Competent Decisions Around Life Insurance
By Vincent Lanzante “The Financial planner for all city workers”
The majority of people who buy life insurance do so because of a recent life event; marriage, pregnancy, having a new-born, etc. This moment marks the starting point of one of the most important decisions you will ever make. The two main concerns around purchasing life insurance is first, the amount, and second, the type.
The amount is calculated based on your current age and income, this is known as your Human Life Value.
The type of insurance is more complicated. Choosing the wrong kind of life insurance can do more damage to your financial plans than just about any other financial product today. Let’s take a look at the two main options of life insurance; term or permanent.
Term life insurance is pure insurance. It is the same concept as home owner’s insurance. If damage happens to your home, you are covered. Term life policies offer death benefit only, so if you die, you win (so to speak). If you live past the length of the policy, your beneficiaries get no money back.
Permanent life policies offer a death benefit and a "savings account" so that if you live, you get back at least some of, and often much more than, the amount you spent on your premiums. Depending on the company you choose to purchase your insurance from, these policies can be very flexible in the way you pay your premiums and access your cash values. The most important component of permanent life insurance is that it is permanent. Having a permanent, tax-free, guaranteed death benefit paid to your family on the day that you die provides several options in retirement that you wouldn’t otherwise have.
The saying you always hear is, "buy term and invest the difference." This ‘common’ belief has been detrimental to the majority of retirees today. In order to make confident decisions around purchasing life insurance, contact a competent financial professional that specializes in this area.
