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Why Life Insurance Is Important for Everyone.
March 29, 2017 by
When Should You Buy Life Insurance?
March 3, 2016 by
If no one depends on your income for support, you probably don’t need life insurance at all.
Your need for life insurance changes with the stages of your life, starting with no need when you’re young, progressing to greater and greater need as you take on more and more responsibility, and finally beginning to diminish as you grow older.
When you’re single
Sad though your death would be, it’s unlikely it would create financial hardship for anyone. Any honest financial assessment of your situation would have to conclude that you have little or no need for life insurance. An argument could be made that you should buy a policy now while you’re young and rates are low. And if someone — a parent, say — depends on you for financial support, then by all means, consider life insurance. But consider the interest you could earn by saving and investing your money instead of spending it on insurance premiums. Still, if somebody — a parent, a grandparent — wants to buy you a policy now to lock in low rates for later in your life, accept it gratefully.
Love and marriage
Married couples with no children may need little or no life insurance, especially if both spouses contribute equally to the household income.
The death of either spouse would not be financially catastrophic; the other could presumably survive on his or her own income. Still, it could be a strain. Perhaps the survivor couldn’t afford the mortgage or rent payments on a single income, or maybe you have big credit card debts. Also, there would be funeral costs.Each of you should probably buy a modest amount of life insurance to protect the other.
Married with children
A one-income family with young children is the classic high-need situation. Basically, all of these people are dependent on one breadwinner for their total support , so insurance on that life is vital. And if the nonearning spouse should die, the other would have to pay for child care — a very expensive proposition that argues for insurance on both lives. This same high-need situation exists for dual-income households with children, for single parents, and for those caring for elderly parents who have limited resources of their own
The golden years
The kids have grown and are making it on their own. You have a pension and considerable assets that can be used to generate a good income after you die. In circumstances like this, you clearly don’t need as much life insurance as you once did.
The one caveat here is estate planning. If your estate is large enough to be subject to the estate-tax when you die, your heirs can use the death benefit to pay the IRS. If the policy is held by a trust, the benefit would not be counted as part of your estate.
If you fall into this category, consider a whole life policy. Since you don’t know when you will die, you’ll need to hold on to your coverage indefinitely.
Life Happens: Never Miss A Moment.
February 17, 2016 by
https://www.lifehappens.org/videos/never-miss-a-moment
7 Reasons Why You Need Life Insurance
February 10, 2016 by
There are very few instances why someone could not benefit from a life insurance policy. We’ve put together seven reasons why almost anyone would need a life insurance policy for themselves or for the main wage earner in their home.
- Instant Estate for your Family
It takes a lifetime to build up a large estate for your family. With life insurance you can instantly provide security for your family if you die unexpectedly. - Pay Off Debt
The mortgage is the first debt that likely comes to mind, but most Americans have many other forms of debt that can drain a family’s finances very quickly when the main income earner dies. Car payments, college loans, credit cards, and other smaller debts can put a lot of strain on the surviving family members. - College Funding
Your young daughter or son may only be learning their ABCs right now, but in the event of your untimely death or debilitating injury the funds for their college tuition could be lost in a matter of months. Life insurance can provide a blanket coverage for such an instance. - Lost Income
A common standard for many families considering life insurance is to estimate that a non-working spouse or homemaker should be insured to have an income of at least $35,000 replaced. - Final Expenses
Even if you have no dependents and no debt or outstanding bills someone will have to pay for your funeral costs. With a burial policy your loved ones will not be stretched to cover the final expense of your burial. - Long Term Investment
Cash value over time is a great way to make your life insurance policy go even further. This “nest egg” could be used for college tuition, starting a business, or a down payment on a house. Whole life policies do not always require a death to receive benefits. - Peace of Mind
When a time of grief overwhelms a household there is nothing that can make things any “better,” but having the peace of mind of a secure estate will certainly make the time of grieving much easier. Life insurance doesn’t take away the pain of losing a loved one, but it certainly helps deal with the reality of living security without your recently deceased
Mortgage Protection.
August 17, 2015 by
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Family Term Life Insurance.
August 17, 2015 by
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Review Life Insurance Needs and Coverage Annually.
August 11, 2015 by
Review Life Insurance Needs and Coverage Annually
Some things need regular maintenance for them to function for you. You need to check your car’s fluids and tire pressure occasionally, and do some preventative maintenance. Same with your lawn mower. Children need occasional doctor visits and immunizations. Life insurance is no different. To ensure that your life insurance is up to date and covers your family’s evolving needs, it’s a good idea to schedule a once-per year life insurance review, in person, with a qualified, licensed insurance professional.
Is your Coverage Current?
There are a number of things that can occur that can cause a need to make a change in your coverage:
- Did you get married?
- Did you have a child?
- Did you adopt a child?
- Did you get divorced?
- Did a spouse die?
- Did your debt level change? For example, did you purchase a house on a mortgage? Did you pay one off?
- Have interest rates changed since you last shopped for insurance?
- Have you retired? Does your family rely more on savings than on your income from work? It may be time to consider a tax-free exchange for an annuity designed to generate income and preserve savings.
- Has your income changed?
- Are you now a partner in a company?
- Do you have a key employee?
- Did you inherit a substantial amount money or property?
- Will your parents rely on you for financial assistance or support?
- Have you lost weight?
- Have you quit smoking?
Do I have a sound life insurance strategy in place?
Any of these common life changes can precipitate the need for a significant change in life insurance coverage. But even if you haven’t undergone one of these life-changing events, it’s still a good idea to have a good heart to heart with your insurance agent on an annual basis. Here are some reasons to start with:
Options may expire. If you’ve had a policy for a while, you may have some options to purchase additional coverage expire soon. It may be time to sit down and review your options and see if you want or need the additional coverage. This is especially true if your health has declined, or you’ve gained weight. You may not have another chance to purchase life insurance at your original rating.
You may want to convert term life insurance to a permanent insurance policy. Term insurance provides the most face amount per dollar of monthly premium now – but it is very expensive over the course of a lifetime. Your agent can review your options and help you select the best strategy for you.
There may be new solutions and products available that may suit your needs that weren’t available a year ago. Life insurance companies are constantly evolving, looking to uncover customers’ needs and provide solutions to enhance their financial security. For example, your company may now offer a useful new rider or other benefit.
Regular reviews are also important to prevent unwanted lapsing of insurance policies. These are particularly important if you own a universal life policy and you have been paying premium out of cash value. Even if your existing insurance policy is with another company, you can still review it with us. If you qualify, an exchange may be warranted.
We’d like to invite you to schedule a no-obligation personal life insurance needs review. The purpose is to look at your current coverage and how well it dovetails with your personal financial needs, goals and risks. From there, we will determine if your current life insurance strategy still meets your needs, or if a change is warranted.
If you have a permanent policy, with cash value – whether it’s a whole life, universal life, or equity-indexed universal life policy, we can also explore some strategies that may be available to you to make use of the substantial living benefits of these policies
5 Life Insurance Types to Know.
July 27, 2015 by
Whether you need life insurance or not is generally a relatively simple decision to make. But there are many life insurance types, and deciding which one will serve you best can be more complicated. Here’s a handy introduction to the five main types of life insurance: term, whole, universal, variable, and variable universal.
Why life insurance?
Let’s start, though, with a quick review of why you might need life insurance in the first place. Obviously, you might need it if you have young kids and a spouse and want to provide for them in case you die and aren’t around to do so yourself. But life insurance is also valuable if you have any other people who depend on you financially — or might in the future — such as parents or nieces or nephews or a disabled loved one. For that reason, single or childless people shouldn’t quickly assume that they don’t need life insurance.
You might also get life insurance that can pay off a mortgage should you die, or that can keep your business running for a while once you’re gone or that can pay any estate taxes or funeral expenses that materialize upon your death. (Of course, for some of these reasons, you might just accumulate money in a separate fund, bypassing insurance.)
It’s worth noting that come tax time, the payout (“death benefit”) is received tax-free by the beneficiary, as death benefits in general are, for all types of life insurance. An exception would be if you owned a life insurance policy on yourself, with proceeds becoming part of your estate. If so, then they might be subject to an estate tax.
With that out of the way, it’s time to jump into the types of insurance. Note that each of them is sometimes referred to by a different name, so focus on the description of each. Whole life insurance, for example, may be called ordinary life insurance, and universal life insurance might be called adjustable life insurance.
Term life insurance
Term life policies are often chosen by insurance consumers because they can make the most sense. As its name suggests, a term life insurance policy remains in force for a specified term — often 10 to 30 years. Thus, it won’t necessarily cover your entire life — but by age 60 or 80, you may not really need it anymore, with your children grown and your retirement nest egg established.
Term life insurance also tends to be simpler and significantly less expensive than other life insurance types. In part, that’s because it offers a death benefit should you die during the policy’s lifetime, and little else. Term life policies generally offer the most insurance coverage for your buck, because the policies aren’t offering you many other features.
Premiums for term life policies are often fixed at first, for a certain period, and then they start rising. There are many variations of term policies, though. For example, you might be able to opt for fixed premiums, in exchange for a death benefit that decreases as you age. Many policies let you renew for additional years, usually at a higher cost, and some let you convert the policy into a whole life insurance policy.
Considering that the Society of Actuaries has estimated that 39% of whole-life policies are terminated within the first 10 years, getting a term policy is an even more appealing option.
Whole life insurance
Another widely used kind of life insurance is the whole life policy. It’s designed to last for your entire life and usually features a lot of certainty: You’ll have fixed premiums and a specified death benefit. And along with that, you’ll accumulate a cash value account that serves as an “investment” component to the policy. The longer the policy is in force, the more money accumulates in the cash account — on a tax-deferred basis and according to a schedule. If you stop paying premiums before you die (or before age 95 or 100, when many policies let you stop paying), you’ll lose out on the death benefit, but you can claim the cash value.
In addition, many whole life policies will pay you dividends that will effectively reduce the cost of your premiums. Some policies will let you use the cash that has accumulated in your account to pay your premiums, too.
The next three life insurance types are variations of whole life insurance.
Universal life insurance
Universal life insurance also involves a cash-value account growing over time, but it does so in a different way, based on prevailing interest rates (and typically guaranteed to not fall below a particular point). It’s also very flexible, permitting the policy holder to adjust, over time, the premiums, cash accumulation, or term of the policy. If you find you need or want more coverage later in life, for example, you can get it. Or if you want to pay less for less coverage, you can opt for that, too.
Variable life insurance
With variable life insurance, the policy has two parts — one is a general account intended to cover the insurer’s obligations and the other an investment account, where the policy holder gets more choices regarding how money in the account is invested — for example, perhaps being able to invest through one or more stock mutual funds, bond mutual funds, or money market funds, or a combination of them. This increases the upside of the account, but also adds more variability to the cash account and also the death benefit.
Variable universal life insurance
Variable universal life insurance is a combination of universal life and variable life, permitting adjustments in the premiums, death benefit, and investment options. The death benefit may fluctuate in value depending on the performance of the underlying investments — though insurers will typically have a floor below which it can’t fall. These policy holders bear more risk, in return for a chance at higher returns.
It’s worth noting that with the insurance policies that have investment components, you might consider passing that component up and simply investing your own money in funds or other investments you choose yourself. That can be a less expensive way to invest, giving you ultimate control and flexibility, and it can permit the dollars you do allocate to insurance to buy you more insurance.
Whichever of the life insurance types that you select, be sure to choose a strong, highly rated insurer. If you’re quoted a great price by a company you’ve never heard of that ends up going out of business in a decade, you’ll be wishing you’d gone with a top-rated outfit instead.