issue life insurance
You may qualify for lower premiums and more coverage through a traditional policy.
Your application may be rejected if you have preexisting health conditions, a dangerous job, or high-risk hobbies.
Is simplified issue life insurance worth it?
A simplified issue policy may be worth it if you’re in relatively good health and you need your policy to be in force right away. For example, if you’re a new parent seeking coverage, you may not want to wait several weeks for coverage to begin. Or if you’ve been ordered by a court to obtain life insurance as part of a child support agreement, you may need your policy to be in force immediately.
If you need immediate coverage, you may have the option of buying a temporary policy while you wait for a traditional life insurance application to be approved. But if you have dependents and you’re unwilling to deal with the time and medical exam required for most life insurance policies, buying simplified issue life insurance can be worth it to provide financial protection for your loved ones.
Alternatives to simplified issue life insurance
Simplified issue life insurance is worth exploring when you have an immediate life insurance need, but it’s not the only option. Here are some alternatives to consider.
Buy temporary life insurance to avoid a coverage gap. If you’re willing to undergo a medical exam but need coverage to begin immediately, you could purchase temporary life insurance for protection while your application is processed. The applications for temporary coverage and simplified issue life insurance are similar in that you’ll only need to complete a basic questionnaire. But once you obtain temporary life insurance, you’ll typically have around 90 days to complete a medical exam for your permanent policy. Insurers often limit your coverage to $1 million through a temporary policy.
Undergo full underwriting. Going through the standard underwriting process takes time, and the medical exam can be intimidating. But it could save you money on premiums, especially if you’re young and in good health.
Obtain group life insurance through your employer. If your employer offers group term life insurance as a benefit, you can usually obtain coverage at little to no cost, without a medical exam or answering health questions. The death benefit is usually capped at one or two times your salary. You may have the option to purchase additional coverage, although you might need to provide health information or undergo an exam. Most group policies won’t allow you to keep your coverage if you leave your job
.
Frequently asked questions
What’s the difference between simplified issue and guaranteed issue life insurance?
A guaranteed issue policy is a type of life insurance that accepts anyone, with no medical exam or health information required. A simplified issue life policy offers a streamlined application process, but coverage isn’t guaranteed and you’ll need to answer questions about your medical history when you apply.
Can I get life insurance without a medical exam?
You can obtain both simplified issue life insurance and guaranteed issue life insurance with no exam. However, an exam may help you lower your premiums and qualify for more coverage if you’re young, healthy and don’t engage in risky activities.
Does simplified whole life insurance build cash value?
As with any whole life policy, simplified whole life insurance will build cash value. But because these policies are often intended specifically for final expenses, the cash value is minimal compared with traditional whole life policies.
The Super Man complex most healthy people have has a kryptonite when it comes to life insurance options: the non-medical factors that affect your life insurance rates.
It’s a huge shock to many people who get a free life insurance quote who are in the best shape of their lives when they can’t qualify for the best life insurance rates because of non-medical factors. It usually goes something like this:
“I Crossfit 3 times/week and compete in Iron Man triathalons and you’re telling me that I can’t qualify for the best rates because I’m a rock climber?”
Yes. That’s what we’re saying.
In our 8 years of helping consumers find the lowest life insurance rates available, here are the top 5 “non-medical” factors that affect your life insurance rates (in no particular order).
Non-Medical Factors that Affect Life Insurance Rates
1. Hazardous Occupations
Have you seen “Deadliest Catch” ? Those 700 lb steel traps on a boat being swung around by 25 foot waves isn’t really the ideal risk for life insurance companies. Expect to pay more… a lot more.
We’re also talking about occupations like oil rig workers, ironworkers (think high rise structural construction) and bomb diffusers. Yes, I’ve actually insured a police bomb diffuser. One of the sharpest clients I can remember – but he pays A LOT more for his life insurance than if he didn’t have this hazardous occupation.
Again, most of these people are in great shape because of the nature of their occupation – but their non-medical factors come into play when underwriting their applications.
2. Hazardous Activities
In this group, the most common risks we see are deep sea scuba divers, private pilots, motor racing, skydivers and high altitude rock climbers. Most of these people HAVE to be in great shape to perform these activities at a high level and most of them are. However, these risky activities come with increased premiums when it comes to life insurance no matter how fit you are.
Be prepared to fill out a questionnaire regarding the specifics of your hazardous activities as life insurance companies will determine your pricing based on many factors including your training, experience, and how often you perform these activities. If you are going to participate in high-risk activities don’t be surprised if you land in the high-risk life insurance premium bucket.
3. Foreign Travel
If you have any plans to travel abroad, your life insurance company wants to know about them. If it’s a high-risk area, like any of the places on this government Travel Warnings List, you’ll have a very hard time finding coverage until you come home from your trip.
Life insurance companies will also be looking at the purpose of travel and length of stay. For example – you may have a 2 week vacation planned to Bali, Indonesia, but Indonesia may be on the state departments “Travel Warnings” list or be a high risk country in the company’s underwriting guidelines. Many companies won’t consider this risk after factoring the purpose and length of stay.
Many companies will ask about previous foreign travel as well. If you show a pattern of traveling to potentially high risk places, they may factor that in to their underwriting decision.
4. Family History
This is the biggest disappointment to consumers purchasing life insurance because it’s something you have no control over. Generally speaking, if any of your parents or siblings passed away before the age of 60 of cancer, heart disease or diabetes – most life insurance companies won’t offer their best health classification.
However there are some highly rated and very well known life insurance companies that don’t factor this in. If you’re in great health, make sure your agent provides you with these options.
Ads by Money. We may be compensated if you click this ad.Ad
5. DUI’s and Moving Violations
Life insurance companies will pull your Motor Vehicle Report (MVR) and factor in any excessive moving violations and DUI’s. A couple speeding tickets usually isn’t an issue, but when you get a reckless driving ticket, DUI or an excessive number of moving violations – it becomes a factor in your life insurance pricing.
Every life insurance company will have different underwriting guidelines for each specific high risk activity.
The best advice we can give is to be open, honest and detailed with your agent about your non-medical factors. It’s your life insurance agent’s job to find you the best life insurance rates available and the more information we have, the better chance you have of actually securing the best rates.
Lastly, if you have a family or anyone financially dependent on you – don’t be disheartened because of the higher pricing. Many people we speak with think it’s “unfair” that they have to pay more because of these “non-medical” factors that come into play when determining your life insurance rates. It’s unfair to your family if you don’t protect them.
Remember the purpose of this coverage. Tomorrow is promised to one, so protect your family today.
Jeff Root is an independent life insurance agent at rootfin.com where he helps consumers across the nation find the lowest life insurance available.
Real estate agents and brokers, if you could choose where your next listing is coming from, wouldn’t you always answer, “repeat or referral business?”
Of course, you would.
Repeat and referral clients are easier to work with. They already know, love and trust you. You’re probably not going to compete for their business. And, they are less likely to throw objections at you! Also, they don’t ask you to cut your commission or shoot them a kickback.
So if you wish to boost your repeat and referral business ASAP, it’s time to embrace three specific steps:
Create a database
Have an organized database with names, numbers, email addresses, LinkedIn, Facebook, Instagram and other contact information on each client. You don’t need a fancy CRM. Call each person to update the rest of their profile. It’s a great excuse to make that first — or next — contact. Use your F-O-R-D (family, occupation, recreation, dreams) conversation outline to make these calls fruitful. Refer to our podcasts and other articles about how to speak with your sphere of influence.
Speak with all of your contacts regularly.
That means face-to-face or voice-to-voice real contact. A contact is a conversation with a decision-making adult about real estate. For example, if you have 200 people in your database and you speak with 10 per day on work days, you can actually speak to 100% of your list every single month. What would that do to your repeat and referral business? If 10 is too many, start with five contacts per day and you will speak with 100% of your list every sixty days.
Expand your center of influence systematically.
10% of the people in your database will do business with you or refer business to you every year, assuming you communicate with them. If your database is 100 people strong, you’ll have 10 transactions from them yearly. 200 people could mean 20 transactions, and so forth. Smaller is better. Don’t dump random leads into your database. Past clients, friends, family, neighbors and people in your sphere of influence belong on this list. You can have a second list of your professional center of influence that includes lenders, title professionals, painters, insurance representatives etc.
To expand your center of influence contacts, try these three approaches:
a) Things you like to do anyway
This list could include your hobbies, sports teams, arts and culture events, fitness routine or going on organized hikes. You’ll be around like-minded people, talking about mutual interests. Use MeetUp.com to find things that interest you. Try out new clubs to expand your contacts.
b) Business networking
For the sake of networking. Business Network International, the Chamber of Commerce, Toastmasters, entrepreneurs club, investors clubs, and more are all great ways to meet new professional contacts.
c) Charitable events.
Auctions, food drives, toy drives, fundraisers, school and church events are all great for a multitude of reasons. You’ll be around philanthropic-minded wealthy patrons of these events, expanding your sphere into neighborhoods you may not yet be working in, meeting interesting people and networking at a high level.
It’s also important to get into the habit of immediately adding new contacts to your smartphone contacts, then emailing their name to yourself so you can get them into your CRM. Add a note in your contacts to remind yourself how you met them. For example: ‘Sherry Seller. Met at Orange Theory. Married, three kids, and a fish. Moved to Austin from Chicago.’
Most importantly, remember that in order for these tips to become predictable, duplicatable sources of business, you add more contacts and touch base with them more frequently to achieve that flow of leads.
Tim and Julie Harris host a podcast for real estate professionals. Tim and Julie of Premier Coaching have been real estate coaches for more than two decades, coaching the top agents in the country through different types of markets.
Disability insurance is the most underrated type of insurance, and one that I routinely would see clients skip. Who ever thinks they will become disabled?
Hard truth – According to some statistics from the Council for Disability Awareness, 1 in 4 workers who are 20 years old will be disabled before they retire. That’s a shocking number for most people to consider. If you can’t perform your job, you can’t earn money, and that’s where a disability insurance plan can save the day.
The best disability insurance companies make it easy to get a quote online. Below you can quickly get a quote from top rated disability insurance companies we recommend, or keep reading to learn more about disability insurance and its uses.
Table of Contents
Quotes From Top Rated Disability Insurance Companies We Recommend
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#1
Quotes from the top disability carriers to ensure you find the best rates
Helps thousands of consumers apply for disability insurance each year
Rated Excellent on TrustPilot
Benefit terms range from 3 months to age 67
Choose your waiting period
Multiple riders add flexibility to your policy
#2
Benefit periods from as little as 2 years or all the way to retirement age
Family care benefit provides coverage for up to a year if policyholder has to take off work to care for a child, spouse, or parent
10% discount to business owners and an additional 10% to preferred occupational classes.
Offers the option of Full Coverage for Mental/Nervous disabilities or a 10% discount for a 2 year limitation.
Rated A (Excellent) by A.M. Best for financial strength
What is Disability Insurance?
The idea behind disability insurance is simple.
It operates similar to a traditional life insurance plan, but instead of paying out upon your death, it pays out if you become disabled.
Coverage for these plans can vary in the size. Just like with other kinds of insurance plans, every disability policy is different.
If you already know what you want and just want to browse different rates from several carriers, click here.
Some plans are going to replace 45 %of your income, while others are going to give more replacement at 65%.
The more replacement coverage you want, the more you’re going to pay for your plan.
The Differences with Workman’s Compensation
When an employee suffers an injury on the job, oftentimes their employer will compensate them through worker’s compensation.
It is important to understand the difference between disability insurance and worker’s compensation – because the two are not the same thing.
The key difference between workers’ compensation and disability insurance is that workers’ compensation (or workers’ comp) pays for injuries that are work-related. Employers will obtain workers’ comp insurance in order to pay for incidents that occur on the job.
If workers sustain injuries on the job, it is oftentimes up to the employer to pay for the person’s medical bills, as well as for the individual’s lost wages if the employee must take time off work because of the injury.
An employee who collects payment via workers’ comp will typically, however, not have a long-term disability, but rather a temporary injury from which he or she will soon return.
On the other hand, disability insurance pays for a percentage of a person’s earnings if the insured is not able to work due to an injury or illness – regardless of whether that injury or accident happened at work or elsewhere.
In addition, if the disability insurance policy is an individual policy (versus an employer-sponsored group plan), the insured will be covered under the policy regardless of who he or she is employed through.
According to the Council for Disability Awareness, less than 5 percent of disabling accidents and illnesses are work related.
This means that the other 95 percent are not – and that these other 95 percent are also not covered by workers’ compensation insurance.
What About Social Security Disability Benefits?
It can be extremely difficult to qualify for Social Security’s disability benefits. For example, Social Security will only pay benefits if a person is considered to be totally disabled. This means that the individual cannot do work that they did previously, nor can they do other jobs either.
In addition, the person’s disability must have lasted, or be expected to last, for at least one year or result in death.
An individual must also have collected enough work credits in order to qualify for Social Security disability benefits.
You can take a look at the 2019 Social Security Administration limits and rates for OASDI and social security here.
The number of credits will be dependent on the age that the individual is when he or she becomes disabled.
With that in mind, the importance of disability insurance becomes even more clear.
This type of insurance can provide you with the additional funds that you need to help pay living expenses – without the need to dip into savings, retirement assets, or worse yet – use credit – for the purpose of paying day to day bills until you are back on the job.
If Social Security deems that a person’s situation qualifies, there is still a five month waiting period before benefits are paid.
This, too, can create a financial hardship for many people in terms of paying living expenses – especially if there are added medical costs due to the illness or injury that has been suffered.
So, we know Social Security won’t give the money you need and workman’s comp probably won’t cover it, so now what?
This is why you should explore a private disability insurance policy.
Types of Disability Insurance
The two main types of coverage are long-term disability and short-term disability.
You can probably guess from the name, but short-term policies are designed to cover employees for a much shorter time, anything shorter than two years.
Long-term disability, on the other hand, is built for anything past two years. A long-term disability insurance policy could continue to pay out for the rest of your life if it’s needed but typically runs from 5-10 years.
Some of the common causes for short-term disability insurance include:
having a baby
a severe illness
a major injury.
Long-term disability could include a lot of things, but some common causes are:
cancer
muscular disorders
cardiovascular complications
or serious injuries
Long-Term Disability vs. Short-Term Disability
Aside from the obvious, there are a few key differences between long-term disability and short-term disability.
One of those is the waiting period for a payout.
With short-term, policyholders can start receiving weekly checks as quickly as a 1 to 7 days after you file a claim for the policy.
With a long-term disability insurance policy, on the other hand, it can be anywhere from 90 days to 180 days.
If you’re looking at the cost difference between the two plans, short-term policies are going to be significantly more affordable than its long-term counterpart. Long-term plans can give you years more coverage which could translate to thousands and thousands of additional coverage from the insurance company.
Another key difference between the two kinds of plans is how you can get the coverage.
A lot of companies offer their employees short-term disability insurance, but almost no companies have a long-term disability insurance program.
If you want to get the long-term coverage, you’ll have to purchase a plan through a private insurance company. If your company offers any type of short-term disability insurance, you should always enroll in the program.
Group, Individual, Multi-life
Inside of the two main types of disability insurance are several “sub-types” of coverage.
One of those is group coverage.
These are policies which are offered through an employer and are offered to all the employees. Group coverage could be either short-term disability or long-term disability.
Employer-sponsored short-term plans are designed to pay for any disabilities which occur outside of the workplace. Short-term disabilities are much more common than long-term disabilities which could impact you for the rest of your life.
Individual Disability Insurance
If your company doesn’t have any sponsored plans, you can purchase a private policy through an insurance company.
You’ll be required to answer some medical questions and depending on the plan, take a medical exam.
Multi-Life Disability Insurance
When you’re shopping around for a disability insurance policy, you’ll probably come across plans being sold as “multi-life plans.”
The idea of these plans is to get several key people in a business (think of several doctors in a practice) to all apply at the same time with their plan.
The insurance company markets these policies as multi-life so they can offer simpler underwriting processes and pass some of the savings onto the policyholders.
Is Group Disability Enough?
For the employees who are lucky enough to get disability insurance through their employer, you still might be lacking. Just because you have a plan through your job, it might not be enough.
Let’s say you’re not able to go to work because of an accident. You can’t get to your job and pull in your paycheck, are you going to be able to pay for all of your monthly bills without having to make any extreme sacrifices.
To determine if your group disability insurance is enough, you’ll need to do some basic math.
Look at your plan and see how much coverage it provides.
For this example, let’s say it pays 50% of your salary. Now, take a look at your bills and expenses.
If the total of those numbers is more than 50% of your income, then your group disability isn’t enough.
If you’ve crunched the numbers and came to the jarring realization your group plan isn’t enough, the best choice is to purchase an additional individual plan.
Both of the policies can work together, and your individual plan can pick up the slack left behind.
What’s the Difference Between Owner-Occupation and Any-Occupation?
One of the most important things to understand about disability insurance plans are the differences between an owner-occupation plan and an any-occupation plan.
They may sound the same, but they completely change how your plan operates and the coverage it will give you.
First, let’s look at owner-occupation (sometimes called own-occupation protection). Policies with this protection will only pay out if you can no longer to the duties and tasks required to you by your job.
If you’re an electrician, but you can not do the simple tasks required on a day-to-day basis, then an own-occupation plan will pay you the benefits.
Any-occupation policies will only pay the benefits of the plan if you can no longer perform any occupation based on your education and work experience.
As you can tell, any-occupation policies have much stricter rules on the circumstances in which they will pay the policyholder.
Type of Disability Insurance
Description of Disability Insurance
Short-term disability insurance
Provides coverage for a limited period of time, usually up to 6 months, and replaces a portion of your income if you are unable to work due to illness or injury.
Long-term disability insurance
Provides coverage for a longer period of time, typically until retirement age, and replaces a portion of your income if you are unable to work due to illness or injury.
Group disability insurance
Provided by an employer as part of a benefits package, group disability insurance offers coverage to all employees and may be offered as short-term or long-term disability insurance.
Individual disability insurance
Purchased by an individual, this type of disability insurance offers customized coverage and can be either short-term or long-term disability insurance.
Own-occupation disability insurance
Offers coverage if you are unable to work in your specific occupation due to illness or injury, even if you are able to work in a different occupation.
Any-occupation disability insurance
Offers coverage only if you are unable to work in any occupation due to illness or injury.
Residual disability insurance
Offers coverage if you are able to work but have a reduction in income due to illness or injury.
How Much Does Disability Insurance Cost?
Now for the part everyone wants to know, how much is a disability insurance plan going to cost you?
Well, there are a lot of different factors which are going to affect how much the premiums are. It’s difficult for me to give an exact number without knowing your exact situation.
For example, the age of the applicant is going to play a major role in the premium rates. If a 25-year old applies for a policy, it’s going to be significantly cheaper than a plan for a 45-year old.
The general rule of thumb for disability insurance is the premiums are going to be anywhere from 1% to 3% of your gross income.
If you are making $100,000, you can budget for $1,000 – $3,000 every year.
As I mentioned, there are dozens of different factors which will completely change how much you pay.
If you’re a smoker, then you’re going to pay much more for your plan.
If you have a riskier job, you’re going to pay more.
The rule of thumb is exactly that.
How Much Disability Insurance Do You Need?
I alluded to the amount of disability insurance earlier in this article, but now let’s take a hard look at how much coverage you should have.
Not having enough disability insurance protection could cause some serious financial strain if something were to happen.
First, let’s look at your living expenses. If you don’t already have a budget, take some time to look at all of your monthly bills (power bill, water bill, mortgage payment, etc.) and your spending (groceries, gas, etc.).
On top of those monthly expenses, add in a few “unexpected” bills as well. You never know when something is going to break or an extra bill is going to pop up.
You want to have some cushion in your budgeting. Otherwise, you end up living paycheck-to-paycheck.
After you have the monthly expenses number, you can do some subtracting.
If you aren’t working, your expenses are going to look very different than they do now. For example, if you aren’t driving to work every day, you probably won’t be spending as much on gas.
You won’t be spending money on work clothes, and you will probably cut out some additional “entertainment expenses” as well.
Now you have a new number, your monthly expenses minus some tweaks.
The next number you want to add to the equation is any income you’ll make from other sources besides your disability insurance plan.
This category can include any money from your investments, money from your spouse or partner’s job (or a second job if they decide to add another job) and any additional disability income you may qualify for.
If you’re the main income earner in your home, then having disability insurance is one of the most important purchases you can make.
Key Man
For most people, they purchase disability insurance for their family and loved ones. for others, they buy a plan to protect their business.
If you’re one of the foundational workers in your business (ex. an owner, CEO, etc.), then you should consider buying a disability insurance policy for your company.
Key man plans operate a little differently than a traditional disability policy. With these policies, the business pays the premiums for the plan, and if something were to happen to you and you couldn’t perform your job, then the business is going to get the money from the payout.
These policies are a way for the companies to protect themselves against financial struggles if a key person in the business were unable to work because of illness or injury.
The company can use this money to outsource those duties or to hire someone to replace the key person while they are out with the disability.
Disability Insurance for High Income Occupations
There is a certain group of people which disability insurance could have some serious problems.
If you are a high-income earner, the standard disability insurance policy simply may not be enough. Just about every insurance company which sells one of these plans is going to have an income limit.
Regardless of the percentage they replace, they are not going to offer more than that limit.
Typically, these are doctors or lawyers who own their own firms, for example.
Some policyholders may find the insurance company’s limit is below the 60% they offer in income insurance.
If you’re one of these people, there are some things you can do to get the protection you need, regardless of how much money you make every year.
One option is to choose a company who offers higher limits. Each company has different coverage limits on their policy. We can help you shop around until you find one with a high enough limit for your needs.
Another route is to buy two separate plans from different companies. Sure, you’ll pay more in premiums every month, but you’ll have the protection in place if you ever need it.
Where to Get a Disability Insurance Quote
You now know the basics of disability insurance coverage, it’s time to go out and find a policy of your own.
There are more than 40 insurance companies which sell these plans. As I mentioned, they are all different. Some are going to have higher limits, offer a larger percentage, or have cheaper rates.
You need to find a company which suits your needs.
Before you pick a company, compare the rates and plans from several companies. You don’t buy the first house you see, why would you buy the first policy you find?
Sure, you can use your own time to contact those 40+ companies individually, or you can use a tool which will do the dirty work for you.
If you’ve decided you want to get disability insurance or supplement the coverage you already have from work, check out PolicyGenius. They are one of the few companies out there which can gather quotes from dozens of companies for disability insurance, all in one place.
PolicyGenius allows you to tailor your quotes to exactly the kind of policy you’re looking for; the perfect amount of coverage with the proper waiting period.
They know shopping for insurance isn’t easy, but they make it as quick as possible.
FAQs – Best Disability Insurance Quotes
How can I get the best disability insurance quotes?
To get the best disability insurance quotes, it’s important to shop around and compare policies from different insurance companies. You can request quotes online or by speaking with a licensed insurance agent. Be sure to provide accurate information about your occupation, income, and health to receive an accurate quote.
What factors can affect the cost of disability insurance?
The cost of disability insurance can be affected by several factors, including your age, occupation, health status, and the type and amount of coverage you select. Policies with longer benefit periods or more comprehensive coverage may be more expensive.
How much disability insurance coverage do I need?
The amount of disability insurance coverage you need depends on factors such as your income, monthly expenses, and savings. A general guideline is to have enough coverage to replace 60% to 80% of your income, but this may vary depending on your individual circumstances.
The American housewife! Who has a more important or more responsible occupation? Wife, mother, laundress, counselor, maid, chef, purchasing agent. All of these are her duties at one time or another.
So begins Buying Food, a home economics film from 1950. Buying Food is fascinating not just for its shopping tips, but also for the inside look at a grocery store from 60 years ago. (Self-service grocery stores were introduced in 1916 and grew in popularity during the 1920s and 1930s, but they were still relatively young in 1950.)
The condescending narrator e-nun-ci-ates his thesis:
If her income is limited — and most incomes are — it is her duty to be sure that what she has to spend buys the most in healthful, nutritious food for her family. Yes, she feels that she must buy wisely if she can. But what does this mean? What can she do to be sure that her money goes as far as possible?
Most of these tips will probably be quite familiar. But remember, this film is meant to educate future housewives: high school girls. Tips include:
Use a grocery list to eliminate impulse buying. Notice that the film’s impulse buyer is a man. A man can’t possibly know how to shop properly, right? (Kris would answer “yes”.)
Buy only what you need. When you buy too much, whether through impulse or through mistaken economy, you run the risk of creating waste. And wasted food is a huge drain on the budget (both then and now).
Compare unit pricing. The film doesn’t call it unit pricing, but that’s what it is. Viewers are instructed to compare the price per ounce on a can of beans, for example. Search for the best value, which isn’t always the largest lot.
Buy in bulk. You can often save money by purchasing “case lots”. (Actually, the grocery store we used to shop at in my home town still has a “case sale” every summer. You can order cases of your favorite food in advance. I’d always order a case or two of my favorite canned chili. It was a great way to save money.)
Don’t buy foods your family won’t eat. And don’t buy too many perishables. Again, you don’t want to waste food.
Know what you’re buying before you buy. “When you buy canned goods, be sure to read the label. The information on the label is much more reliable than the flowery language of advertisements.”
Purchase produce in season, when possible. Produce costs less and tastes better when it is in season. (Yes, it’s obvious, but it’s a main point in the film.) The film also notes that “if the housewife’s time is not too highly valued”, home-canned produce can be a savings.
Frozen foods are a good choice. They’re nearest in quality to fresh produce. They cost a little more, but this cost is offset by the fact that there’s no waste.
Use the best grade of milk available to you. “Disease may be contracted by drinking unsanitary raw milk.” (Of all the tips, this seems least applicable to modern grocery shoppers.)
But successful meals aren’t just about smart shopping. The film notes that cooking skills are important, too:
The cooking ability of the housewife [is] highly important. It doesn’t take much skill to make an excellent meal from an expensive t-bone steak. But the sign of an accomplished cook is an attractive and tasty dish made from less expensive meat: hamburger, frankfurters. Even a well-prepared, well-seasoned stew is a dish a housewife can be proud to set before her family.
Over the past few weeks, Kris and I have had fun browsing through the Public Domain media at the Internet Archive. There’s a massive collection of old instructional films (like this one) on a variety of subjects — dating, diet, driving — including many on personal finance. If you, too, enjoy films like this, I encourage you to spend some time exploring the site.
Note: This film was created for high school home economics classes of the 1950s. Yes, by modern standards it’s sexist, but if you can put your brain on “pause”, it’s a fun film, and an interesting glimpse at the past. Plus, most of the tips are still applicable today.