LIFE INSURANCE

Life Insurance is certainly an important discussion when properly planning. Some people believe that having life insurance -- planning for their death -- will bring misfortune to their lives, and would rather not have any at all. Unfortunately, too many people don't realize the importance of life insurance until it's too late.

Life insurance protects those who depend on your income, such as your spouse, children and quite possibly, your parents. If you die prematurely, life insurance can provide ongoing income to your dependents, until they are able to live comfortably without it. It can also provide emergency support for legal, medical and funeral costs, should family savings not be sufficient to cover them.

Imagine yourself gone tomorrow; what would the immediate impact on your family be? Are they counting on your paycheck in the years ahead to cover basic needs and future savings goals? Could they afford the funeral costs? Who would pay the home mortgage?

At this stage in your life, if you still don't have life insurance, maybe it's time to consider getting some -- not for your sake, but for your family's. There are certainly several types of plans so understanding the two basic classes of insurance to choose from: term and permanent life insurance is essential in deciding what is best for you.

Term Life Insurance
Term life insurance is life insurance, and nothing more. The premium payments are applied 100% to the cost of the insurance. As retirement approaches, the need for life insurance is most likely to decline, as children become able to support themselves, debt decreases, and retirement savings begin to accumulate. At this point, term insurance can easily be dropped. There are several advantages as to why term insurance may be right for you.

·      Very Simple: Pick a length of term and you are essentially renting that amount of coverage

·      Competitive prices: Because of their simplicity, term life policies can be easily compared on the basis of price alone, which has effectively led to extremely competitive prices.

·      Flexible: All term products offered are very flexible, allowing for both renewable and convertible. Never buy term coverage that doesn’t offer these options.

Permanent Coverage

Permanent coverage can be classified it into 3 different categories. Understanding what is important to you, what you’re trying to achieve, and the differences between them we can decided which option is most logical in your case. Below outlines the key features with each option:

Term – 100

·      Guaranteed level costing which covers the cost of insurance

·      Level death benefit and completely tax-free

·      Best priced permanent coverage

Universal Life

·      Combines term life with a long-term tax-savings sheltered savings plan.

·      Your premium is devised by paying for the cost of insurance and the remainder applied to the investment portion

·      You may access the investment gains tax-preferred making it an attractive way to supplement retirement and insure that all of it will be passed to your beneficiaries tax-free

Whole Life

·      Policy owners receive dividends annually

·      Over years accumulates significant cash values and death benefits

·      Additional way to access tax-preferred income in retirement

·      Level and Guaranteed Price Coverage that remains in force as long as you want

·      Accumulates Cash Value which can act as a guaranteed investment

·      Allows you to access up to 90% of the Cash Values completely tax-free

·      Tax-free benefit to your beneficiaries

Regardless of what kind of coverage you decide on, its important that you understand how much coverage you should consider and why. Taking a look at your entire financial picture can help make the decision on which form of life insurance is most fitting to your need.

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