If you cringe at the idea of term life insurance due to the fact that you feel as if you're wasting your money because you don't think you'll die, it'll be easy to understand the appeal of a "return-of-premium" or ROP term life insurance.

A return-of-premium term life insurance policy provides the peace of mind that comes with a traditional term life insurance policy, but you'll pay a bit more (about 30-45%) and 20 or 30 years later, if you outlive your policy, you'll get all of your money back, tax-free!

For someone needing life insurance, this can be a good deal. But there are some cautions. The first is to think about whether you can realistically afford the higher premiums. I believe that the first priority for life insurance is to have sufficient coverage. If you can't realistically afford return-of-premium coverage for the amount you need, I would recommend that you choose a cheap life insurance policy for that coverage amount.

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Finding and choosing the right term life insurance coverage can be a time consuming and complex process, especially if the individual looking to secure coverage has outstanding health issues and/or a lifestyle that includes activities deemed to be "high-risk." Clearly, this is not a "one-size-fits-all" proposition. Depending on the specific medical condition or high-risk activity, it is not uncommon for one insurance company to charge significantly more than another. Why? Because each life insurance company has a different set of underwriting guidelines.

Some of these company-specific underwriting rules are well known, but most are not, and don't even show up in the carrier's rate books or product brochures. The only way to know about them is to deal with a broker who does a lot of business with several carriers - and is in a position to know what each will or won't do. This experience is critical because industry-wide, only about 30% of individuals qualify for the "preferred plus" rate class.

Tips for finding affordable life insurance:

· Ask the right questions – Talk with an expert that is familiar with multiple carriers' underwriting rules. Such experts will know which carriers will bend their rules, and when.

· Deal with a broker – Brokerage firms, such as AccuQuote, know the ins and outs of several carriers - and are in a position to know what each will or won't do. Some of these carrier-specific underwriting rules are well known, but most are not, and don't even show up in the carrier's rate books or product brochures.

· Make sure you fess up – if you do anything extreme, such as sky dive on a regular basis, and don't tell your life insurance company at the time of applying, they can refuse to pay the death claim should you die.

· Think about pursuing a policy that excludes your risky endeavor – Some insurers will allow you to purchase a policy, which states that if you perish while engaged in the excluded activity, your beneficiaries would not receive the death benefit. The advantage to this is that you would not pay extras above the cost of your policy.

· Educate yourself – Go to school, get a license, do all the safety things that you're supposed to be doing and present yourself as an expert in skydiving.

· Notify your agent if you stop this activity – If you no longer are skydiving, contact your agent as you can save money immediately.

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I write about key man insurance at least once a year. Why? Because it can make a break a business.

If you're a business owner, you should ask yourself: what happens to my company if something happens to a key employee or me?

The answer can decide whether the company survives the loss -- and whether a business owner puts his family at financial risk.

There are ways to provide protection, including key-man term life insurance. Such coverage takes over should income be interrupted. And it's not just business owners that need life insurance protection. The company's top salesperson should also be covered. In fact, companies should look at insuring anyone who is integral to its financial success.

If you lose a key employee, key man life insurance will pay you for your lost profits, thereby buying you some time to replace the individual and get the business up and running again.

The key man term life insurance policy can also serve as an incentive to retain key employees and use it as part of your benefits package. How? You can split the benefits from the life insurance policy any way you want. You can offer part of the proceeds to the employee's family.

How much key man life insurance coverage is needed? Typical benefits run between $250,000 and $1 million. There are two ways to determine the right amount of key person life insurance. You can buy 8 to 10 times the employee's salary or look at the economic value of the employee to your business and ask yourself, "How much money would I lose if something happened to this person?" The answer to that question will tell you how much life insurance to buy.

How much does it cost? That depends on several factors, including the age and health of the people. However, today life insurance rates are 60% less than what they were 10 years ago. In 1994 it cost $995 to insure a 40-year-old man with an average 20-year term life insurance policy. Today, that same policy would cost you less than $400 per year.

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During this time, where good investments are hard to come by, some life insurance agents are touting permanent life insurance policies as an attractive alternative. However, as with any "investment", it's important to know the pros and cons of permanent life insurance policies before deciding whether or not to buy one.

The basic difference between term life insurance and permanent (whole or universal) is this: On the death of the insured, both term life insurance and permanent policies pay a death benefit to the named beneficiary. However, permanent life insurance plans include "living values" in the form of cash values. These values can be accessed in the form of policy loans, withdrawals, and also by surrendering the policy.

A permanent life insurance policy is a type of 'forced savings' plan. However keep in mind, assuming the same death benefit; they premiums on these types of plans are generally 5-12 times as much as a level term life insurance policy. A permanent policy will typically not work out well for you unless you're prepared to stick with it for a long time. Unfortunately, most people aren't able to afford the face amount of insurance they need to protect their family in a permanent insurance chassis. Even if they stretch their budget to buy permanent coverage, they often lose the faith and bail out too early. When this happens, they find out that they'd have been better off never having started the plan. They have no life insurance protection, and the surrender values add up to abysmal results on the 'investment' side of the transaction.

I prefer term life insurance for most people because it is affordable, making you less likely to lapse your policy. The main purpose of having a life insurance policy should be to protect your family. Term life insurance accomplishes this need for a lot less. If you are determined to consider permanent coverage, you might consider the old adage, 'buy term life insurance and invest the difference'. Simply take the cost difference between a permanent policy and term life insurance policy and invest that money.

At today's rates (which are the lowest in the history of life insurance), the annual premium for a 40-year-old male (non-smoker) in good health for a $500,000, 20-year term level term life insurance policy is only about $350!

To get a real sense of the value of term life insurance, let's compare term life insurance quotes and universal life quotes. A healthy 40-year-old nonsmoking male would have to pay about $3,000 per year to acquire a $500,000 universal policy. For the first few years, most of these policies have zero surrender value. But say he had instead invested $2,650 (the difference between $3,000, the cost of the universal policy, and $350, the cost of a term life insurance policy) in a mutual fund that averaged a total return of 10% annually. At the end of the first year, he'd have $2,841, accounting for taxes on the earnings at a 28% rate. At the end of 10 years, he would have accumulated more than $46,000 in after-tax savings in the mutual fund. Over the same period, the cash value of the policy would likely only have climbed only to about $21,558.

Here are some tips when shopping for a term life insurance policy:

· Comparison shop but don't get lured by a "come on" life insurance rate

· Buy a term life insurance policy worth at least seven to ten times the breadwinner's annual salary

· Buy from a reputable term life insurance company that is financially stable

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Whether you smoke two packs of cigarettes a day, or have an occasional cigar or pipe, the life insurance quotes you'll most likely see are going to be smoker rates which are typically double, often, as much as triple, the price of` non-tobacco users.

For example, a 40-year-old male who is a smoker qualifying for preferred term life insurance rates on a policy with a face value of $500,000 would be quoted $2,480 for a 30-year level term life insurance policy. If that same person qualified for non-smoker rates he would only pay $620 for the same policy. That's a savings of $1,860 per year and $55,800 over the length of the policy!

If you've been putting off shopping for life insurance because you're a smoker, or think you are paying exorbitant premiums because of your habit, it's time to start shopping around. Many people are overpaying for their life insurance because they don't realize that there are deals to be had out there.

We suggest the following tips for finding a life insurance company that will offer tobacco users more favorable rates – sometimes, even non-smoker rates:

• Shop around – Some companies require a negative test for nicotine in order to qualify for non-smoker term life insurance rates. While at others, testing positive for nicotine is acceptable. As a result, an occasional cigar smoker or tobacco chewer could end up paying a lot more than they have to.

• Deal with a broker – Only a brokerage firm that has a broad pulse on the insurance market will know which company might offer the most favorable rates to a given person, based on their individual profile.

• Do NOT lie on your application – Because premiums offered to those who admit to tobacco use are often triple those of people who don't smoke, some people are tempted to lie to get a better rate, but the effort often backfires.

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I don't have any pets, but I often here people in the office talk about their animals getting sick. Veterinary Pet Insurance (VPI), recently analyzed its medical claims received in 2007 to determine the top 10 most commonly claimed conditions for dogs and cats. They said that for both canines and felines, the top 10 conditions accounted for about 25 percent of all medical claims received last year.

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Dave Ramsey does a really good job explaining the difference in price between term life insurance and permanent life insurance in this YouTube video.

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A lot of seniors have the idea that Medicare would cover their long term care expenses. That actually isn't the case. In fact, Medicare does not pay for long term care and people may want to consider private insurance.

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According to a new survey conducted by Harris Interactive on behalf of America's Health Insurance Plans (AHIP), four out of five disability income insurance claimants are satisfied with their policy.

The survey of disability insurance claimants assessed their satisfaction with their policy and their experience filing a claim and receiving benefits. Overall, four out of five claimants (82 percent) said that they were satisfied with their disability income insurance policy. Specifically, claimants were satisfied with the process for filing a claim (81 percent), the promptness of the payments (79 percent), the responsiveness of the insurer (75 percent), and the overall communication from their insurer (71 percent).

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According to a recent poll conducted by Thrivent Financial for Lutherans, retired American females are more frugal than their male counterparts.

The poll found that retired females are more likely than their male counterparts to take practical steps to save money compared to their pre-retirement lifestyles:

• Forty-four percent of retired females said they are giving fewer or smaller gifts to family members in retirement compared to 29 percent of males.
• Forty-two percent of retired females said they are shopping more with coupons or at sales in retirement compared to 28 percent of retired males.
• Thirty-five percent of retired females said they are eating out less often or at less expensive restaurants in retirement compared to 29 percent of retired males.
  

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Members of the National Association of Insurance Commissioners (NAIC) recently adopted guidelines that protect insurance consumers from discriminatory underwriting practices in the sale of life insurance.

The changes to the NAIC Unfair Trade Practices Model Act limit an insurer's ability to refuse life insurance because of lawful past travel or, under specific circumstances, lawful future travel.

Specifically, future travel cannot be the basis for a coverage decision unless travel to a specific destination at a specific time is found, based on sound actuarial principals and actual or anticipated experience, to create a risk of loss greater than that for individuals who do now travel to that place at that time.

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Every individually underwritten term life insurance policy requires a medical exam. The exam is paid for by the life insurance company and is completed by a medical technician or a nurse.

The exam usually consists of a series of health questions as well as a:

• Blood test

• Urine specimen

• Blood pressure reading

With the official start of hurricane season only a few days away, coastal residents need to make sure that they are properly prepared for the above average hurricane season predicted for 2008, according to the Insurance Information Institute (I.I.I.).

The 2008 hurricane season, which starts June 1 and runs through November 30 is expected to be an active one. London-based forecaster Tropical Storm Risk predicts that there is a 63 percent probability that hurricane activity in 2008 will be in the top one-third of years historically. Colorado State University forecasters William Gray and Philip Klotzbach predict that there will be 15 storms in all (9.6 is the average), including eight hurricanes and four storms that could reach "major" status with Category 3 winds or higher. Experts at the NOAA Climate Prediction Center are projecting a 65 percent chance that the Atlantic Hurricane Season will be above normal this season-suggesting that more active and intense hurricane seasons will continue to be the trend.

Before you can purchase life insurance coverage you must qualify by meeting specific requirements. The process is known as risk-classification or underwriting. The underwriting process helps the insurer determine the rate you will pay, based on the level of risk you pose.

Auto insurance helps illustrate the concept. Good drivers pay less for coverage than poor drivers. The amount of premium you pay is based on the amount of risk you pose. Life insurance is similar. For instance, if you smoke, you present a higher risk than a non-smoker. Therefore, you will pay a higher premium for life insurance for the same amount and type of coverage.

Life insurance is not like most products that you can buy on the spot and take home with you that day.

The life insurance application process can be confusing. That's why I'm happy to explain what's involved in the process and why it can take 8 weeks or sometimes longer for an offer to be made.