Have you ever considered what the economic impact would be on your family if you died? Most people don’t like to think about such things, but every person who has loved ones who depend on them financially should consider the answer to that question.
We love our spouses, we love our children, we love our grandchildren, so obviously we should care about what happens to them if we die. That is what life insurance is for, to make sure your loved ones will be ok if something happens to you. Life insurance can be used in many ways to solve many financial issues, but family protection may be the most important. When you’re gone, knowing the people you love most will be ok, can bring great peace of mind.
My intent with this topic is not to educate you about all the different types of insurance and which is best but to motivate you to take action if you have not already and protect your loved ones. The longer you wait the more expensive the cost of life insurance. If you become seriously ill, then it may be too late to get coverage. The cost of life insurance is determined by your age, lifestyle, and current health.
Often your employer will offer group life insurance coverage and in many cases at very competitive rates. There is usually a limit to how much coverage you can get through your employer. I would suggest starting there. It is wise to have outside coverage as well since your coverage almost always terminates if your employment terminates. It’s not likely you will keep the same employer through all your working years.
Another important question: How much is enough? A qualified insurance professional can help you answer that question, but you should consider buying enough life insurance protection so that your family can maintain their lifestyle, that means enough income to pay the bills, pay off debt, send the kids and or spouse to college etc. and possibly have a retirement nest egg as well. I believe every situation is different, an insurance review with a licensed professional can help you determine the amount of coverage that is right for you at a cost that makes sense for your budget.
There are primarily two types of Life Insurance: Temporary and Permanent. Term insurance is temporary meaning you are covered for a limited number of years. This is usually the least expensive option. You can buy term for practically any number of years from 1 to 30, the most common is 10, 20 or 30-year term. You may be able to continue the policy at the end of the term but at a higher cost.
Whole life, Universal Life, Indexed life, and Variable Universal Life are all permanent forms of life insurance. If you pay the minimum premium, the insurance coverage stays in force. These types of policies have a cash value that earns interest, grows tax deferred, and may provide additional benefits later such as supplemental retirement income, or access to tax free loans. Term insurance does not have a cash accumulation feature.
{{tncms-inline content=”<p>DISCLAIMER: 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 by having a policy approved. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrended prematurely, there may be surrender charges and income tax implications.</p> <p>Gary D. Meeks, RICP, is a registered representative offering securities and advisory services through Cetera Advisor Networks LLC, member FINRA/SIPC. Cetera is under separate ownership from any other named entity. 90 W 100 N Ste 6, Price, UT 84501, (435) 637-8160.</p>” id=”9ca7aba7-8b3d-46b6-b4ec-e319cdda0b58″ style-type=”info” title=”Disclaimer” type=”relcontent”}}
Life insurance is a fundamental part of any serious financial planning
Gary D. Meeks