Who handles your life insurance? It is estimated that over half of American households have no life insurance protection at all. Facing mortality can be difficult, but planning for the inevitable is crucial. Life insurance is not just about leaving an inheritance and it’s not just for people with debt. Life insurance covers final expenses (average low-key funeral is now $10,000), children’s educations, existing debt like mortgages and vehicle loans, allows surviving family members to grieve, regroup and carry-on without economic worries, and it can even donate to your most beloved charity.
Life insurance comes in many forms, but the two most talked about are term and universal. There are arguments for both types of coverage, and a decision about whether to purchase one, the other, or both can only be made after consultation with an experience life insurance agent. Every person’s life situation is different, from family to finances, so a professional risk analysis is critical in customizing protection.
Life insurance can also be used to grow “cash value” on a tax deferred basis in both indexed and variable securities backed products. The possibilities are plenty and life insurance is a tool that everyone should have in their repertoire.
As your personal situations change (i.e., marriage, birth of a child or job promotion), so will your life insurance needs. Care should be taken to ensure these strategies and products are suitable for your long-term life insurance needs. You should weigh your objectives, time horizon and risk tolerance as well as any associated costs before investing. Also, be aware that market volatility can lead to the possibility of the need for additional premium in your policy. Variable life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as gender, health and age, underlying fund charges and expenses, and additional charges for riders that customize a policy to fit your individual needs.