081321 How to Choose a Life Insurance Policy Type...

With all of the life insurance options available, it may seem

complicated to choose the right one.

Start by deciding between term life and permanent life insurance.

Consider a term life insurance policy if you need life insurance for

a specific amount of time.

For instance, if you want insurance to cover your working years

as possible “income replacement” if you were no longer around.

Term life insurance is also a good choice if your budget is limited.

Since term life insurance provides protection for a specific amount

of time, and it’s not a cash value life insurance policy, the rates will

be lower than permanent life insurance.

As you enter different stages of life, your life insurance needs may

change. Many term life insurance policies are convertible to a

permanent policy. The options will depend on your policy and

insurer. Term life conversion allows you to switch to a permanent

policy without re-applying or taking a life insurance medical exam.

On the other hand, a permanent life insurance policy will last for the

duration of your life. If building cash value is important to you, look

at permanent life insurance options. But if you’re purchasing a

permanent policy only to capitalize on the cash value accumulation,

depending on the policy, you’re better off putting your money into a

savings or investment vehicle, so you’re not paying for the life

insurance and charges within a permanent policy.

And cash value isn’t typically intended for beneficiaries. Upon death,

any cash value generally reverts back to the life insurance company.

Your beneficiaries get the policy’s death benefit, not the death benefit

plus cash value. That said, some policy types will offer the death

benefit plus cash value, but for a higher price.

How to Choose a Life Insurance Coverage Amount

A good rule of thumb for estimating how much coverage you need is

to... Add up all the expenses you want to cover, such as income

replacement for your work, a mortgage and children’s college

expenses.

From that, subtract the amounts that your family could use to cover

those expenses, such as savings and existing life insurance. Leave

out retirement savings if your spouse will need that later on.

The resulting number is how much life insurance you need. It may

look high, especially if you’ve factored in income replacement for

many years. Still, life insurance quotes are free, so it doesn’t hurt to

price out the coverage you need.

If it turns out to be un-affordable, you can buy what you can afford now

to lock in a good rate. You can buy more later, just be aware that

several years from now your rate will be based on your older age and

any health conditions you’ve developed.

https://www.forbes.com/advisor/life-insurance/how-it-works/#22527ac27f30

Comments

022823 The 9 Benefits of Whole Life Insurance...

(1) Provide for Loved Ones… It’s the basic need everyone thinks about. You have a young family. You are the major breadwinner. Something happens to you. How is Your family supposed to make ends meet? It’s a form of protection. Peace of mind. (2) Key Man Insurance… You and your partner own a business. It’s grown. Many employees Depend on you. If something happens to your partner, it’s likely their Spouse or family will inherit their share of the business. Cash would Be a lot more useful to them. Life insurance on both partners can Provide the cash to buy out heirs and keep the business intact. (3) Emergency Loans… Hopefully your client lives a long life. The whole life policy accumulates Cash value, eventually growing to the full face value, or beyond. Many Policies allow you to borrow money against the cash value. You would pay interest. (4) Funding Estate Taxes… Your client owns a farm. I...

090921 Those Dying From Covid-19 Are Least Likely to Own Life Insurance...

Many companies have sharply reduced estimates of their exposure, as measured by payouts per 100,000 U.S. fatalities As the number of U.S. corona virus deaths surpasses 200,000, public-health experts point to a series of missteps and miscalculations in the country's response. Here’s a look back at how the U.S. became the center of the global pandemic. Sept. 28, 2020 5:30 am ET U.S. life insurers are paying out far fewer Covid-19 death claims than initially expected, largely because the virus is disproportionately killing people with little to no insurance. In the past few weeks, many life-insurance companies have sharply reduced estimates of their exposure, as measured by payouts per 100,000 U.S. Covid-19 fatalities. Estimates have come down by an average of 40% to 50%, according to Credit Suisse stock analyst Andrew Kligerman. Driving the rapid reduction in exposure are two groups… older Americans and minoriti...

080822 Less Common Life Insurance Needs

On top of the most common reasons for buying life insurance, It can help cover some less common needs. These could include… *Insuring Children Buying a policy on a child can ensure that the family will financially Survive the loss of the child, but keep in mind that such a loss is Fairly unlikely. It can also ensure the child’s ability to qualify for life Insurance in the future. That could be helpful in the case of a health Diagnosis that might make it harder to pass the underwriting process. *Replacing Retirement Benefits Life insurance is often marketed as income replacement for an Insured person during their working years, but some retirees may Choose to keep theirs after leaving work. It can be used to replace The loss of any retirement income for their spouse or any dependents. *Investment Permanent life insurance can provide you with a potential income Source. You can access your cash value once it has buil...

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