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?
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 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)
- Lower cost in early years
- Covers a specific term of years
- Option to convert to permanent without proof of good health
- Higher cost in later years
- Increasing premiums possible
- Premiums are paid every year for policy to remain in force
- No cash value
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.
- 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
- Higher Cost in early years
- Dividends & Interest rates are not guaranteed