You see, the whole idea behind term life insurance is that the insurance company is betting that you are not going to die within the term, allowing them to keep all of the premiums you have paid, without having to pay anything out. Usually it’s a reasonably safe bet.

After all, most people who buy insurance frankly hope that they lose the “bet.” Most of us would much rather lose out on our insurance premiums than die. We buy the insurance hoping that we live much too long for anyone to ever collect it, but still hedging our bets so that we can provide for our families if we do die within the term, which most of us set to be roughly equal to the years we expect to be working and raising kids.

Of course, if we have medical conditions that could be considered life threatening or life shortening, the insurance company runs a greater risk that we will die within the term. Since the premiums paid for a term life insurance policy are normally very small compared to the death benefit the company has to pay if you die within the term, insurance companies get very nervous about insuring people with some medical conditions.

In some cases, you can still buy life insurance with health problems, but because the insurance company is taking more risk, they’re going to charge you more. Unfortunately, with some kinds of pre existing conditions, you may not be able to buy life insurance at all.

You may be asking, what does this have to do with me? I’m in good health. Well, congratulations on your health, but the whole point is that you need to go ahead and buy your life insurance while you’re healthy, because you never know when a routine physical could turn into a diagnosis that would stop you from being able to get any life insurance.

The good news with life insurance is that, as long as you didn’t lie when you were applying, the insurance company can’t cancel your policy because of a medical condition you or your doctor discover later.

Photo via conorwithonen

That said, there are some ways to die that are worse than others. Some are truly horrifying. Take, for example, Kichizo Ishida. Very few men would want to go out the way that he did.

Ishida’s story starts with Sada Abe. Sada was the youngest surviving child in a family of four children. Unfortunately for Ishida, Sada’s childhood wasn’t stellar. She fell in with the wrong crowd. She was raped at the age of 15, and became troubled as any young girl would. Eventually, she was sent to work at a geisha house because her family couldn’t handle her.

This might have been fine for Sada, but she didn’t have the kind of training she’d have needed as a child to become one of the superstar geishas that, at the time, were very much like celebrities. Essentially, she filled the roll of a call girl and, eventually, left the geisha house to work as a prostitute.

Sada moved from brothel to brothel after stealing from clients and running away from various brothels. By the 1930s, she was working as an unlicensed prostitute. Her parents died in 1932 and 1934, and she became the mistress of one Kinnosuke Kasahara in 1934.

By 1935, she decided to work in a restaurant owned by Kichizo Ishida. He accepted Sada into an apprenticeship, and made sexual advances. She fell in love with him, and they began an affair. Unfortunately Ishida was married, and he intended to return to his wife in May 1936.

That’s where things got messed up. She bought a kitchen knife, and threatened Ishida. He thought it was some sort of sexual game, and aroused him. The long story made short is that Ishida asked Sada to strangle him, which she did. She strangled him to death, actually, after which she cut off his genitals and carved her name into his body.

Lorena Bobbit has nothing on Sada Abe.

Now that’s a horrible way to die. Makes you hope that you die peacefully, in your sleep, doesn’t it?

Photo via Lunchbox Photography

In many cases, suicide is an excluded cause of death for life insurance. After all, it would only seem rational that the life insurance companies don’t offer a financial incentive for killing yourself. In many states, there are no laws in this regard and the life insurance companies can exclude suicides outright.

In 36 states, however, the government has decided to meddle with term life insurance policies. In these states, there is a waiting period of about two years, after which the life insurance policies must cover death due to suicide.

The legislators involved typically argue that paying life insurance claims after a suicide don’t really offer a financial incentive to kill yourself. Opponents argue that the markets should be free, and that if a consumer wants to buy into an insurance contract that excludes suicide and save a little bit on his premiums, he should be able to do so.

It’s also interesting that many of the same state governments who claim that a suicide coverage policy doesn’t actually create a financial incentive are the same ones who write laws that forbid people from being paid for their organs. They believe that being paid for their organs creates an incentive to sell them.

Time will tell whether or not things change in this area. If the trend continues, it’s likely that the exclusions will continue to be fewer and fewer.

Photo via Bryan Davidson

The state of Ohio is looking at legislation that would do just that. This particular bill would allow the state to create a database that includes information about life insurance policies held by people within the state. The database would then be accessible to beneficiaries and help them in claiming unclaimed proceeds.

The database would have some safeguards on privacy. The proposal includes a provision that the information that is contained in the database would only be made available when a policy holder dies. Furthermore, the information would only be made available to people that are specifically listed in the policy holder’s will.

Companies that sell life insurance, whether it’s term life insurance or whole life policies, would be required to register their policies in the state’s database within 30 days of issuing the policy. The Ohio Superintendent of Insurance would have powers to, according to the legislation, “adopt rules as necessary to establish and implement the statewide life insurance database.”

This proposal comes during a time when the Ohio Department of Insurance already has a voluntary program that accomplishes much the same kind of thing. There are many life insurance companies, including some of the largest in the state, that are already participating in the program. The program comes at no cost to the insurance companies.

Currently, the program lets a deceased person’s family submit a search request to the Department of Insurance. They then forward the request on to all of the companies who are allowed to sell life Insurance in the State of Ohio.

It is estimated that implementing such a database could result in millions of dollars of unclaimed insurance policies in Ohio being able to be claimed.

Photo via Jamison_Judd

Things are changing, however. With the highly-public Bernard Maddoff scandal, for example, people are much more aware of what’s going on with white collar crime. Maddoff received a jail sentence of 150 years for his Ponzi scheme that literally stole billions of dollars from people.

Sholam Weiss is a white collar criminal that has discovered the hard way what life is like in the wake of the Maddoff scandal. In fact, Weiss wishes his sentence were as short as Maddoff’s. That’s because Weiss has been convicted of life insurance fraud, and has been sentenced to 845 years in jail.

That isn’t a typo. 8-4-5. If you take Bernie Maddoff’s sentence and add 695 years, you get Weiss’ sentence.

To be sure, Weiss’ attorney is trying to get the sentence reduced. He’s appealed to have the sentenced reduced by 800 years.

How did Weiss get to this point? Well, in 1994 he stole $125 million from the customers of National Heritage Life Insurance Co. in Florida. The firm collapsed, and almost all of the firm’s 25,000 policy holders lost their policies, some of which had substantial cash value and were being used as savings and retirement accounts. (Yet another reason why you should consider term life insurance instead of whole life. Keep your investments separate from your insurance, folks.)

Weiss was convicted of the crime in 2000. Before the guilty verdict came down, however, Weiss fled. He went on the lam, for eight months. He was found in October of 2000 in Austria and extradited.

While most will agree that Weiss’ sentence is probably a little bit extreme, and probably done, in part, to make a point, the fact is that the legal system has very little tolerance for these kinds of white collar crimes any more.

Photo via lizjones112

Anyways, forget those. The latest incident involves a man in Germany. Heinz W. (not his real name) was 55 years old when he died. The father of two strangled himself to death by way of autoerotic asphyxiation. And his life insurance company doesn’t want to pay for it.

And really, why should they? After all, the insurance company probably looked at specific risk factors. They probably considered whether Hanz was a smoker, and whether he had any preexisting health conditions.

They really didn’t know that Heinz’s wife would find him in their bed one day, wearing a leather suit and having strangled himself with a chain.

Of course, at first, the wife didn’t think that’s what had happened. She figured he’d been murdered, in spite of the obvious evidence to the contrary. She called the police and everything. A court eventually declared that the death was caused by “an erotic accident,” and therefore Hanz had accidentally killed himself.

The incident happened one day when Heinz sat in wait, waiting for his wife to go to work and his kids to go to school. His strange game of self-stimulation began with donning the leather suit and chaining himself to the bed.

Now, here’s where it gets bizarre. You see, Hanz and his wife owned a bed that had an adjustable head. He used the control for the bed to cut off his air supply.

At some point during the process, it’s likely that Hanz lost control and dropped the remote. When that happened, the head of the bed kept moving and our boy Hanz couldn’t get any air. He then suffocated.

Because Hanz killed himself, albeit inadvertently, the insurance company is not required to pay the life insurance claim. The claim was valued at more than $300,000.

Photo via marysuephotoeth

The study focused on 2009 life insurance online search activity. The major finding was that life insurance information searches increased to 16.6 million queries.  This was a 15% bump over 2008.

Life Insurance Companies

The search term used was “life insurance.” The following companies listed as the top five with percentage of hits:

• MetLife.com:  5.8%
• NewYorkLife.com: 2.8%
• StateFarm.com: 2.5%
• SelectQuote.com: 1.7%
• Accuquotelife: 1.6%

The results prove how important it is for life insurance carriers to have a strong online presence.  It provides them with another customer touch point. That touch point can be providing coverage or premium information. Or it can be an actual quote calculated for the customer who’s seeking to purchase some term insurance.

The online presence is important, not only because more consumers are searching but because all of the insurance carriers are attempting to carve out their online space.

The Online Life Insurance Experience for Consumers

Part of this increase reflects the ease and confidence consumers feel when using the internet to research and purchase financial services. For example, a consumer can research everything they need to know about term life insurance from coverage options to term limits to the different types of term insurance.  They can research the financial strength and company reputation. In fact, they can accumulate more information in minutes than they could ever read!

Then, when the consumer is ready to purchase, they can get a quote or at least a range of premiums, instantly. The can even compare several insurance company quotes side by side in minutes.

It’s no wonder searches are on the rise. Term life.org suspects those searches will continue to rise in 2010.

Photo via Okko Pyykkö

Even if your funeral director isn’t a disgusting freaking pervert, there are other concerns. One news story recently suggested that, as the economy tightens, some funeral directors are turning to unlawful practices such as cremating bodies that are supposed to be buried.

The kicker of it is this: once you’re dead, there’s not a damn thing you can do about any of it. Your family (and your corpse) is at the mercy of your funeral director. All the life insurance in the world can’t make up for these kinds of abuses.

So, what can you do? Well, for starters, you can pick your funeral director wisely. Here are some tips to make sure you pick someone who’s going to be considerate of your family and treat your body with the respect you deserve after you’ve left it:

Ask for referrals. The best way to find a funeral director is to ask others about their experience. If your great uncle passed away last year, talk with your great aunt about her experience. Find out whether she, and the rest of the family, were satisfied with the funeral director (as well as the cemetery personnel or others involved in interment).

Ask for references. Contact some of the local funeral homes and ask if they have clients you can speak with. Most of the time, they’ll be able to provide some references of folks they’ve helped in the past.

Make your wishes known. Talk to your family about your funeral arrangements. Consider putting specific final requests in writing, or even in your will.

Consider pre-planning your funeral. The last thing you want your family to have to do when you’ve passed away is to deal with planning your funeral. Instead, you may be able to pre-plan and even pre-pay for your funeral. You’ll save your family plenty of time and frustration, and you may even save some money on the expenses by buying them at today’s prices rather than whatever they cost after you’re gone. That way, the proceeds from your term life insurance can go to settling your estate and making sure your family’s needs are met, rather than your final expenses.

Photo via Sarah.Epps

Now, the age of the women is obviously the first thing that sticks out about this story. How often do a pair of senior citizens commit cold-blooded murder? What makes this story even more horrific, however, is the hows and the whys of what happened.

It turns out that Golay and Rutterschmidt took out life insurance policies on the two men, coming to a whopping sum of $2.8 million. They then killed the men, making their deaths appear to have been hit and run accidents.

The saga began in 1997 when the women became friends with Paul Vados in 1997. They let Vados stay with them for a time, and convinced him to take out a life insurance policy. From there, they then forged his name to take out additional policies. When Vados was killed in what seemed to be a hit-and-run in 1999, they collected. In all, there were over a dozen life insurance policies on Vados.

When the duo decided to duplicate their efforts again, they found Kenneth McDavid. Like with Vados, they brought him into their home and convinced him to sign life insurance policies. McDavid had a total of 23 insurance policies naming the women as beneficiaries.

It appeared, as well, that the pair were trying to find yet another victim. Jimmy Covington, a 48 year-old man, was approached by the women, taken to a fast food restaurant and was promised shelter. He became suspicious when the women asked him to give personal details, and when they asked him to sign life insurance documents.

Officials were able to boost their case for prosecution of the women using secretly recorded conversations while the women were in jail. Ruttershmidt said to Golay, in one conversation, “You did all these insurances extra. That’s what raised the suspicion.”

The court convicted Golay and Rutterschmidt in April of 2008. The women were both sentenced to life terms in prison without parole.

Photo via M Hedin

GINA Won’t Save You

Still, there is a darker side. All of this tech has led to the need to pass new laws. For example, there is a federal law now that prevents health insurance companies as well as employers from discriminating against an individual based on their genetic predisposition to disease. This law signals the advent of a new era, in which privacy concerns and genetic advances find themselves at odds with one another.

The act is called the “Genetic Information Nondiscrimination Act,” or GINA for short. What’s especially disconcerting about GINA isn’t so much what it says, but what it doesn’t say. GINA deals with medical insurance, and with employers. It doesn’t deal with many other areas.

Long Term Care, Disability and Life Insurance Don’t Count

Take, for example, the issue of long term care. There is no federal law that says insurance companies can’t use genetic information in determining premiums or even acceptance for long term care insurance. The same holds true for disability insurance and for life insurance.

The areas of long term care insurance, disability insurance and life insurance are left to the states to decide, at least in how they relate to genetic screening. There are currently 10 states that regulate the use of genetic information in the area of long term care insurance, for example. Other state either are considering or have already considered privacy measures for genetic screening, as well.

The missing provisions from the GINA act may cause some serious problems. For example, term life insurance carriers could actually deny coverage for an individual based on what a genetic test found. They could do it without the customer even having any knowledge that they looked at the results of the genetic test.

What Can You Do?

One way consumers can keep the information private is using testing companies that don’t assign individually identifiable information to their test results. The problem comes when the consumer shares information from those with their doctor. At that point, those results become a permanent part of the patient’s medical record, and can be accessed by long-term care insurers and others.