Yes, it can happen to you. You may take all the safety precautions, but racing is a danger
As racers get more experienced on the track and more proficient with their cars, they sometimes get caught neglecting personal issues. This is where the regret can start to creep in if these issues are ignored. It seems that the competitive nature doesn't allow racers to think a situation can get the better of them. After all, dying is only for grown-ups or older people. Death is not a comfortable subject for conversation, especially among the macho. Life insurance is something nobody wants to talk about, but it's too important to be ignored.
There's a group of professional life insurance agents who also understand the thrill of racing competition. Agents of New Jersey-based Competition Life race vintage stock cars and vintage sports cars when the occasion permits, so they can understand the racer's mindset.
With their unique bridge between the sport and the business, agents like Steve Sunshine have realized how racers approach the subject of life insurance. Some are misinformed.
1. Honesty is the best policy. If you are a racer, be proud of it! Some believe that not telling your agent that you race can save money. It's not the case. Tell your agent everything. This will save your family a lot of grief if you happen to die on the track and help the agent representing you to an insurance company.
2. The agent that sells you your car, home, and liability insurance takes care of your life insurance. This person might not necessarily be the one you would want to talk to for your "Racer's Life Insurance." If you had a headache, you wouldn't go to a foot doctor just because he was a doctor. For best results, find a specialist.
3. An excuse often heard is "I can't get life insurance because I have had too many medical problems." With that attitude, you can't accomplish anything (It's like saying "I can never win a race ..." If that's true, why try?). Don't take yourself out of the marketplace without getting professional advice, and always get a second opinion. Companies make deals all the time. You just need to find the right agent. There are only a few agencies that specialize in "Impaired Risk" underwriting, but they do exist.
4. "Life Insurance is too expensive." Investigate all types of products available. Some agents push the product most suitable to pay a high commission. Find an agent that will explain all the types of products available. Be wary of an agent that only seems to want to sell one product and one company. If you can't afford the premium, just think of how your family will survive a death benefit when you die.
5. Why do I need life insurance? Life insurance is like a parachute. If you need it and don't have it, you will never need it again. Hindsight is 20/20. The time you need to buy life insurance is when you don't need it. If you really need it, you probably won't be able to get it because medically, you might not qualify.
6. "What if I only race occasionally, but decide to begin a professional career in racing a couple of years from now?" Whatever insurance you purchased is permanent as long as you pay it and the policy is in force. You do not have to tell the company of your newfound career as long as you had no plan to do it at the time you applied.
7. "What if I make my kids the beneficiary of the policy?" You cannot assign a death benefit to a minor. In a case like this, the court would have to appoint a trustee for your kids that you didn't plan on. The best solution is to have a clearly documented "Will" and a "Minor Trustee" for your kids.
8. "Why do I have to do this now?" Since none of us have a "crystal ball" and can pick the day they are going to die, then today would certainly be a good choice!
9. "I need to save money. What's the 'best deal' in life insurance?" Buy the cheapest policy you can find today and die tomorrow. This way, you gave the life insurance company the least, and got the most out of it. Seriously, that's not likely to happen. The best deal is actually just having it. There is no one answer to this question because there is no "one size fits all." It's like going to an engine builder and asking him what's the best cam for a small block without telling him critical information like what kind of racing you are doing, how much compression you are running, heads, flow numbers, and all the rest.
To determine your actual needs, it is best to have an agent do a thorough fact finder. The agent can then fit the proper product to your individual situation. You wouldn't try to fit a Chevy head on a Ford motor.
Beneficiary - A person named in a life insurance policy, annuity, will, trust, or other agreement to receive a financial benefit upon the death of the owner. A beneficiary can be an individual, company, organization, and so on.
Cash Surrender Value - The amount that an insurance policyholder is entitled to receive when he or she discontinues coverage. Policyholders are usually able to borrow against the surrender value of a policy from the insurance company. Loans that are not repaid will reduce the policy's death benefit.
Chartered Life Underwriter (CLU) - A professional designation granted by The American College to individuals who complete a comprehensive curriculum focused primarily on risk management. Prerequisites include passing a series of written examinations, meeting specified experience requirements, and maintaining ethical standards. The curriculum encompasses insurance and financial planning, income taxation, individual life insurance, life insurance law, estate and succession planning, and planning for business owners and professionals.
Estate Conservation - Activities coordinated to provide for the orderly and cost-effective distribution of an individual's assets at the time of his or her death. Estate conservation often includes wills and trusts.
Estate Tax - Upon the death of a decedent, federal and state governments impose taxes on the value of the estate left to others (with limitations).
Executor - A person named by the probate courts or the will to carry out the directions and requests of the decedent.
Intestate - The condition of an estate left by a decedent without a valid will. State law then determines who inherits the property or serves as guardian for any minor children.
Living Trust - A trust created by a person during his or her lifetime.
Probate - The court-supervised process in which a decedent's estate is settled and distributed.
Term Insurance - Term life insurance provides a death benefit if the insured dies. Term insurance does not accumulate cash value and ends after a certain number of years, or at a certain age.
Testator - One who has made a will, or who dies having left a will.
Universal Life Insurance - A type of life insurance that combines a death benefit with a savings element accumulating tax deferred at current interest rates. Under a universal life insurance policy, the policyholder can increase or decrease his or her coverage, with limitations, without purchasing a new policy.
Variable Universal Life Insurance - A type of life insurance that combines a death benefit with a savings element accumulating tax deferred at current interest rates. Under a variable universal life insurance policy, the cash value in the policy can be placed in a variety of subaccounts with different investment objectives. The policyholder can transfer funds among the subaccounts as he or she wishes. Fees are charged after a certain number of transfers.
Whole Life Insurance - A type of life insurance that offers a death benefit and also accumulates cash value, tax deferred at fixed interest rates. Whole life insurance policies generally have a fixed annual premium that does not rise over the duration of the policy. Whole life insurance is also referred to as "ordinary" or "straight" life insurance.
Will - A legal document that declares a person's wishes concerning the disposition of property, the guardianship of his or her children, and the administration of the estate after his or her death.
For more insurance terms and information, visit www.competitionlife.com.