I know, the last thing you want to read about or talk about is Life Insurance. But why? Why is it something people dislike so much? Is it the image in your head of that sleazy looking salesperson? Is it because it is intangible? Is it because it is depressing and morbid to talk about dying? Or does it really just come down to the cost?
I would make a bet it is a little bit of all of them.
But in reality, it is a discussion that should be embraced. You wouldn’t drive your car without insurance, and you certainly wouldn’t think about not insuring your home. So why is it so difficult to wrap our heads around insuring our potential and taking care of our loved ones? Yes, I said you’re potential and not your life. Ultimately, if you die prematurely your family is left behind, broken, without you, as well as financially devastated without your future earning potential. This represents the greatest risk of not having life insurance in place.
You have goals individually and as a family, we all do. Paying off the mortgage, setting up an education plan for the kids, future retirement, or simply building a legacy. Life insurance provides the funds required for your loved ones pay off that mortgage, and continue to invest for the future, and the time to heal while not having the concerns of paying your day to day expenses. You see, unfortunately, when the primary income earner passes away the bills continue to arrive, and then of course there are funeral costs to consider. Life insurance is the perfect way to protect your family from financial ruin should the unthinkable occur.
Life Insurance comes in many forms so it is important to match the right insurance products with your needs.
Term Life Insurance: this is coverage for a specified term such as 10 or 20 year term. Traditionally this is coverage which is less expensive than the alternatives. Ensuring that you identify a term that fits the needs of your family is important. Selecting Term 10 just because it is the least expensive today doesn’t mean it will save you money over your lifetime.
Permanent Life Insurance:
This is a term for several types of insurance products with coverage that can remain in effect for life.
- Term to 100 insurance is coverage to age 100 and does not include a savings component. This is coverage typically offered once you are at or near retirement age and is usually purchased as an estate tool to cover off the taxes associated with an estate, thus keeping the estate value intact for beneficiaries.
- Whole Life insurance provides lifelong coverage and includes a tax-deferred savings component managed by an insurance company. These policies can be purchased for several reasons, for all ages and can be a very effective planning tool not just from an estate perspective but from a tax and living benefits perspective as well.
- Universal Life insurance is also lifelong coverage and also includes a tax-deferred investment component however; investment choices can be made by you or your Financial Advisor. This product is very flexible, and can accommodate several financial planning needs throughout a person’s life.
You may have a plan through your employer which covers a certain multiple of your income, and/or may offer some elective amounts you can add. However, the amount of insurance which is required can be surprising. A needs analysis can and should be conducted to identify your total coverage required, and then any employment plans can be considered as a part of that amount.
I know (nor do I expect) that simply reading this information will change your view of Life Insurance. For the many reasons outlined, it is seen as an uncomfortable topic. It doesn’t have to be if you have the right professionals working with you. At Insightful Wealth Group we have the knowledge and tools to assess your and your family’s present and future needs. Once a thorough analysis has been completed we will recommend the solution which protects you and your loved ones. Give us a call to start the process.