Insurance that pays out a sum of money to a beneficiary upon the death of an insured person. It can also have an investment component. Life insurance is a cornerstone of financial planning, offering peace of mind in knowing that your life’s wishes will be carried out — even if you’re not there to see them through.
When do you have a need for Life Insurance?
- Excellent times to purchase Life Insurance are when people get married and when they have children.
- When you purchase a home with a mortgage, is another excellent time to purchase Life Insurance.
- Are you a partner in a business? A Partnership requires planning and Life Insurance is a great way to fund a Buy/Sell Agreement.
- Do you have an estate that will be taxed at 55% upon your death? Life Insurance is the least costly way to pay estate taxes.
How much Life Insurance do you need?
There are many formulas to estimate how much insurance is enough. We can help you figure out an amount that makes sense for you. Call us so we can go over them with you. Some of the things to consider are:
- The value of your debts (mortgage) and of your assets (cash, home equity)
- Education and wedding expenses for children
- How much will it take to replace your income
What kinds of Life Insurance are there?
We focus on three types:
- Term: The least expensive type of Life Insurance policy, Term Life is similar to renting a house where you get the benefits without ownership. Some policies provide an opportunity to convert Term to Permanent, also known as Whole Life insurance. Here is an example breakdown of term life insurance rates:
Age $250K Policy $500K Policy $1M Policy $3M Policy 60 $797 $1,365 $2,615 $7,715 65 $1,240 $2,575 $4,565 $14,275 70 $2,070 $4,075 $7,330 $21,810 75 $3,997 $8,285 $15,185 $46,555 80 $7,450 $14,840 $29,560 $88,560
- Return of Premium Term (ROP): Similar to Term Life Insurance where you are receiving the benefits without owning the policy, with a ROP policy the insurance company issues a tax-free refund of all premiums paid when an insured outlives the term.
- Whole Life: is like owning a house or having a mortgage on one. Over time, Whole Life policies build cash value. That cash can be borrowed, left alone to increase the death benefit, or redeemed by cashing in the policy.