Life Insurance
The goal of life insurance is easy and straight-forward. Life insurance exists to help you protect your family, preserve your assets and provide for your children’s future. So why is choosing a plan so hard? We find that there are only two real questions that our clients need to answer:
1. How much coverage do I need?
2. What type of coverage do I need?
To answer these questions, we recommend you meet with one of our sales or client service representatives. Why? Every person's situation is unique, and we know that one-size-fits-all is not true.
Consider these facts...
Fact: 22% of families with dependent children admit they will have immediate trouble meeting everyday living expenses and another 26% of families with dependent children can cover expenses for only a few months if a primary wage earner dies.1
Fact: 56% of married parents believe their current life insurance coverage is inadequate.2
Fact: 68 million Americans have no life insurance and those with coverage have far less than most experts recommend to ensure a secure financial future for their families.3
A major risk to a working American's family is premature death and loss of income. At a minimum you should provide for your family by covering all or a portion of your income potential with life insurance. Common solutions to this situation are group term life, or 20-30 year term life programs. A simple rule of thumb is to maintain 7-10 times your income in life insurance.
Some Americans have not made provisions for their final expenses or estate. The saying goes, "Permanent insurance for permanent needs". Final expenses, inheritance, etc. are all items that do not go away; therefore, you should either set aside money to cover these expenses or purchase a permanent life insurance policy to cover them.
1. LIMRA International "Facts About Life" Fact Sheet, September 2007.
2. LIMRA International "Facts About Life" Fact Sheet, September 2007.
3. Life and health Insurance Foundation for Education (LIFE), "Why Devote a Month to Life insurance Awareness?" September 2007.
How to choose...
Understand your needs. Before you can select from the myriad of plan options, you first need to determine how much coverage you need and how much you can afford to spend on life insurance.
Start with term life converage. The most affordable type of life insurance, term life, can provide a solid foundation to cover you while you work, or for a specified time.
Consider layering. Most often people cannot afford to buy one big policy to last a lifetime. Start where you are, assess your current situation, then add coverage based on your current needs. A common practice is adding term life insurance plans each time a child is born. This approach helps protect the family from the additional expenses associated with child-rearing. As the children become independent, the plans simply expire.
Don't ignore permanent life. Many people wait to consider permanent life insurance until later in life. This could cost you. The premiums for permanent life are typically based on your age at time of application, and most permanent plans are subject to health questions.
Beware inexpensive permanent policies. Some companies will sell "permanent policies" that are only guaranteed if you "pay the necessary premium". Be very careful. Some of these policies could increase your premiums after an introductory period.
Look for guarantees. Not all insurance is guaranteed. Especially true with permanent life policies, you should make sure that your policy guarantees coverage for a lifetime. You need to know up front if the premium and face amount are guaranteed and for how long. Review the sales literature and policies carefully.