Life Insurance

Life Insurance Buyers GuideWhat is Life Insurance?

Life Insurance is an agreement between you and the insurance company. The insurer will pay a lump sum of money upon your death in return for a monthly premium.

Life insurance rates have gone down in recent years. Get a quote today to see for yourself

Why do I need life insurance?

Purchasing life insurance isn’t about whether or not you need to purchase life insurance, but rather how much life insurance will be needed. Death is inevitable and unfortunate if it comes at a premature time. Who will pay the bills when you are not around?

Consider the following:

  • (Income Replacement) – Are you the main breadwinner of the family?
  • (Mortgage Protection) – Are you paying monthly on a home?
  • (Business Purposes) – Key Person/Employee, Buy/Sell agreement, Collateral etc
  • (Estate & Legacy Planning) – Will there be tax consequences to your heirs? Maybe you just want to leave something behind

Life insurance is a means of financial protection typically for a named beneficiary. You can choose to leave the money to a charity or a trust in some instances. Even if you have money in the bank to cover expenses, you must consider probate. Tax free and probate avoiding life insurance can be an immediate solution for many situations.

How do I know what type or how much of life insurance do I need?

We recommend that you do a “financial needs analysis” (FNA) to calculate the type and amount of life insurance you will need. As with any insurance decision, this should be done with an experienced insurance advisor.  Remember you are here because you are seeking professional advice. Some things that we take in consideration are the following:

  • Immediate financial needs. Items in this category will be final expenses, any outstanding medical or hospital bills, funeral costs, car loans, credit card debt and any unforeseen expenses such as travel for out of town family members that will need to be present.
  • Everyday expenses that your income supports; child care, utilities, food, cost of transportation, clothing, maintenance fees etc.
  • Future costs. This can be weddings for the children or college loans & tuition for instance

Once you have added all these expenses together, figure out which resources you have to cover these costs and subtract them for the total needed.  The balance of this process is roughly the amount of life insurance you will need to purchase.

A policy to remain in effect for the insured’s whole with a level premium and a guaranteed interest rate for the cash value.

When the cash value in the policy is earning enough interest to pay for the policy premiums.