Equitable Reserve Association

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Frequently Asked Questions

ABOUT INSURANCE & FRATERNAL BENEFIT SOCIETIES

ABOUT CUSTOMER SERVICE

HELPFUL GOVERNMENT RESOURCE SITES









ABOUT INSURANCE & FRATERNAL BENEFIT SOCIETIES

What is the difference between term and permanent life insurance?

Permanent and term life insurance provide death benefit coverage. They both pay the face value of the certificate on the death of the insured individual. Permanent life insurance covers you throughout your entire life while term life insurance provides coverage for a specified number of years.

Since the coverage is limited, the premiums for term life insurance are usually lower than those for permanent life insurance. However, premiums are based on your age at the time of renewal - the older you are, the higher your premium. Once your term life insurance contract expires, the chances are you'll be required to renew at a higher premium rate. Premiums for permanent life insurance usually remain constant throughout your life.

Because of its lower initial premiums, term insurance is attractive to those who wish to select the largest death benefit for their premium dollar. Term insurance provides protection for a specific period of time and pays a death benefit only if you die during its term. Coverage expires at the end of a specified term, which depends on the type of policy you purchase, unless your certificate or policy permits you to renew it for a further term, or you have a contractual right to convert it to permanent life insurance.

To sum it up: Compare term insurance to renting. Until you know what you want or can afford it, you buy the maximum amount of coverage for the least amount of money. Term insurance pays a death benefit only if you die during the term and once the insurance expires, you may have to renew the insurance, often at a higher premium (if your contract allows). Term insurance is also good for debts which will be reduced over time, such as mortgages, business loans and recreational purchases such as RV's or vacation homes.

Permanent Insurance is like owning. Every time you pay a premium, you build cash value on a tax-deferred basis. On most policies, if you need to, you can borrow from the certificate's cash value for important purchases such as college tuition or a down payment on a home. Many permanent policies allow a withdrawal of cash value from the certificate, but each loan or withdrawal will reduce the death benefit if you do not pay it back.




What is an annuity?

An annuity is a long-term contract between you and an insurance organization to provide a guaranteed lifetime income. Unlike life insurance, annuities provide benefits during your lifetime. Most people buy annuities to supplement their income during retirement.

Annuities offer several advantages as a vehicle for accumulating retirement funds. Annuities earn a competitive interest rate. And annuities have a guaranteed minimum interest rate, assuring you of minimum growth and safety of principal. Best of all, annuities are tax-deferred. Unlike certificates of deposit, money market funds, mutual funds or bonds, the interest you earn on your annuity is not taxed until you withdraw the money. Since this usually takes place at retirement when your total income is lower, these funds may be taxed at a lower rate.

An annuity can be an extremely flexible component of your retirement plan, which, if you choose, can provide the security of a consistent flow of income that cannot be outlived. Many options exist, making it possible to tailor the advantages of an annuity to your specific situation. You can buy an annuity either with a single, lump-sum payment or by making periodic premium payments. You also choose when you will begin receiving payouts from your annuity, either immediately or at some future date.

Because annuities are designed for retirement savings, you may pay a 10 percent federal tax penalty and federal income tax if you withdraw the taxable amount of your annuity before age 59 1/2. Under certain limited circumstances, such as death and disability, you can withdraw funds without penalty before you reach age 59 1/2.




What is an IRA?

An IRA, also called an individual retirement annuity or account, is a vehicle for accumulating money for retirement. The interest earned on money placed in an IRA grows tax-deferred, meaning you do not pay any taxes on the funds until you withdraw them. Since these funds are most typically withdrawn at retirement when you are in a lower tax bracket, the taxes you'll pay will probably be less.

Because IRAs are intended for retirement, you may have to pay tax penalties if you withdraw the money before age 59 1/2 (except in special circumstances). Be sure to check with your tax adviser before withdrawing funds from your IRA.




What is a rider?

Riders are amendments you can add at the time you purchase a life insurance certificate or at a later date. The riders expand the benefits to better suit your personal situation.

Equitable Reserve offers riders, which enhance the Society's already flexible portfolio of life insurance products and make it possible for you to tailor your plan to meet your specific needs.




What is a fraternal benefit society?

Many aspects of a fraternal benefit society can be explained in terms common to a traditional life insurance company. But, while it offers financial products, it offers even more. Community and human needs, not always met by governmental bodies, are often addressed by fraternals. Through hands-on charitable and patriotic work, fraternals make a difference in the lives of individuals, communities and the nation.

Approximately 10 million men, women and children belong to fraternal benefit societies in the United States and Canada. Fraternals often share an ethnic, religious or occupational background; but Equitable Reserve, as a general fraternal, serves people who share a commitment to volunteerism and who support our common member bond.




ABOUT CUSTOMER SERVICE

Should I replace my existing life insurance?

According to the National Association of Life Underwriters (NALU), replacing an old life insurance certificate with a new one is rarely to your advantage.

Existing certificates often have more favorable provisions than new ones in such areas as settlement options, disability benefits and loan interest rates. And because premiums are based on your age at the time of purchase, the annual premiums for a new certificate with the same or similar benefits as your existing certificate will probably be higher.

What's more, the initial costs of issuing life insurance certificates are either charged against the cash value increases in the earlier certificate years or charged upon surrender of the new certificate. By replacing an old certificate, you may pay insurance costs twice.




How do I file a death claim?

The first thing to do in the event of a loved one's death is to call his or her life insurance representative and ask for help filing a death claim. The representative can help you complete the necessary forms. If you don't know the representative's name, contact Equitable Reserve Association's Claims Department by phone (1-800-722-1574) or in writing to find out how to file the claim.

Second, get certified copies of the death certificate from the funeral director. You may need to submit a copy of the death certificate to each insurer with whom your loved one had a life insurance certificate.

You may also obtain forms on this web site in the member services section.




Why can't I get information on my spouse's life insurance policy?

Your spouse, as the owner of the certificate, is the only one who is entitled to the information. Insurance companies are subject to the Gramm-Leach-Bliley Act and state privacy laws and do not disclose any protected information except as permitted by those laws.




May I pay my premium or purchase tickets and merchandise with my credit card?

Sorry! At this time, we are unable to accept credit or debit cards for method of payment.




How do I print forms found on this Web Site?

Our forms are created in Adobe Acrobat Reader, making them easily printable from any Windows based printer. You must have Adobe Acrobat reader version 6.0 or better. This is available free online if you do not have it.

Follow these steps:
  1. If you have an older version of Acrobat Reader, you can easily download the latest version — free of charge — by simply clicking on the Adobe button on our Web Site.
  2. Double-click on the form to open it in Acrobat Reader.
  3. Click the print icon in Acrobat Reader to print.




I've lost my policy. What should I do?

If you've misplaced your Equitable Reserve policy, there is no need to worry. You may either contact your agent or you may call our Member Services department at 1-800-722-1574. They will send you the proper form to request a replacement for the lost policy.




HELPFUL GOVERNMENT RESOURCE SITES

Here are government sites that offer helpful resources about insurance and financial services.

Department of Labor:
Includes an online library, statistics and data, laws and regulations, and more.
http://www.dol.gov/

Centers for Medicare & Medicaid Services (CMS):
Site for the HCFA, the federal agency that administers Medicare, Medicaid and the State Children's Health Insurance Program (SCHIP).
http://cms.hhs.gov/

Internal Revenue Service:
Features "The Digital Daily" tax publication, contact information, tax stats and more.
http://www.irs.gov/

IRS Forms & Publications:
Can be downloaded or printed.
http://www.irs.gov/formspubs/article/0,,id=97483,00.html

Medicare:
The official U.S. Government site for Medicare information.
http://www.medicare.gov/

Pension Benefit Guaranty Corporation:
Provides FAQs, interest rates, and business, legal and participant information.
http://www.pbgc.gov/

Securities and Exchange Commission:
Features access to EDGAR database, investor assistance and complaints, and current SEC rulemaking.
http://www.sec.gov/

Social Security Administration:
Includes Social Security, Medicare, disability, and customer service information.
http://www.ssa.gov/