Why People HATE Life Insurance!
It's a fact.
Think about it...
When was the last time you went to a cocktail party and had a fascinating conversation about how awesome your life insurance policy is?
“Never” would be the correct answer!
However, most adults understand or think that they might need life insurance "someday".
The problem is, "someday" remains an excuse for over 44% of the US population, according to statistics from LIMRA; a life insurance think tank.
Face it, life insurance is one of the many fixed costs that we must build into our monthly budgets.
Insurance of all kinds is a necessary evil. Insurance, and specifically life insurance, forms the bedrock of all financial planning. Without a solid foundation, most plans fail.
So, here are some things to think about as you begin your research for on life insurance.
Remember, when it comes to your personal finances, there is no “right answer."
Forget about the populist financial evangelists and go with your gut. If you WANT to provide extra money for your family above the traditional 10X salary, go for it!
You’ll see that term life insurance is so cheap, you’ll wonder why you haven’t taken care of your life insurance planning sooner!
Adulting and Life Insurance
As we grow up and start "adulting", we learn that there are many different responsibilities to protect what and who we love.
Life insurance is an essential part of a stable financial future.
As we expand our families, embark on entrepreneurial ventures, we begin to understand the critical and irreplaceable role that insurance plays.
There are many different policies and companies you can partnering with. For our purposes in this introduction to life insurance, let’s talk about the basics. We’ll come back to more specific flavors of life insurance another day.
The main reasons we recommend life insurance, and how it protects you and the life you've built.
Use Life Insurance to Safeguard your family
Chances are, if you're reading this, you are responsible for providing for the livelihood of others.
Be it a spouse, children or other family members and possibly employees of a business. For those that rely on you, imagine what would happen to their quality of life if your income was gone. Due to an accident or illness.
How could your family maintain its lifestyle. If a stay at home spouse passes away, how with the working spouse cover the extra childcare need to pick up the slack at home?
Beyond the regular bills and extra medical costs, a time of grieving could also make for difficulty maintaining even the daily tasks. Things like household cleaning, cooking, childcare and more.
Life Insurance can be used to not only cover these expenses but also offer financial peace of mind and a cushion to help you settle family matters, and provide the all-important emotional support for your children and tax-free income.
Create an Inheritance with Life Insurance
Whether you have a large sum of money or assets to pass on or some small items that are heartfelt heirlooms. Having life insurance in place can create an instant estate for your family when you’re gone.
You can create a fund for a new home for your kids when they get older. Creating a legacy is one of the most common uses of life insurance.
Life Insurance when you're 60+
One of the things to consider if you are 60 years of age or older is the need for a burial life insurance policy. Some people think because they are buying a Medicare supplement plan it would include burial insurance, but that's not the case.
Even if you are in declining health, you might be able to still qualify for a guaranteed issued whole life insurance policy.
Death benefits range from $5,000 to $50,000 in coverage. The only catch is you have to live at least two years before the policy will payout. Otherwise, the life insurance company would only be required to refund your money plus interest.
Bottom line, buy life insurance while you're still young and in better health.
Life Insurance to Pay Off Debt
Contrary to what many believe, when we pass on, our debts do not go to the grave with us. Rather, they can stay after to haunt our loved ones. The big debt that folks often forget about is private college loans. Federal college loans have built-in forbearance for death and disability of the borrower.
Private loans, which can be attractive due to favorable interest rates and payment terms, do not offer forbearance at death or disability.
For example, if you have college or grad school loans and you get married, your new spouse can “inherit” you school debt.
Parent co-signers of private loans will also be on the hook when you’re gone as well.
Fortunately, there’s life insurance. Parents can insure their kids to the extent of the loan amount so that if something bad happens, the debt can be repaid, easily and cheaply. The cost to insurance your child is dirt cheap compared to older parents in their 50’s.
Life Insurance Replaces Income for Survivors
As a parent or guardian, you'll likely want to know that your children are not suffering financially. Having access to quality education and opportunities. You also want to support their most significant lifetime milestones like marriage or childbirth.
For this reason, extra coverage can be the difference between barely making it and ensuring they thrive. One other thing about income replacement… If you do the calculations, it’s often better for you to continue paying your mortgage vs. paying it off in a lump sum. The mortgage interest deduction is a nice savings on your tax bill.
Simple Peace of Mind with Life Insurance
While no amount of money could ever replace a person, having life insurance can help ease the burden of those remaining family members.
No other financial instrument will create a pool of money at death.
Consider this, when you set up a retirement or other savings fund. You usually have goals that go with the fund-retirement, home, college etc.
What happens to those savings plans if you’re only a year or two into the plan and you meet a premature demise?
If you have life insurance, you’ll have the peace of mind knowing that your financial goals will be met even if you can’t continue the savings plan yourself.
We Can Help with Life Insurance
We are committed to providing support and education around protecting your dreams and those you love.
We are happy to answer questions you may have! Contact us today 800-459-6060 to discuss your unique needs, budget and available options for affordable
Life Insurance coverage.
Chris Acker, CLU, ChFC is the owner of CB Acker Associates Insurance Service in Silicon Valley. He has been helping families with their life insurance needs since 1985. Specializes in high-risk life insurance, especially sleep apnea life insurance