PERSONAL LIFE INSURANCE
What are some of the reasons to have life insurance?
- To provide a death benefit to a remaining family, friend or charity.
- Death benefits are paid tax-free.
- Cash value policies (Whole Life and Universal) grow their cash value on a tax-deferred basis.
- Living benefits can provide a portion of the death benefit to the insured should they be suffering from a chronic, critical or terminal illness.
Which policy is right for you?
There are many types of life insurance. Which one is right for you? It’s a good question, but probably not an easy one for you to answer on your own. Here are some of your choices:
Term life is generally the least expensive type of life insurance. With a term life policy, you decide how much coverage you need and for how many years. Sounds simple, but there are things to consider such as conversion periods and living benefits. These are some details that you need to discuss with a licensed insurance professional.
Whole life allows you to keep your insurance as long as you live. Whole life is a much more expensive form of life insurance compared to Term life, but it provides more than a death benefit. It also provides a savings plan that can be used in the future to supplement your retirement and can actually increase the death benefit originally purchased. Whole life premiums can increase over time due to an increased cost of insurance.
Universal life takes the best from Term and Whole life and combines them into this type of policy. You can have a set amount of insurance for as long as you live, plus you can borrow against the plan or use the interest you’ve earned to pay your premiums in your later years. There are both Fixed and Indexed Universal Life policies available which offer a cash accumulation fund. Ask me about the difference in the two.
GUARANTEED UNIVERSAL LIFE
Guaranteed Universal Life is similar to Term Life in that you insure for a fixed amount of insurance and there is no cash accumulation, but it doesn’t expire after a certain number of years. You can keep it for life. These policies are more expensive than term because you will be covered for as long as you pay your premiums.
Juvenile life protects children lives. It’s a hard conversation to have, but it’s a conversation worth having. There are two reasons to have this type of policy. First, in the unthinkable situation where a child dies, it helps the family pay for the child’s funeral. Second, it can guarantee that the child will be able to have life insurance throughout their lifetime. Why is this important? If a child gets sick early in life, let’s say they get diabetes, have a heart problem, or cancer (among other things), when they grow up and want to get life insurance, insurance companies may not be willing to write a policy for them, or the cost may be prohibitive due to their medical history.
Accidental life is very inexpensive, and there are no medical questions to answer. These policies will only payout in the case of a death being due to an accident.
FINAL EXPENSE LIFE
Final Expense life is most commonly written for seniors who have no insurance, but don’t want to have their loved ones have to pay for their funeral. Policies are available up to $25,000.
FUNERAL / CREMATION / BURIAL
Funeral/Cremation/Burial plans are a way to plan and pay for your funeral before you pass away. Why is this important? When you die, your loved ones are often in a very emotional state and they really don’t want to sit in a funeral home trying to decide what kind of coffin or urn to purchase for you. They also need to decide where to have your viewing, if there’s going to be one. There are many more decisions that need to be made at that time. Take this burden off your family and plan it all in advance. You don’t need to pay for your funeral all at once when you get this policy. It’s funded by a life insurance policy, so you can pay it over time.
"GET ME BACK HOME" PLAN
This plan covers you in case you pass away more than 100 miles from home. Why 100 miles? Most funeral homes will not travel more than 100 miles to pick up a body. If you’re out of town, whether on business or pleasure, and you die, this plan will take care of all the paperwork, body preparation and shipping of your body back home. This covers your trip anywhere with the exception of war-torn areas and unfriendly nations. The cost to get your body back will cost from $1,000s to well over $10,000. Do you want your loved ones to pay these fees and have to negotiate all of the paperwork and legalities from where you passed? For $500 you can enroll in this plan and it’s good for the rest of your life.