Life insurance can be confusing without question but don’t let that stop you from going forward. I will bet you either know someone or know someone who knows someone that either benefited or could have benefited from life insurance.  I personally have seen the upside to having it and the downside for not. Sudden death of a spouse, parent or child is devastating on an emotional level but if finances become very tight in conjunction with the pain felt from the loss it can be unbearable for your survivors.

Basic life insurance protection should be in your financial tool bag. The great thing about life insurance is options abound for trying to fit coverage into your budget. Below I will outline the basic types of life insurance and how the process works.

Think about life insurance in two parts. The first is cash value products which means you own the contract and have the ABILITY to build cash in the product. You don’t have to but you have the option. The second is term insurance which is like renting an apartment. The contract is yours for a period of time and it has no ability to build cash value.

So option one, cash value products have some benefits over term. First they can build cash if you choose. This can be nice because the true cost of the product is the net of the premiums paid and the cash accumulated in the product. They also can be structured to last your entire life and have some flexibility for increasing you limits and amending your payment terms if needed. You can also borrow money from them if there is cash available to do so. Downsides are they can be complicated for some to understand and will require more up front capital to fund.

Option two is term insurance. The pro’s to term insurance are it is less capital up front, easy to understand and works nicely if you have certain obligations that have time frames to them such as a mortgage or college expenses.  Another benefit is after the term is up you can transfer all or some of your death benefit to a cash value type product with NO medical underwriting. Downside is your premium paid is a true cost with no cash savings offset. The coverage will also become very expensive to keep after the initial term is over and buying a cash value product after the term will be priced at the age you are when you convert not when you purchased the term insurance.

Another option, which we often suggest, is combining the two in a layered approach. For instance, a lower base amount of coverage in a cash product and one or two term policies of varying lenghts to protect your family from the financial consequences of an unforseen death in the family.

Regardless of how you do it make sure you get it done. The process essentially is pick an amount of coverage or an amount you can pay and we work up some illustrations. Once the choice is made we fill out an application a service will come to you to take medical information and blood/urine samples. Once approved you get a policy and pay your premium. All in all plan on five to seven weeks from start to finish. If you are replacing an existing policy it will take longer due to NYS regulations but we will help you every step of the way.

Get started tody if you have no life insurance or very little because your family will thank you for at least making the financial end of a bad situation a lot better.