Category: PHP Agency Reviews

How Inflation Affects Life-Insured Individuals

In general, investors, consumers, and financial regulators can all agree on one thing—inflation is rarely good for the economy. It leads to rapidly rising costs, devalues currencies, and undermines the value of investments. Yet inflation isn’t always a bad thing. When it comes to life insurance policies, the benefits of inflation can sometimes outweigh the downsides.

Although inflation usually causes consumer goods to become more expensive, it can have the opposite effect on insurance premiums. PHP Agency Reviews takes a look at how inflation affects insurance policies and learn why individuals with life insurance may actually benefit over the next year or two as inflation continues to rise.

Understanding How Inflation Affects Interest Rates

To understand how inflation affects insurance premiums, it’s important to understand how inflation affects interest rates. In short, the relationship between these two economic measures is positively correlated. When inflation rates begin to rise, the Federal Reserve usually adjusts interest rates to real in excess cash reserves stored within the economy.

What does this have to do with insurance premiums, though? Insurance companies usually invest the premiums that they collect into bonds. When interest rates are high, insurance companies can earn a higher return on their investment, and vice versa. Therefore, insurance companies stand to earn more from their investments when inflation rises.

How Inflation Affects Insurance Premiums

Now that we understand how inflation and interest rates are related, let’s take a look at how this affects insurance premiums. In short, when inflation is high, insurance premiums usually go down, and vice versa. When inflation is high, insurance companies can earn a higher return on their investment, which means that they don’t have to charge as much for premiums in order to make a profit.

In other words, high inflation rates lead to lower insurance premiums. Conversely, when inflation is low, insurance companies earn a lower return on their investment, which means that they have to charge more for premiums in order to make a profit. I.e., low inflation rates lead to higher insurance premiums.

So, what does this mean for life insurance policyholders? In the short term, policyholders may see their premiums go down as inflation rates continue to rise. In the long-term, however, policyholders may see their premiums go back up as regulators real in the economy and insurance companies readjust to lower interest rates.

Policyholders may also see their death benefits go up as the cost of living goes up. This is because most life insurance policies have a provision that protects against inflation. This provision is known as the “cost of living rider” or the “COL rider.” It’s put in place to maintain the value of the policy and protect customers against sudden jumps in the price of consumer goods.

The Bottom Line
Inflation is generally viewed as a bad thing. Yet, for life insurance policyholders, the benefits of inflation usually outweigh the downsides. In the short-term, insurance companies usually stand to profit from their investments and policyholders see the benefit as their premiums drop. However, once inflation comes back under control, their premiums may return to normal.

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What Are a Few Common Life Insurance Mistakes?

Purchasing life insurance can seem a bit daunting for individuals who are not fully aware of the options available to them. To this point, without the direction of an agent that is empathetic and aware of their current and future needs for life insurance, there are several pitfalls that consumers could fall victim to. PHP Agency realizes that becoming educated on some of the common mistakes that people make when exploring coverage options is important to ensure that we make the best decisions possible. Here, PHP Agency reviews a few of these mistakes and how potential consumers can best avoid them.

Waiting Too Long to Explore Options

Many people hold the misconception that life insurance is prohibitively expensive to purchase. This means that they may put off buying the coverage that they need. It is important to note that life insurance premiums are based on factors such as age and overall health and buying a life insurance policy while you are younger can help you secure a policy at a low cost. Those that wait to buy may find that their premiums are higher, as life insurance rates typically increase as people age and their health deteriorates over time.

Not Shopping Around for Rates and Policies

Prices in the life insurance space can vary widely depending on the level of coverage and what the options include, and consumers should certainly not limit their search to just one company. One company’s term insurance product could easily be more than double a competitor’s, and that does not mean that the higher priced coverage is inherently better or more fit to your situation. To get the best deal possible for your needs, it is recommended to shop around and hear from at least three companies for different coverage levels before deciding.

Purchasing Too Little Coverage

Not buying enough coverage is a common mistake in the life insurance space because some families underestimate their needs for insurance. After all, it takes a large death benefit to replace a breadwinner’s monthly income if their paychecks were to stop rolling in. It is recommended to ensure that your policy covers your lost income as well as potential bills such as funeral costs, the mortgage, education, and other expenses that you anticipate over the course of your children’s lives. By balancing comparing your current assets with your financial obligations, you can decide how much coverage will be needed to fill in the gap.

Buying the Wrong Type of Coverage

PHP Agency speaks to how each of us have individual needs for life insurance and there is no “one size fits all” option that can cover us all. For this reason, it is important that individuals purchasing life insurance fully understand the policies they are looking at. What does it cover? What does it not? How much are you required to pay? It is crucial to know the answers to all these questions and more early in the conversation. Even if you have the help of an agent to decide which policies would best fit your needs, you will need to remember that your needs may still change over the years. After significant life events that may change your insurance needs, go back and reassess if your current policy will still work for you.

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What Life Events Can Change Someone’s Insurance Needs?

Life insurance is often an aspect of financial security that people put off. Even when they do not, many do not consider the possibility that they will need to change their level or type of coverage as their life situations change. PHP Agency realizes that this is a mistake as there are many life events that can impact someone’s insurance needs. Here, PHP Agency reviews a few of the most common reasons that people may evaluate (and potentially change) their insurance.

Marriage

When couples marry, join a civil union, or become life partners, most likely both individuals work towards contributing to a household. This means that, should one person die, the other could quickly become responsible for handling many financial obligations. People typically evaluate their insurance needs when they find their life partner because such coverage could help the surviving partner maintain their quality of life and pay their financial obligations. Death benefits paid out through life insurance policies can be used for responsibilities such as mortgage, car loan, student loans, and debts.

Income Growth

Term covers are often based on a couple’s household income, which is meant to help support your family’s lifestyle after your death. Because of this, it is important to review and perhaps increase your health and term cover if you experience a significant income growth. Increasing the cover for health and life insurance plans can help ensure that your family has support in your absence, preventing damaging financial situations that could arise if your current coverage does not reflect your new income.

Purchasing First Home

Many couples prepare for purchasing a home for a while, and it can be daunting to evaluate everything that is needed to ensure financial stability should a partner pass away. After all, mortgage is more than likely a couple’s biggest debt, and insurance, property taxes, and upkeep certainly contribute to the costs of home ownership. Life insurance can help make sure that a surviving partner can afford to keep the home should an unexpected event befall their family. If there is no joint homeowner, life insurance can help make your property an asset for your loved ones rather than become a foreclosure.

Having Children

Having a child, either through birth or adoption, certainly changes a couple’s finances. Most parents will have a reflective moment where they realize that they must do everything possible to provide financial security and protection to their children. Life insurance is one tool that can help a parent ensure their children’s safety should the unexpected happen. Death benefits that are paid if life insurance needs to be used can be used to cover a child’s needs and help them maintain a financially secure future.

Retirement

There are a lot of things that an individual should evaluate when it comes time to retire, and life insurance is no exception. One of the interesting things about evaluating insurance needs during retirement is that there are many different scenarios that will impact one’s needs. For example, some retirees see their permanent life policies as a potential source of retirement income source. Retirees with grown children and a partner with enough income may decide they no longer need their insurance policy. Others may wish to keep their life policy to help their heirs pay legal fees and taxes associated with their estate after their death.

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PHP Agency Reviews What Job Candidates Look for in Company Insurance Options

PHP Agency Reviews what most people are looking for in a company’s insurance options. While some insurance companies offer a limited number of benefits, others offer the full load of insurance benefits. This is what more and more people are looking for in a company. The more benefits, the better their retirement looks for them. So, let us look and some of the most popular benefits candidates seek to find.

During the pandemic companies all over the world have lost employees or had to let go of their employees due to the lack of business. With that said, the unemployment rate fell to a record low of 4.3% this summer, leaving HR managers in a tough position to find quality candidates. Companies have had to learn how to innovate new ways to attract quality candidates. And one way to do that is to offer compelling company benefits. Offering competitive benefits package will help in acquisition and retention. Here is how they are doing just that…

Medical, Dental, and Vision Insurance. Most employers offer these types of insurance. This helps the employee take care of themselves and their family members. This one is a must for anyone who is looking for a salaried job. Unfortunately, health insurance can be the most expensive perk for an employer to offer. The good news is for small businesses, they can offer health insurance without bearing the cost of the entire premium. All they must do it pay a portion of the monthly premium to make their expenses more manageable. Any sort of insurance benefit an employee can get they will appreciate it.

Retirement Benefits. Offering a retirement plan can strengthen your employer brand and increase the number of applicants. Most companies offer a traditional 401k plan as an employee benefit. Retirement plans are a popular employment benefit since both business owners and the employees gets tax breaks whenever they make contributions.

Wellness Programs. More and more employees are taking care of their health and being mindful of their overall wellbeing. Since this has become such a hot topic these days, companies have decided to offer wellness programs as part of their benefits package. This would provide the employee, healthy snacks, yoga classes, discounts to a gym membership, and even mediation classes to name a few. Corporate wellness is increasingly being viewed as a key component to company success.

While companies struggle to find top talent, many are looking at their benefits package and insurance options to attract candidates. Research shows that competitive perks can be the best way to gain more top talent. These top candidates are looking for flexible schedules, health care insurance, retirement planning, life insurance, and wellness programs. Offer these benefits and you will find your top talent.

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PHP Agency Reviews What New Parents Should Look for In a Health Insurance Plan

PHP Agency Reviews what new parents should know to look for when choosing a health insurance plan. Being a new parent is an exciting moment. There are all sorts of things that are going that you as a parent are making sure gets done the right way. One of those things is choosing a health insurance plan that is right for your baby. Deciphering health plans for your baby is not fun, but here are a few ways to navigate through your company’s health plans to make sure you are picking the right one for your family.

Begin by evaluating both parents’ coverages. Before anything else, investigate you and your partners healthcare coverages. Especially if you both get covered through your place of work. Pay attention to the different coverage tiers of the plans because some plans allow you to cover just yourself and one dependent, either a child or a spouse; others might require coverage for the whole family. “In some instances, it may be worth having two separate policies. If both parents are on the same policy, then adding a child can sometimes turn the policy into a family policy at a much, much higher cost,” says insurance agent Greg Sanders.

Look at the total cost of a given plan, not just the monthly premium. When you weigh the pros and cons of a plan, be sure to add in copays, deductibles, and all other medical fees that you are likely to have with a particular plan. Also be sure to factor in any possible visits made to the urgent care or the emergency room as well as lab tests and prescriptions. Finally, when it comes to out-of-pocket costs, you will want to consider if the pediatrician you would like to use and a nearby hospital are in-network, in case of emergency. Out of network can potentially cost more out of pocket money.

Consider enrolling in your companies flexible spending account plan for dependent care. If you know that you will need childcare, consider using a Dependent Care Flexible Spending Account (FSA) to get a break on the cost. FSAs are a use it or lose it type of account. If you know you are not going to have your baby that year, you might consider contributing less than if you had your baby before the time the years FSA ran out. Health Saving Account (HSA) is if you have a higher deductible, which you can contribute up to a certain amount of your pre-tax dollars. This money can be taken out tax free as long as it goes towards eligible medical expenses. While various health-care items are included, keep in mind that everyday costs like childcare, formula, or diapers are not considered medical expenses, it is important to know what is covered before deciding if an HSA is right for you.

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PHP Agency Supports April Financial Literacy Month

Financial Literacy has been around for over two decades. It runs throughout the entire month of April. During Financial Literacy month financial institutions, nonprofits, and human service agencies across the country run a variety of events that carry out plans designed to improve financial literacy, especially among our nation’s youth. Organizations, like PHP Agency, help increase their focus on the importance of financial literacy through programs, events, and counseling. The main goal is to help consumers learn more about their finances and help improve their financial stability.

Financial literacy is the understanding of how money really works. It also includes the understanding of generational wealth, what the importance is of a mutual fund, or an IRA, or the importance of a stock, what a 401k is, as well as what sort of insurances are out there. Understanding how these all work in your favor and being able to take advantage of it at a younger age verses at an older age, will only benefit you. It is about how to have control over your own money.

Financial literacy helps break those bad generational trends and habits by creating generational freedom. PHP Agency offers the opportunity to break those curses by providing knowledge on how to be smart with your money, what to do with it, as well as providing financial goals that help you live the life you deserve. It is about knowing how to make the right financial decisions that will prepare you for a better future.

When working with a Financial Agency like PHP, they help educate consumers on how to control their money without letting the money controlling them. When families come in with their children that are beginning their journey with becoming an adult, agencies like these helps educate the parents on topics such as:

Should you add your child/ren as an authorized user on your credit card/s?
How to teach your kids good money habits?
How to involve your kids in your family budget?
How to teach your teens about credit?
What is a saving account and how does it work?
Investments for teens.

Financial Literacy month is for everyone. It is a full month of educating individuals on how to manage money, what sorts of retirement plans are out there, insurances, and other money securities that will help people create a stable financial protection for the rest of their lives.

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PHP Agency Reviews Why More People are Buying Life Insurance Young

Young adults have a wide range of new responsibilities to consider and purchasing life insurance is not always the first thing to come to mind. After all, young people that are not married, do not have children, and are healthy, may not understand the importance of purchasing life insurance ahead of these events. PHP Agency realizes that, given many of the circumstances of the past year, young people have begun purchasing life insurance younger. Here, PHP Agency reviews a few of the reasons why.

Locks-in Great Rates for Young Adults

One of the biggest reasons young adults have been purchasing life insurance is because, in doing so, they can lock in lower premiums and noticeably reduce the amount spent on life insurance over the course of their lifetime. In one’s 20s and 30s, a person is likely in the best shape of their life. Health is a large determining factor for how much a person needs to pay to secure life insurance. This means that getting insured before developing health conditions such as high blood pressure or high cholesterol can help a young person lock-in more affordable premiums. If someone is to wait until they age or develop health concerns, they may find that their premiums are much higher. In some instances, they may even find that their pre-existing conditions make securing insurance difficult.

Protects Loved Ones in the Event of Your Passing

When we are young and healthy, it is hard to imagine anything happening to us that could leave our loved ones struggling to get by. As a young adult, you may have credit card debt, student loans, or car financings that could become a burden to parents or co-signers in the event of your sudden passing. For young adults that are homeowners and in a relationship, purchasing life insurance can ensure that a surviving partner does not need to cover the remaining costs themselves in order to avoid losing the property. When PHP Agency reviews reasons that young people purchase life insurance, they find that it is often because of life changing events such as purchasing a house or having a child. One of the benefits of coverage options such as term life insurance is that they can be an affordable way to receive coverage for a specific length of time, which can include the length of a mortgage.

Contributes to Long-Term Financial Strategy

Many young adults are at the stage in their life where they are looking for ways to improve their financial stability. When PHP Agency reviews the ways in which young adults contribute to their long-term financial strategy, life insurance stands out as a crucial facet. This is because life insurance, if an individual opts for a permanent policy, can build credit that has a variety of benefits. Holders of permanent life insurance policies can borrow against it as the cash value of their policy grows. When purchasing life insurance young, the policy has more time to grow in value. Permanent life insurance policies can also develop guaranteed cash values that can be accessed at any time. As these values grow, they can serve as an additional tool for young adults that are facing financial obligations.