Let’s get the answers to the most commonly asked questions about life insurance.
I constantly talk to people regarding their strategic approach to keeping healthy, both physically and, sometimes just as important, financially. My specialty is providing an in-depth analysis of the products in the market that will help you navigate hardship in the event of an unforeseen event. It typically includes a combination of the best resources available in the areas of health, long term care and life insurance.
Considering that life can change at an instant, having a life insurance policy is perhaps the cornerstone of any sound financial strategy, regardless of the option you may choose. It’s about securing the financial health of your family. That requires you to dig in a little deeper in the ways you can protect your family’s financial outlook by mapping out:
Education costs for your child(ren)
Mortgage payments and associated costs (insurance, maintenance, utilities, etc.)
Maintaining your family’s standard of living
Eliminating or minimizing estate taxes
A life insurance policy allows you to plan by ensuring that your loved ones remain with as strong a financial standing as possible.
I understand that it may be about wants vs needs. Even though an insurance policy might seem pricy, there are affordable alternatives in the market. Your budget plays a significant role in being able to purchase a policy. This is where I come in. There are many options out there, and I can help you find the best alternative that fits YOUR personal circumstances.
What types of Life Insurance are in the market?
After working out your budget, I help choose the right insurance policy for you. This is the most common question I get. In general, there are two types of life insurance policies, with several options to complement your protection. Here’s a quick overview:
Permanent life insurance refers to life insurance policies that is designed to cover you to, at least, age 90. Permanent life insurance includes both ‘whole life’ and ‘universal life’ insurance. Each offers an amount to be disbursed to your beneficiaries. The main difference between these is that, while both offer a savings component that may accumulate interest, the cost of universal life insurance premiums will be adjusted to current interest rates.
Term life insurance, as its name implies, is limited to term periods – 10, 20 or 30 years – and guarantees that the premium will remain the same, for a stated death benefit. This type of coverage is most suitable for mortgage and young family protection. Typically, the premiums are based on a person’s age, health, and life expectancy. For larger benefit amounts, a medical exam will be performed.
When discussing term life insurance, there are riders that complement your coverage. Some riders are included in the insurance plan while others are “added on” at a cost:
Accelerated Death Benefit for Terminal Illness Rider is designed to advance up to 80% of the death benefit if the insured can demonstrate 12 months or less of their life expectancy. This is a no-cost rider.
Waiver of Premium for Unemployment Rider is a six-month benefit period that waives premiums for the base plan and all riders if the insured becomes unemployed. There may or may not be a cost for this rider
Accidental Death Benefit Rider provides for an additional death benefit amount in the event of your accidental death, at an additional cost.
Dependent Children’s Rider allows you to purchase a small amount of term life insurance coverage for your dependent children (infant through 20 years), at an additional cost.
Other Insured Rider allows you to purchase coverage for another adult individual, such as a spouse. Full underwriting is required for the additional person, as well as an additional premium.
Disability Waiver of Premium Rider - If you become disabled for six months or more, the premium for the base policy and all riders will be waived after the six-month period for as long as the disability continues. There is a cost for this rider.
When should I get life insurance?
The younger, the better. I typically recommend my clients to get life insurance when they start a family. Life insurance products change all the time. And life can change in a second.
There are changes to life insurance policies every year – including premium cost -- so the sooner, the better. You can start out with a small policy and increase as you grow professionally, or decrease if your financial situation changes. The purpose is to protect your family.
In 2020, COVID has changed the way insurers provide coverage, so the sooner you start planning on your strategy to secure your financial health, the better. The bottom line is that our health will always be tied to our financial well-being. While we may not always be able to control unforeseen events that affect our health, having a plan is what matters. Ready to start looking? Contact me TODAY!