Life insurance is vital to your financial plan. It can be a huge help to your survivors for debt payment, income replacement and savings for the future. This type of policy is one you can rest assure you will eventually use.
The problem we have found is that many consumers are confused by all their choices and reach the point of inaction. We try to help you eliminate the confusion and focus on a few key points:
- What is your goal?
Do you want protection for a certain period of time or do you want protection for a lifetime. You may want both and that is ok. Nobody ever said you have to own only one type of policy to accomplish your goals.
- What is your tolerance for risk?
Do you want to know what you are going to pay for the life of the policy or can you handle some ups and downs.
- What is your realistic budget to spend on life insurance?
We have a link to a great calculator but when it is all said and done what you should have and what you can pay for may be two different things. Remember, life insurance is always evolving and what you can do today may not reflect what you can do tomorrow. Getting started is the most important step you can take because even a little bit will help your survivors.
- Are you prepared to act or are you just window shopping?
Sorry for the abruptness but time and again life insurance quotes are given and people hem and haw over what to do and in the end do nothing. Be prepared for some paperwork, a meeting or two with one of our agents and a medical exam of some type. If you think that is too much you may not be ready to buy at this time. No problem, at some point you will because someone you know will either benefit from a well planned policy or someone will wish their loved one had bought some insurance to make life a little easier.
Basics
Life insurance can take many forms but think of it in just two ways.
Renting and Owning
- Renting=Term Insurance
The premium is paid and the coverage is in place. There will be no residual benefits or cash build up.
Pros- Inexpensive, easy to understand and can be converted to a different type of policy if your situation changes.
Cons- Has a time frame that you need to be aware of or you may lose your coverage, not readily adaptable to changing situations without converting or taking on additional policies and no ability to gain value for your money
- Owning=Permanent or Cash Value
What do we mean by permanent? Lifetime coverage as opposed to time limits. These products have the ability to build cash and therefore offset the cost of the coverage.
Pros- Very flexible depending on the product, builds value if structured to do so, no time limits or customized time limits if properly funded
Cons- More cash needed to fund, a little more complicated to understand due to the number of products available that fit in this general category
Our Approach
We have found that most of our customers who buy life insurance realize the value but do not have the disposable income to buy all that they need. We suggest you buy what you can and modify along the way. A good way to do that is to buy life insurance in layers. Buy some layer of permanent coverage that will last your lifetime. Have it be flexible so that you can increase this layer as time and finances allow. Then use term insurance to cover the rest. Typically there will be a period of time where your spouse and children will benefit from more protection. This need for protection may decrease over time or change forms so it can be adjusted along the way.
We do not tout life insurance as an investment. It can be a savings plan but the primary purpose is the death benefit. Due to this philosophy we will not run a lot of confusing illustrations. One or two with the numbers explained. We do not sell Variable products of any type. Not because we don’t believe in them it is just that we are not properly licensed to do so. These products have investment vehicles built into them and our approach is not as exotic so we stick to fixed products. The most popular combination is Term insurance in combination with Universal Life.
Customer profile
Our customers buying life insurance tend to be in the early thirties to mid fifties with children that they care for on a primary basis. Most have decent jobs and own homes. Most are in good health but not necessarily without risk factors. They usually are looking for $50,00 to $500,000 worth of coverage by using our approach or all of one type of insurance (Term or Permanent). These people tend to be conservative in nature and want all or most of the premiums guaranteed for the life of the policy. They do not typically look at Life insurance as an investment but see the value of some cash value to borrow against if needed or a way to offset some of the cost. Most have a budget and do not deviate very far from that budget. The layered approach makes sense to most of them and they execute so that the process does not drag on longer than necessary. So far nobody has returned a policy. We think this just might be working.
We would love to simplify this product but it is hard to do in print. Call us today and get started. It costs you nothing and you will have a good idea of how much this will cost in a few days. Judge it from there but if you don’t feel we have got the answer for you continue to look because it really is that important!!
TIPS
- Know how much you can spend on life insurance before you start shopping
- Gather all your medical information in one place
- Once the process is started see it through
- Use a calculator to get an idea of coverage you may need. Get it quoted and see what it costs. Remember getting illustrations run won’t cost you a thing.
|
