Insurance Planning

What Could Happen?

Insurance is one of those things in life that we hope we never need to use. We hope we never get in a car accident, but we have car insurance just in case we do. Life insurance is slightly different. According to some studies, 100% of people will die. It is an unfortunate truth, but we all realize there isn’t a question of whether we will die, it’s a question of when. Therefore, it should be even more of a priority for all of us than for something that might happen, like a car accident, right? Do you have it?

One key point to realize about life insurance is that it isn’t insurance for you. It’s for your loved ones. It’s to give your loved ones the money they need to take care of things when you are gone. It isn’t a happy thing to think about, but dying costs money. Between the funeral, casket, grave, and more it can cost tens of thousands of dollars, at least. Beyond that, would you like to give your loved one enough money to take care of expenses, for at least a couple of months? How about enough to clear any debts. If you are the primary income for your household, those can be absolutely invaluable to your family. That is what insurance is for. To give you (and your loved ones) confidence to know money should be handled when you are no longer there.

How much should you plan for?

That is dependent on your situation. There are many factors that can play into that question.

Are you the primary, or sole, provider for you home?

How able will your household be to provide for expenses?

Do you have unpaid debts or forsee a large expense?

Do you want to increase your family’s financial legacy?

We work with you to determine the best number for you and your family.

There are three primary kinds of life insurance, all with their own benefits.

First there is your basic, Term Life Insurance.

You simply set a term (e.g. 20 years) you want the life insurance to be active for, and how much you want (e.g. $300,000). You pay your monthly premium, and if you die within the “term” $300,000 is paid out to whomever you choose. The younger you are whenever you purchase a policy, the cheaper premiums will be.

Second is Whole-Life Insurance

In Whole-Life you have a set premium until you pass away (or until you cancel the policy). These premiums are usually higher than term-life insurance premiums. However, since you would hopefully keep it longer than term, it can turn out to be about equal. Like term life insurance, you have a death benefit. That is the amount of money that will be paid out at your death. However you are able to do more with a whole life policy. That death benefit number can also be used like a savings account and accessed before death. If you take money out, that amount will be subtracted from the death benefit total amount.

Finally, there is a Universal-Life policy.

Universal Life is similar to Whole-Life in that it has a cash value, and a death benefit. However, the primary advantage of a universal life policy is that it is interest sensitive. That means that it is similar to an investment that grow over time. So, you can grow the value of your account, and ultimately grow your death benefit. Another benefit of a universal life policy is the ability to make adjustments. You can lower your death benefit at some point, and also lower your premiums.

The cost and availability of Life Insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable first by having the policy approved.