Life insurance is a tricky subject because we don’t like talking about death.  Especially our death!  However, we need to be realistic.

Okay, now that everyone had a chance to read, digest, and sleep on the first 5, let’s talk about the next 5 things you must know about life insurance.  

6-  There should be two broad varieties of life insurance about which you should become aware- Term and Permanent.

• If you guys have been even remotely paid attention to my blog, you are well versed on the difference in there.  However, just in case you are new to the party…..I’ll explain quickly.  With TERM, you are basically renting a policy.  You chose an amount of time you would like to be covered, and as long as you make the payments, you’re covered until that time expires.  Once it expires, unless you add any riders, your policy is over and the insurance company keeps your money.  Remember, it’s the cheapest.  It’s the cheapest for a reason.  With PERMANENT, you own the policy.  There are all sorts of these types of policies, and if you would like to know more about them give me a call (480)400-0225, or check out some of my old blogs.  Simply put, you have insurance until you die.  Also, this type of policy builds a cash value, so your money is not just gone once a premium is paid.  This is why these types of policies are more expensive than term.

7-  Life insurance can be extremely expensive, but it can also be surprisingly inexpensive.

• If you end up getting all the bells and whistles in a permanent policy, it can certainly get pretty expensive.  However, most people are surprised when they find out just how inexpensive life insurance can be.  Give me a call and see how much it is for you.

8-  Determining the optimal life insurance policy for you doesn’t have to be complicated.

• Use this simple step that works for just about anybody.  Multiply the wage earner’s income by 15 and purchase a policy with an equivalent death benefit for a term that extends until the person insured would presumably retire.  Okay, what???  Here, let me show you with this example.
  • John is 40.  He wants to retire at 65.  He makes $100,000

• • • $100,000 x 15 = $1,500,000 of death benefit
    • John would get a 25 year (65-40) $1.5 million term

• $1,500,000 earning 5% annually produces $75,000 of income.  Your family could live off that for the remainder of their lives without ever having to touch the $1.5 mil.  Cool right?

9-  Consider using a live person to help in your death planning.

• This is where I come in everyone.  Give me a call.  I can help you with what type of coverage will be best for you and your family, help you with your rate, etc.  Let’s get you covered.

10-  Know your options when cancelling an existing life insurance policy so you don’t leave money, or coverage, on the table.

• If you find that you have overpaid for a policy you just don’t need, you need to be proceed carefully.  Make sure you don’t have any new medical issues that could lower your rate from the earlier policy.  Term is easy, just stop making payments and it’s over.  However with whole life and the cash value it accumulates, it’s a more complicated process.  Make sure you request an “inforce illustration” and a “cost basis report” from your agent.

Life insurance is a tricky subject because we don’t like talking about death.  Especially our death!  However, we need to be realistic.  Bad things happen.  My buddy’s 28 year old brother just died of a heart attack yesterday.  Seriously, I found out this morning!  You just never know.  Make sure you and your family are protected.  Cheers.