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Life Insurance

Why do you Need Life Insurance?

We offer you a variety of plans to protect your family and financial security. An investment for you, whether you are looking to provide for a beneficiary, pay final expenses and funeral cost, or provide a charitable gift to an organization or family member. Here is some information on the need and benefits of life insurance:

There are Two Reasons to Buy Life Insurance

Cover debts you owe

  • Final Expenses
  • Debt Reductions
  • Mortgage Pay-off

Provide for your love ones

  • College Education
  • Emergency Funds
  • Charitable Donations
  • Income for your surviving family

How Much Life Insurance Do I Need?

Debt Calculations

Final Expenses $________________

Debt Reduction $________________

Mortgage Payoff $________________

Providing for Your Family

College Education $_________________

Emergency Fund $_________________

Charity Donations $_________________

Family Income $_________________

Life Insurance Needed  $_________________

Deduct any existing life insurance =  Life Insurance Needed

An Alternative Method to Determine How to Properly Prepare for Your Family’s Security

Providing proper income for your Surviving Family members can be easily determined.

1.   Determine annual income divide by a conservative interest rate.
(i.e. 3-4%)    $30,000 divided by 4%=$750,000

2.  Multiply your annual gross income x 6.  This should provide your Family sufficient funds and time to establish Financial Security

What Kind of Insurance do I Need?

There are basically two types of life insurance, Term Insurance and Permanent Insurance.

Term Insurance

Term insurance provides life insurance coverage for a specified term of years in exchange for a specified premium. The policy does not accumulate cash value. Term is generally considered “pure” insurance, where the premium buys protection in the event of death and nothing else.

There are three key factors to be considered in term insurance:

  • Face amount (protection or death benefit)
  • Premium to be paid (cost to the insured)
  • Length of coverage (term)

Advantages

  • Lower cost in early years
  • Covers a specific term of years
  • Option to convert to permanent without proof of good health

Disadvantages

  • Higher cost in later years
  • Increasing premiums possible
  • Premiums are paid every year for policy to remain in force
  • No cash value

Permanent Insurance

Permanent Life Insurance is life insurance that remains in force (in-line) until the policy matures (pays out), unless the owner fails to pay the premium when due (the policy expires OR policies lapse). The policy cannot be canceled by the insurer for any reason except fraud in the application, and that cancellation must occur within a period of time defined by law (usually two years). Permanent insurance builds a cash value that reduces the amount at risk to the insurance company and thus the insurance expense over time. This means that a policy with a million dollar face value can be relatively expensive to a 70 year old. The owner can access the money in the cash value by withdrawing money, borrowing the cash value, or surrendering the policy and receiving the surrender value.

Advantages

  • Lower cost in later years
  • Cash Value can be accessible through a policy loan or policy surrender
  • Fixed Premiums
  • Guaranteed Cash Value
  • Tax deferred growth on cash value
  • Coverage is permanent for life
  • Value builds to cover future premiums

Disadvantages

  • Higher Cost in early years
  • Dividends & Interest rates are not guaranteed