posted by Chris | Hold back your excitement as you read this missive!
Seriously. Most people need life insurance for either protecting their families (or business partners) or for estate planning. There are several types of life insurance policies including universal life & variable life ( aka, permanent insurance) and term insurance.
Some policies include a savings component and some do not. Today we will concentrate on term insurance.
Term insurance is pure life insurance with no savings component otherwise known as cash value. How it works:
1. It provides protection for a specific period of time for a specific dollar amount. For example if you buy a 10-year policy with a one million dollar death benefit – if you die in year 9, your beneficiary will receive one million dollars. If you die in year 11 of a 10 year policy your beneficiary will receive nothing.
2. You can usually purchase term insurance starting with a death benefit of $200,000 up to several million dollars of death benefit.
3. You can choose from 10 to 30 year guaranteed policies and even longer. There are lots of companies offering term insurance with a host of terms. Some offer level premiums and others offer policies where your premiums increase annually.
4. Can be converted to permanent life insurance depending on the contract and company.
The big question is how much coverage does one need?
You can check with your financial advisor or an insurance salesperson. You could also do an internet search for a life insurance needs analysis. That will assist you in determining the amount of life insurance coverage you need.
It's wise to get several quotes, so you can compare the term, the price and the quality of the company offering the insurance.
Insurance may not be exciting – but to your beneficiary it may just be invaluable.
Christopher J. Conner
Certified Financial Planner TM
Certified Fund Specialist
5200 W. Newberry Road E-7
Gainesville, Florida 32607
352-225-3132 (Fax) 352-225-3784
A Few Other Posts by Chris:
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Advisory Services offered through Jonathan Roberts Advisory Group.
Securities offered through J.W. Cole Financial, Member FINRA/SIPC
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